• TABLE OF CONTENTS
HIDE
 Front Cover
 Acknowledgement
 Table of Contents
 A message from the president
 Introduction from the vice president...
 University of Florida overview
 Financial statements
 Financial aid administered
 Back Matter
 Back Cover






Group Title: University of Florida Annual Financial Report. 2000-2001.
Title: University of Florida Annual Financial Report. 2002 - 2003.
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Full Citation
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Permanent Link: http://ufdc.ufl.edu/UF00072278/00004
 Material Information
Title: University of Florida Annual Financial Report. 2002 - 2003.
Series Title: University of Florida Annual Financial Report
Physical Description: Serial
Language: English
Creator: Finance and Accounting Division
Affiliation: University of Florida -- Office of Administrative Affairs -- Finance and Accounting Division
Publisher: Office of Administrative Affairs, University of Florida
Publication Date: 2003
 Subjects
Subject: University of Florida.   ( lcsh )
Spatial Coverage: North America -- United States of America -- Florida
 Record Information
Bibliographic ID: UF00072278
Volume ID: VID00004
Source Institution: University of Florida
Holding Location: George A. Smathers Libraries, University of Florida
Rights Management: All rights reserved, Board of Trustees of the University of Florida

Table of Contents
    Front Cover
        Front cover
    Acknowledgement
        Acknowledgement
    Table of Contents
        Page 1
    A message from the president
        Page 2
    Introduction from the vice president for Finance and Administration
        Page 3
    University of Florida overview
        Page 4
        History
            Page 5
            Page 6
        Facilities
            Page 7
            Page 8
            Page 9
        Programs
            Page 10
        Students
            Page 10
        Faculty
            Page 11
            Page 12
        Sports and recreational activities
            Page 13
        An excellent value
            Page 14
            Page 15
    Financial statements
        Page 16
        Management's discussion and analysis
            Page 17
        Statement of revenues, expenses, and changes in net assets
            Page 18
            Page 19
        Statement of cash flows
            Page 20
            Page 21
            Page 22
            Page 23
            Page 24
        Notes to the financial statements
            Page 25
            Page 26
            Page 27
            Page 28
            Page 29
            Page 30
            Page 31
            Page 32
            Page 33
            Page 34
            Page 35
            Page 36
            Page 37
            Page 38
            Page 39
            Page 40
            Page 41
            Page 42
            Page 43
            Page 44
            Page 45
            Page 46
            Page 47
    Financial aid administered
        Page 48
    Back Matter
        Back matter
    Back Cover
        Page 50
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UNI\ ERSIT' OF FLORIDA

Annual Financial Report
2 ()()2-03
TABLE OF CONTENTS


A Message from the President 2
Introduction from the Vice President for Finance and Administration 3
University of Florida Overview 4
Mission, History and Facilities
Programs, Students and Faculty
Sports and Recreational Activities
An Excellent Value
Financial Statements
Report of Independent Auditors 16
Management's Discussion and Analysis 17
Statement of Net Assets 22
Statement of Revenues, Expenses, and Changes in Net Assets 23
Statement of Cash Flows 24
Notes to the Financial Statements 25
Financial Aid Administered 48












he University of Florida has enjoyed a magnificent sesquicentennial year with exceptional
achilrements in our classrooms and laboratories matching the fireworks and pageantry of our
150t anniversary celebrations. Befitting its role as Florida's flagship university, the University
of Florida has set records for both research grants and the quality of its student population.

Message In the middle of the 1800s, the Florida legislature understood the key role higher education
from the must play in the development of the state. Now, during the first years of the 21st century, the

President University of Florida has more than met the vision of the legislature so long ago. Today, UF, one
of the top-five largest university campuses in the country, is providing its students with an
immense variety of course options and its faculty with first-class facilities in which to teach and
conduct cutting-edge research.

This past year we welcomed more students than ever before as the university's student
population neared 48,000. However, the qualifications of our incoming freshman have climbed
even higher as the typical entering student brings a better than 3.9 grade point average. For the
first time, UF landed more National Achievement Scholars than any other public university in
the prestigious Association of American Universities and was second for public institutions in
attracting National Merit Scholars. The word obviously is getting out to the best and brightest
young scholars that the University of Florida offers a truly world-class education.

UF's researchers increasingly have earned the top respect of the international community's
governments and corporations. This past year, UF received more than $458 million in research
grants, well exceeding the previous record. Placing the funding into immediate use, UF re-
searchers have explored fascinating regions of unexplored science to include the new field of
biomimetics seeking inspiration and reverse engineering solutions from nature's strongest,
fastest and most adaptive examples.

The university cherishes its responsibility to serve Florida's communities. From the extraor-
dinary efforts of our Institute of Food and Agricultural Sciences to safeguard and enhance our
state's agricultural resources, to the statewide reach of our various healthcare programs, UF
stands as a promise of a better life for all Florida.

As I close out my tour of duty as the president of the University of Florida, I know I leave
the university in the very capable hands of incoming president Dr. J. Bernard Machen, who will
have the support of an exceptional team of administrators, faculty staff, students, and alumni.
More than ever before, the University of Florida is where vision becomes reality, and the future
is at home.





Charles E. Young
President


University of Florida











L am pleased to present the University of Florida Annual Financial Report for
200 003. Our annual financial report is intended to provide a broad perspective of
the university's mission and to present fairly its financial position and activities. This
report reflects the continued commitment of UF's Finance and Administration to
document the growth and stability of the University of Florida. By meeting that
requirement, we have received an unqualified opinion on our financial statements
from the State of Florida Auditor General. Please see the Management's Discussion
and Analysis later in this report for a more detailed discussion of the university's
financial status.

The changes in university governance in Florida continue to have a significant
effect on the University of Florida. As a result of this devolution process, the univer-
sity is designing and implementing a new personnel, payroll, accounting, and student
services system, known collectively as the UF Bridges project. The university has
committed significant resources to provide a full compliment of administrative and
student applications that will improve all aspects of the university business processes.
The implementation of UF Bridges is a multi-year effort. On July 1, 2004, UF Bridges
is scheduled to begin providing the payroll, personnel, and accounting functions to
the university. The initiation of UF Bridges' student applications will begin in 2006.

In the dynamic involvement of 21st century higher education, we continually seek
to reinforce success and discover new opportunities to improve the financial opera-
tions and administration of the University of Florida. The exacting standards neces-
sary to effectively support one of the nation's most complex higher education
institutions demand the significant commitment of every member of the university a
commitment honored each day, in each office at the University of Florida.


Ed Poppell
Vice President for Finance and Administration


A Component Unit of the State of Florida


Introduction

from the Vice

President for

Finance and

Administration









































celebration
of its sesquicen-
tennial in 2003

provided the
University of
Florida the opportunity to showcase the dramatic

progress that changed the dream of the Florida

Legislature 150 years ago into today's well-
respected, land-grant research institution and

flagship of Florida's higher education system.
Currently, the university ranks as one of the top five
largest in the nation with an ever-growing reputation

now attracting the finest instructors, researchers,

administrative experts and students in the world.


Mission

The Florida elections of November
2002 created the state's Education Board
of Governors designed to enhance the
role of higher education within Florida's
political structure and provide a broad
strategic vision for Florida's state univer-
sity system. With Florida's electorate
focused on education, the role of its
leading higher education institution
becomes ever more important. This
attention is understandable, as the state
of Florida has transformed itself in the
last 150 years from an isolated, scarcely
populated corner of the pre-civil war era
to a dynamic and diverse population
center of 21st century America. The U.S.
Census Bureau projections that Florida's
population will increase to 25 million by
2030 contrasts sharply with the just over
2 million figure of 1950. Long estab-
lished as its state's largest and most


4 University of Florida





Overview


University of Florida


Overview


comprehensive university, the University
of Florida recognizes its unique leader-
ship responsibility to the people of its
state as well as to the nation. Its faculty
and staff are dedicated to the common
pursuit of the university's threefold
mission: education, research and service.

Each of the three pillars of its
mission is addressed with an institu-
tional resolve that is as unrelenting as it
is internally pervasive. The fundamental
purpose of the university is teaching
students from undergraduate though
doctorate levels. Research and scholar-
ship are integral to the education process
as well as responding to the needs of
society. The term, "service," addresses
the university's obligation to share the
benefits of its knowledge and abilities to
benefit the public welfare. These three
interlocking elements span all of UF's
academic disciplines and multidisci-


plinary centers, and represent the
university's commitment to pursuing
and disseminating new knowledge while
building upon the experiences of the
past. The University of Florida aspires
to advance the state, nation and
international community by strength-
ening the human condition and im-
proving the quality of life.



History

Florida's oldest university, the
University of Florida traces its begin-
nings to 1853 when the state-funded East
Florida Seminary acquired the private
Kingsbury Academy in Ocala. After the
Civil War, the institution moved to
Gainesville. It was consolidated with the
state's land grant Florida Agricultural
College, then in Lake City, and was
renamed as the University of Florida.


A Component Unit of the State of Florida


Florida benefits from
UF research

Scientific research at the University
of Florida helped the state address
some of its biggest challenges in 2003
- while also nurturing its growing
prominence as a technology and
research center and spurring eco-
nomic development and job creation.
Scientists, engineers and medical
researchers worked on a number of
projects that directly address impor-
tant issues facing Florida. Examples
range from improving homes'
hurricane worthiness and helping to
shape the mammoth Everglades
restoration effort to improving the
lives of Florida's elderly population.
Supported with a record $458.
million in research grants, UF
researchers also developed
innovative new approaches to
challenges ranging from solving
Florida's landfill space crunch to
making its citrus crops more
productive.
UF researchers also led numerous
ambitious science and engineering
projects with international impor-
tance. In one example, a team of
University of Florida and Columbia
University scientists received nearly
$ II million to probe the genetic
underpinnings of nerve cells, including
those responsible for learning and
memory. This research is just one of
several major UF health-related
efforts seeking to make life better for
all Floridians.










ITle_ H E A_ SCHOOLS 6


Accounting
Agriculture and Life Sciences
Building Construction
Business Administration
Dentistry
Design, Construction, and Planning
Division of Continuing Education*
Education
Engineering
Fine Arts
Forest Resources and Conservation
Health and Human Performance
Health Professions
High School
Journalism and Communications
Law
Liberal Arts and Sciences
Medicine
Natural Resources and Environment
Nursing
Pharmacy
Pharmacy Doctor
Physician Assistant Program
Veterinary Medicine

Subtotal

Minus Concurrent Degree**


903
3,623
559
6,713
374
981
535
1,810
6,607
1,180
129
1,882
1,409
35
3,305
1,312
12,953
758
180
860
372
1,174
119
501

48,274


Total


844
3,508
561
6,600
370
1,005
450
1,777
6,437
1,175
124
1,893
1,343
28
3,441
1,299
12,336
759
198
806
351
1,016
120
444

46,885

87

46,798


800
3,642
541
6,357
368
1,003
414
1,885
6,244
1,126
124
1,899
1,220
8
3,352
1,264
12,368
712
202
837
366
952
122
416

46,222


* Includes Continuing Education and correspondence students not enrolled in a college.
** Concurrent Degree programs counted separately as of Fall 2000. Prior to this time they were included within the College of L


In that year of 1906, UF had
an enrollment of 102 male

students. During World War

II, the university entered into
agreements to establish
training programs for U.S.
service personnel, such as
those in U.S. Army Air Force
aircrew training. Until 1947,
the University of Florida was
designated for men only and
one of only three state universities. Others
were Florida State College for Women
(now Florida State University) and
Florida A&M. However, women had,
under certain circumstances, attended UF


as early as 1916. When the legislature
removed all barriers for female enroll-
ment at UF in 1947, the University of
Florida student body numbered 8,177
men and 601 women. Today, the univer-
sity has grown to become one of the five
largest universities in the nation, with an
enrollment of approximately 48,000
students, divided almost equally between
female and male students. Recognized as
a Carnegie Foundation Research Exten-
sive Institution, the University of Florida
also is a member of the prestigious
Association of American Universities

(AAU), the only Florida university so
recognized.


6 University of Florida


875
3,776
520
5,631
378
1,019
368
1,897
5,915
1,079
129
1,889
1,18 1
13
3,063
1,270
11,942
673
190
894
289
787
117
381

44,276


887
3,799
535
5,074
373
934
382
1,996
5,775
1,071
135
1,858
1,062
12
3,005
1,319
I 1,992
657
158
894
321
596
116
376

43,327


Uf Day at the state capitol.


s nineverarnon: 7007 700 1 7000 8


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Overview


At the end of June 2001, the gover-
nance structure of UF changed when the
Florida Board of Regents was dissolved
and replaced by separate boards of
trustees appointed to each state univer-
sity. The midterm elections of 2002
included a Florida state constitutional
amendment that established a statewide
board of higher education. During 2002-
2003, the university conducted a national
presidential search to replace Dr. Charles
Young, retiring after serving as UF's
president since 1999. This search con-
cluded successfully with the appoint-
ment of Dr. J. Bernard Machen, a popular
and innovative president of the Univer-
sity of Utah. He assumes his new duties
in January 2004.

From its humble beginnings in
1853 to becoming a national academic
leader by 2003, the University of
Florida celebrates 150 years of out-
standing service to the people of the
Sunshine State.


Facilities

On more than 2,000 acres, most of it
within the limits of a 100,000-population
urban area, the University of Florida
operates out of more than 900 buildings;
more than 170 of them hold classrooms
and laboratories. UF's facilities have a
book value of more than $1 billion, with a
replacement value of more than $2
billion. The northeastern area of the
campus is listed as an Historic District on
the National Register of Historic Places.
The 24 single-student residence areas
house some 7,400 students and five
family housing villages house more than
1,800 married and graduate students. The
recently completed Hume Hall Honors
Residency Building is the first-ever
Residential College built from the ground
up in the U.S. and serves honors stu-
dents. Other recently completed
projects include the new Health Profes-
sions, Nursing and Pharmacy Com-
plex. UF also is in the construction
stage of the $85 million Genetics,


UF Bookstore and Welcome Center


A Component Unit of the State of Florida


Florida smiles courtesy of
UF Dentistry

The University of Florida College
of Dentistry, through its Statewide
Network for Community Oral Health,
provided a significant amount of
Florida's indigent dental care during
the last two years. The network of
three UF-owned clinics in Jacksonville,
St. Petersburg and Hialeah and 12
partner community health clinics
located across the state, from the
Panhandle to Biscayne Bay, extended
low-cost and reduced-fee treatment
to Florida's indigent residents during
87,349 patient visits by the end of
academic year 2002. Of that number;
68,01 I were made by people with
annual incomes just above, at or
below the poverty level. In fact, 80
percent of the patients UF College of
Dentistry treats have incomes in that
range. The network's goals of
providing low-cost dental care to
Florida's underserved residents and
expanding educational opportunities
for the college's advanced education
in general dentistry residents and
students enrolled in the foreign
trained dentist program are accom-
plished through establishing mutually
beneficial dental health partnerships
with county health departments,
community health centers, and
philanthropic facilities.

This year's new clinic partnerships
with Hillsborough Community
College and St. Petersburg College
expands the university's educational
and service missions into theTampa
and St. Petersburg communities. Now,
more than ever Florida smiles better!






















Tabe I-SATEENOLLEN BYCONTY- .ALL 20021


Hardee
Hendry
Hernando
Highlands
Hillsborough
Holmes
Indian River
Jackson
Jefferson
Lafayette
Lake
Lee
Leon
Levy
Liberty
Madison
Manatee
Marion
Martin
Miami-Dade
Monroe
Nassau
Okaloosa


23
50
155
122
2,302
20
254
69
18
9
339
784
716
116
3
19
383
768
318
3,810
137
94
465


Okeechobee
Orange
Osceola
Palm Beach
Pasco
Pinellas
Polk
Putnam
St. Johns
St. Lucie
Santa Rosa
Sarasota
Seminole
Sumter
Suwannee
Taylor
Union
Volusia
Wakulla
Walton
Washington

Total


Cancer and Biotechnology Building and
funding has been acquired for the $90
million Proton-Beam Therapy Center in
Jacksonville.

The university hosts an impressive
array of facilities dedicated to honoring
the arts, humanities and the sciences. The
Florida Museum of Natural History is the
largest natural history / anthropology
museum in the Southeast, and among the
top 10 in the nation. Its natural science
collections contain more than 20 million
specimens. The museum's $4.2 million
gift to create a lepidoptera center, able to
house one of the world's largest butterfly
collections and live butterfly exhibits, is
nearing completion. The Samuel P. Harn
Museum of Art, with more than 26,000
square feet of exhibit space, is one of the
largest museums in the region. The Harn
Museum is converting a $3.2 million gift


into the construction of a 20,000-square-
foot sculpture atrium. The Phillips Center
for Performing Arts attracts world-class

symphony orchestras, Broadway plays,
operas, and large-scale ballet productions
to Gainesville, with each of its recent
seasons already recognized as some of
the finest displays of artistic perfor-
mances in the country. Further, UF
Performing Arts takes its educational role
seriously, with important seminars
featuring world-class experts already a
hallmark of its programs. UF Performing
Arts also operate the Baughman Center, a
serene facility designed to provide an
intimate setting for musical recitals,
seminars, and meditative and contempla-
tive uses. Other notable facilities include
the world's largest citrus research center,
the University Art Gallery, a microkelvin
laboratory capable of producing near
zero degrees Kelvin, a world class brain


8 University of Florida


Alachua
Baker
Bay
Bradford
Brevard
Broward
Calhoun
Charlotte
Citrus
Clay
Collier
Columbia
Desoto
Dixie
Duval
Escambia
Flagler
Franklin
Gadsen
Gilchrist
Glades
Gulf
Hamilton


5,235
27
285
67
1,339
4,530
16
180
197
518
460
170
25
12
1,921
462
103
4
28
63
7
9
13


45
2,194
212
2,602
433
2,329
668
130
409
326
194
833
1,410
51
91
30
31
854
10
25
20

39,542


UF Party on the Plaza
entertainment.








































































Bachelors
Masters
Doctor of Philosophy
Juris Doctor
Doctor of Medicine
Doctor of Dental Medicine
Doctor of Pharmacy
Doctor of Veterinary Medicine


7,776
2,752
607
416
107
71
231
82


7,663
2,470
574
363
120
79
203
73


7,655
2,224
516
381
115
79
169
80


7,430
2,113
445
412
117
78
106
78


A Component Unit of the State of Florida


Overview


institute, an engineering research center
for particle science and technology, a 100-
kilowatt training and research reactor, the
second largest academic computing
center in the South, one of the nation's
few self-contained intensive care hyper-
baric chambers, a public television and
radio station, and two commercial radio
stations. The university's Institute of
Food and Agricultural Sciences (IFAS) is
an extensive, statewide operation. In
addition to the facilities on the University


of Florida campus and Exten-
., sion offices in each of Florida's
67 counties, IFAS has 1,292
buildings, 3.1 million gross
square feet and 16,591 acres
throughout the state. These
facilities are used for teaching,
research and demonstration.
For example, the IFAS facility
in Apopka, Florida consists of
40,000 square feet of labs and
offices, 11,000 square feet of
teaching spaces, and 115,000
square feet of greenhouse and
other environmental space.

The University Libraries
consist of the main research
library and six branch libraries
throughout campus, along with
the Health Science Center
Library and the Legal Informa-
tion Center. They form the
largest information resource system in
the state, containing more than 4 million
volumes within its 10 million document
holdings. Library collections are accessed
through the computerized LUIS online
system. UF's Library West facility
currently is undergoing major expansion
and renovation.


UF Education:Win-Win Programs

While UF's College of Education
always has been a leader in Florida
regarding the many facets of Pre-K- 1 2
education, the renewed emphasis by
national and state governments
makes the college's role even more
central.To meet the needs of the
state and its communities, the college
both offers its students guided
teaching opportunities within the
surrounding communities to gain first
hand experience as well as providing
resources and research to improve
education wherever it occurs.

UF's Stewart Mott Davis Center
for Community Education assists
communities in developing educa-
tional programs and services to meet
the changing needs of their citizens.
The center provides training, research,
technical assistance, and development
of instructional and supportive
materials and has assisted thousands
of recipients over its two decades of
service.

In a classic win-win program, UF
technology-based field experience
programs pair pre-service teachers
from the University of Florida with
selected in-service teachers in
Alachua County Schools.Together;
they develop and conduct technol-
ogy-based, curriculum-focused
activities.These programs are
designed to give pre-service teachers
firsthand experience integrating
technology within the K-1 2 classroom
curriculum.

UF programs reach as far as
Miami-Dade County through the
Institute for Children and Adolescent
Research.


I 18]I T II I3 AWARDEID'B D LEVEL


2002-0n 2001-02 2nnn000-01 I999-00 oI R-










Programs


UF SPONSORED RESEARCH
FUNDING -FEDERAL AND
NON-FEDERAL SOURCES
(in millions)
$500









93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03
Fiscal Year
SFederal ii Non-Federal



UF TECHNOLOGYTRANSFER
INCOME (in millions)
$40
$35
$30
$25
$20



$5-
93-94 94-95 95-96 96 97 9 98 98 99 99-00 00-01 01-02 02 03
Fiscal Year


One of only 18 land-grant universities
in the esteemed higher education organi-
zation, the AAU, the University of Florida
offers more programs on a single campus
than all but a few U.S. universities. The
University of Florida is a doctoral/
research extensive institution as catego-
rized by the Carnegie Foundation. It has
16 colleges and more than 150 research,
service and education centers, bureaus
and institutes. These bring together
faculty and student scholars from various
academic programs to provide research
and development services in all areas of
state interest. Nearly 100 undergraduate
majors are offered. More than 1,900
freshmen and sophomores participate in
the honors program, which offers 90-100
honors courses per semester. The gradu-
ate school coordinates more than 200
graduate programs. Professional degree
programs include those offered in den-
tistry, law, medicine, pharmacy and
veterinary medicine.

As Florida's land-grant university, UF
has a distinguished record of developing
Florida agriculture into a national leader
through research and extension services,
stretching the influence of the university
into every county of the state and beyond.

The University of Florida recently
completed a focused self-study approved
by the Southern Association of Colleges
and Schools Commission on Colleges.
The focus of the self-study was on
"globalizing" education at the University
of Florida. The results of this two-and-a-
half-year process will provide UF with a
direction for the future as well as estab-
lishing benchmarks for assessing progress
toward a truly international university.
Currently, UF offers 80 international
programs, an increase of 12 percent over
the previous year.


Students

Enrollment for fall semester 2002
totaled 48,184 students, including 39,542
in-state students representing all Florida
counties. There are approximately 2,700
international students representing more
than 100 countries. The remainder come
from the 49 other states, the District of
Columbia, Puerto Rico, and the Virgin
Islands. The ratio of women to men is
currently 52:48. Seventy-three percent of
enrolled students are undergraduates, 20
percent are graduate students and 7
percent are in professional degree
programs (including dentistry, law,
medicine, pharmacy and veterinary
medicine). Approximately 24 percent of
the UF student body members are
minorities with 7.4 percent of the student
population consisting of African Ameri-
can students, 9.9 percent Hispanic/
Latino students, and 6.5 percent Asian-
American or Pacific Islander students.

University of Florida students are
among the best in the nation. Approxi-
mately 90 percent of all entering fresh-
men score above the national average on


10 University of Florida


F' Iii I ~










Programs


UF SPONSORED RESEARCH
FUNDING -FEDERAL AND
NON-FEDERAL SOURCES
(in millions)
$500









93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03
Fiscal Year
SFederal ii Non-Federal



UF TECHNOLOGYTRANSFER
INCOME (in millions)
$40
$35
$30
$25
$20



$5-
93-94 94-95 95-96 96 97 9 98 98 99 99-00 00-01 01-02 02 03
Fiscal Year


One of only 18 land-grant universities
in the esteemed higher education organi-
zation, the AAU, the University of Florida
offers more programs on a single campus
than all but a few U.S. universities. The
University of Florida is a doctoral/
research extensive institution as catego-
rized by the Carnegie Foundation. It has
16 colleges and more than 150 research,
service and education centers, bureaus
and institutes. These bring together
faculty and student scholars from various
academic programs to provide research
and development services in all areas of
state interest. Nearly 100 undergraduate
majors are offered. More than 1,900
freshmen and sophomores participate in
the honors program, which offers 90-100
honors courses per semester. The gradu-
ate school coordinates more than 200
graduate programs. Professional degree
programs include those offered in den-
tistry, law, medicine, pharmacy and
veterinary medicine.

As Florida's land-grant university, UF
has a distinguished record of developing
Florida agriculture into a national leader
through research and extension services,
stretching the influence of the university
into every county of the state and beyond.

The University of Florida recently
completed a focused self-study approved
by the Southern Association of Colleges
and Schools Commission on Colleges.
The focus of the self-study was on
"globalizing" education at the University
of Florida. The results of this two-and-a-
half-year process will provide UF with a
direction for the future as well as estab-
lishing benchmarks for assessing progress
toward a truly international university.
Currently, UF offers 80 international
programs, an increase of 12 percent over
the previous year.


Students

Enrollment for fall semester 2002
totaled 48,184 students, including 39,542
in-state students representing all Florida
counties. There are approximately 2,700
international students representing more
than 100 countries. The remainder come
from the 49 other states, the District of
Columbia, Puerto Rico, and the Virgin
Islands. The ratio of women to men is
currently 52:48. Seventy-three percent of
enrolled students are undergraduates, 20
percent are graduate students and 7
percent are in professional degree
programs (including dentistry, law,
medicine, pharmacy and veterinary
medicine). Approximately 24 percent of
the UF student body members are
minorities with 7.4 percent of the student
population consisting of African Ameri-
can students, 9.9 percent Hispanic/
Latino students, and 6.5 percent Asian-
American or Pacific Islander students.

University of Florida students are
among the best in the nation. Approxi-
mately 90 percent of all entering fresh-
men score above the national average on


10 University of Florida


F' Iii I ~





Overview


standardized college entrance exams
taken by college-bound students. The
University of Florida ranks second in the
nation among public universities in the
number of freshmen National Merit
Scholars in attendance. Florida also ranks
first among all public universities and
third among all institutions in the num-
ber of National Achievement Scholars in
attendance and UF received more Inter-
national Baccalaureate transcripts than
any other institution in the world.
Committed to diversity at every level, UF
is third among all AAU universities in
awarding bachelor degrees to Hispanic/
Latino students, third in the AAU for
awarding bachelor degrees to African
American students and in the top 25 for
all universities nationally in Ph.D.s
awarded to African Americans. Aiding
student development, UF has invested
extensively in campus computing
infrastructure and in classroom renova-
tions and technology upgrades in the last
five years to meet the needs of modern
education in an age of rapidly changing
technology. Further, UF's freshmen
retention rate of 93 percent speaks to the
outstanding quality of the university's


ing to online programs designed to assist
self-tracking of academic progress and
class registration.

In addition to being academically
motivated, students lead a rich social and
extracurricular life. They belong to more
than 500 student organizations on
campus, attend more than 2,000 campus
concerts, art exhibits and theatrical
productions, guest lectures, sports
contests, and other events a year. UF
students participate in an average of two
out-of-class seminars and lectures a day,
and enjoy a variety of outdoor activities
throughout the year.



Faculty

A distinguished faculty of more than
4,000 attracted $458 million in research
and training grants in 2002-2003, up $20
million from the previous record-
breaking year. The University of Florida
now has 62 Eminent Scholar Chairs.
Nearly two-dozen faculty members have
been selected to the National Academies
of Science and/or Engineering, the
Institute of Medicine or a counterpart in


entire academic experience, from counsel- another nation. Also, in a national


A Component Unit of the State of Florida


Nothing runs like UF's FAWN

With the addition of I3 new
monitoring stations, the Florida
Automated Weather Network -
(FAWN) now covers the state with
33 stations linked to computers in
Gainesville.

The University of Florida weather
network was started in 1997 after
the National Weather Service
discontinued forecasts for agriculture,
said Larry Treadaway, who coordi-
nates FAWN for UF's Institute of
Food and Agricultural Sciences. Until
now, network coverage has been
limited mainly to Central and South
Florida.

Treadaway said growers and
others interested in real time weather
data can access the system via
telephone or the FAWN Web site. In
addition to data, the system can give
farmers reliable climate predictions
three to six months in advance.

Each solar-powered station
collects weather data and transmits it
to a computer in Gainesville every 15
minutes.The stations measure
temperatures at two, six and 30 feet
above ground, soil temperature, wind
speed and direction, rainfall, relative
humidity, barometric pressure, leaf
wetness and solar radiation.

"We have always needed a
complete statewide network because
regular forecasts for cities may be
misleading to farmers located in
cooler rural areas," Treadaway said.
Wherever Floridians are, FAWN's got
them covered.










































ranking of total Fulbright awards as of
2002, the University of Florida stood in
the top ten among all public universities.

The University of Florida has been
awarded national scientific centers to
include the McKnight Brain Institute for
the study of neurological disease; the
Engineering Research Center for Particle
Science; and the National High Magnetic
Field Laboratory in Tallahassee under the
auspices of the University of Florida,
Florida State University and Los Alamos
National Laboratory.

A short listing of honored faculty,
past and present, includes: Pulitzer Prize-
winners in editorial writing and poetry; a
recognized pioneer in aviation engineer-
ing; a leading scholar on econometrics;
three winners of NASA's top award for
research; one of the four charter members
of the Solar Hall of Fame; and a winner of
the Smithsonian Institution's award for


conservation. UF is a recognized leader
in a wide variety of specialties and areas,
from pharmacy and public relations to
oral-and-maxillofacial surgery and
special education. UF scientists and
researchers made significant discoveries
and developments in such areas as
microbiology, geology, dentistry, elec-
tronic engineering and medical technol-
ogy among others fields. In all, UF ranks
sixth among all public universities in
patents awarded.


12 University of Florida






Overview


Sports and

Recreational Activities

The University of Florida continually
enjoys significant success with its varsity
sports program, with the UF women's
tennis team capturing its fourth NCAA
title. The university has made a strong
commitment to support each varsity
sport it fields and to provide exciting
athletic competition for fans and student-
athletes alike. In 2002-2003, the Univer-
sity of Florida finished seventh in the
national all-sports competition for overall
men's and women's program excellence
and was recently ranked as one of the
top-four best sports colleges by Sports
Illustrated. For an unprecedented seventh
time, the University of Florida completed
a sweep of the Southeastern Conference
All-Sports titles, capturing the New York
Times Regional Newspaper Group SEC
All-Sports title as well as finishing first in
this year's men's and women's all-sports
competition. Prior to 1992, no school in
SEC history had ever won both the men's
and women's all-sports titles in the same
academic year. Florida became the first to
win all three in 1992 and has repeated the
feat in 1993, 1996, 1998, 2000, 2001 and
2002. Providing such effective manage-
ment of the university's sports program is
the University Athletic Association, a
direct support organization serving as
one of several component units
of the university.

Aside from varsity sports,
University of Florida students,
faculty and staff enjoy first-
class recreational facilities
located at convenient spots on
the campus, with numerous
recreational and fitness pro-
grams offered. The Stephen C.
O'Connell Center and the


J. Wayne Reitz Union provide space for a
myriad of activities. A thousand people
can participate simultaneously in eight
different recreational activities in the
O'Connell Center, which seats 12,000 for
concerts and other events. The O'Connell
Center also is home to the Gator basket-
ball, volleyball, swimming and gymnas-
tics teams. Thousands use the J. Wayne
Reitz Union daily for dining, meetings,
games, hotel accommodations and more.
Expansion to union facilities was com-
pleted this year, featuring a new visitors'
center and bookstore. The Student
Recreation and Fitness Center was the
first facility dedicated to recreation at the
university when it opened in 1991, and
now offers more than 100 fitness classes
per week. The Southwest Recreational
Center is a 100,000-square-foot facility
located on the corner of a 26-acre site that
features lighted outdoor basketball
courts, tennis courts and a tournament-
grade four-field softball complex. The
university also hosts some 50 sports
clubs, from Aikido to water skiing and
wheelchair basketball, and its intramural
sports attracted more than 32,000 partici-
pants each semester during the past
academic year. During 2002, the UF
intramural co-ed flag football team won
its second national championship in New
Orleans. Open spaces, small ponds,
picnic areas, shady nooks, and even an


UF Women Tennis team wins National Championship


A Component Unit of the State of Florida


Serving Florida's Animal
Community

Two years after Dorothy
Schweitzer of Dunnellon rescued
Cindy, then only a puppy, from
abandonment and starvation, her
beloved dog developed a life-
threatening, painful tumor above her
eye.Thanks to a pioneering form of
radiation therapy developed at the
University of Florida, Cindy is now
enjoying a long life.

With one massive but precisely
targeted dose of radiation directed at
the tumor, UF veterinarians ensured
that Cindy would prevail over
adversity.

"It was four years ago that Cindy
received that treatment," Schweitzer
said."It's just a miracle, a 100-percent
miracle."

The radiation therapy technique
was developed through a unique
partnership between UF veterinarians
and scientists based at UF's McKnight
Brain Institute. Since the procedure
became available, more than 30 small
animal patients from all over the state
have received the treatment through
UF's Veterinary Medical Teaching
Hospital, most with positive results.
The procedure is now being
expanded to target tumors not just
in the head region, but in the limbs
as well.

Clinicians at UF's College of
Veterinary Medicine, the state's only
veterinary college, saw 9,062 small
and 20,385 large animals from all over
the state last year


" "


















































Florida Bay at sunset.


RESEARCH AWARDS BY SPONSOR FY 2002-2003
(in millions)


Other
$19.3
A0o


Industry
$54.4
12%


State &
Local
$43.8
10%


Federal
$289.3
63%


FEDERAL AWARDS
BY AGENCY


NIH
NSF
USDA
DOD
HHS
HRSA
Education
NASA
Energy
Veteran's Affairs
Commerce
DOT
Interior
EPA
Aid
Other HHS
Other Federal


Millions
$104.4
40.7
26.3
24.2
23.3
11.5
11.3
S1.0
9.6
6.5
5.5
3.6
2.9
2.7
2.0
1.7
1.3

$289.3


81-acre wildlife sanctuary and lake on
campus provide venues to enjoy
Florida's year-round outdoor life.




An Excellent Value

The University of Florida has earned
a national reputation for being an
excellent value. In the last few years, UF
has drawn the attention of various
publications. Kiplinger's Personal Finance
magazine in 2002 ranked UF ninth in its
"Top 100 Values in Public Universities."
The 2003 U.S. News and World Report
rated UF fifteenth among all public
universities. Moreover, few organizations


14 University of Florida









UF FOUNDATION TOTAL ASSETS
(in millions)

$1000
$900
$800
$700
$600
$500
$400
$300-
0onn


UF FOUNDATION ENDOWMENT
ASSETS (in millions)


ZP/uu-
$600
$500
$400
$300
$200


$100 1 $100


93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03
Fiscal Year




provide a return on investment like the
University of Florida. For each tax dollar
invested on the university, UF generated
$5.20 total spending in the state economy
with direct benefits to Florida citizens
with discoveries in science, technology,
healthcare, education and other areas.
Since 1990, dozens of UF-affiliated
companies have been created, while
support of the university by its benefac-
tors reached new heights during this
period.

The University of Florida well
understands the premier role the state of
Florida asks it to accept. While the
university stands as one of the largest
and most dynamic institutions of higher
learning in the United States, each
moment and dollar spent at every level
must have the singular purpose to
enhance, through the exceptional perfor-
mance of its mission, the investment
made by the people of its society. The
university is implementing a strategic
plan designed to adapt current and
expected resources to meet the priorities
of an increasingly fast-paced age.

With an integrated statewide higher
education structure now established and
the university's presidential search


93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03
Fiscal Year



meeting exceptional success, the Univer-
sity of Florida now has all the elements in
place for increasing its international
prominence. Each day of Florida's
flagship university's next 150 years
promises a campus environment ever
more innovative, exciting and productive
than any of its past.


A Component Unit of the State of Florida


t- -'

*6~I1


h. ,


UF Students Contribute

UF has become the university of
choice for top undergraduate and
graduate students from around the
world and all walks of life. During the
past academic year; UF received 940
International Baccalaureate transcripts,
surpassing the previous year's total by
nearly I30 and more than doubling
the IB transcript total of the next two
universities combined. UF also is first
among all public universities in
attracting National Achievement
Scholars and second in landing
National Merit Scholars.

Once students arrive at the
university, they enjoy the experience,
with the 93 percent freshman
retention rate one of the nation's
highest.

The attraction of a University of
Florida education is obvious. UF is
located in one of North America's
most livable communities and the
scenic campus hosts an impressive
array of activities. The university
supports some 500 student organiza-
tions, 50 sports clubs, and 2,500
intramural teams. UF also is an
incredible bargain. Of the 34 public
universities of the prestigious Associa-
tion of American Universities, UF's in-
state tuition is the least expensive. UF
students, however appear mindful of
the sacrifice of the people of Florida
on their behalf. UF students as a
whole donated more than $1.2 million
to charities and provided more than
75,000 hours of volunteer service
during the 2002-03 academic year













k uJ AUDITOR GENERAL
S '"STATE OF FLORIDA
G74 Claude Pepper Building
William O. Monroe, CPA I I West Madison Street 850/488-5534/SC 278-5534
Auditor General Tallahassee, Florida 32399-1450 Fax: 488-6975/SC 278-6975


The President of the Senate, the Speaker of the
House of Representatives, and the
Legislative Auditing Committee


INDEPENDENTAUDITOR'S REPORT ON FINANCIAL STATEMENTS

We have audited the accompanying financial statements of the University of Florida, a component unit of the State of Florida, and its aggregate discretely
presented component units as of and for the fiscal year ended June 30,2003, as shown on pages 22 through 47. These financial statements are the responsibility
of the University's management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial
statements of the aggregate discretely presented component units, as described in note I to the financial statements, which comprise 100 percent of the
transactions and account balances of the discretely presented component units columns. Those financial statements were audited by other auditors whose
reports thereon have been furnished to us, and our opinion on the financial statements, insofar as it relates to the amounts included for these entities, is based
solely upon the reports of the other auditors.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial
audits contained in GovernmentAuditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of the other
auditors provide a reasonable basis for our opinions.

In our opinion, based on our audit and the reports of the other auditors, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the University of Florida and of its aggregate discretely presented component units as of June 30, 2003, and the respective
changes in financial position and cash flows,where applicable,thereof for the fiscal year then ended, in conformity with accounting principles generally accepted
in the United States ofAmerica.

In accordance with Government Auditing Standards,we have also issued our report dated February 24,2004, on our consideration of the University of Florida's
internal control over financial reporting and on our tests of its compliance with certain provisions of laws, administrative rules, regulations, contracts, and grants.
That report is an integral part of an audit performed in accordance with GovernmentAuditing Standards and should be read in conjunction with this report in
considering the results of our audit. That report will be included as part of our separately issued audit report on the University.

The MANAGEMENT'S DISCUSSION ANDANALYSIS on pages 17 through 21 is not a required part of the financial statements, but is supplementary
information required by accounting principles generally accepted in the United States. We have applied certain limited procedures, which consisted principally
of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit the
information and express no opinion thereon.

Respectfully submitted,





William O. Monroe, CPA
February 24, 2004



16 University of Florida





Management's Discussion and Analysis MD&A


Management's

Discussion and

Analysis


From the Vice President for Finance and
Administration


Introduction and Background

The following Management's Discussion and Analy-
sis (MD&A) provides an overview of the financial posi-
tion and activities of the University of Florida (the
University) for the year ended June 30, 2003, and should
be read in conjunction with the financial statements and
notes thereto. This overview is required by Governmen-
tal Accounting Standards Board (GASB) principles, GASB
Statement No. 35, Basic Financial Statements and
Management's Discussion and Analysis for Public Col-
leges and Universities, as amended by GASB Statements
Nos. 37 and 38.


Financial Highlights

The University's net assets increased by $101.2 mil-
lion or 7.' in comparison with the prior year net assets.
The University's investment in capital assets accounts for
a significant portion of the increase. The net increase is
further explained in the discussion of the Statement of
Net Assets.
The University continued capital improvements on
projects included in the University's five-year capital im-
provement plan. The top three priority projects are Util-
ity/Infrastructure Improvements, a Genetic and Cancer
Research Center (total project cost of $83.8 million) and
the Library West Addition and Renovation (total project
cost of $30.9 million). Additional information about the
University's capital commitments at June 30, 2003, for
these and other projects is presented in note 13 to the fi-
nancial statements.
Total operating revenues increased by 9.1, Major
components of operating revenues are contracts and
grants and tuition and fees. Revenues from contracts and
grants increased 9.3, Student tuition and fees, net of
scholarship allowances, increased by 11.41 The increase
in student tuition and fees is because of the increase in
rates for resident undergraduates by (' ,. graduate stu-
dents by 1'0 and non-resident students by 17 Addi-
tionally, although total enrollment increased by less than
1, non-resident enrollment increased 4.5%. The sum of
the net operating revenues (expenses) and other revenues,
expenses, gains or losses, which include State appropria-
tions and investment income, increased by 8.1, Operat-
ing expenses, of which (, were personnel services,
increased by 8 ,-1



Overview of Financial Statements

The GASB Statement No. 35 requires the University's
financial report to include three financial statements: the
Statement of Net Assets; the Statement of Revenues, Ex-
penses, and Changes in Net Assets; and the Statement of
Cash Flows. The financial statements encompass the
University and its component units. These component
units include:
a The University's Direct Support Organizations -
these are separate, not-for-profit corporations organized
and operated exclusively to assist the University in achiev-
ing excellence by providing supplemental resources from
private gifts, bequests and valuable education support
servi ce.


A Component Unit of the State of Florida 17









j The Health Science Center Affiliates these are
the several corporations closely affiliated with the Uni-
versity of Florida J. Hillis Miller Health Science Center,
including the Faculty Practice Plans.

a Shands Hospital and Others includes the Shands
Teaching Hospital and Clinics, Inc., a not-for-profit cor-
poration that is contractually obligated to manage, oper-
ate, maintain and insure the hospital facilities in support
of the programs of the Health Science Center at the Uni-
versity of Florida.

Information regarding these component units, includ-
ing summaries of their separately issued financial state-
ments, is presented in Note 1 and Note 19 to the financial
statements. This MD&A focuses on the University, ex-
cluding the component units. Management information
for these component units is included in their separately
issued financial statements.

The financial statements characterize revenues and
expenses as either operating or nonoperating. A signifi-
cant portion of the University's anticipated, recurring re-
sources are considered nonoperating as defined by GASB
Statement No. 35. The principal components of nonop-
erating revenues and their related amounts for the 2002-
03 fiscal year are State appropriations for operations
($531.8 million) and net investment income ($43.2 mil-
lion). Recurring nonoperating expenses primarily con-
sist of interest expense on bonds and revenue certificates
payable, totaling $7 million for the 2002-03 fiscal year.




Statement of Net Assets

The Statement of Net Assets reflects the assets and
liabilities of the University, using the accrual basis of ac-
counting, and presents the financial position of the Uni-
versity at a specified time. The difference between total
assets and total liabilities, net assets, is one indicator of
the current financial condition of the University. The
changes in the net assets that occur over time indicate
improvements or deterioration in the University's finan-
cial condition.

The following summarizes the University's assets,
liabilities, and net assets at June 30:


2nn"~


Assets:
Current Assets
Capital Assets, Net
Other Noncurrent Assets
Total Assets

Liabilities:
Current Liabilities
Noncurrent Liabilities
Total Liabilities

Net Assets:
Invested in Capital Assets,
Net of Related Debt
Restricted
Unrestricted

Total Net Assets


$ 688.8
986.4
170.0
$ 1,845.2


$ 196.5
269.0
$ 465.5


?nn?


$ 617.6
919.1
126.4
$ 1,663.1


$ 120.4
264.2
$ 384.6


$ 858.2 $ 790.2


$ 1,379.7 $ 1,278.5


Statement of Revenues, Expenses, and

Changes in Net Assets

The Statement of Revenues, Expenses, and Changes
in Net Assets presents the results of the University's rev-
enue and expense activity, categorized as operating or
nonoperating. All of the current year's revenues and ex-
penses are recognized when earned or incurred, regard-
less of when cash is received or paid. The following
summarizes the University's activity for the fiscal years
ended June 30:


Operating Revenues
Operating Expenses


2003
$ 824.9
(1,383.3)


Operating Loss


(558.4)


Nonoperating Revenues (Expenses)

Income (Loss) Before Other Revenues,
Expenses, Gains, or Losses

Other Revenues, Expenses,
Gains, or Losses

Increase in Net Assets

Net Assets Beginning of Year

Net Assets End of Year


2002
$ 756.2
(1,273.2)

(517.0)

526.2

9.2


84.1


93.3


1,278.5 1,185.2

$ 1,379.7 $ 1,278.5


18 University of Florida


Condened Sttemen of Nt Assts (i million)






Management's Discussion and Analysis MD&A


Operating Revenues

GASB Statement No. 35 categorizes revenues into op-
erating and nonoperating. Operating revenues generally
result from exchange transactions where each of the par-
ties to the transaction either give up or receive something
of equal or similar value.

The following summarizes the operating revenues, by
source, which were used to fund the University's operat-
ing activities for the fiscal years ended June 30:


I Oprain Reene (i ilos


Grants and Contracts
Tuition and Fees, Net of
Scholarship Allowances
Sales and Services of
Auxiliary Operations
Sales and Services of
Educational Departments
Other

Total Operating Revenues


2003
$ 535.9
148.2

78.7

57.8

4.3


2002
$ 490.2
133.0

72.7

56.8

3.5


$ 824.9 $ 756.2


Natural Classifications 2003 2002
Personnel Services $ 912.3 $ 863.4
Supplies and Other Services 271.9 230.8
Depreciation 83.1 76.3
Scholarships and Waivers 52.0 45.3
Utilities and Communications 42.5 43.4
Self-Insured Claims and Expenses 21.5 14.0

Total Operating Expenses $ 1,383.3 $ 1,273.2


Functional Classifications 2003 2002
Instruction $ 439.8 $ 415.9


Research
Public Service
Institutional Support
Academic Support
Auxiliary Operations
Depreciation
Operation and Maintenance of Plant
Student Services
Scholarships and Fellowships, Net*
Other


371.5
105.1
96.9
90.8
86.1
83.1
70.4
28.8
9.9
0.9


333.4
105.7
73.0
84.3
78.6
76.3
66.7
27.8
S1.0
0.5


Total Operating Expenses $ 1,383.3 $ 1,273.2

* Net of Scholarship Allowances of $57.4 million in 2002-03 and $47.7
in 2001-02.


Operating Expenses

Expenses are categorized as either operating or non-
operating. The majority of the University's expenses are
exchange transactions, which GASB Statement No. 35 de-
fines as operating expenses. GASB gives financial report-
ing entities the choice of reporting expenses in either the
functional or natural classifications. The University has
chosen to report the expenses in their natural classifica-
tions on the face of the statement and has displayed the
functional classifications in the notes to the financial state-
ments. The before schedule summarizes the operating
expenses for each method of classification for the fiscal
years ended June 30:



Nonoperating Revenues and Expenses

Certain revenue sources that the University relies on
to provide funding for operations, including State appro-
priations, gifts, and investment income, are defined by
GASB as nonoperating. Nonoperating expenses include
capital financing costs and costs related to capital assets.
The following summarizes the University's nonoperating
revenues and expenses for the fiscal years ended June 30:


State Appropriations
Investment Income
Other Nonoperating Revenues
Interest on Capital Asset-Related Debt
Other Nonoperating Expenses

Net Nonoperating Revenues
(Expenses)


2003
$ 531.8
43.2
12.8
(7.0)
(3.2)


2002
$ 505.4
19.6
10.2
(7.4)
(1.6)


$ 577.6 $ 526.2


Other Revenues, Expenses,

Gains, or Losses

This category is composed of capital appropriations,
capital grants and gifts, and transfers. The following sum-
marizes the University's other revenues, expenses, gains
or losses for the fiscal years ended June 30:


A Component Unit of the State of Florida 19


I Nonoperating Revenues (Expenses) (in millions) I











2003 2002
Capital Appropriations $ 52.4 $ 39.1
Capital Grants, Contracts and Donations 29.6 40.7
Transfers 4.3

Total Other Revenues $ 82.0 $ 84.1


Statement of Cash Flows

The Statement of Cash Flows provides information
about the University's sources and uses of cash and cash
equivalents during the fiscal year. This statement classi-
fies sources and uses of cash and cash equivalents into
the four categories defined by the GASB for the fiscal years
ended June 30:


7nn?


Cash Flows From:
Operating Activities
Total Provided
Total Used
Total


$ 840.0
(1.281.6)
(441.6)


Noncapital Financing Activities
State Appropriations
Operating Subsidies and Transfers
Other
Total


531.8
.2

532.0


Capital and Related Financing Activities
Capital Appropriations, Subsidies, 103.6
Transfers, Grants and Gifts
Other Receipts and Proceeds 12.1
Purchases of Capital Assets (153.0)
Principal and Interest Paid on (13.3)
Capital Debt and Leases
Total (50.6)


Investing Activities
Net Cash (Used in) Provided by
Investing Activities

Net Change in Cash and
Cash Equivalents

Cash and Cash Equivalents,
Beginning of Year

Cash and Cash Equivalents,
End of Year


(27.2)


12.6


112.7


2nn?


$ 754.2
(1,196.6)
(442.4)


505.4
5.4
.7
5 11.5


95.8

4.5
(138.4)
(13.1)

(51.2)



4.2


22.1


90.6


$ 125.3 $ 112.7


Capital Assets, Expenses,

Commitments and Debt

Administration

Capital Assets

At June 30, 2003, the University had approximately
$986.4 million invested in capital assets, net of accumu-
lated depreciation of $949.5 million. Depreciation charges
for the current year totaled $83.1 million. The following
table summarizes the University's capital assets, net of
accumulated depreciation at June 30:



Capital sses, et in iffons


Land
Infrastructure and Other Improvements
Buildings
Furniture and Equipment
Library Resources
Property Under Capital Lease and
Lease Improvements
Other Capital Assets
Construction in Progress

Total Capital Assets, Net


72003
$ 10.2
25.5
555.3
226.1
61.7
9.3


2002
10.2
26.3
511.6
207.5
60.2
9.8


4.1 3.3
94.2 90.2

$ 986.4 $ 919.1


Additional information about the University's capi-
tal assets is presented in Note 7 to the financial statements.



Capital Expenses and Commitments

Major capital expenses through June 30, 2003 were
incurred on the following projects: New Bookstore with
Attached Parking and Visitor/Welcome Center ($15.4
million), Maintenance, Repairs, and Renovations ($13.3
million), Utility/Infrastructure Improvements ($8.1 mil-
lion), UMC-Shands Jacksonville Proton-Beam Facility
($7.1 million), and Weil Hall Renovation ($6.6 million).
The Hume Hall project (total capitalized costs of more
than $21 million) was completed in August 2002. The fol-
lowing table summarizes the University's major capital
commitments with remaining balances over $5 million as
of June 30, 2003:


20 University of Florida


I Summay of Csh Flow (in million






Management's Discussion and Analysis MD&A


Commitment


roject ame ommt e


Orthopedics Surgery and Sports Medicine Institute
UMC-Shands Jacksonville Proton-Beam Facility
Library West Addition and Renovation
Holland Law Library Addition
Law School
2001-02 Maintenance, Repairs, and Renovations
2002-03 Maintenance, Repairs, and Renovations
Lepidoptera Facility
2001-02 Critical Deferred Maintenance
Harn Sculpture Atrium
Constans Theatre Addition
Projects with remaining balances less than $5 million

Total


Additional information about the University's capi-
tal commitments, including a listing of major commit-
ments whose estimated cost is $1 million or more, is
presented in Note 13 to the financial statements.



Debt Administration

As of June 30, 2003, the University had approximately
$133.6 million in outstanding bonds and revenue certifi-
cates, installment purchase agreements and capital leases,
representing a decrease of $5.8 million (4 2 .) from the
prior year. During the year, the State Board of Education
issued $50,545,000 of University System Improvement
Revenue Refunding Bonds, Series 2003A. The Univer-
sity of Florida's portion of the refunding was used to
defense outstanding University System Improvement
Revenue Bonds, Series 1993 (Academic and Student Ser-
vices Facilities Bonds). The following table summarizes
the outstanding long-term debt described above as of
June 30:


Long-Ter Debt (in0miffio


Bonds and Revenue Certificates
Installment Purchase Agreements
Capital Leases

Total Long-Term Debt


2003
$ 129.1
.5
4.0


7007
$ 135.0
.3
4.1


$ 133.6 $ 139.4


Additional information about the University's long-
term liabilities, including the current year refunding, is
presented in Note 9 to the financial statements.




Economic Outlook

The changes in university governance in Florida man-
date that the University of Florida devolve from the State
on July 1, 2004. As a result of the devolution process, the
University is designing and implementing its own per-
sonnel, payroll, accounting, and student services pro-
grams. The University's Enterprise Resource Planning
(ERP) Project is a multi-year effort to implement the
programs and to improve University business pro-
cesses. The estimated cost of the project exceeds $25
million.

The University expects an increase in revenue from
student tuition and fees. Tuition and fee rates for the 2003-
04 fiscal year have increased for resident undergraduates
and graduate students by ,, and 14 ,. respectively; fees
for non-resident undergraduate and graduate students
have increased by 15% and 1,' ,. respectively. Overall
enrollment for Fall 2003 is up from Fall 2002 by 1.4'
with graduate and professional enrollment up by 4.1
and 3.7 ,. respectively, and non-resident enrollment up
by 4.4


A Component Unit of the State of Florida 21


Current


$ 23.0
26.0
1 1.8
9.9
7.7
9.5
8.1
8.4
6.6
5.4
8.1
94.9

$ 219.4


$ 2.4
7.1
.5
.8

2.7
1.5
2.8
1.2
.1
3.0
62.4

$ 84.5


$ 20.6
18.9
1 1.3
9.1
7.7
6.8
6.6
5.6
5.4
5.3
5.1
32.5

$ 134.9


P.- N.. ^ ,


E.. .


Capita ExpenseCommitmets (Remaning Balnce over$5 Millin) (in mffions)












(amounts expressed in thousands)


Direct-Support Health Science Shands Hospital


university Orvanizations C s selemorannum only;


ASSETS
Current Assets:
Cash (Note 2) $ 22,527
Unexpended General Revenue Releases 79,402
Investments (Note 3) 446,795
Accounts Receivable, Net (Note 4) 70,834
Due from Primary Government/Component Units (Note 5) 59,159
Loans and Notes Receivable, Net (Note 4) 5,463
Inventories (Note 6) 3,981
Other Current Assets 652


Total Current Assets


$ 25,984

21,067
38,535
59,574
125
835
4.222


688,813 150,342


Noncurrent Assets:
Restricted Cash (Note 2)
Unexpended General Revenue Releases Restricted
Restricted Investments (Note 3)
Loans and Notes Receivable, Net (Note 4)
Depreciable Capital Assets, Net (Note7)
Non-depreciable Capital Assets (Note 7)
Other Noncurrent Assets


Total Noncurrent Assets


21,460
1,919
117,950
27,734
881,605
104,770
978


1,156,416


TOTAL ASSETS


606

914,069
5,142
69,480
76,321
920

1,066,538


$ 37,091

II
44,55
14,574


1,504

97,731




13,325

18,274
375
19,898

51,872


$ 60,673

116,053
140,709
3,284


81.474

402,193




183,220

525,302
40,264
68,395

817,181


$ 146,275
79,402
583,926
294,629
136,591
5,588
4,816
87.852

1,339,079


22,066
1,919
1,228,564
32,876
1,494,661
221,730
90,191

3,092,007


$ 1,845,229 $ 1,216,880 $ 149,603 $ 1,219,374 $ 4,431,086


LIABILITIES
Current Liabilities:
Accounts Payable $
Accrued Salaries and Wages Payable
Due to Primary Government/Component Units (Note 5)
Deferred Revenue
Deposits Held in Custody
Obligations Under Securities Lending and
Repurchase Agreements (Note 3)
Long-Term Liabilities Current Portion: (Note 9)
Bonds and Revenue Certificates Payable
Installment Purchase Agreements Payable
Capital Leases Payable
Compensated Absences Payable
Liability for Self-Insured Claims
Other Current Liabilities


Total Current Liabilities


29,625
23,813
10,329
22,989
8,443

80,267

5,962
247
69
5,747
9,060


$ 12,823
4,695
60,397
59,944
III



1,365


1,263

7.008


196.551 147,606


Noncurrent Liabilities: (Note 9)
Bonds and Revenue Certificates Payable
Installment Purchase Agreements Payable
Capital Leases Payable
Compensated Absences Payable
Liability for Self-Insured Claims
Other Noncurrent Liabilities


Total Noncurrent Liabilities


123,166
243
3,935
104,095
37,572


77,935


31

35.664


269.011 113,630


TOTAL LIABILITIES


NET ASSETS
Invested in Capital Assets, Net of Related Debt
Restricted:
Nonexpendable:
Endowment
Expendable:
Loans
Capital Projects
Debt Service
Other Restricted Net Assets
Unrestricted


Total Net Assets


858,176


47,846
146,872
3,044
224,016
99,713

1,379,667


52,236


582,959


192,329
128,120

955,644


$ 9,484
14,530
6,409

4



415

4
1,313

9.848

42,007


19,040


10,928

5.956

35,924


77,931


11,748


59,924

71,672


$ 162,329
24
2,710
47
44


$ 214,261
43,062
79,845
82,980
8,602


80,267


177,025


413,735
892
11,182


S12.475

538,284


715,309


117,933


30,325
354,694

504,065


16,549
1,14 1
2,140
8,323
9,060
16.959

563,189


633,876
1,135
15,117
115,054
37,572
154.095

956,849

1,520,038


1,040,093


584,072

47,846
146,872
3,044
446,670
642,451

2,911,048


TOTAL LIABILITIES AND NET ASSETS


$ 1,845,229 $ 1,216,880 $ 149,603 $ 1,219,374 $ 4,431,086


The accompanying Notes are an integral part of the financial statements.


University of Florida


Combined Totals


22






Financial Statements




(amounts expressed in thousands)

Direct-Support Health Science Shands Hospital Combined Totals
University Organizations Center Affiliates and Others (Memorandum only)
REVENUES
Operating Revenues:
Student Tuition and Fees, Net of Scholarship
Allowances of $57,375 $ 148,171 $ $ $ $ 148,171
Federal Grants and Contracts 238,171 238,171
State and Local Grants and Contracts 50,778 50,778
Nongovernmental Grants and Contracts 246,894 246,894
Sales and Services of Auxiliary Enterprises (Note 10) 78,719 78,719
Sales and Services of Educational Departments 57,807 -- 57,807
Sales and Services of Component Units 43,172 -438 43,610
Hospital Revenues 916 290,337 1,207,848 1,499,101
Gifts and Donations Component Units -127,880 19,857 29,434 177,171
Royalties and Licensing Fees Component Units 34,694 -964 35,658
Interest on Loans and Notes Receivable 949 949
Other Operating Revenues 3,383 6,809 17,540 41,418 69,150

Total Operating Revenues 824,872 213.471 327.734 1.280.102 2.646.179

EXPENSES
Operating Expenses:
Personnel Services 912,324 912,324
Supplies and Other Services 271,953 271,953
Utilities and Communication 42,509 42,509
Scholarships and Waivers 51,997 51,997
Depreciation 83,102 4,658 5,041 57,058 149,859
Self-Insured Claims and Expenses 21,465 21,465
Component Unit Operating Expenses 261,195 296.728 1.059.858 1.617.781

Total Operating Expenses (Note 12) 1 1,83i50 265.853 3.1I.769 1. 16.916 3.067.888

Operating Income (Loss) (558.478) (52,382) 25.965 163.186 (421 I709)

NONOPERATING REVENUES (EXPENSES)
State Appropriations 531,843 531,843
Investment Income (Loss) 43,188 17,324 2,675 (4,317) 58,870
Interest on Capital Asset Related Debt (7,026) (2,166) (192) (9,384)
Other Nonoperating Revenues (Expenses) 9,618 1.938 (75.03 1) 20.581 (42.894)

Net Nonoperating Revenues (Expenses) 577,623 17,096 (72,548) 16.264 538.435

Income (Loss) Before Other Revenues, Expenses,
Gains, or Losses 19.145 (35,286) (46,583) 179,450 I 16,726

Capital Appropriations 52,408 52,408
Capital Grants, Contracts and Donations 29,620 -1,451 31,071
Addition to Permanent Endowments 31,416 1,013 32,429
Transfers from/(to) Component Units 123 44,026 (45.627) (1,478)

Total Other Revenues, Expenses, Gains or Losses 82,028 31,539 44,026 (43,163) 114,430

Increase (Decrease) in Net Assets 101,173 (3,747) (2,557) 136,287 231,156

Net Assets, Beginning of Year 1,278,494 1,029,362 80,819 373,930 2,762,605

Adjustment to Beginning Net Assets (Note 18) (69.971) (6.590) (6.152) (82.713)

Adjusted Net Assets, Beginning of Year 1,278,494 959.391 74.229 367.778 2.679.892

Net Assets, End of Year $ 1,379,667 $ 955,644 $ 71,672 $ 504,065 $ 2,911,048

The accompanying Notes are an integral part of the financial statements.


A Component Unit of the State of Florida 23












(amounts expressed in thousands)

University


CASH FLOWS FROM OPERATING ACTIVITIES
Student Tuition and Fees
Grants and Contracts
Sales and Services of Auxiliary Enterprises
Sales and Services of Educational Departments
Repayment of Loans Receivable
Interest on Loans Receivable
Other Operating Receipts
Payments to Employees
Payments to Suppliers
Payments for Scholarships and Fellowships
Loans Issued to Students
Payments on Self-Insurance Claims
Other Operating Expenses

Net Cash Provided (Used) by Operating Activities


$ 147,263
544,979
79,199
57,864
7,256
1,006
2,406
(902,423)
(245,182)
(51,997)
(7,404)
(13,315)
(61,294)

(441,642)


531,843
128,685
(128,753)
159
(53)
1,239
(1,142)

531,978


37,558
40,419
25,643
12,060
20
(152,958)
(6,337)
(6,949)

(50,544)


857,591
(910,087)
25.304

(27,192)

12,600

1 12.708

$ 125,308



$ (558,478)


83,102

9,011
(112)
(237)
7,720
4,866
8,150
(676)
(22)
5.034

$ (441,642)


CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
State Appropriations
Direct Loan Program Receipts
Direct Loan Program Disbursements
Operating Subsidies and Transfers
Funds Held for Others
Other Nonoperating Receipts
Other Nonoperating Expenses

Net Cash Provided (Used) by Noncapital Financing Activities

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Capital Appropriations
Capital Subsidies and Transfers
Capital Grants and Gifts Received
Proceeds from Sales of Capital Assets
Other Receipts for Capital Projects
Purchases of Capital Assets
Principal Paid on Capital Debt and Leases
Interest Paid on Capital Debt and Leases

Net Cash Provided (Used) by Capital and Related Financing Activities

CASH FLOWS FROM INVESTING ACTIVITIES
Sale of Investments
Purchase of Investments
Interest on Investments

Net Cash Provided (Used) by Investing Activities

Net Increase (Decrease) in Cash and Cash Equivalents

Cash and Cash Equivalents, Beginning of Year

Cash and Cash Equivalents, End of Year

RECONCILIATION OF NET OPERATING REVENUES (EXPENSES)
TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income (Loss)
Adjustments to Reconcile Net Operating Income (Loss)
to Net Cash Provided (Used) by Operating Activities
Depreciation Expense
Changes in Assets and Liabilities
Receivables, Net
Inventories
Other Assets
Accounts Payable
Accrued Salaries and Wages Payable
Liability for Self-Insured Claims
Deferred Revenue
Deposits Held for Others
Compensated Absences

NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES

NONCASH CAPITAL FINANCING ACTIVITY
See Note 9A for details of a refunding of bonded debt during the fiscal year.

The accompanying Notes are an integral part of the financial statements.


24 University of Florida





Notes to the Financial Statements Notes


Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2003


1. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

The significant accounting policies followed by the Uni-
versity of Florida are described below to enhance the use-
fulness of the financial statements.

A. Reporting Entity

The University of Florida is a separate public instru-
mentality that is part of a state university system of
public universities. A constitutional amendment ef-
fective January 7, 2003, created a board of governors
to be responsible for the management of the state uni-
versity system. A separate board of trustees shall ad-
minister each public university.

The University of Florida Board of Trustees (Trustees)
consists of thirteen members. The Governor appoints
six citizen members and the Board of Governors
appoints five citizen members. These members are
confirmed by the Florida Senate and serve staggered
terms of five years. The chair of the faculty senate and
the president of the student body of the University


also are members. The Board of Governors establishes
the powers and duties of the Trustees. The Trustees
are responsible for setting policies for the University,
which provides governance in accordance with
Florida law, State Board of Education rules, and the
Board of Governors. The Trustees select the
University President and the State Board of Education
must ratify the candidate selected. The University
President serves as the executive officer and the
corporate secretary of the Trustees and is responsible
for administering the policies prescribed by the
Trustees for the University.
Criteria for defining the reporting entity are identi-
fied and described in the Governmental Accounting
Standards Board's (GASB) Codification of Govern-
mental Accounting and Financial Reporting Stan-
dards, Sections 2100 and 2600. Application of these
criteria determines potential component units for
which the primary government is financially account-
able and other organizations for which the nature and
significance of their relationship with the primary
government are such that exclusion would cause the


A Component Unit of the State of Florida 25








primary government's financial statements to be mis-
leading or incomplete. Based on the application of
these criteria, the University of Florida is a compo-
nent unit of the State of Florida and its financial ac-
tivity is reported in the State's Comprehensive Annual
Financial Report by discrete presentation.

B. Blended Component Unit

Based on the application of the criteria for determin-
ing component units, the University of Florida
Healthcare Education Insurance Company (UFHEIC)
is included within the University Board of Trustees'
reporting entity as a blended component unit. The
UFHEIC was created on September 1, 1994, as a self-
insurance mechanism created pursuant to Section
1004.24, Florida Statutes. Although legally separate
from the University of Florida (the company's single
share of stock is owned by the Florida Board of Gov-
ernors), the company's sole purpose is to assist in pro-
viding liability protection for the University of Florida
Board of Trustees and its affiliated individuals and
entities, and is therefore reported as if it is part of the
University.

C. Discretely Presented Component Units

Based on the application of the criteria for determin-
ing component units, the following organizations are
included within the University Board of Trustees' re-
porting entity as discretely presented component
units. The University further categorizes its identi-
fied component units as Direct-Support Organiza-
tions, Health Science Center Affiliates and Shands
Teaching Hospital and Others. Additional informa-
tion on the University's component units, including
copies of audit reports, is available by contacting the
University Controller's Office.

D. Direct-Support Organizations

The University's direct-support organizations, as pro-
vided for in Section 1004.28, Florida Statutes, and
Florida Administrative Code Rule 6C-9.011, are con-
sidered component units of the University of Florida
and therefore the latest audited financial statements
of these organizations are included in the financial
statements of the University by discrete presentation.
These are separate, not-for-profit corporations orga-
nized and operated exclusively to assist the Univer-
sity to achieve excellence by providing supplemental


resources from private gifts and bequests, and valu-
able education support services. The Statute autho-
rizes these organizations to receive, hold, invest and
administer property and to make expenditures to or
for the benefit of the University. An annual audit of
each organization's financial statements is conducted
by independent certified public accountants. The
annual report is submitted to the Auditor General and
the University Board of Trustees. These not-for-profit
corporations and their purposes are explained as
follows:

University of Florida Foundation, Inc. solicits, collects,
manages, and directs contributions to the various aca-
demic departments and programs of the University
and assists the University in fund raising, public re-
lations, and maintenance of alumni records.

University of Florida Research Foundation, Inc. promotes,
encourages, and assists research activities of the Uni-
versity through income derived from or related to the
development and commercialization of intellectual
properties, which include inventions, discoveries,
processes, and work products.

University Athletic Association, Inc. conducts various
inter-collegiate athletic programs for and on behalf
of the University.

Gator Boosters, Inc. supports athletic activities at the
University.

University of Florida Law Center Association, Inc. supports
the College of Law.

Florida Foundation Seed Producers, Inc. supplies Florida
farmers and producers with crop seed and nursery
stock. This organization stocks foundation seed of the
best-known varieties acceptable to Florida climate and
soils in adequate quantities and at reasonable prices.

Florida 4-H Club Foundation, Inc. promotes the educa-
tional objectives of the Florida Cooperative Extension
Service.

Florida Association of Basic Medical Scientists, Inc. pro-
motes research and education in the basic medical
sciences.

Southwest Florida Research and Education Foundation, Inc.
provides research and educational support to the
University of Florida Southwest Florida Research and
Education Center.


26 University of Florida





Notes to the Financial Statements


Citrus Research and Education Foundation, Inc. expedites
citrus production, propagates new plant materials,
collects and analyzes environmental impact research
data, and provides research and education support
to the University of Florida Citrus Research and
Education Center at Lake Alfred.

Florida Leadership and Education Foundation, Inc. was
formed to further agriculture and natural resource
education and related activities, promote agriculture
and natural resources leadership, and make contri-
butions to and confer benefits upon the University.

Treasure Coast Agricultural Research Foundation, Inc. sup-
ports, encourages, and fosters research, education, and
extension at the Institute of Food and Agricultural
Sciences of the University on issues related to the cit-
rus industry within the Indian River region.

University of Florida Alumni Association, Inc. supports
activities of the alumni of the University of Florida.

E. Health Science Center Affiliates

The financial operations and financial position of sev-
eral corporations closely affiliated with the Univer-
sity of Florida J. Hillis Miller Health Science Center
(JHMHC) are considered to be component units of
the University of Florida and therefore the latest au-
dited statements of these organizations are included
in the financial statements of the University by dis-
crete presentation. The first seven corporations listed
are Faculty Practice Plans, as provided for in the
Florida Administrative Code Rule 6C- 9.017. The Fac-
ulty Practice Plans provide educationally-oriented
clinical practice settings and opportunities through
which faculty members provide health, medical, and
dental care to patients as an integral part of their aca-
demic activities and their employment as faculty.
Because these faculty practice activities generate in-
come, the colleges are authorized to regulate fees gen-
erated from faculty practice and maintain Faculty
Practice Plans for the orderly collection and distribu-
tion of fees. These organizations provide significant
support for the clinical instruction function of the
JHMHC. University of Florida Health Services, Inc.
and University of Florida Jacksonville Healthcare, Inc.,
Health Services Support Organizations, as provided
for in the Florida Administrative Code Rule 6C-9.020,
engage in strategic alliances and partnerships with
non-academic entities, effecting managed care con-


tracting and provider network development for the
JHMHC. Faculty Clinic, Inc. was originally organized
to operate a multi-specialty clinic. However, effective
January 1, 1995, Faculty Clinic, Inc. was restructured
to operate as a facilities management company. Jack-
sonville Health Education Programs, Inc. operates the
Borland Medical Library in Jacksonville, Florida.

a Florida Clinical Practice Association, Inc.

o UF Jacksonville Physicians, Inc.

a Faculty Associates, Inc.

a Florida Health Professions Association, Inc.

a UF College of Nursing Faculty Practice
Association, Inc.

o UF College of Pharmacy Faculty
Practice Association, Inc.

a Florida Veterinary Medicine Faculty
Association, Inc.

a UF Health Services, Inc.

a UF Jacksonville Healthcare, Inc.

o Faculty Clinic, Inc. d.b.a. UF Faculty
Clinic/Jacksonville

o Jacksonville Health Education Programs, Inc.

F Shands Teaching Hospital and Others

Shands Teaching Hospital and Clinics, Inc. was in-
corporated October 15, 1979, as a not-for-profit cor-
poration. Shands, a major tertiary care teaching
institution, is a leading referral center in the State of
Florida and the southeast United States and facilitates
medical education programs at the University.

Shands entered into a contractual agreement, as of July
1, 1980, with the State Board of Education of the State
of Florida, as subsequently restated and amended,
which provides for the use of hospital facilities at the
University of Florida Health Science Center through
December 31, 2030, with renewal provisions. The con-
tractual agreement also provides for the transfer to
Shands of all other assets and liabilities arising from
the operation of the hospital facilities prior to July 1,
1980. At termination of the contractual agreement,
the net assets of Shands revert to the State Board of
Education. Legal title to all buildings and improve-
ments transferred to Shands remains with the State
of Florida during the term of the contractual agree-


A Component Unit of the State of Florida 27

























ment. The contractual agreement provides for a 12-
month grace period for any event of default, other
than the bankruptcy of Shands. In addition, the con-
tractual agreement limits the right of the State Board
of Education to terminate the contractual agreement
solely to the circumstance in which Shands declares
bankruptcy and, in such event, requires net rev-
enues derived from the operation of the hospital
facilities to continue to be applied to the payment
of Shands' debts.

Under the terms of the contractual agreement, Shands
is obligated to manage, operate, maintain, and insure
the hospital facilities in support of the programs of
the Health Science Center at the University of Florida
and further agrees to contract with the State Board of
Education for the provision of these programs. By
operation of law, the University of Florida Board of
Trustees has become the successor-in-interest to the
State Board of Education.

Baby Gator Child Care Center, Inc. was incorporated
October 19, 1970, under Florida Statutes, Section
1011.48, to establish and operate an educational re-
search center for child development for children of
University of Florida students, faculty, and staff. The
Center is funded primarily through fees paid by par-
ents and an annual allocation of funds from the Capi-
tal Improvement Trust Fund established by the State
Board of Education. In addition, the Center receives
other governmental assistance. The Center uses a fa-
cility owned by the University without charge. The
University also provides other services and support
for the Center, some also without charge. The Center's
policy is to not record contributed facilities, services,
and other support in its financial statements.


University Village Apartments, Inc. (the Corpora-
tion) was established in 1969, for the purpose of pro-
viding housing for low and moderate-income families,
especially those affiliated with the University of
Florida. Capital was contributed at inception by the
University of Florida Foundation, Inc., but no capital
stock was issued because the Corporation does not
operate for the benefit of any special interest.

The Corporation provides housing under Section
221(d)(3) of the National Housing Act. The facility con-
sists of twenty-eight two-story buildings regulated by
the U. S. Department of Housing and Urban Devel-
opment (HUD) as to rent charges and operating meth-
ods. The Corporation's major program is its Section
221 insured loan, which is in the repayment phase.
Legal title to the property is held by the Corporation.

G. Basis of Presentation

The University's accounting policies conform to gen-
erally accepted accounting principles applicable to
public colleges and universities as prescribed by the
Governmental Accounting Standards Board (GASB).
The National Association of College and University
Business Officers (NACUBO) also provides the Uni-
versity with recommendations prescribed in accor-
dance with generally accepted accounting principles
promulgated by GASB and the Financial Accounting
Standards Board (FASB).

In November 1999, the GASB issued Statement No.
35, Basic Financial Statements and Management's
Discussion and Analysis for Public Colleges and Uni-
versities. This Statement includes public colleges and
universities within the financial reporting guidelines
of GASB Statement No. 34, Basic Financial State-
ments and Management's Discussion and Analysis
for State and Local Governments. GASB Statement
No. 35 allows public colleges and universities the
option of reporting as a special-purpose government
engaged in only business-type activities, engaged in
only governmental activities, or engaged in both gov-
ernmental and business-type activities. The universi-
ties of the state university system, including the
University of Florida, elected to report as entities en-
gaged in only business-type activities. This election
requires the adoption of the accrual basis of account-
ing and entity-wide reporting including the follow-
ing components:


28 University of Florida





Notes to the Financial Statements Notes


Management's Discussion and Analysis

Basic Financial Statements:

1) Statement of Net Assets

2) Statement of Revenues, Expenses, and
Changes in Net Assets

3) Statement of Cash Flows

Notes to the Financial Statements

The University of Florida is a component unit of the
State of Florida for financial reporting purposes. The
financial balances and activities included in these fi-
nancial statements are, therefore, also included in the
State's Comprehensive Annual Financial Report.

H. Basis of Accounting

The basis of accounting refers to when revenues, ex-
penses, and related assets and liabilities are recog-
nized in the accounts and reported in the financial
statements. Specifically, it relates to the timing of the
measurements made, regardless of the measurement
focus applied. The University's financial statements
are presented using the economic resources measure-
ment focus and the accrual basis of accounting. Rev-
enues, expenses, gains, losses, assets, and liabilities
resulting from exchange and exchange-like transac-
tions are recognized when the exchange takes place.
Revenues, expenses, gains, losses, assets, and liabili-
ties resulting from nonexchange activities are gener-
ally recognized when all applicable eligibility
requirements, including time requirements, are met.
Auxiliary service departments account for interde-
partmental transactions as reductions of expenses and
not revenues of those departments.
The University's principal operating activities con-
sist of instruction, research and public service. Oper-
ating revenues and expenses generally include all
fiscal transactions directly related to these activities
plus administration, operation and maintenance of
plant assets, and depreciation on capital assets. In-
cluded in nonoperating revenues are State appropria-
tions, investment income and revenues for capital
construction projects. Interest on asset-related debts
is a non-operating expense.
The University follows FASB Statements and Inter-
pretations issued on or before November 30, 1989, Ac-
counting Principles Board Opinions, and Accounting
Research Bulletins, unless those pronouncements con-
flict with GASB pronouncements.


The Statement of Net Assets is presented in a classi-
fied format to distinguish between current and non-
current assets and liabilities. When both restricted
and unrestricted resources are available to fund cer-
tain programs, grants, etc., it is the University's policy
to first apply the restricted resources to such programs
followed by the use of the unrestricted resources.

The Statement of Revenues, Expenses, and Changes
in Net Assets is presented by major sources and is
reported net of tuition scholarship allowances. Tuition
scholarship allowances are the differences between
the stated charge for goods and services provided by
the University and the amount that is actually paid
by a student or a third party making payment on be-
half of the student. The University applied "The Al-
ternate Method" as prescribed in NACUBO Advisory
Report 2000-05 to determine the tuition scholarship
allowances reported in the Statement of Revenues,
Expenses, and Changes in Net Assets. Under this
method, the University computes these amounts
by allocating the cash payments to students, ex-
cluding payments for services, on a ratio of total
aid to the aid not considered to be third-party aid.

The Statement of Cash Flows is presented using the
direct method and is in compliance with GASB State-
ment No. 9, Reporting Cash Flow for Proprietary and
Non-expendable Trust Funds. Cash and cash equiva-
lents as presented in the Statement of Cash Flows
includes cash and unexpended general revenue re-
leases.

1. Capital Assets

University capital assets consist of land, buildings,
infrastructure and other improvements, furniture and
equipment, property under capital lease and lease
improvements, library resources, works of art and his-
torical treasures, construction in progress, and other
capital assets. These assets are capitalized and re-
corded at cost at the date of acquisition or at appraised
value at the date received in the case of gifts or pur-
chases from the State Division of Surplus Property.
Additions, improvements and other outlays that sig-
nificantly extend the useful life of an asset are capi-
talized. Other costs incurred for repairs and
maintenance are expensed as incurred. The Univer-
sity has a capitalization threshold of $1,000 for all
movable equipment items and a $100,000 threshold


A Component Unit of the State of Florida 29










or 25% of the cost of the building for building reno-
vations and improvements. Depredation is computed
on the straight-line basis over the estimated useful
life of the related assets.

The following ranges of estimated useful lives were
used to determine depreciation expense:

a Buildings / Improvements 20 to 50 years, depend-
ing on construction

a Infrastructure and Other Improvements 12 to 50
years

a Leasehold Improvements 5 to 20 years or the term
of the lease, whichever is less

a Furniture and Equipment

1) Equipment (non-office) -10 to 20 years

2) Computer Equipment 3 to 7 years

3) Moveable Equipment 3 to 20 years

a Library Resources 10 years


J. Other Significant Accounting Policies

Other significant accounting policies are set forth
in the financial statements and subsequent notes
hereafter.



2. CASH

The amount reported as cash consists of cash on hand,
cash in demand accounts and cash held in the State
of Florida Treasury. Cash set aside to make debt ser-
vice payments, maintain sinking or reserve funds, and
to purchase or construct capital assets is classified as
restricted. Cash in demand accounts is held in banks
qualified in accordance with the provisions of Chap-
ter 280, Florida Statutes, as a public depository. De-
posits are fully insured by Federal depository
insurance or collateralized with securities held in
Florida's multiple financial institution collateral pool
required by Chapter 280, Florida Statutes. As of June
30, 2003, deposits in foreign banks totaled $76,859.


rr~nr I rr~nr '7 ~~n Mlr.-Ut-V~I..


United States Government and
Federally-Guaranteed Obligations
Federal Agency Obligations
Bonds and Notes
Stocks
Certificates of Deposits
Total Classified Investments

External Investments Pools:
Florida State Treasury
Florida State Board of Administration
Money Market and Mutual Funds

Total University Investments


$ $ 22,033,446


17,676
750,000
$ 767,676


6,274,436
13,351,677
13,304,170

$ 54.963.729


$ $ 22,033,446

6,274,436
13,351,677
13,321,846
S 750,000
$ 55,731,405


505,454,813
766,794
2,791,330

$ 564,744,342


Tablse* 2M TSINSTMN.6TS ^ ^ ^ ^


. vues on uravesuraerse Category I Cat e


United States Government and
Federally-Guaranteed Obligations
Federal Agency Obligations
Commercial Paper
Bonds and Notes
Stocks
Certificates of Deposit
Total Classified Investments


$ 113,539,917 $



71,524,206
235,122,530
215,104
$420,401,757 $


$ 9,437,657 $ 122,977,574


994,000
307,000

833,572
2,134,572


3,481,990
1,748,499
3,887,346
5,884,266

$ 24,439,758


Investment Agreements
Real Estate Agreements
Money Market and Mutual Funds

Total Component Units Investments


3,481,990
2,742,499
75,718,552
241,006,796
1,048,676
446,976,087

126,270,55 1
9,822,179
664.675.295

$1,247,744,112


30 University of Florida


ypes o nves mens ....->-so, ....->-...7 .. ....->-...ye ......-.. w... --


R Table 1. UNIVERSITY INVESTMENTS


T f I t t


CL____~_ I rL____~_~


CL____~_~ U___I__L \1_1_






Notes to the Financial Statements Notes


Capital Assets, Nondepreciable:
Land
Construction in Progress
Works of Art and Historical Treasures
Total Capital Assets, Nondepreciable

Capital Assets, Depreciable:
Buildings
Infrastructure and Other Improvements
Furniture and Equipment
Library Resources
Property Under Capital Lease and
Lease Improvements
Works of Art and Historical Treasures
Other Capital Assets
Total Capital Assets, Depreciable

Less Accumulated Depreciation for:
Buildings
Infrastructure and Other Improvements
Furniture and Equipment
Library Resources
Property Under Capital Lease and
Lease Improvements
Works of Art and Historical Treasures
Other Capital Assets
Total Accumulated Depreciation

Total Capital Assets, Depreciable, Net


$ 10,145,884
90,245,461
413,062
100,804,407


982,743,890
58,146,749
459,593,218
198,431,392
9,815,002

300,093
6,034,468
1,715,064,812


470,716,752
31,819,868
252,144,460
138,223,160
462,000

104,590
3,336,949
896,807,779


82,290,471

82,290,471


76,810,533
787,848
62,523,923
13,314,327


24,592
1,981,238
155,442,461


32,564,698
1,619,785
35,160,510
11,283,009
75,500

23,049
929,152
81,655,703


$ 26,614
78,298,642

78,325,256


2,917,930
12,135
34,547,160
500,874


6,050
1,463,484
39,447,633


1,922,198
6,237
25,865,637



6,050
1,208,824
29,008,946


$ 10,119,270
94,237,290
413.062
104,769,622


1,056,636,493
58,922,462
487,569,981
211,244,845
9,815,002

318,635
6,552,222
1,831,059,640


501,359,252
33,433,416
261,439,333
149,506,169
537,500

121,589
3,057,277
949,454,536


818.257.033 73,786,758 10,438,687 881,605,104


Total Capital Assets, Net


$ 919,061,440 $ 156,077,229


$ 88,763,943 $ 986,374,726


3. INVESTMENTS

The University participates in investment pools
through the State Treasury and the State Board of Ad-
ministration in accordance with the provisions of Sec-
tions 17.61 and 215.49, Florida Statutes. These
investment pools operate under investment guide-
lines established by Section 215.47, Florida Statutes.
The University's investments in these pools are re-
ported at market value.

Additionally as authorized by Section 1004.24(2),
Florida Statutes, and specifically authorized by the
former Board of Regents in 1995, the University has
invested assets of the Health Science Center Self-In-
surance Program outside the State Treasury. Local in-
vestments consist of instruments listed in Section
215.47, Florida Statutes, and are reported at market
value. The University has also received donations of
marketable securities. These securities are reported
at market value.

Investments set aside to make debt service payments,
maintain sinking or reserve funds, and to purchase
or construct capital assets are classified as restricted.


Generally accepted accounting principles require the
classification of credit risk of investments into the fol-
lowing three categories:

Risk Category 1 Insured or registered, or securities
held by the entity or its agent in the entity's name.

Risk Category 2 Uninsured and unregistered, with se-
curities held by the counterpart's trust department
or agent in the entity's name.

Risk Category 3 Uninsured and unregistered, with se-
curities held by the counterpart or by its trust de-
partment or agent but not in the entity's name.

University investments in the investment pools man-
aged by the State Treasury and the State Board of Ad-
ministration cannot be categorized because the
University's investments are not evidenced by spe-
cific, identifiable investment securities.

Under the State Treasury's authority to purchase and
sell securities, it has entered into securities lending
and reverse repurchase agreements. A securities lend-
ing agreement is a loan of securities for collateral with
a simultaneous agreement to return the collateral for


A Component Unit of the State of Florida 31


Beginning


Ending


apmrrinr nnnaianrp annerunnn auperionng Ralanrp


I Table CAPITL ASSET









the same securities in the future. A reverse repurchase
agreement is a sale of securities with a simultaneous
agreement to repurchase them in the future at the
same price plus a contract rate of interest. As required
by generally accepted accounting principles, the Uni-
versity has reported investments and an offsetting
current liability totaling $80,267,113 in order to ac-
count for these transactions. Required note disclosures
for these agreements are reported in the State's Com-
prehensive Annual Financial Report.

Investments of the University at June 30, 2003 are
shown in Table 1.

Investments held by the University's component units
at June 30 are reported at market value based on
quoted market prices. These investments are shown
in Table 2.


4. RECEIVABLES


A. Accounts Receivable

Accounts receivable reported in the Statement of Net
Assets represent amounts for student fees and vari-
ous student services provided by the University, vari-
ous auxiliary services provided to students and
third parties, grant reimbursements from third par-
ties and interest accrued on investments.


B. Loans and Notes Receivable

Loans and notes receivable represent all amounts
owed on promissory notes from debtors, including
student loans made under the Federal Perkins Loan
Program and other loan programs.


C. Allowances for Uncollectible Receivables


The University provides allowances for uncollectible
accounts and loans and notes receivable based upon
management's best estimate of uncollectible accounts
and notes at fiscal year end, considering type, age,
collection history of receivables, and any other fac-
tors as considered appropriate. Accounts receivable
are reported net of an allowance of $7,924,620, which
is lT' of total related accounts receivable. Loans and
notes receivable are reported net of an allowance for
uncollectible loans and notes of $3,609,749, which is
1' of total related loans and notes receivable.


5. DUE FROM AND TO PRIMARY GOVERNMENT/
COMPONENT UNITS

The University of Florida is a component unit of the
State of Florida (See Note 1). The University's finan-
cial statements are reported for the fiscal year ended
June 30, 2003. The University's component units fi-
nancial statements are reported for their most recent
fiscal year where an audit report is available. In some
cases, the fiscal year end is not June 30, 2003. Accord-
ingly, amounts reported by the component units and
the University as Due From and To Primary Govern-
ment/ Component Units on the Statement of Net As-
sets may not agree.


6. INVENTORIES

Inventories have been categorized into the following
two types:

A. Departmental Inventories Those inventories
maintained by departments and not available for re-
sale. Departmental inventories are comprised of
such items as classroom and laboratory supplies,


I Tabl 4. LNG-TER LIABLITIE


Beginning
l I,,


Ending
BlI,,


Current
DP i


Bonds, Notes, and Leases:
Bonds and Revenue Certificates
Installment Purchase Agreements
Capital Leases

Total Bonds, Notes, and Leases

Other Liabilities:
Compensated Absences
Liability for Self-Insured Claims

Total Long-Term Liabilities


$ 134,967,455
358,254
4,068,461


139,394,170


104,808,194
38.482.628


$ 12,893,849
301,524


13,195,373


5,034,007
18.666.592


$ 18,732,821
170,139
64.750


18,967,710


10.516.413


$ 282,684,992 $ 36,895,972 $ 29,484,123


32 University of Florida


$ 129,128,483
489,639
4,003,711


133,621,833


109,842,201
46,632,807

$ 290,096,841


$ 5,962,327
246,786
68,927


6,278,040


5,746,705
9,060,428

$ 21,085,173


., ..ns....... a ance me.....,,, e uc ons a n


D A t:






Notes to the Financial Statements


teaching materials, and office supply items, which
are consumed in the teaching/work process. These
inventories are normally expensed when pur-
chased and therefore are not reported on the State-
ment of Net Assets.

B. Merchandise Inventories Those inventories
maintained which are available for resale to individu-
als and / or other University departments and are not
expensed at the time of purchase. These inventories
are reported on the Statement of Net Assets and are
valued at cost using either the moving average
method or the first-in, first-out method.



7. CAPITAL ASSETS

The activity of the University's major classes of capi-
tal assets for the 2002-03 fiscal year is presented in
Table 3. Depreciation expense reported on the State-
ment of Revenues, Expenses, and Changes in Net
Assets include net losses on disposition of capital
assets and other minor adjustments totaling
$1,446,314.


8. MUSEUM AND ART COLLECTIONS

The Florida Museum of Natural History, which is part
of the University, maintains a depository of biologi-
cal, geological, archaeological, and ethnographic
materials. The Museum's collections contain approxi-
mately 20,000,000 individual items, more than half of
which are catalogued, either individually or in lots.
While many of the collections are undoubtedly
quite valuable and irreplaceable, the University has
not placed a dollar valuation on these items and,
accordingly, the financial statements do not include
these assets.



9. LONG-TERM LIABILITIES

Long-term liabilities of the University include bonds
and revenue certificates, installment purchase agree-
ments, capital leases, compensated absences and self-
insured claims.


I al BOD N REEU CETFCTE AAL


Amount of
Original
sIue


Total
DR+ird A


Bonds
Interest
DRte


Amount Outstanding
P alI Intes+


Maturity
Dat%


Student Housing Bonds:
1959E
1959F
1974
1984
1993
1998
2000
Subtotal

Parking Garage Bonds:
1993
1998
Subtotal


$ 3,730,000
1,500,000
2,880,000
3,500,000
13,000,000
26,155,000
30,695,000
81,460,000


19,545,000
I0,000,000
29,545,000


Academic and Student Services Facilities Bonds:
1991 5,686,923
1993 22,548,089
1997 11,349,317
1997A 4,723,765
1998 13,783,839
2001 4,259,373
2003A 12,359,757
Subtotal 74,711,063


Less: Unamortized Bond Discounts

Add: Unamortized Bond Premium

Less: Unamortized Refunding Loss


Total Bonds


$ 185,716,063 $ 55,692,970 $ 129,128,483 $ 78,006,126


A Component Unit of the State of Florida 33


$ 3,437,000
1,070,000
2,665,000
1,775,000
2,025,000
2,425,000
455,000
13,852,000


8,455,000
1,110,000
9,565,000



5,686,923
22,548,089
1,805,467
212,484
1,701,809
146,359
174,839
32,275,970


$ 293,000
430,000
215,000
1,725,000
10,975,000
23,730,000
30,240,000
67,608,000


11,090,000
8,890,000
19,980,000





9,543,850
4,511,281
12,082,030
4,113,014
12,184,918
42,435,093


$ 12,180
59,700
15,050
324,900
7,436,312
14,515,048
28,919,924
51,283,114


2,604,183
3,596,133
6,200,316





5,942,938
1,884,246
6,713,212
2,655,301
3,326,999
20,522,696


3.00%
3.00%
7.00%
3.00%
5.00 to 5.50%
4.00 to 5.00%
5.00 to 7.00%



4.40 to 5.00%
3.65 to 4.75%






5.00 to 7.00%
4.20 to 5.00%
4.00 to 5.00%
4.00 to 5.00%
3.00 to 5.00%


(1,415,350)

1,169,320


(648.580)


a BB B C ;B BBB B "BL "" """'"" "''"


Bond Series









Timb 6 .I BONIIE I "B IOU.i N I NGI


Fiscal Year
Ending June 30

2004
2005
2006
2007
2008
2009-2013
2014-2018
2019-2023
2024-2028
2029-2030
Subtotal
Less: Unamortized
Bond Discounts
Add: Unamortized
Bond Premium
Less: Unamortized
Refunding Loss

Total


Princinal


$ 5,962,327
5,904,347
6,043,699
6,306,707
6,363,557
31,814,490
27,280,583
23,232,071
13,055,312
4,060,000
130,023,093
(1,415,350)


1,169,320

(648,580)


Interest


$ 6,470,100
6,193,570
5,913,722
5,623,407
5,316,757
22,248,434
14,692,965
8,036,257
3,188,564
322,350
78,006,126


$ 12,4
12,0
11,9
11,9
11,6


bonds are not included in the University of Florida's
Statement of Net Assets. As a result of the refunding,
Total the University reduced its debt service requirement

32,427 by $1,468,647 over the next 10 years and obtained an
97,917 economic gain of $1,262,328. At June 30, 2003, the

30514 outstanding balance of the defeated bonds was
80,314 $13,032,213.


54,062,924
41,973,548
31,268,328
16,243,876
4,382,350
208,029,219
(1,415,350)


A summary of pertinent information related to the
University's bond indebtedness appears in Table 5.
Principal and interest requirements on the above
bonded debt outstanding as of June 30, 2003 appear
in Table 6.


1,169,320

(648,580) B. Installment Purchase Agreements


The University has entered into several installment
$ 129,128,483 $ 78,006,126 $ 207,134,609 purchase agreements for the purchase of equipment

reported at $1,346,248. In Table 7 is a schedule of fu-
ture minimum payments remaining under the agree-
mont-c at- ficral ,oar onrl Tho ctaorl intoroct rat-o


A summary of the University's long-term liability ac-
tivity for the fiscal year ended June 30, 2003, appears
in Table 4.


A. Bonds and Revenue Certificates Payable

Bonds and revenue certificates were issued to con-
struct University facilities, including parking garages,
student housing, and academic and student service
facilities. Bonds and revenue certificates outstanding,
which include both term and serial bonds, are secured
by a pledge of housing rental revenues, traffic and
parking fees and various student fee assessments. The
building fee and capital improvement fee, collected
as a part of tuition and remitted to the State Board of
Education, is used to retire the revenue certificates
for the academic and student service facilities.

Bond Defeasance The University has extinguished
long-term debt obligations by the issuance of new
long-term debt instruments as follows:

On April 10, 2003, the State Board of Education is-
sued $50,545,000 of University System Improvement
Revenue Refunding Bonds, Series 2003A. The Uni-
versity of Florida's portion of the refunding bonds
($12,359,757) was used to defense $13,032,213 of out-
standing University System Improvement Revenue
Bonds, Series 1993. Securities were placed in an irre-
vocable trust with an escrow agent to provide for all
future debt service payments on the defeated bonds.
The trust assets and the liability for the defeated


ranged from 1 ,2' to 5.91


Fiscal Year
Fndino nlim 3an


2004
2005
2006
2007
2008
Total Minimum Payments
Less: Interest

Total Present Value


Amninnt


$ 258,242
173,229
29,869
27,104
20,313
508,757
19.118

$ 489,639


C. Obligations Under Capital Lease

On June 8, 1994, the former Board of Regents, on be-
half of the University of Florida, entered into a lease
agreement with the University of Florida Foundation,
Inc. (the Foundation), a direct-support organization
(component unit) of the University. Under the terms
of the agreement, the University agreed to lease from
the Foundation a 607-space parking garage (the ga-
rage) located near the Health Science Center Admin-
istrative Offices for a period of thirty years beginning
July 1, 1994. Lease payments of $100,000 annually are
due each July 1. The garage was simultaneously ac-
quired by the Foundation from Shands Teaching Hos-
pital and Clinics, Inc. (Shands), also a component unit,


34 University of Florida


Tale7.INSTLJI JLMETJURHAJ!IAJGREEMElNTS






Notes to the Financial Statements Notes


Tl 8 IA S UDER A


Shands 607- Space Parking Garage
Shands 800- Space Parking Garage

Total


Fiscal Year
Fndino Iuna nlf


2004
2005
2006
2007
2008
2009-2013
2014-2018
2019-2023
2024-2028
2029-2030


Total


terest. For reporting purposes, the lease is con-

Outstanding sidered a capital lease under FASB Statement
Interest Original Balance At No. 13, Accounting for Leases. The initial ob-
Rate Balance June 30, 2003
ligation was discounted at an imputed inter-
6.45% $ 1,382,470 $ 1,133,152 est rate of 6.45, and was recorded at
6.45% 2,981,939 2,870,559
$2,981,939. The asset, "Leased Property Under
$ 4,364,409 $ 4,003,71 Capital Lease," was recorded at cost to Shands

of $6,815,002. A summary of pertinent infor-
mation related to the two capital leases appears
11&N1TER/E1ST] in Table 8.


Prinrinal


$ 68,927
73,373
78,106
83,144
88,507
535,892
732,496
1,001,229
928,163
413,874


ni terest


$ 258,240
253,794
249,061
244,023
238,660
1,099,942
903,338
634,605
307,671
40,460


$ 3


Principal and interest requirements on the
Total
above outstanding balances are presented in
27,167 Table 9.


327,167
327,167
327,167
327,167
1,635,834
1,635,834
1,635,834
1,235,834
454,334


$ 4,003,711 $ 4,229,794 $ 8,233,505


D. Compensated Absences Liability

Employees earn the right to be compensated
during absences for annual leave (vacation)
and sick leave earned pursuant to Florida Ad-
ministrative Code Section 6C-5.920, and pur-
suant to bargaining agreements with the
United Faculty of Florida. Leave earned is ac-


and financed by the Foundation through the issuance
of a promissory note secured by a nonrecourse mort-
gage containing payment terms similar to those in the
lease agreement between the Foundation and the Uni-
versity. Lease payments from the University to the
Foundation and from the Foundation to Shands were
based on an original construction cost of $3,000,000
and no interest. For reporting purposes, the lease is
considered a capital lease under Financial Account-
ing Standards Board (FASB) Statement No. 13, Ac-
counting for Leases. The initial obligation was
discounted at an imputed interest rate of 6.45% and
was recorded at $1,382,470. The asset, "Leased Prop-
erty Under Capital Lease," was recorded at cost to
Shands of $3,000,000.

On March 1, 2000, the University, acting for and on
behalf of the former Board of Regents, entered into a
lease agreement with Shands. Under the terms of the
agreement, the University agreed to lease from Shands
an 800-space parking garage located near the Health
Science Center Administrative Offices for a period of
thirty years beginning March 1, 2000. Lease payments
of $227,167 annually are due each May 1, beginning
May 1, 2001. Lease payment amounts were based on
an original construction cost of $6,815,002 and no in-


crued to the credit of the employee, and records are
kept on each employee's unpaid (unused) leave bal-
ance. GASB Statement No. 16 requires that the Uni-
versity accrue a liability in the Statement of Net Assets
for employees' vested right to receive compensation
for future absences when certain conditions are met,
whereas State appropriations fund only the portion
of accrued leave that is used or paid in the current
fiscal year. Although the University expects the liabil-
ity to be funded primarily from future appropriations,
generally accepted accounting principles do not per-
mit the recording of a receivable in anticipation of
future appropriations. Consequently, the recording of
the liability for compensated absences, without the
corresponding recognition of such future resources,
results in the appearance of a reduced ability to meet
current obligations. At June 30, 2003, the total esti-
mated liability for annual, sick, and compensatory
leave, which includes the University's share of the
Florida Retirement System and FICA contributions,
was $54,458,573, $55,108,719 and $274,909, respec-
tively. The current portion of the compensated ab-
sences liability is based on actual payouts over the
last three years, calculated as a percentage of those
years' total compensated absences liability. The
University's total net assets balance at June 30, 2003


A Component Unit of the State of Florida 35


Endinm pue30m If.., mm


Table 9. CAPITAL LEASES PRI


r -niCal I _-










of $1,379,667,018 would have been $1,489,509,219 had
the liability for compensated absences not been ap-
plied against it.



10. INTERDEPARTMENTAL AUXILIARY SALES

Interdepartmental sales between auxiliary service
departments and other institutional departments
have been eliminated from expenses and revenues
for reporting purposes. The interdepartmental
transactions eliminated in the financial statement

Table 10. FUNCTONAL EXPENSE


Amount
n, h(,, .^ )


Instruction
Research
Public Service
Academic Support
Student Services
Institutional Support
Operations and Maintenance of Plant
Scholarships and Fellowships
Auxiliary Operations
Loan Operating Expenses
Depreciation

Total Operating Expenses


$ 439,789
371,532
105,047
90,825
28,826
96,941
70,439
9,877
86,123
849
83.102

$ 1,383,350


preparation totaled $68,588,505 for the fiscal year
ended June 30, 2003.



11. OPERATING LEASES

The University has long-term commitments for as-
sets leased under operating lease agreements. These
leased assets and the related commitments are not
reported on the University's Statement of Net Assets.
Operating lease payments are recorded as expenses
of the related funds when paid or incurred, and are
reported in the Statement of Revenues, Expenses, and
Changes in Net Assets. Outstanding commitments re-
sulting from these lease agreements are not consid-
ered material and are contingent upon future
appropriations.


12. FUNCTIONAL DISTRIBUTION OF OPERATING
EXPENSES

The operating expenses on the Statement of Revenues,
Expenses, and Changes in Net Assets are presented
in the natural classifications. Table 10 presents those
same expenses in functional classifications as recom-
mended by NACUBO. The functional classification


ITable1*.. MAJORCONSTRUCTIONS COMMITMEN


Quarantine Facility-Indian River REC $ 3,889,000
PK Yonge Laboratory School Structural Emergency Phase I 8,000,000
Security Lighting 2,531,003
Harn Sculpture Atrium 5,400,000
Orthopedics Surgery and Sports Medicine Institute 23,000,000
New Bookstore with Attached Parking and Visitor/Welcome Center 18,250,000
Murphree Residence Hall Electrical Upgrade 2,975,556
Law School 7,697,458
Diamond Village Renovation 6,380,393
Constans Theater Addition 8,070,355
Accounting Classroom Building 9,063,800
Genetic and Cancer Research Center 5,400,000
IFAS Gulf Coast REC Renovations and Repairs 1,500,000
Weil Hall Renovation 8,382,721
Library West Addition and Renovation I 1,793,000
IFAS Relocation and Construction Trust Fund 6,006,691
Holland Law Library Addition 9,924,000
Lepidoptera Facility 8,400,000
Development and Upgrade of Active/Passive Recreational Facility 1,700,000
Utility/Infrastructure Improvements I 1,195,869
2000-2001 Maintenance, Repairs and Renovations 9,591,929
2001-2002 Critical Deferred Maintenance 6,580,340
UMC-Shands Jacksonville Proton-Beam Facility 26,000,000
2001-2002 Maintenance, Repairs, and Renovations 9,526,563
2002-2003 Maintenance, Repairs, and Renovations 8,114,801


$ 219,373,479


$ 406,081
4,932,589
1,896,569
135,666
2,350,094
15,380,526
2,687,425

4,276,954
3,011,978
4,660,338
1,125,230
151,485
6,550,750
520,658
3,093,979
806,405
2,775,268
97,886
8,102,336
8,959,542
1,150,266
7,130,932
2,762,300
1,553,564

$ 84,518,821


$ 3,482,919
3,067,41 I
634,434
5,264,334
20,649,906
2,869,474
288,131
7,697,458
2,103,439
5,058,377
4,403,462
4,274,770
1,348,515
1,831,971
1 1,272,342
2,912,712
9,117,595
5,624,732
1,602,114
3,093,533
632,387
5,430,074
18,869,068
6,764,263
6,561,237

$ 134,854,658


36 University of Florida


Current


C


Commitment
ni-


Total


Function n t ous s


Tr L LU ii i i i iiLi i iiiL &MeUn&x ies ia anceL





Notes to the Financial Statements


(instruction, research, etc.) is assigned to a department
based on the nature of the activity, which represents
the material portion of the activity attributable to the
department. For example, activities of academic de-
partments for which the primary departmental func-
tion is instruction may include some activities other
than direct instruction such as research and public
service. However, when the primary mission of those
departments consists of instructional program ele-
ments, all expenses of those departments are reported
under the instruction classification.


13. CONSTRUCTION COMMITMENTS

A summary of major construction commitments of
$1 million or more at June 30, 2003, is presented in
Table 11.


14. RETIREMENT PLANS

A. Florida Retirement System

Most employees working in regularly established
positions of the University are covered by the Florida
Retirement System, a State-administered cost-sharing,
multiple-employer, public employee defined benefit
retirement plan (Plan). Plan provisions are established
by Chapters 121 and 122, Florida Statutes; Chapter
112, Part IV, Florida Statutes; Chapter 238, Florida Stat-
utes; and Florida Retirement System Rules, Chapter
60S, Florida Administrative Code, wherein plan eli-
gibility, contributions, and benefits are defined and
described in detail. Participating employers include
all State departments, counties, district school boards,
universities and community colleges. Many munici-
palities and special districts have elected to be par-
ticipating employers. Essentially, all regular
employees of participating employers are eligible
and must enroll as members of the plan.

The Florida Legislature has reduced the vesting pe-
riod from 10 to 6 years of service. Any member em-
ployed in a regularly established position on July 1,
2001, with a total of 6 or more years of creditable ser-
vice will be considered vested. Former members who
are not employed with a participating Plan employer
on July 1, 2001, must return to covered employment
for one year to become eligible for the six-year vest-
ing provision. An exception to this one-year require-
ment applies to former members who are within one


year of vesting under the pre-2001 vesting require-
ments. These members will only be required to work
the lesser of one year or the amount of time it would
have taken to vest in their class of membership prior
to July 1, 2001. 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 before the specified re-
tirement age. The Plan provides retirement, disabil-
ity, and death benefits, and annual cost-of-living
adjustments, as well as supplements for certain em-
ployees to cover social security benefits lost by virtue
of retirement system membership.

A Deferred Retirement Option Program (DROP), sub-
ject to provisions of Section 121.091, Florida Statutes,
permits employees eligible for normal retirement
under the Plan to defer receipt of monthly retirement
benefit payments while continuing employment with
a Florida Retirement System employer. An employee
may participate in the DROP for a period not to ex-
ceed 60 months after the participation election date.
During DROP participation, the deferred monthly
benefit accruing on behalf of the participant, plus in-
terest compounded monthly, is held in the Florida
Retirement System Trust Fund. Upon termination of
employment, the participant receives the total DROP
benefits and begins to receive previously determined
retirement benefits.

The Plan's financial statements and other supplemen-
tal information are included in the State's Compre-
hensive Annual Financial Report, which is available
from the State of Florida, Department of Financial
Services in Tallahassee, Florida. An annual report on
the Plan, which includes its financial statements, re-
quired supplemental information, actuarial report,
and other relevant information, is available from the
State of Florida, Division of Retirement in Tallahas-
see, Florida.

The State of Florida establishes contribution rates for
Plan members. During the 2002-03 fiscal year, con-
tribution rates for the employer are presented in
Table 12.

The University's liability for participation in the Plan
is limited to the payment of the required contribu-
tion at the rates and frequencies established by law
on future payrolls of the University. The University's


A Component Unit of the State of Florida 37








I Tle1S2. IDA RIR E SS


Cl... nr Pl-


Parr-nt nf rf-rn. C.1-.I


Florida Retirement System, Regular 5.76%
Florida Retirement System, Senior Management Services 6.06%
Florida Retirement System, Special Risk 16.01%
Deferred Retirement Optional Program-
Applicable to members from all of the above classes or plan 9.1 1%

* Employer rates for each membership class include I. I 1% for health insurance
subsidy (See Note 15) and. 15% for administrative costs of the Public Employee
Optional Retirement,


total contributions made to the Plan (none from em-
ployees) for fiscal years ended June 30, 2001, June 30,
2002 and June 30, 2003, totaled $30,526,712,
$26,522,648 and $21,097,988, respectively, which were
equal to the required contributions for each fiscal year.

B. State University System Optional
Retirement Program

Pursuant to Section 121.35, Florida Statutes, the Florida
Legislature created an Optional Retirement Program
(Program) for eligible State University System faculty
and administrators. The Program, which became
effective July 1, 1984, was expanded in 1988 to include
the State University System Executive Service. The
Program is designed to aid the university system in
recruiting employees by offering more portability to
those employees who are not expected to remain in
the Florida Retirement System for six or more years.

The Program is a defined contribution plan, which
provides full and immediate vesting of all contribu-
tions submitted to the participating companies on
behalf of the participant. Employees in eligible posi-
tions can make an irrevocable election to participate
in the Program rather than the Florida Retirement
System, and purchase retirement and death benefits
through contracts provided by certain insurance car-
riers. The employing university contributes on behalf
of the participant an amount equal to 10.4" of the
participant's gross monthly compensation. A small
amount remains in the Optional Retirement Program
Trust Fund for program administrative costs. The re-
maining contribution is invested in the company or
companies selected by the participant to create a fund
for the purchase of annuities at retirement. The par-
ticipant may contribute by salary deduction an
amount not to exceed the percentage contributed by
the University to the participant's annuity account.


There were 4,439 University participants during the
2002-03 fiscal year. Required contributions made to
the Program totaled $26,997,619, including
$13,404,227 from employee contributions, on a cov-
ered payroll of $267,401,572.

C. Public Employee Optional Retirement Program

Pursuant to Section 121.4501, Florida Statutes, effec-
tive June 1, 2002, the Florida Legislature created a
Public Employees Optional Retirement Program
(PEORP), also known as the Florida Retirement Sys-
tem (FRS) Investment Program. The Program is a
defined contribution plan, sponsored by the State of
Florida, available as an option to the FRS and is self-
directed by the employee. University employees al-
ready participating in the State University System
Optional Retirement Program or the DROP are not
eligible to participate in this program. With each bi-
weekly pay period, the University contributes a per-
centage (same as FRS rate) of the participating
employees' earnings to an annuity plan. Pension ben-
efits are determined by the dollars in the account at
the time of retirement.

There were 423 University participants during the
2002-03 fiscal year. Required contributions made to
the PEORP totaled $631,419.

D. Institute of Food and Agricultural Sciences
Supplemental Retirement

In 1984, the Florida Legislature enacted the Institute
of Food and Agricultural Sciences Supplemental Re-
tirement Act to provide a supplement to the monthly
retirement benefit being paid under the Federal Civil
Service Retirement System to retirees of the Institute
of Food and Agricultural Sciences (IFAS) at the Uni-
versity of Florida. The supplement is designated for
IFAS cooperative extension employees employed be-
fore July 1, 1983, who are not entitled to benefits from
either a State-supported retirement system or social
security based on their service with IFAS. It was in-
tended to compensate these IFAS employees for the
difference between their Civil Service benefit and the
benefits a FRS member receives, which include a so-
cial security benefit. No additional persons can be-
come eligible for this supplement.

Employee contributions were $516,272 and employer
contributions were $1,079,707. For the 2002-03 fiscal


38 University of Florida





Notes to the Financial Statements


year, the University's covered payroll was $6,127,103
for 113 employees.

E. Other Retirement Programs

Other retirement programs include the Florida
Teacher's Retirement System and the U.S. Civil Ser-
vice Retirement System. Seven employees were cov-
ered by the Florida Teacher's Retirement System
during the 2002-03 fiscal year. Employer contributions
were $56,105, and employee contributions were
$30,895 on a covered payroll of $509,319. Nineteen
employees were covered by the U.S. Civil Service
Retirement System during the 2002-03 fiscal year.
Employer contributions were $103,108, and employee
contributions were $95,886 on a covered payroll of
$1,130,795.


15. POST-EMPLOYMENT BENEFITS

Pursuant to Section 112.363, Florida Statutes, the
Florida Legislature established the Retiree Health In-
surance Subsidy (HIS) to assist retirees of all State-
administered retirement systems in paying health
insurance costs. During the 2002-03 fiscal year, the
HIS program was funded by required contributions
consisting of 1.11, assessed against the payroll for
all active employees covered in State-administered re-
tirement systems.

This assessment is included in the Florida Retirement
System contribution rates presented in Table 12.

Eligible retirees, spouses, or financial dependents
under any State-administered retirement system must
provide proof of health insurance coverage, which can
include Medicare. During the 2002-03 fiscal year, par-
ticipants received an extra $5 per month for each year
of creditable service completed at the time of retire-
ment; however, no eligible retiree or beneficiary may
receive a subsidy payment of more than $150 or less
than $30. If contributions fail to provide full subsidy
benefits to all participants, the subsidy payments may
be reduced or canceled.


16. RISK MANAGEMENT PROGRAMS

A. State Self-Insurance Funds

In accordance with a program for central insurance
purchases adopted by the Florida Cabinet in 1969, the


Department of Management Services has authority
to purchase insurance on behalf of all State agencies.
This authority was granted with the enactment of
Section 287.022, Florida Statutes. Other actions by the
Legislature have resulted in the development of State
self-insurance funds providing hazard insurance for
property and casualty insurance for State employees
workers' compensation, general liability, and fleet
automotive liability. The University participates in
these programs. Property losses in excess of $2 mil-
lion are commercially insured up to $200 million per
loss event. Payments on tort claims are limited to
$100,000 per person and $200,000 per occurrence as
set by Section 768.28, Florida Statutes. Calculations
of premiums consider the cash needs of the program
and the amount of risk exposure for each participant.
There have been no significant reductions in insur-
ance coverage from the prior year coverage. Settle-
ments have not exceeded insurance coverage during
the past three years.

University employees may obtain health care services
through participation in the State's group health in-
surance plan or through membership in a health
maintenance organization plan under contract with
the State. The State's risk financing activities associ-
ated with State group health insurance, such as risk
of loss related to medical and prescription drug
claims, are administered through the State Employ-
ees Group Health Insurance Trust Fund. It is the prac-
tice of the State not to purchase commercial coverage
for the risk of loss covered by this Fund. Additional
information on the State's group health insurance
plan, including the actuarial report, is available from
the State of Florida, Department of Management Ser-
vices, Division of State Group Insurance in Tallahas-
see, Florida.

B. University Self-Insurance Programs

The J. Hillis Miller Health Science Center (JHMHC)
Self-insurance Program and the University of Florida
JHMHC/Jacksonville Self-Insurance Program were
established pursuant to Section 1002.24, Florida
Statutes. The Self-Insurance Programs are used to
account for a program of general and professional
liability protection for the University of Florida Board
of Trustees acting as the six health colleges of the
Health Science Center, including the Student Health
Service Auxiliary and the Veterinary Medical


A Component Unit of the State of Florida 39








Tale13 LABLIYORSEL-NUE CLIM


Claims Liabilities
Beginning of


Current Claims
Changes in


Claims
Liabilities


Fiscal Year Year Estimates Claim Payments End of Year

2001-02 $ 32,426,799 $ 12,066,71 I $ (6,010,882) $ 38,482,628
2002-03 $ 38,482,628 $ 18,666,592 $ (10,516,413) $ 46,632,807





nePrrintinn Amnounts


To decrease net asset balance for the 2001-2002 fiscal year activity
of component units due to change in fiscal year reporting requirement.




Teaching Hospital. Hospital professional liability
protection, including patient general liability, is
provided to Shands Teaching Hospital and Clinics,
Inc., Shands Jacksonville Medical Center, Inc., the
Shands community hospitals in Starke, Lake City and
Live Oak, and other statutorily permitted entities,
which voluntarily participate in the Self-Insurance
Programs. The University of Florida Board of Trustees
is protected for losses, which are subject to Section
768.28, Florida Statutes, including legislative claims
bills, which in combination with the waiver of
immunity limits described in Section 768.28, Florida
Statutes, do not exceed $1 million per claim. The Self-
Insurance Programs provide $2 million per-claim
protection for the participants, which are not subject
to the provisions of Section 768.28, Florida Statutes.
The per-claim limit of liability protection for the
participants does not exceed $2 million per claim in
the event more than one protected entity is involved
in the same claim or action. The Gainesville Self-
Insurance Program retains annual aggregate limits
of liability protection of $14 million and the
Jacksonville Self-Insurance Program retains annual
aggregate limits of liability of $11 million.

Pursuant to the authority of Rule 6C-10.001(2), Florida
Administrative Code, the University of Florida Self-
Insurance Program Councils have created the Univer-
sity of Florida Healthcare Education Insurance
Company (HEIC), a captive insurance company which
is wholly owned by the Florida Board of Governors
and which is domiciled in the State of Vermont. HEIC
is managed by a Board of Directors created by the
Florida Board of Governors. HEIC provides $52 mil-


$ (82,713,000)





lion per-claim and $58 million annual aggregate
claims coverage on a claims-made basis for losses,
which are in excess of the protections afforded by the
Self-Insurance Programs. The excess insurance is paid
to claimants on a first come-first serve basis.

HEIC retains limits of $2 million per claim, with an
annual aggregate of $8 million in excess of the pro-
tections afforded by the Self-Insurance Programs and
fully reinsures the $50 million coverage in excess
thereof.

Claims settlement and adjustment expenses are ac-
crued as expenses and liabilities of the University of
Florida JHMHC Self-Insurance Program, inclusive of
the University of Florida JHMHC Self-Insurance Pro-
gram (Gainesville), the University of Florida
JHMHC/Jacksonville Self-Insurance Program and
University of Florida Healthcare Education Insurance
Company, for the estimated settlement value of claims
reported as a "Liability for Self-Insured Claims." The
estimated settlement value of claims was determined
on the basis of the judgment and experience of man-
agement and the Self-Insurance Program Councils
through a case-by-case review. Estimated losses from
incurred but unreported incidents are accrued based
upon the findings of casualty actuaries.

The amount of "Liability for Self-Insured Claims"
accrued for the Self-Insurance Program at June 30,
2003 was $46,632,807 for compensatory losses and
for allocated expenses. The "Liability for Self-In-
sured Claims" was accrued at an undiscounted
present value.


40 University of Florida


I





Notes to the Financial Statements


The aggregate amount of claims liabilities for which
annuity contracts have been purchased in the claim-
ants' names and for which the related liabilities have
been removed from the Statement of Net Assets to-
tals $1,575,000 for the Self-Insurance Program at June
30, 2003. These annuities have been assigned to third
parties, and all claimants have fully and completely
released trust fund participants from all actual and
contingent liability.

Changes in the balances of claims liabilities for the
Self-Insurance Program during the fiscal years ended
June 30, 2002 and June 30, 2003, appear in Table 13.


17. CONTINGENT LIABILITIES

The University is involved in several pending and
threatened legal actions. The range of potential loss
from all such claims and actions, as estimated by the
University's attorney and management, should not
materially affect future operations and the financial
condition of the University.


18. PRIOR PERIOD ADJUSTMENTS COMPONENT
UNITS

Adjustments to beginning net assets were reported
only when amounts were considered material in ac-
cordance with Accounting Principles Board Opinions
Nos. 9 and 20 and FASB Statement No. 16. All other
non-material adjustments were reported through cur-
rent year operations. Table 14 summarizes the total
adjustments to beginning net assets reported in the
Statement of Revenues, Expenses, and Changes in Net
Assets.


19. COMPONENT UNITS

Summary financial information from the most recent
available audited financial statements of direct-sup-
port organizations and other component units of the
University of Florida, as mentioned in Note 1, is pre-
sented on the following pages in Tables 15, 16 and 17.


20. SEGMENT INFORMATION

A segment is an identifiable activity (or grouping of
activities), that has one or more bonds or other debt
instruments outstanding, with a revenue stream
pledged in support of that debt. In addition, the


activity's revenues, expenses, gains and losses, assets,
and liabilities are required to be accounted for sepa-
rately. The following financial information represents
identifiable activities of the University for which one
or more bonds or other debt instruments are outstand-
ing. Transportation and Parking Services provides the
University with safe and adequate parking facilities.
Several parking garages have been constructed from
the proceeds of revenue-backed debt instruments. The
Division of Housing provides safe, affordable living
space for students of the University of Florida. Sev-
eral revenue bonds have been issued over the years
to provide funding for the construction of facilities to
house students of the University. A summary of the
activity for these segments is presented in Table 18.


A Component Unit of the State of Florida 41











(amounts expressed in thousands)
(amounts expressed in thousands)


CONDENSED STATEMENT OF NET ASSETS
Assets
Due from Primary Government/Component Units
Other Current Assets
Capital Assets, Net
Other Noncurrent Assets


Total Assets


Liabilities
Due to Primary Government/Component Units
Other Current Liabilities
Noncurrent Liabilities


Total Liabilities


Net Assets
Restricted Endowment
Restricted Other
Unrestricted
Invested in Capital Assets, Net of Related Debt


Total Net Assets


$
27,821
26,838
818,751


873,410



49,658
10,842
31.890


92,390



573,938
188,999
1 1,236
6.847


$ 42,591
15,973





135,045



9,004
30,271



39,275






95,770


$ 4,816
41,753
117,644



188,665


$ 4,447
923
81



5 909


45,194
81,710


126,904 1.560


366
17,326
44,069


3,796


471
82


$ 781,020 $ 95,770 $ 61,761 $ 4,349 $ 4,610 $ 2,695


CONDENSED STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN NET ASSETS
Operating Revenues $
Operating Expenses


S68,973 $ 75,115 $ 39,469 $ 23,753 $ 397 $ 1,313
(I 16,728) (78.852) (59,965) (2.313 (835) (1,281


Operating Income (Loss)


(47,755)


Nonoperating Revenues (Expenses)
Investment Income (Loss)
Addition to Permanent Endowments
Other
Transfers from/(to) Component Units


6,574
30,975
(1,054)
(1,547)


(12.807)


Change in Net Assets


Net Assets, Beginning of Year


840,479


Adjustments to Beginning Net Assets


Adjusted Net Assets, Beginning of Year


(3,737) (20,496)


9,181


397


3,841


123,466


1,740


201
22,471


3,916


52,044


5.801


(46652) (33,537


793,827


89,929


21,440



939
26


(438)



(715)

192
192


(22,379)


26 960)


10 2.989


4,323


5,570 2652


Net Assets, End of Year


$ 781,020 9577 $61761 $ 4349 $ 4610 $ 2695


42 University of Florida


University
of Florida
Foundation
7AInflI')flfl


University
of Florida
Research
Foundation
7AInflI')flfl


University
of Florida
Athletic
Association
7AInflI')flfl


Gator
Boosters
7AInflI')flfl


University
of Florida
Law Center
Association
7AInflI')flfl


Florida
Foundation
Seed
Producers
(Unaudited)
7AInflI')flfl


$ 4,192
52


4 -4


4.678


$
2,345
1,092



3.437



684
58



742






1,603
1.092


2,042
2,130
438






Notes to the Financial Statements Notes


Florida Treasure
Assoc. of Southwest Citrus Florida Coast University
Florida Basic Fla. Research Research and Leadership Agricultural of Florida Total
4-H Club Medical and Education Education & Education Research Alumni Direct
Foundation Scientists Foundation Foundation Foundation Foundation Association Support
3I3nIIf3 AI63fI2fl00 AI6fl3fl00 AI1I2f 17211 217f00 AI6flfl00 AI1MI Oroanizatinnf


$ 1,914
1,040


$ 1,614
607


3.115


175 2,221


262


1,764
834


$ 3,099 $ 21 $ 169


$ 157 $ 1,959


$ 34 $


$ 34 $ 149 $ 1,469
(28) (103) (1,.492)


$ 32 $ 1,244 $ 213,471
(28) (2,822) (265,853


4 (1,578) (52,382)



17,324
31,416


(144)


120 1,644


71 (9)


33 (6)


II 1677


3099 $ 21 $ 169 $ 157 $ 1,959


$ 34 $


123


(3747)


1,029,362


(69971)


959,391


$ 955,644


A Component Unit of the State of Florida 43


$ 59,574
90,767
145,802
920,737


1,216 880



60,397
87,209
113,630


261,236



582,959
192,329
128,120
52,236


$ 955,644


$ 1,523
(1.406)


(331)
34


1.13 1

3,243












(amounts expressed in thousands)


CONDENSED STATEMENT OF NET ASSETS
Assets
Due from Primary Government/Component Units
Other Current Assets
Capital Assets, Net
Other Noncurrent Assets


Total Assets


Liabilities
Due to Primary Government/Component Units
Other Current Liabilities
Noncurrent Liabilities


Total Liabilities


Net Assets
Restricted
Unrestricted
Invested in Capital Assets, Net of Related Debt


$ 8,779
34,229
5,122
32.926


81,056





19,117
14.368


33.485





42,450
5,121


$ 3,005
33,068
5,719
158


41 950



4,611
13,485
13,205


31 301


4,930
5,719


$ 756
3,585


$ 621
2,746


4,341 3,367


869
138


1,007


3,334


456
1,313


1.769


$ 47571 $ 10,649 $ 3,334 $ 1,598 $ 2,968


CONDENSED STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN NET ASSETS
Operating Revenues
Operating Expenses


Operating Income (Loss)


$ 164,717 $ 131,957 $ 14,840 $ 7,480 $ 756
(153.474) (120,168) (9,705) (3.510) (287)


1 1,243


Nonoperating Revenues (Expenses)
Investment Income (Loss)
Other
Transfers from/(to) Component Units


2,258
(39,457)
24,497


(1,459)


Change in Net Assets


Net Assets, Beginning of Year


55,204


Adjustments to Beginning Net Assets


Adjusted Net Assets, Beginning of Year


Net Assets, End of Year


(6,174)


11,789



165
(17,358)
4,914


(490)


11,084


55


11,139


5,135



34
(6,252)
1,438


355


3,405


(426)


2,979


3,970



36
(4,627)
116


(505)


2,828



(725)03

2,103


469



39
(362)
9


155


2,412


401


2,813


$ 47,571 $ 10,649 $ 3,334 $ 1,598 $ 2,968


44 University of Florida


Florida
Clinical
Practice
Association


University of
Florida
Jacksonville
Physicians


Faculty
Associates
(Unaudited)


Florida
Health
Professions
Association


Nursing
Faculty
Practice
Association


$ 179
2,820


2999





31



31


Total Net Assets


2,968


3 002/03/6 6/30 3






Notes to the Financial Statements Notes


Veterinary Jacksonville
Pharmacy Medicine University of University of Health Total
Faculty Faculty Florida Florida Education Health
Practice Association Health Jacksonville Faculty Programs Science
Association (Unaudited) Services Healthcare Clinic (Unaudited) Center
6/30/2003 6/3012003 613012003 613012003 613012003 913012002 Affiliates


$ 895
133


$ 20
2,779


1,028 2.799


$ 293
3 257
2,583



3 3.133



1,794
9 970



9 2.764


2,291


(2,214)
2,583


$ 26
3,190
5,225
139


8.580



4
149
6,900


7.053




3,202
(1,675)


$ 14,574
347 83,157
18,649
33223


347 149.603



6,409
1 35,598
35,924


1 77,931




346 59,924
1,748


$ 1.025 $ 2.291




$ $ 7,112
73) (764


$ $ 369 $ 1527 $ 346 $ 71672




$ $ 349 $ 418 $ 105 $327,734
(1I 1808) (1,265) (53) (301.769)


(2) (11,459)





(3)
I5 11,462


905 2,922


(847)



33
(192)
1,105


369 1,410


(10)


(19)


369 1,428


52 25,965



5 2,675
(75,223)
44026


57 (2,557)


289 80,819


(6,590)


289 74,229


$ 1,025 $ 2,291 $ (6) $ 369


$ 1,527 $ 346 $ 71,672


A Component Unit of the State of Florida 45


6,348



53
(6,972)


470


(60)


2,862


(211) (571)












(amounts expressed in thousands)


CONDENSED STATE OF NET ASSETS
Assets
Due from Primary Government/Component Units
Other Current Assets
Capital Assets, Net
Other Noncurrent Assets


Total Assets


Liabilities
Due to Primary Government/Component Units
Other Current Liabilities
Noncurrent Liabilities


Total Liabilities


Net Assets
Restricted Endowments
Restricted Other
Unrestricted
Invested in Capital Assets, Net of Related Debt


$ 2,920
398,563
564,439
251,084

1,217,006



2,655
174,055
537,329

714,039


1,113
30,325
353,668
117,861


$ 3,284
398,909
565,566
251,615


1,906


1,219,374



2,710
174,315
538,284

715,309



1,113
30,325
354,694
117,933


Total Net Assets


$ 502,967 $


391 $


707 $ 504,065


CONDENSED STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN NET ASSETS
Operating Revenues
Operating Expenses


$ 1,278,073
(1,1 14,973)


$ 970
(932)


$ 1,059
(1,011)


$ 1,280,102
(1,1 16,916)


Operating Income (Loss)


Nonoperating Revenues (Expenses)
Investment Income (Loss)
Addition to Permanent Endowments
Other
Transfers from/(to) Component Units


Change in Net Assets


Net Assets, Beginning of Year


Adjustments to Beginning Net Assets

Adjusted Net Assets, Beginning of Year


Net Assets, End of Year


(6,017)

366,746

$ 502,967 $


(176)


(6,152)

367,778


688


391 $


707 $ 504,065


46 University of Florida


Shands
Teaching
Hospital
& Clinics


Baby Gator
Child Care
Center


University
Village
Apartments


Total
Shands
Teaching
Hospital


163,100


163,186


(4,330)
1,013
22,065
(45,627)

136,221


(4,317)
1,013
22,032
(45,627)


372,763


136,287

373,930


00710116 1 not ann 6/10 s






Notes to the Financial Statements


Transportation
and Parking


CONDENSED STATEMENT OF NET ASSETS
Assets
Current Assets
Capital Assets, Net
Other Noncurrent Assets


$ 8,999,411
35,944,121
258,914

45,202,446


Total Assets


Liabilities
Current Liabilities
Noncurrent Liabilities


6,047,397
24,058,881

30,106,278


Total Liabilities


$ 13,678,086
63,219,102
8,672,258

85.569.446


5,794,137
66,582,791

72,376,928


Net Assets
Restricted
Unrestricted
Invested in Capital Assets, Net of Related Debt


3,212,982
1,706,873
10,176,313

$ 15,096,168


Total Net Assets


CONDENSED STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN NET ASSETS
Operating Revenues (Expenses):
Operating Revenues
Depreciation Expense
Other Operating Expenses


Operating Income (Loss)


Nonoperating Revenues (Expenses):
Investment Income
Interest Expense
Other
Capital Related Expenses
Transfers

Net Nonoperating Revenues (Expenses)


$ 11,509,701
(1,842,825)
(7,019,709)

2,647,167


261,095
(1,227,120)
(531,1 10)

1.120.203

(376,932)


7,194,325
5,061,062
937,131


$ 13,192,518





$ 30,936,118
(1,831,027)
(24,142,035)

4.963,056


1,381,778
(3,620,022)
150,079
(1,501,833)
930.488

(2,659,510)


Change in Net Assets


Net Assets, Beginning of Year

Net Assets, End of Year


CONDENSED STATEMENT OF CASH FLOWS
Net Cash Provided (Used) by:
Operating Activities
Noncapital Financing Activities
Capital and Related Financing Activities
Investing Activities

Net Increase (Decrease) in Cash and Cash Equivalents

Cash and Cash Equivalents, Beginning of Year


12,825,933

$ 15,096,168




$ 4,536,851
(216,943)
(3,687,654)
(783.147)


10.888.972

$ 13,192,518




$ 8,194,796
649,916
(14,422,205)
7.811.968


(150,893)


304 197

$ 153,304


Cash and Cash Equivalents, End of Year


2,234,475


9,676,417

$ 11,910,892


A Component Unit of the State of Florida 47


I~ ~ ~ S Tal 18SEMN NOMTO


Notes


Division


2,270,235


2,303,546





Services of Hou e













2002-03
Number of Aid
Recipients Disbursed


Federal Programs
Pell Grants
Supplemental Educational Opportunity Grants
Perkins Student Loans
Health Professions Student Loans (PCL, LDS, HPSL)
Direct Loans


Total Federal Financial Aid Administered


State Programs
Loans:
University of Florida Short Term Loans
Student Aid For Education (SAFE) Loans
University of Florida Long Term Loans
Total Loans Administered


Scholarships and Grants:
Racing
State of Florida Financial Aid Programs
Lottery Trust Grant Funded Waivers
Total State Scholarships and Grants Administered


Total State Financial Aid Administered


Other Scholarships and Grants:
Institutional Grants:
College Awarded Scholarships
Graduate Need-Based Scholarship Waivers
Graduate Tuition Remission Waivers
General Scholarships
Total Institutional Grants


Custodial Scholarships:
Tuition, Trusts, Clubs, Service Organizations, etc.


Total Other Scholarships and Grants


Fee Waivers
Non-Resident Tuition Waivers
Other Waivers


Total Fee Waivers Administered


Total Financial Aid Administered


8,313
1,883
2,060
105
20,068


32,429


1,126
74
467
1,667



469
28,448
540
29,457


31,124


12,568
0
11,855
5,509
29,932


34,326



5,526
1 1,314


16,840


$ 20,914,187
2,367,329
4,890,350
660,816
128.745.387


$ 157,578,069





$ 970,825
117,601
778.699
$ 1,867,125



$ 442,584
57,455,975
1.415.510
$ 59.314.069


$ 61,181,194





$ 28,341,630
0
12,984,941
10,870,263
$ 52,196,834



7,053,281


$ 59,250,115



$ 17,470,158
13,779,972


$ 31,250,130


$ 309,259,508


48 University of Florida













































Reor wa prpae by the Fiac and Accunin



Diiso of th Ofic for Finnc an d iisrto







-~~K A. Crooks-~ P*












K.A. Croks Tod Andeso
an th F Inttt of Fod n Agrclua Science

































SOF
1853 3kD




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