• TABLE OF CONTENTS
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 Front Cover
 Table of Contents
 Foreword
 A message from the President
 Introduction from the Vice President...
 Overview
 Report of independent auditors
 Management's discussion and...
 Statement of net assets
 Statement of revenues, expenses,...
 Statement of cash flows
 Notes to the financial stateme...
 Supplemental information
 Administrators
 Back Cover














Group Title: University of Florida Annual Financial Report. 2000-2001.
Title: University of Florida Annual Financial Report. 2005-06.
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 Material Information
Title: University of Florida Annual Financial Report. 2005-06.
Series Title: University of Florida Annual Financial Report
Physical Description: Serial
Language: English
Creator: Finance and Accounting Division
Publisher: Office of Administrative Affairs, University of Florida
Publication Date: 2006
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Bibliographic ID: UF00072278
Volume ID: VID00007
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.

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Table of Contents
    Front Cover
        Front Cover
    Table of Contents
        Table of Contents
    Foreword
        Page 1
    A message from the President
        Page 2
        Page 3
        Page 4
    Introduction from the Vice President for Finance and Administration
        Page 5
    Overview
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
    Report of independent auditors
        Page 18
    Management's discussion and analysis
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
    Statement of net assets
        Page 24
    Statement of revenues, expenses, and changes in net assets
        Page 25
    Statement of cash flows
        Page 26
    Notes to the financial statements
        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
        Page 48
        Page 49
    Supplemental information
        Page 50
        Page 51
        Page 52
    Administrators
        Page 53
    Back Cover
        Page 54
Full Text










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TABLE OF CONTENTS

A Message from the President 2

Introduction from the Vice President for Finance and Administration 5

University of Florida Overview 6

Financial Statements

Report of Independent Auditors 18

Management's Discussion and Analysis 19

Statement of Net Assets 24

Statement of Revenues, Expenses, and Changes in Net Assets 25
Statement of Cash Flows 26

Notes to the Financial Statements 27

Supplemental Information

Financial Summary by Budget Entities 50

Financial Aid Administered 52











THE UNIVERSITY OF FLORIDA IS IN GAINESVILLE.

THE GATOR NATION IS EVERYWHERE.




There is no numerical symbol for imagination.

No bar graph for visionary thinking.

No mathematical equation that measures inspiration.

Yet the numbers contained in this report represent

exactly those very human contributions ...

inspired, groundbreaking, often world-changing contributions

that make a difference in lives everywhere.

So as we look back at the past year in financial terms,

it is important to reflect on the human contributions, as well.

Contributions made by the millions of people

who inhabit a universe known as The Gator Nation.

The University of Florida is the foundation for that nation ...

a nation of extraordinary people who share grander visions ...

broader horizons.

And while the university itself is in Gainesville ...

the horizons of The Gator Nation ...

are limitless.






0 MESSAGES


MESSAGE FROM THE PRESIDENT





Companies based
on UF technologies
contribute nearly
half a billion dollars
to Florida's economy
annually, according
to a survey released
early in 2005.


AT A UNIVERSITY AS LARGE AND DIVERSE AS THE UNIVERSITY OF
FLORIDA, it is always hard to stitch together a year's worth of
accomplishments into one overarching theme. But if the past year can be
summed up, it is one of achievement in research.
Our faculty netted $518.8 million in sponsored research contracts and
grants, for the first time clearing the $500 million hurdle. We completed
the largest research building on our campus, the 280,000-square foot
Cancer and Genetics Research Complex. And we broke ground for
another major research '..lI.l1;ri..., the Nanoscale Research Facility.
That's not all. We announced a key new partnership with the Burnham
Institute for Medical Research, one that will complement our existing
collaboration with Scripps Florida. The Milken Institute ranked UF fifth
nationwide on its University Technology Transfer and Commercialization
Index. And in one of many recent indicators of our increasing global
prominence, our butterfly collection is now second only to the National
History Museum in London.
These highlights are worth noting for several reasons. One, research
plays a key role in UF's academic standing. Indeed, a thriving research
enterprise is a main ingredient in our efforts to join the nation's top
ten public universities. Two, because research is the backbone for our
technology transfer and commercialization programs, it is essential to
the hundreds of millions of dollars we t... i r,.! i.... to Florida's economy.
One key fact: Companies based on UF technologies '... .r! -! .,.,c. nearly
half a billion dollars to Florida's economy annually, according to a survey
released early in 2005.
The third and perhaps most important reason that research is important
is that it ...r,. il. ii.. I. to the health of our population, our country's
high standard of living and U.S. competitiveness. Many UF efforts fall
into this category three products developed as a result of UF research
include a leading glaucoma drug called Trusopt, a heart-healthy peanut
and a termite control system that has saved thousands of homes and
historic structures. From this past year, however, our work in energy
offers a particularly timely example of our research relevance. Dozens
of UF faculty members are involved in making nuclear energy safer and


A COMPONENT UNIT OF THE STATE OF FLORIDA






0 2005-06 ANNUAL FINANCIAL REPORT


more efficient, developing hydrogen fuel cells, crafting
more efficient photovoltaic solar cells, and so on. But
in the past few months, the national interest in ethanol
drew attention to our faculty members' significant
achievements in converting timber, lawn waste and
other so-called "woody biomass" to ethanol. Indeed, UF
professor Lonnie Ingram, a pioneer in biomass-to-ethanol
technology, was invited to meet with President Bush in
February 2007.

We know we have the ability to tap the energy in this
biomass, thanks to unique technology pioneered by
UF over two decades ago following the oil crisis of the
1970s. This technology has received widespread acclaim,
including a landmark patent designation as the five
millionth patent in 1991. Florida's vehicles consume
about 8.6 billion gallons of fuel each year. Our researchers
believe Florida could produce 10 billion gallons of
ethanol from the state's woody biomass. Of course, that
would require a huge investment in new infrastructure,
but UF research is there to support this transition.

While research took center stage this past year, UF also
made significant progress in areas related to its other
missions of teaching and service.

Perhaps our most notable achievement bridged
both missions. We successfully debuted the Florida
Opportunity Scholarship program, which pays all
education and living expenses for qualified students
who are the first in their families to attend college.
More than 400 Florida Opportunity scholars joined the


2006-07 freshmen class!
The immediate result was
a more diverse class, with
enrollment of African
Americans increasing four
percentage points, from 9
percent to more than 13
percent. That turnaround
was ei...... i '-!., especially if
we can sustain it next year.

S;._-F, if,. .il%. we also
completed the first full year
of the UF sustainability
initiative. This long-term
effort is intended to make
UF a model in conserving
energy and natural resources,
reducing the university's
impacts on the environment and improving the
lives of everyone in our community. We achieved a
lot in the first year and we learned we have a long
way to go. For example, we bought 12 hybrids and
45 Flex Fuel vehicles, we planned 12 buildings to be
certified as "green" under the Leadership in Energy and
Environmental Design program, and we cut hallway
lighting in half. But in just one example of how much
work lies ahead, we are committed to zero solid waste
by 2015. We currently recycle at least 30 percent of our
consumer solid waste, so the challenge is clear.


Thanks to UF research,
energy can grow on trees.







0 MESSAGES


THE NAVIGATOR, UF
AUTONOMOUS VEHICLE.


Other important events and milestones from the past
year:

* We celebrated UF's 100th anniversary in Gainesville.
UF's growth over the past century has truly been
astonishing. When the university opened in 1906, we
had 102 students and 15 faculty members. Today, more
than 50,000 students attend UF and we have more
than 5,000 faculty members.

* We dedicated the Kathryn Chicone Ustler Hall,
home to UF's women's studies program, and held the
groundbreaking for the Jim and Alexis Pugh Hall,
soon-to-be home of the Bob Graham Center for
Public Service.


* We made significant progress in fundraising. The
Faculty Challenge Initiative aimed at enhancing
faculty resources passed $125 million in new funding
ahead of schedule. Happily, we now need to reassess
that goal. Also, it appears our University endowment
is now valued at nearly $1 billion -- an increase of 70
percent in the last three years.

We have made significant progress in the past year, and
there is much for which we can be proud. That said,
we have ambitious plans for the future. To return to
research, the cancer complex and nanotech building will
soon be followed by the Biomedical Sciences Building
and the Pathogen Research Facility. When all of these
facilities are completed in 2009, this campus will have
hundreds of thousands of square feet of additional
research space ample laboratories, classrooms and
meeting spaces to support a truly world-class research
enterprise. I look forward to seeing the important
discoveries and innovations our scientists and engineers
produce as a result.

UF is an i'i,. i,...lb.1 varied institution, one that offers
rich and rewarding opportunities to students, scholars
and scientists of every stripe. We will only enhance these
opportunities as new buildings sprout across campus, new
scholarships and programs come on line, and university-
wide initiatives such as sustainability gain traction. It is
truly an exciting time to be a Gator!








J. Bernard Machen
President


A COMPONENT UNIT OF THE STATE OF FLORIDA


a L1







O 2005-06 ANNUAL FINANCIAL REPORT


I AM PLEASED TO PRESENT THE UNIVERSITY OF FLORIDA ANNUAL FINANCIAL
REPORT FOR 2005-06. This report provides pertinent information
concerning the university's financial position and activities for the year. The
university had a strong financial year as evidenced by net assets of more
than $1.6 billion, a 3.8 percent increase when compared to 2004-05. The
Management's Discussion and Analysis, the financial statements and the notes
to the financial statements document the university's financial success and
health for this year.

During the year significant capital resources were devoted to enhancing
facilities necessary for fulfilling the instructional, research and clinical mis-
sions of the university. Construction projects completed include the Cancer
and Genetics Research Center, a multi-disciplinary biomedical research
facility, which is expected to boost Florida's biotechnology efforts and serve as a
model for interdisciplinary research. Library West, which opened in 1967, was
renovated and expanded to create a new building which included integration
of electronic and print resources and support for new teaching methodologies
to meet the needs of the graduate and undergraduate students Planning and
construction continues on several major projects including the Pathogen
Research Facility, the NIMET Nanoscale Research Facility, the Proton
Therapy Institute located in Jacksonville, Florida, and the Biomedical
Sciences Building.

Finance and Administration is committed to conducting business in a fiscally
responsible manner under the highest ethical standards. Our principles include
maintaining an internal control environment which enhances sound business
practices and clearly defines roles, responsibilities and accountability. As the
university grows and changes, we will continue to provide the framework
necessary to ensure financial strength.


Ed Poppell
Vice President for Finance and Administration


University of Florida


INTRODUCTION FROM

THE VICE PRESIDENT FOR

FINANCE AND ADMINISTRATION





















OEI





Sb






O 2005-06 ANNUAL FINANCIAL REPORT


THE UNIVERSITY OF FLORIDA IS COMMITTED TO THREE DISTINCT



YET INTERLOCKING MISSIONS:



TEACHING, RESEARCH AND SERVICE.







: HISTORY


Educating students, from undergraduate through doctoral,
is the recognized purpose of the university, but the
quality of that education benefits significantly from the
other two missions. Research provides an environment
of inspiration and discovery so critical to educating
the leaders of tomorrow. And service addresses the
university's obligation to use its knowledge and skills to
benefit the public welfare, but also engrains a tradition of
public service in students.

These three elements span all of the university's academic
disciplines and multidisciplinary centers, and represent
a deep commitment to the pursuit and dissemination
of new knowledge while building upon our history and
traditions.

UF is one of only 18 land-grant universities in the
esteemed Association of American Universities, and is a
doctoral/research extensive institution as categorized by
the Carnegie Foundation.


As Florida's oldest university, the rich history of the
University of Florida began in 1853, when the state-
funded East Florida Seminary acquired the Kingsbury
Academy in Ocala. The institution relocated north to
Gainesville at the end of the Civil War. The institution
was consolidated
with the state's
land grant Florida
Agricultural College,
then in Lake City,
and was renamed the
University of Florida '
in 1906. In those days f
the university was an .1
all-male institution
with only 102 students. During World War II, the
university established training programs for U.S. service
personnel, such as U.S. Army Air Corps aircrew training.


University of Florida


MISSION









Until 1947 the University of Florida was one of only
three state universities, which included the Florida State
College for Women (now Florida State University) and
Florida A&M. Women attended the university as early as
1916, and the student body grew to 601 women and 8,177
men when the legislature removed all barriers for female
enrollment in 1947.
Today, the university has grown to become one of the five
largest universities in the nation, boasting an enrollment
of more than 50,000 students.
The governance structure of the University of Florida
changed at the end of 2001, when the governor appointed
separate boards of trustees to each state university. In
January 2004, Dr. J. Bernard Machen became the 11th
president of the University of Florida, having previously
served as president of the University of Utah.
In 2005, The Scientist magazine ranked UF among the best
places to work in academia.


STUDENTS
Preliminary fall 2006 enrollment figures for the university
include nearly 40,000 in-state students, representing all
Florida counties, with 2,125 undergrads representing
all 49 of the other states, the District of Columbia,
Puerto Rico and the Virgin Islands. UF is also gaining
an increasingly international student body, with
approximately 3,000 international students representing
more than 100 countries. The ratio of women to men is


currently 53 to 47. Seventy percent of enrolled students
are undergraduates, 22 percent are graduate students
and eight percent are in professional degree programs.
Approximately 25 percent of the University of Florida
student body members are minorities with 7.4 percent of
the student population consisting of African American
students, 10.9 percent Hispanic/Latino students, and 6.9
percent Asian-American or Pacific Islander students.
University of Florida students are among the best in
the nation, as approximately 90 percent of incoming
freshman score above the national average on
standardized college entrance exams. Many prestigious
scholarship programs that fund undergraduate and


Dr. James F. Preston


"Our work focuses on the development
of efficient methods to convert
biomass materials to alternative fuels
such as ethanol."


I Bioass







0 2005-06 ANNUAL FINANCIAL REPORT


graduate study in the United States and abroad are
awarded to University of Florida students annually. Past
UF winners have included a Rhodes, Mitchell, several
Udalls and Trumans, many Fullbright Fellowships, and
others. The University of Florida also has received more
International Baccalaureate transcripts than any other
institution in the world. Committed to diversity at every
level, the university is second among all Association of
American Universities members in awarding bachelor's
degrees to Hispanic/Latino students, second for awarding
bachelor's degrees to African-American students
and third for all universities nationally in
doctorates awarded to African Americans.

In the last five years, the University of Florida
has invested extensively in campus computing
infrastructure and in classroom renovation-
and technology upgrades. Further,
the University of Florida's freshman
retention rate of 94 percent speaks
to the outstanding quality of the
university's entire academic experience,
from counseling to online programs to
self-tracking of academic progress to
class registration.

University of Florida students are
also given many opportunities to
participate in extracurricular activities.













n our quest to reduce our dependence upon foreign oil, the
field of bioenergy research is one of the most promising,
providing both practical and near term solutions. Conversion
of underutilized resources such as forest and agricultural
residues, as well as crops grown specifically for conversion
to fuel, offers tremendous potential. In collaboration with
L.O. Ingram, K.T. Shanmugam, and other faculty in the


There are more than 750 student organizations on
campus, and students attend more than 2,000 campus
concerts, art exhibits, theatrical productions, guest
lectures, sports concerts and other events each year.
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.


Department of Microbiology and Cell Science, Dr. Preston's
work is directed at the development of bacterial biocatalysts
that efficiently convert cellulosic biomass to alternative fuels.
Commercial applications are already under way, most notably
the conversion of sugar cane, which is particularly well-suited
to the process.







a OVERVIEW


Headcount Enrollment by Colleges and Schools Fall Terms
Colleae/School


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


2005 2004 2003 2002 2001

873 972 947 903 844
4,084 3,798 3,707 3,623 3,508
672 628 609 559 561
5,546 5,682 6,221 6,713 6,600
380 380 373 374 370
996 987 989 981 1,005
417 372 294 535 450
1,898 1,912 1,749 1,810 1,777
6,635 6,402 6,580 6,607 6,437
1,230 1,147 1,180 1,180 1,175
186 161 144 129 124
2,028 1,838 1,815 1,882 1,893
39 27 36 35 28
2,973 2,985 3,157 3,305 3,441
1,363 1,273 1,267 1,312 1,299
14,496 14,016 13,713 12,954 12,337
851 800 789 758 759
217 177 181 180 198
926 920 936 860 806
640 574 468 372 351
1,873 1,595 1,387 1,174 1,016
120 119 117 119 120
1,605 1,552 1,561 1,409 1,343
519 512 511 501 444

50,567 48,829 48,731 48,275 46,886
55 63 58 90 87


TOTAL 50,512 48,766 48,673 48,185 46,799

(A) Includes Continuing Education and correspondence students not enrolled in a college.




RESEARCH SUCCESSES

The University of Florida is a world leader in research,
1...C.. r.ci, significantly to nearly every field of
endeavor. UF researchers have pioneered new therapies
and better treatments in the fights against aging and
disease. They have developed renewable energy sources
that offer great promise in reducing our dependence upon
fossil fuels. They have engineered healthier foods, more


Dr. Agbandje-McKenna is an associate professor of
biochemistry and molecular biology at UF.

Using structural and molecular biology tools, her main
research focus is the study of viruses infecting bacteria,
plants, and mammals. The parvovirus B19 is an example that
infects humans, which causes Fifth Disease in children and


rheumatic-like symptoms in adults. The aim of her research
is to understand how the viruses infect their host cells and
tissues, and replicate new viruses for re-infection.

The ultimate goal is to aid the development of disease
treatments in the form of virus assembly disrupters, viral
vaccines, foreign antigen delivery vehicles, and gene therapy
vectors.


IBilochirrmistr



























ihi A,,
MACROBIOLOGY RESEARCHERS LONNIE INGRAM AND GREG
LULI DISCUSS A NEW BACTERIUM DEVELOPED BY INGRAM THAT
PRODUCES ETHANOL FROM BIOMASS.


energy-efficient and sustainable construction techniques
and better ways to protect the environment. They work
closely with NASA on a wide variety of critical scientific
projects. And in the process, they improve the lives of
millions of people in Florida and around the world.
The Milken Institute named UF one of the top 5
institutions in the country for the transfer of research
to the marketplace in _`".'"., Through years of research,
University of Florida scientists, inventors, engineers and
researchers have developed products and practices that


have been .li-.i -li... r...1 and applied with an international
reach. In fact, some 80 biotechnology companies have
emerged from university research initiatives, and these
companies i... n-t.r iIl..r. an estimated half a billion dollars
annually to Florida's economy alone.
UF also leads in royalty licensing. Significant products
include the glaucoma drug Trusopt, the Gatorades thirst
quencher, and the Sentricon termite elimination system.
The university also patented 64 inventions in 2005,
making it seventh highest in number of patents issued.
Development projects include a partnership with
Spain to create the world's largest telescope in the
Canary Islands, the construction of a new proton beam
facility in Jacksonville for the treatment of cancer,
and a collaboration with the Burnham Institute to
construct a 50,000-square-foot facility in Orlando,
dedicated to research in the areas of diabetes, i.i -.
genetics and cancer.
UF was awarded $518.8 million in sponsored research
in 2005-06 more than all other Florida universities
combined.


PROGRAMS
The University of Florida offers a vast array of programs
on its single campus, and there are 16 colleges and more
than 150 research, service and education centers, bureaus


Agbandje-McKenna


"Our work is aimed at developing viral based
strategies that aid in the development of
new, more effective treatments for disease.
The UF College of Medicine provides an ideal
environment Tor advancing our objectives."


























and institutes. Faculty and student scholars are brought
together from various academic programs to provide
research and development services in all areas of interest.
Nearly 100 undergraduate majors are offered, and more
than 1,900 freshman and sophomores participate in
the honors program, which offers 90 to 100 courses per
semester. The graduate school coordinates 242 graduate
and professional degree programs, which include dentistry,
law, medicine, pharmacy and veterinary medicine.
In addition, UF has a distinguished record of developing
Florida agriculture into a national leader through research
and extension services, expanding the influence of the
university into every county of the state and beyond.


FACULTY


The distinguished faculty of the University of Florida
attracted almost $519 million in research and training
grants for 2005-06, up $25 million from the previous
record-breaking year. The university faculty, which
numbers more than 5,0 '"'', now has 62 Eminent Scholar
Chairs, and more than two dozen faculty members are
elected members of the National Academies of Science
and/or Fr'. t i.,.. i ii., the Institute of Medicine, or a
counterpart in another nation. The University of Florida
also remains one of the top 20 public universities as
ranked by U.S. News and World Report.


*^ Enioneta


Dr. Lou Guillette


"Our work examining birth defects
in alligators is providing important
insights into the origins of adult
diseases, such as those associated
with infertility in humans."


Suillette is far too modest: among many other significant
accomplishments, his research influenced the passage
of the Food Quality Protection Act, described by the
Environmental Protection Agency as "the most comprehensive
and historic overhaul of the nation's pesticide and food safety
laws in decades." A Distinguished Professor in Zoology at







F 2005-06 ANNUAL FINANCIAL REPORT


As a testament to the success of the University of
Florida faculty, the university has been awarded
national scientific centers that 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 joint auspices of the University
of Florida, Florida State University and Los Alamos
National Laboratory.

There have been many honored faculty, past and present,
including Pulitzer Prize-winners in editorial writing and
poetry; a recognized pioneer in aviation engineering;
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 and a
winner of the prestigious Fields Medal.

From pharmacy and public relations to pain mitigation
and materials .. nr._ i ,.I. i r;., the University of Florida is
a recognized leader in a wide variety of specialties and
areas. University of Florida researchers and scientists have
made significant developments and discoveries in many
fields, including astronomy, microbiology, metallurgy and
medical technology. The university ranks 13th among all
universities in patents awarded.



FACILITIES

The University of Florida is in Gainesville, which is
recognized as one of the nation's best college towns.


Degrees Awarded by Type of Degree


Degree

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


2005-06

8,255
3,053
718
394
345
115
82
78


2004-05

8,417
2,958
702
383
325
99
77
79


2003-04

8,574
3,022
694
425
272
116
75
76


2002-03

7,975
2,889
591
414
254
111
82
80


2001-02

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


UF, Guillette is also renowned for his exceptional abilities to inspire
his students. "We should be teaching 'scholarship' the pursuit of
knowledge, rather than studentshipp,' where students are sat down
and told what is important."

Guillette was recently named one of just 20 Howard Hughes Medical
Institute professors nationwide.









Occupying more than 2,000 acres, the university operates
out of more than 979 buildings, with more than 180
containing classrooms and laboratories. The University of
Florida's facilities are valued at more than $2.1 billion.
The northeastern area of the campus is a Historic
District on the National Register of Historic Places.
The 24 single-student residence areas house some 7,200
students and five family housing villages house nearly
1,800 married and graduate students. The Hume Honors
Residency Building is the first residential college built
from the ground up in the U.S. to serve honors students.
In addition, the University of Florida department of
housing offers living facilities for engineering students,
international students, a career exploration community,
a leader scholar community and two residence areas with
a wellness focus. In fall 2006, the university plans to
convert residence halls into areas for fine arts majors, as
well as a global living partnership. Additionally, since the
1980s the University of Florida has offered a faculty-in-
residence program on campus, where faculty members live
in the residence halls, serving as mentors and advisors.
Currently, the University of Florida is in the construction
stage of the state-of-the-art Proton Beam Therapy Center
in Jacksonville. On the main campus, the $85 million
Biomedical Sciences Building is nearing completion.
Additional facility improvements completed or under
construction include the Orthopedic Surgery and Sports
Medicine Institute, the Mary Ann Ham Cofrin Pavilion,
the Legal Information Center, the ICBR Biotechnology


Laboratory Pavilion, and the remodeling of the Pharmacy
Wing of the Health Science Center. The university
began construction in the summer of 2006 on the Jim and
Alexis Pugh Hall, which will house the new Bob Graham
Center for Public Service.


Dr. Ron Parise


"My education and experience at the
University of Florida not only launched
my career in astronomy research and
space communications, but literally
launched me into space!"


BNASA








9 2005-06 ANNUAL FINANCIAL REPORT


ACKSON
45
NASSAU
GADSDEN JEFFERSON HAMILTON 115
ALHOUN LEON 12 MADISON 13
ALHOUN 13
733 22 DUVAL
13 733 22 SUWANNEE BAKER 2,143
LIBERTY WAKULLA 86 COLUMBIA 30
2 8 TAYLOR 160UNIONBRADCLAY
GULF FRANKLIN 20 LAFAYETTE 30 FORD 574 ST. JOHNS
6 517
14 2 6 GIL- 69 517
CHRIST ALACHUA PUTNAM
DIXIE 68 4,499 138
15 .


In-State Enrollment by County Fall 2005


MARION
774


Total In-State Enrollment: 40,969


The University of Florida hosts an impressive array of

facilities dedicated to honoring the arts, humanities and

the sciences. The Florida Museum of Natural History is

among the top 10 natural history/anthropology museums
in the nation and is the largest in the Southeast. Its

natural science collections contain more than 24 million

specimens. The museum opened the $12 million McGuire

Center for Lepidoptera and Biodiversity, which houses

the world's second largest butterfly collection and a live

butterfly rainforest. More than 236,000 people have visited

the center since it opened in summer 2004. The museum

has also won the Award of Excellence in the 2004-05

Curator's Competition sponsored by Southeastern Museums

Conference for its ..:. l.b,..r ., "Florida Fossils." The Samuel

P. Ham Museum of Art is one of the largest museums in the

region, with more than 26,000 square feet of exhibit space.
















Dr. Parise, a veteran of space flights on Columbia and

Endeavor, received his master of science and doctor of

philosophy degrees from the University of Florida. He was

selected by NASA as a payload specialist in support of the
Astro observatory mission, and during his 12 years in that role

he was involved in mission planning, simulator development,


CITRUS
204 LAKE
SUMTER 372
HERNANDO 48
135
PASCO
477


HILLS-
PINELLAS BOROUGH
2,254 2,632


MANATEE HARDEE
437 21

DESOTO
SARASOTA 22
856
CHARLOTTE
194

LEE
692


FLAlLER
124

VOLUSIA
896

SEMINOLE
1,434
ORANGE
2,512

OSCEOLA
267 BREVARD
1,432
INDIAN RIVER
262
OKEECHOBEE
44 ST. LUCIE
HIGHLANDS 307
111
MARTIN
419


GLADES
8
HENDRY
47


PALM BEACH
2,864


COLLIER BROWARD
479 4,860


MIAMI-
MONROE DADE
129 4,100




















integration and test activities, flight procedure development,

and scientific data analysis, in addition to his flight crew

responsibilities for the Astro program.

Dr. Parise has logged more than 614 hours and 10.6 million

miles in space.


SANTA H
ROSA
184 OKALOOSA
452
ESCAMBIA 2 WALTON
425 33


OLMES
14 J
WASHINGTOI
14
C
BAY
290










Federal Awards by Agency
(in millions)


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


SPORTS AND RECREATIONAL ACTIVITIES


The University of Florida prides itself on the excellence
of its collegiate sports programs and enjoys significant
success with its varsity teams. Last year, the Gators had
10 teams accomplish top-10 finishes in their respective
sports, including a NCAA national title by the men's
basketball team. The 2006-07 season is already off to
a strong start, highlighted by the football team's BCS
national title. The first time in history one university has
held both titles in the same year.

The University of Florida finished fifth in the national all-
sports competition for overall men's and women's program
excellence, up from its previous ranking of seventh. Only
the University of Florida and the University of California
- Los Angeles, have finished in the top-10 all-sports
ranking in every year since the 1983-84 academic year.

Florida was also successful away from the athletic arena
in 2005-06, as the Gators had 187 SEC Academic Honor
Roll accolades. The total ranked as the second-highest in
school history.

Few schools in the country can boast an Olympic
tradition as rich as the University of Florida. Since 1968,
117 Gator student-athletes have represented 27 countries
in 10 Olympiads and laid claim to 76 medals, including
39 gold medals.


The University of Florida provides an athletic
atmosphere rivaled by only a few other schools in the
nation. Providing guidance, leadership and management
of the university's sports programs, the University
Athletic Association is 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 campus, with numerous
recreational and fitness programs offered. The Stephen C.
O'Connell Center and the J. Wayne Reitz Union provide
space for a myriad of activities. With a capacity of 12,000
people for concerts and other events, the O'Connell
Center has space for 1,000 people to participate in
eight different recreational activities simultaneously.
The O'Connell Center is home to Gator basketball,
volleyball, swimming and gymnastics teams. Thousands
use the Reitz Union daily for ,.1;i; iii., meetings, games,
hotel accommodations and more.

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


A COMPONENT UNIT OF THE STATE OF FLORIDA


$143.8
39.6
33.3
23.0
13.6
12.2
11.3
10.1
8.8
7.8
4.9
3.6
3.1
2.7
6.6
$324.4






F 2005-06 ANNUAL FINANCIAL REPORT


Research Awards by Sponsor for 2005-06 Fiscal Year
(in millions)


S S. S


100,000-square-foot facility located on the corner of a 26-
acre site that features lighted outdoor basketball, tennis
and volleyball courts, and a tournament-grade four-field
softball complex. The university also hosts more than 60
sports clubs from Aikido to water-skiing and wheelchair


basketball. The University of Florida's intramural sports
program attracted more than 30,000 participants each
semester during the last academic year.

The University of Florida is committed to an
environmentally friendly campus, with its open spaces,
small ponds, picnic areas, shady nooks, and even an
81-acre wildlife sanctuary. In addition to providing
venues to enjoy Florida's year-round outdoor life, the
University of Florida recently launched a new campaign
of sustainability, a campus-wide plan that concentrates
on environmental and social initiatives. The University
of Florida is focusing on maintaining sustainable
practices in the areas of ecology, economy and equity.
In recognition of the initiative's success, the University
of Florida is the first university designated as a Certified
Audubon Cooperative Sanctuary, by the Audubon
Cooperative Sanctuary System. It is one of 607 such
sanctuaries in the world.

And so, as the University of Florida builds upon its
successes and continues its leadership into the future, it
remains in the enviable position of being pedagogically
respected, financially sound, organizationally stable and
eager for the continuing challenges of the 21st century.


University of Florida












"' AUDITOR GENERAL
STATE OF FLORIDA
G74 Claude Pepper Building
William 0. Monroe, CPA 111 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

INDEPENDENT AUDITOR'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, 2006, as shown on pages
24 through 49. These financial statements are the responsibility of University management. Our responsibility is to express
opinions on these financial statements based on our audit. We did not audit the financial statements of the discretely presented
component units, as described in note 1 to the financial statements, which comprise 100 percent of the transactions and account
balances of the aggregate 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. The prior year partial comparative
information has been derived from the University's 2004-05 financial statements and, in our report dated February 20, 2006, we
expressed an unqualified opinion on the respective financial statements.
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 Government Auditing 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, 2006, 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 of America.
The financial statements include partial prior-year comparative information. Such information does not include all of the
information required to constitute a presentation in conformity with accounting principles generally accepted in the United States
of America. Accordingly, such information should be read in conjunction with the University's financial statements for the fiscal
year ended June 30, 2005, from which such partial information was derived.
In accordance with Government Auditing Standards, we have also issued our report dated February 5, 2007, 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 grant agreements and other matters included under the heading
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER
MATTERS BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING
STANDARDS. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should
be read in conjunction with this report in considering the results of our audit. That report is included as a part of our separately
issued audit report on the University.
The MANAGEMENT'S DISCUSSION AND ANALYSIS on pages 19 through 23 is not a required part of the basic financial statements,
but is supplementary information required by accounting principles generally accepted in the United States of America. We
have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of
measurement and presentation of the required supplementary information. However, we did not audit the information and
express no opinion on it.
Respectfully submitted,




William 0. Monroe, CPA
February 5, 2007


A COMPONENT UNIT OF THE STATE OF FLORIDA


































MANAGEMENT'S DISCUSSION AND ANALYSIS

FROM THE VICE PRESIDENT FOR FINANCE AND ADMINISTRATION


INTRODUCTION AND BACKGROUND

The Management's Discussion and Analysis (MD&A) provides an
overview of the financial position and activities of the University
of Florida (the University) for the fiscal year ended June 30, 2006,
and should be read in conjunction with the financial statements
and notes thereto. This overview is required by Governmental
Accounting Standards Board (GASB) Statement No. 35, Basic
Financial Statements and Management's Discussion and Analysis for
Public Colleges and Universities, as amended by GASB Statements
Nos. 37 and 38. The MD&A, and financial statements and notes
thereto, are the responsibility of University management.



FINANCIAL HIGHLIGHTS

The University's assets totaled $2,157.3 million at June 30, 2006.
This balance reflects a $110.8 million, or 5.4%, increase from the
2004-05 fiscal year. While assets grew, liabilities also increased.
Liabilities totaled $475.5 million at June 30, 2006, compared to
$426.4 million at June 30, 2005, an increase of $49.1 million or
11.5%. As a result, the University's net assets increased by $61.7
million, or 3.8%, reaching a year end balance of $1,681.8 million.

The University's operating revenues totaled $983.2 million for the
2005-06 fiscal year, representing a slight decrease from the 2004-05
fiscal year. Major components of operating revenues are contracts and


grants and student tuition and fees. Two primary factors contributed
to the decrease in revenues. First, while research awards to the
University of Florida increased, the amount of deferred revenue
increased over the prior year. Second, while student tuition and fees
increased, the scholarship allowances also increased, resulting in a
net decrease in tuition of $4.2 million.

Net nonoperating revenues and expenses increased 6.5% primarily
because in the 2005-06 fiscal year, the University had a 7% increase
in State appropriations.

Operating expenses totaled $1,732.4 million for the 2005-06 fiscal
year, representing an increase of 5.7% over the 2004-05 fiscal year.
The largest category of operating expenses, compensation and
employee benefits, increased by 7.1%.

The University had significant construction activity during the
year. Construction projects completed include: (1) Cancer and
Genetics Research Center (capitalizable costs of $74.9 million);
(2) Library West addition and renovation (capitalizable costs of
$27.9 million); (3) ICBR Biotechnology Lab (capitalizable costs
of $5.9 million); and (4) Ham Sculpture Atrium (capitalizable
costs of $6.2 million). Construction continues on several major
projects including: (1) NIMET Nanoscale Research Facility; (2)
Proton Therapy Institute located in Jacksonville, Florida; and (3)
Biomedical Sciences Building.


University of Florida







*MD&A


OVERVIEW OF FINANCIAL STATEMENTS

Pursuant to GASB Statement No. 35, the University's financial
report includes three basic financial statements: the Statement of
Net Assets; the Statement of Revenues, Expenses, and Changes
in Net Assets; and the Statement of Cash Flows. The financial
statements, and notes thereto, encompass the University and its
component units. These component units include:

* The University's Direct-Support Organizations These are
separate, not-for-profit corporations organized and operated
exclusively to assist the University in achieving excellence by
providing supplemental resources from private gifts, bequests
and valuable education support services.

* The Health Science Center Affiliates These are the several
corporations closely affiliated with the University of Florida
J. Hillis Miller Health Science Center, including the Faculty
Practice Plans.

* Shands Hospital and Others This includes Shands Teaching
Hospital and Clinics, Inc., a not-for-profit corporation that
is contractually 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.

Information regarding these component units, including summaries
of their separately issued financial statements, is presented in notes
1, 3 and 22 to the financial statements. This MD&A focuses on the
University, excluding the component units. MD&A information
regarding these component units is included in their separately issued
audit reports, if reporting under GASB standards. Component units
reporting under FASB standards do not include an MD&A in their
audit reports.

The financial statements characterize revenues and expenses as either
operating or nonoperating. A significant portion of the University's
anticipated, recurring resources are considered nonoperating as
defined by GASB Statement No. 35. The principal component of
nonoperating revenues for the fiscal year ended June 30, 2006, is
State appropriations for operations ($596.3 million).

Recurring nonoperating expenses consist primarily of interest
expense on bonds and revenue certificates payable, totaling $5.3
million for the fiscal year ended June 30, 2006.


STATEMENT OF NET ASSETS


The Statement of Net Assets reflects the assets and liabilities of the
University, using the accrual basis of accounting, and presents the
financial position of the University at a specified time. The difference
between total assets and total liabilities, net assets, is one indicator
of the University's current financial condition. The changes in net
assets that occur over time indicate improvement or deterioration in
the University's financial condition. The following summarizes the
University's assets, liabilities, and net assets at June 30:


Condensed Statement of Net Assets
(in millions)


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


2006

$ 750.8
1,300.3
106.2
2,157.3

160.5
315.0
475.5


2005

$ 708.8
1,230.2
107.5
2,046.5

134.3
292.1
426.4


1,185.3 1,111.1

415.2 415.8
81.3 93.2

$1.681.8 $ 1.620.1


STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN NET ASSETS

The Statement of Revenues, Expenses, and Changes in Net Assets
presents the University's revenue and expense activity, categorized as
operating and nonoperating. Revenues and expenses are recognized
when earned or incurred, regardless of when cash is received or paid.
On the following page is a summary of the University's activity for
the 2005-06 and 2004-05 fiscal years:



OPERATING REVENUES

GASB Statement No. 35 categorizes revenues as either operating or
nonoperating. Operating revenues generally result from exchange
transactions where each of the parties to the transaction either give
up or receive something of equal or similar value.

On the following page is a summary of the operating revenues by
source that were used to fund operating activities during the 2005-06
and 2004-05 fiscal years:


A COMPONENT UNIT OF THE STATE OF FLORIDA







10 2005-06 ANNUAL FINANCIAL REPORT


Condensed Statement of Revenues, Expenses, and Changes
in Net Assets
(in millions)


Operating Revenues
Operating Expenses

Operating Loss

Net 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

Adjustment to Beginning
Net Assets See Note 20

Net Assets End of Year



Operating Revenues
(in millions)


2005-06

$ 983.2
(1,732.4)

(749.2)

703.8

(45.4)


2004-05

$ 1,021.4
(1,638.5)

(617.1)

660.7

43.6


107.1 104.2


61.7 147.8

1,620.1 1,423.2

49.1


$ 1,681.8 $ 1,620.1


2005-06 2004-05

Grants and Contracts $ 642.5 $ 699.4
Student Tuition and Fees, Net of 152.5 156.7
Scholarship Allowances
Sales and Services of Auxiliary Enterprises* 133.5 120.7
Sales and Services of Educational Departments* 53.4 42.0
Other 1.3 2.6

Total Operating Revenues $ 983.2 $1,021.4

* Financial activities of the University' self-insurance program were reclassified in the
2005-06 fiscal year Prior fiscal year amounts have been adjusted to make amounts
between fiscal years comparable.


OPERATING EXPENSES

Expenses are categorized as operating or nonoperating. The majority
of the University's expenses are operating expenses as defined by
GASB Statement No. 35. GASB gives financial reporting entities
the choice of reporting expenses in the functional or natural
classifications. The University has chosen to report the expenses in
their natural classification on the Statement of Revenues, Expenses,
and Changes in Net Assets and has displayed the functional
classification in the notes to the financial statements.

The following summarizes the operating expenses for each method of
classification for the 2005-06 and 2004-05 fiscal years:


Operating Expenses
(in millions)

Natural Classifications

Compensation and Employee Benefits
Services and Supplies
Depreciation
Scholarships, Fellowships and Waivers*
Utilities and Communications
Self-Insured Claims and Expenses

Total Operating Expenses


2005-06

$ 1,128.0
340.9
107.4
68.6
63.9
23.6

$1,732.4


2004-05

$ 1,053.5
327.8
101.2
82.7
51.2
22.1

$1,638.5


Functional Classifications 2005-06 2004-05

Instruction $534.9 $489.4
Research 441.2 428.2
Auxiliary Operations** 139.2 124.8
Public Service 135.0 143.4
Academic Support 110.0 101.7
Depreciation 107.4 101.2
Institutional Support** 95.6 95.2
Operation and Maintenance of Plant 90.6 80.4
Scholarships, Fellowships and Waivers* 47.4 41.9
Student Services 31.1 32.3

Total Operating Expenses $1,732.4 $1,638.5
* Net of Scholarship A/owances of $102.9 million in the 2005-06 fiscalyear and $862
million in the 2004-05 fiscal year
** Financial activities of the Universitys self-insurance program were reclassified in the
2005-06 fiscal year Prior fiscal year amounts have been adjusted to make amounts
between fiscal years comparable.


NONOPERATING REVENUES AND
EXPENSES

Certain revenue sources that the University relies on to provide
funding for operations, including State appropriations, certain
gifts and grants, and investment income, are defined by GASB as
nonoperating. Nonoperating expenses include capital financing costs
and other costs related to capital assets. The following summarizes
the University's nonoperating revenues and expenses for the 2005-06
and 2004-05 fiscal years:



Nonoperating Revenues (Expenses)
(in millions)
2005-06 2004-05

State Appropriations $ 596.3 $ 557.1
Federal and State Student Financial Aid 97.0 90.1
Investment Income 19.2 22.9
Interest on Capital Asset-Related Debt (5.3) (6.4)
Other Nonoperating Revenues (Expenses) (3.4) (3.0)

Net Nonoperating Revenues (Expenses) $ 703.8 $ 660.7


University of Florida







*MD&A


OTHER REVENUES, EXPENSES, GAINS,
OR LOSSES

This category is mainly composed of capital appropriations and
capital grants, contracts, and donations. The following summarizes
the University's other revenues, expenses, gains or losses for the
2005-06 and 2004-05 fiscal years:



Other Revenues, Expenses, Gains, or Losses
(in millions)


Capital Appropriations
Capital Grants, Contracts and Donations
Loss on Disposal of Capital Assets

Total Other Revenues, Expenses,
Gains, or Losses


2005-06

$ 68.7
43.0
(4.6)


2004-05

$ 42.7
67.2
(5.7)


$107.1 $104.2


STATEMENT OF CASH FLOWS

The Statement of Cash Flows provides information about the
University's financial results by reporting the major sources and uses
of cash and cash equivalents. This statement will assist in evaluating
the University's ability to generate net cash flows, its ability to
meet its financial obligations as they come due, and its need for
external financing. Cash flows from operating activities show the
net cash used by the operating activities of the University. Cash
flows from capital and related financing activities include activities
of the capital funds and related long-term debt. Cash flows from
investing activities show the net source and use of cash related to
the purchases and sales of investments, and income earned on those
investments. Cash flows from noncapital financing activities include
those activities not covered in the other sections.

Major sources of funds came from State appropriations ($596.3
million), net student tuition and fees ($148.9 million), grants
and contracts ($683.8 million), and sales and services of auxiliary
enterprises ($135.8 million).

During the 2004-05 fiscal year, the changes in balances in Due
from State, Due to State, Due from Component Units and Due
to Component Units, were reported as Operating Subsidies and
Transfers for operating funds, and as Capital Subsidies and Transfers
for non-operating funds. For the 2005-06 fiscal year, the changes have
been combined with operating Grants and Contracts and Capital
Gifts and Grants Received, respectively. Therefore, the 2004-05
fiscal year amounts reported on the Statement of Cash Flows have
been restated for comparability.

The following summarizes cash flows for the 2005-06 and 2004-05
fiscal years:


Condensed Statement of Summary of Cash Flows
(in millions)


Cash Provided (Used) by:
Operating Activities
Noncapital Financing Activities
Capital and Related Financing Activities
Investing Activities

Net Change in Cash and
Cash Equivalents

Cash and Cash Equivalents,
Beginning of Year

Cash and Cash Equivalents,
End of Year


2005-06 2004-05

$ (578.4) $ (539.5)
691.5 632.4
(104.7) (121.9)
(12.3) .7

(3.9) (28.3)


4.5


32.8


$ .6 $ 4.5


CAPITAL ASSETS, CAPITAL EXPENSES
AND COMMITMENTS, AND DEBT
ADMINISTRATION

CAPITAL ASSETS

At June 30, 2006, the University had approximately $2.4 billion in
capital assets, less accumulated depreciation of $1.1 billion, for net
capital assets of $1.3 billion. Depreciation charges for the current
fiscal year totaled $107.4 million. The following table summarizes
the University's capital assets, net of accumulated depreciation, at
June 30:


Capital Assets, Net
(in millions)

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


2006 2005

$ 10.9 $ 10.4
850.5 696.7
34.1 30.3
236.5 226.7
57.6 58.5
7.7 9.1


19.0
1.5
82.5


24.2
1.7
172.6


Total Capital Assets
(Non-Depreciable and Depreciable, Net) $1,300.3 $1,230.2

Additional information about the University's capital assets is presented in Note 8
to the financial statements.


A COMPONENT UNIT OF THE STATE OF FLORIDA







* 2005-06 ANNUAL FINANCIAL REPORT


CAPITAL EXPENSES AND COMMITM

Major capital expenses through June 30, 200(
following continuing projects: Proton Th
in Jacksonville, Florida ($17.9 million), Mu
($6.9 million), and the Kathryn Chicone Ust
The following table summarizes the Uni
commitments as of June 30, 2006:



Capital Expenses and Commitments
(in millions)


Current
Commitment


Project Name


Biomedical Sciences Building
NIMET Nanoscale Research Facility
Graham Center at Pugh Hall
Proton Therapy Institute located
in Jacksonville, FL
2005-2006 Utility and Infrastructure
Hub Renovation
George Steinbrenner Band Building
Projects with remaining balances
less than $5 million

Total


$ 92.4
35.2
15.7

31.4
14.0
10.7
6.0

115.5

$ 320.9


Additional information about the University' capital commit
the financial statements.


DEBT ADMINISTRATION


As of June 30, 2006, the University had $125.4
bonds and revenue certificates, capital le
purchase agreements, representing an incre
3.3% from the prior fiscal year. The followir
outstanding capital asset related debt by type


Capital Asset Related Debt
(in millions)


Bonds and Revenue Certificates
Capital Leases
Installment Purchase Agreements


Total Capital Asset Related Debt

Additional information about the University' capital asset relat
to the financial statements.


ENTS

6, were incurred on the
erapy Institute located
phree Hall renovation
ler Hall ($4.0 million).
versity's major capital







Commitment
Expenses Balance

$ .7 $ 91.7
2.1 33.1
-15.7

17.9 13.5
.5 13.5
3.3 7.4
.1 5.9

57.9 57.6

$ 82.5 $ 238.4

cents is presented in Note 15 to






million in outstanding
ases, and installment
ease of $4 million, or
g table summarizes the
of debt at June 30:





2006 2005

$119.2 $117.3
3.8 3.9
2.4 .2

$125.4 $121.4

ed debt is presented in Note 11


ECONOMIC FACTORS THAT WILL AFFECT
THE FUTURE

The budget that the Florida Legislature adopted for the 2006-07
fiscal year provided an 11.8% increase for State universities. The
Legislature provided a salary increase of 3% for State university
employees; and provided $54.5 million for enrollment growth at State
universities (the University's share is $4.8 million or 8.8%). The
University expects an increase in revenue from student tuition and
fees because of increased enrollment and increased student tuition
and fees. Effective Fall 2006, in addition to assessing tuition and fees
based on student residency, course level, and program, tuition rates
are now also based on the first enrolled term of the current degree.
The new fee schedule resulted in increases as shown below:



Undergraduate Courses


Resident Tuition & Fees
Non-Resident Tuition & Fees


Graduate Courses

Resident Tuition & Fees
Non-Resident Tuition & Fees


Pre-Fall 2005
3.6% increase
3.1% increase



Pre-Fall 2005
5% increase
1.4% increase


Fall 2005
3.6% increase
3.3% increase



Fall 2005
5% increase
1.5% increase


Fall 2006
3.6% increase
3.3% increase



Fall 2006
9.5% increase
2.8% increase


Overall enrollment for Fall 2006 (50,785 students after drop/add)
increased 2.3% from Fall 2005. Undergraduate enrollment increased
by 1.1% and graduate and professional enrollment increased by
3.5% and 10.2%, respectively, which illustrates the continued shift
of enrollment into graduate and professional courses with higher
tuition costs.


University of Florida







9 FINANCIAL STATEMENTS


STATEMENT OF NET ASSETS as of June 30, 2006
(amounts expressed in thousands)

Component Units (FYE 2006)


ASSETS
Current Assets:
Cash and Cash Equivalents (Note 2)
Investments (Note 3)
Accounts Receivable, Net (Note 4)
Loans and Notes Receivable, Net (Note 4)
Due from State (Note 5)
Due from Component Units/University (Note 6)
Inventories (Note 7)
Other Current Assets


Total Current Assets


Noncurrent Assets:
Restricted Cash and Cash Equivalents (Note 2)
Restricted Investments (Note 3)
Loans and Notes Receivable, Net (Note 4)
Depreciable Capital Assets, Net (Note 8)
Non-depreciable Capital Assets (Note 8)
Other Noncurrent Assets


Total Noncurrent Assets


LIABILITIES
Current Liabilities:
Accounts Payable
Accrued Salaries and Wages Payable
Due to State
Due to Component Units/University (Note 6)
Deferred Revenues (Note 10)
Deposits Held in Custody
Long-Term Liabilities Current Portion: (Note 11)
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


$ 298
535,289
108,750
3,783
96,396

5,614
646

750 776


273
71,314
33,685
1,206,525
93,806
915

1,406,518


$ 63,645
28,802
176
9,444
27,050
4,803

6,595
742
83
9,599
9,613


160,552


Noncurrent Liabilities: (Note 11):
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


112,665
1,656
3,700
130,300
66,646


314,967

475,519


TOTAL LIABILITIES


University of Florida
2006 2005


$ 4,330
500,685
127,852
3,952
65,876

5,700
414

708 809


208
73,864
32,531
1,046,932
183,343
863

1,337,741


$ 61,337
24,860
261
12,269
6,316
5,491

6,044
187
78
8,504
8,988


134,335


111,247
79
3,783
120,782
56,214


292,105


Direct-Support
Organizations


$ 24,068
96,252
62,888

34,349
76,091
1,237
4,621

299,506


399
1,252,799
1,255
123,613
39,963
1,347

1,419,376

$ 1,718.882



$ 16,403
6,100

83,953
61,629
103

1,565


2,018

6.164

177,935


118,350


89

30,364

148,803


426,440 326,738


Health Science
Center Affiliates


$ 56,179
3,042
52,183


26,859
73
4,579

142.915


1,500
22,251

18,573
380
15,891

58,595


$ 10,323
17,331

9,759
46
62

532

83
6,968

3.857

48,961


18,231


152
19,584

1,458

39,425

88,386


Shands Hospital
and Others


$ 186,115
172,902
167,120


8,089
3
37,960

572 189


188,926

560,990
79,026
78,587

907,529

$ 1,479.718


217,390
71

8,207
47


17,453

220


112

243,500


394,178

6,616


61,624

462,418

705,918


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


TOTAL LIABILITIES AND NET ASSETS


1,185,280


51,225
104,764
3,722
255,488
81.296

1,681,775

$ 2,157,294


1,111,191


49,866
85,869
3,923
276,099
93 162

1,620,110


53,724


820,654


400,323
117,443

1,392,144


$ 2,046,550 $ 1,718,882


1,500
110 656

113,124

$ 201,510


220,805


3,167
549,673

773,800

$ 1,479,718


The accompanying notes to the financial statements are an integral part of the financial statements.

A COMPONENT UNIT OF THE STATE OF FLORIDA


TOTAL ASSETS


$ 2.157.294 $ 2.046.550







# 2005-06 ANNUAL FINANCIAL REPORT


STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
for the Fiscal Year Ended June 30, 2006
(amounts expressed in thousands)


Component Units (FYE 2006)
University of Florida Direct-Support Health Science Shands Hospital
2005-06 2004-05 Organizations Center Affiliates and Others


REVENUES
Operating Revenues:
Student Tuition and Fees $ 255,373 $ 242,921
Scholarship Allowances (102,868) (86,216)
Student Tuition and Fees, Net of Scholarship Allowances 152,505 156,705
Federal Grants and Contracts 284,353 294,692
State and Local Grants and Contracts 36,118 70,080
Nongovernmental Grants and Contracts 322,067 334,642
Sales and Services of Auxiliary Enterprises (Notel2) 133,546 120,686
Sales and Services of Educational Departments 53,373 42,026
Sales and Services of Component Units
Hospital Revenues
Gifts and Donations Component Units
Royalties and Licensing Fees Component Units
Interest on Loans and Notes Receivable 726 386
Other Operating Revenues 533 2,194

Total Operating Revenues 983,221 1,021,411

EXPENSES
Operating Expenses:
Compensation and Employee Benefits 1,128,013 1,053,495
Services and Supplies 340,892 327,796
Utilities and Communications 63,884 51,133
Scholarships, Fellowships and Waivers 68,614 82,748
Depreciation 107,398 101,215
Self-Insured Claims and Expenses 23,612 22,119
Other Component Unit Operating Expenses _

Total Operating Expenses (Note 13) 1,732,413 1,638,506

Operating Income (Loss) (749,192) (617,095)

NONOPERATING REVENUES (EXPENSES)
State Appropriations 596,314 557,086
Federal and State Student Financial Aid 97,013 90,111
Investment Income 19,246 22,894
Interest on Capital Asset Related Debt (5,342) (6,419)
Other Nonoperating Revenues (Expenses) (3,436) (2,895)

Net Nonoperating Revenues (Expenses) 703,795 660,777

Income (Loss) Before Other Revenues, Expenses,
Gains, or Losses (45,397) 43,682

Capital Appropriations 68,716 42,745
Capital Grants, Contracts and Donations 43,008 67,201
Gain/(Loss) on Disposal of Capital Assets (4,662) (5,778)
Additions to Permanent Endowments
Transfers from/(to) Component Units -

Total Other Revenues, Expenses, Gains or Losses 107 062 104,168

Increase in Net Assts 61,665 147,850

Net Assets, Beginning of Year 1,620,110 1,423,163

Adjustment to Beginning Net Assets (Note 20) 49,097

Adjusted Net Assets, Beginning of Year, as Restated 1,620,110 1,472,260

Net Assets, End of Year $ 1,681,775 $ 1,620,110

The accompanying notes to the financial statements are an integral part of the financial statements.

University of Florida


$







49,364

108,725
43,115

4,703

205,907







6,464

250,417

256,881

(50,974)




131,522
(4,180)
3,215

130,557


79,583



20
88,885
3,597

92,502

172,085

1,220,059



1,220,059

$ 1,392,144


$








379,484
8,043


10,148

397,675







4,444

328,737

333,181

64,494




2,395
(191)
(103,086)

(100,882)


(36,388)



175

49,278

49,453

13,065

100,059



100,059

$ 113,124


$







598
1,397,435
9,205
1,098

143,520

1,551,856







63,832

1,362,307

1,426,139

125,717




18,436

(17,261)

1,175


126,892




985
(32,596)

(31,611)

95,281

678,519



678,519

$ 773,800







9 FINANCIAL STATEMENTS


STATEMENT OF CASH FLOWS for the Fiscal Year Ended June 30, 2006
(amounts expressed in thousands)


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
Payments to Employees
Payments to Suppliers
Payments for Scholarships and Fellowships
Loans Issued to Students
Payments on Self-Insurance Claims
Other Operating Disbursements


Net Cash Used by Operating Activities

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
State Appropriations
Federal and State Scholarship Grants
Direct Loan Program Receipts
Direct Loan Program Disbursements
Funds Held for Others
Other Nonoperating Receipts
Other Nonoperating Disbursements

Net Cash Provided by Noncapital Financing Activities

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

Net Cash Used by Capital and Related Financing Activities

CASH FLOWS FROM INVESTING ACTIVITIES
Sales of Investments
Purchase of Investments
Investment Income


Net Cash Provided (Used) by Investing Activities

Net Decrease in Cash and Cash Equivalents

Cash and Cash Equivalents, Beginning of Year

Cash and Cash Equivalents, End of Year

RECONCILIATION OF NET OPERATING LOSS
TO NET CASH USED BY OPERATING ACTIVITIES
Operating Loss
Adjustments to Reconcile Net Operating Income to Net
Cash Used by Operating Activities:
Depreciation Expense
Changes in Assets and Liabilities:
Receivables, Net
Due from State and Component Units
Inventories
Other Assets
Accounts Payable
Accrued Salaries and Wages Payable
Due to State and Component Units
Deferred Revenue
Deposits Held in Custody
Compensated Absences Payable
Liability for Self Insured Claims

NET CASH USED BY OPERATING ACTIVITIES


University of Florida
2005-06 2004-05


$ 148,865
683,829
135,811
53,323
7,503
787
(1,114,254)
(404,321)
(68,614)
(8,486)
(12,555)
(371)

(578,483)


596,314
97,013
151,343
(151,238)
(2,130)
4,827
(4,628)

691,501


68,716
15,254
129
(175,814)
(7,602)
(5,342)

(104,659)


1,610,027
(1,643,986)
21,633

(12,326)

(3,967)

4,538

$ 571


$ (749,192)


107,398

17,787

86
(233)
601
3,146
(469)
20,734
(11)
10,613
11,057


$ (578,483)


$ 156,993
648,665
119,979
42,051
8,297
813
(1,047,517)
(351,644)
(82,748)
(9,843)
(10,997)
(13,564)

(539,515)


557,086
90,111
153,240
(153,591)
(12,835)
1,321
(2,937)

632,395


22,911
56,246
75
(188,311)
(6,351)
(6,419)

(121,849)


1,298,211
(1,320,257)
22,796

750

(28,219)

32,757

$ 4,538


$ (617,095)


101,215

(54,365)
422
89
632
26,565
(8,646)
604
(14,710)
29
14,623
11,122


$ (539,515)


The accompanying notes to the financial statements are an integral part of the financial statements.


A COMPONENT UNIT OF THE STATE OF FLORIDA








































NOTES TO THE FINANCIAL STATEMENTS

For the Fiscal Year Ended June 30, 2006


- SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

The significant accounting policies followed by the University
of Florida are described below to enhance the usefulness of the
financial statements.


A. Reporting Entity

The University of Florida is a separate public instrumentality
that is part of the State university system of public universities,
and is directly governed by a Board of Trustees (Trustees)
consisting of thirteen members. The Governor appoints six
citizen members and the State's 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 are also members. The State's Board of Education
is responsible for overseeing kindergarten through graduate
school education in the State. The State's Board of Governors
establishes the powers and duties of the Trustees. The Trustees
are responsible for setting policies for the University, which


provide governance in accordance with Florida law, State Board
of Education rules, and Board of Governors regulations. The
Trustees select the University President and the State Board
of Education ratifies 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 identified and
described in the Governmental Accounting Standards Board's
(GASB) Codification of Governmental Accounting and Financial
Reporting Standards, Sections 2100 and 2600. These criteria were
used to evaluate potential component units for which the primary
government is financially accountable and other organizations
for which the nature and significance of their relationship with
the primary government are such that exclusion would cause
the primary government's financial statements to be misleading
or incomplete. Based on the application of these criteria,
the University of Florida is a component unit of the State of
Florida, and its financial balances and activities are reported
in the State's Comprehensive Annual Financial Report by
discrete presentation.


University of Florida







9 NOTES


B. Blended Component Unit

Based on the application of the criteria for determining
component units, the University of Florida Self-Insurance
Program (the Program), combined with the University of
Florida Healthcare Education Insurance Company (HEIC), is
included within the University's reporting entity as a blended
component unit. The Program was created by the State's Board
of Governors, pursuant to Section 1004.24, Florida Statutes.
The HEIC 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 Program's and the HEIC's sole purpose is to
assist in providing liability protection for the University
and its affiliated individuals and entities, and are therefore
reported as if they are part of the University. See Note 18 for
more details.


C. Discretely Presented Component Units

Based on the application of the criteria for determining
component units, certain affiliated organizations are included
within the University's reporting entity as discretely presented
component units. The University further categorizes its
component units as Direct-Support Organizations, Health
Science Center Affiliates, and Shands Teaching Hospital
and Others. 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. Additional
information on the University's discretely presented
component units, including copies of audit reports, is available
by contacting the Office of University Relations. Condensed
financial statements for the University's discretely presented
component units are shown in Note 22.


D. Direct-Support Organizations

The University's direct-support organizations, as provided for
in Section 1004.28, Florida Statutes, and Board of Governors
Regulation 6C-9.011, are considered 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
legally separate, not-for-profit, corporations are organized
and operated exclusively to assist the University to achieve
excellence by providing supplemental resources from private
gifts and bequests, and valuable education support services.


The Statute authorizes these organizations to receive, hold,
invest and administer property and to make expenditures to or
for the benefit of the University. These organizations and their
purposes are explained as follows:

University of Florida Foundation, Inc. solicits, collects,
manages, and directs contributions to the various academic
departments and programs of the University, and assists the
University in fund raising, public relations, and maintenance
of alumni records.

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

The 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.

The 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 educational
objectives of the Florida Cooperative Extension Service.

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

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.

The 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 contributions to and confer benefits upon
the University.


A COMPONENT UNIT OF THE STATE OF FLORIDA







) 2005-06 ANNUAL FINANCIAL REPORT


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

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

University of Florida Investment Corporation promotes the
educational purposes of the University of Florida by providing
investment research, advice, counsel, and management to and
for the University Board of Trustees and affiliated organizations
of the University.


E. Health Science Center Affiliates


Several corporations closely affiliated with the University of
Florida J. Hillis Miller Health Science Center (JHMHC) are
considered to be component units of the University of Florida.
These corporations are as follows:

* Florida Clinical Practice Association, Inc.

* UF Jacksonville Physicians, Inc.

* Faculty Associates, Inc.

* Florida Health Professions Association, Inc.

* UF College of Nursing Faculty Practice Association,
Inc.

* UF College of Pharmacy Faculty Practice
Association, Inc.

* Florida Veterinary Medicine Faculty Association,
Inc.

* UF Jacksonville Healthcare, Inc.

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

* Jacksonville Health Education Programs, Inc.
(discontinued as a component unit effective for the
2005-06 fiscal year)

The first seven corporations listed are Faculty Practice Plans,
as provided for in Board of Governors Regulation 6C- 9.017.
The Faculty 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 academic activities and their
employment as faculty. Because these faculty practice activities


generate income, the colleges are authorized to regulate fees
generated from faculty practice and maintain Faculty Practice
Plans for the orderly collection and distribution of fees. These
organizations provide significant support for the clinical
instruction function of the JHMHC.

University of Florida Jacksonville Healthcare, Inc., a Health
Services Support Organization, as provided for in Board of
Governors Regulation 6C-9.020, engages in strategic alliances
and partnerships with non-academic entities, ..tnri,..
managed care contracting 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.


F. Shands Teaching Hospital and Others

Shands Teaching Hospital and Clinics, Inc. (Shands) was
incorporated October 15, 1979, as a not-for-profit corporation.
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, as subsequently restated and amended, with the State
Board of Education of the State of Florida, to provide for the
use of hospital facilities at the JHMHC through December 31,
2030, with renewal provisions. The contractual 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 improvements
transferred to Shands remains with the State of Florida during
the term of the contractual agreement. The contractual
agreement provides for a 12-month grace period for any event
of default, other than the bankruptcy of Shands. In addition,
the contractual 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 revenues 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 JHMHC and further


University of Florida







0 NOTES


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. (the Center) was
incorporated October 19, 1970, under Section 1011.48,
Florida Statutes, to establish and operate an educational
research center for child development for children of
University of Florida students, faculty and staff. The Center
is funded primarily through fees paid by parents and an annual
allocation of funds from the Capital Improvement Trust Fund
established by the State Board of Education. In addition, the
Center receives other governmental assistance. The Center
uses a facility 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 Corporation) was
established in 1969, for the purpose of providing 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 consists of 28 two-story buildings
and is regulated by the United States Department of Housing
and Urban Development as to rent charges and operating
methods. 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 with accounting
principles generally accepted in the United States of America
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 University with
recommendations prescribed in accordance with generally
accepted accounting principles promulgated by GASB and the
Financial Accounting Standards Board (FASB). GASB allows
public universities various reporting options. The University
of Florida has elected to report as an entity engaged in only
business-type activities. This election requires the adoption


of the accrual basis of accounting and entity-wide reporting
including the following components:

* 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

4) Notes to the Financial Statements


H. Basis of Accounting

Basis of accountingrefers to whenrevenues, expenses, andrelated
assets and liabilities are recognized 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 measurement focus and the
accrual basis of accounting. Revenues, expenses, gains, losses,
assets, and liabilities resulting from exchange and exchange-
like transactions are recognized when the exchange takes
place. Revenues, expenses, gains, losses, assets, and liabilities
resulting from non-exchange activities are generally recognized
when all applicable ..i,.i-ir ,i, requirements, including time
requirements, are met.

The University's discretely presented component units use the
accrual basis of accounting whereby revenues are earned and
expenses are recognized when incurred; some follow GASB
and some, such as the University of Florida Foundation, Inc.
and Shands Teaching Hospital and Clinics, Inc., follow FASB
standards of accounting and financial reporting for not-for-
profit organizations.

The University follows FASB Statements and Interpretations
issued after November 30, 1989, unless those pronouncements
conflict with GASB pronouncements.

Interdepartmental sales between auxiliary service departments
and other institutional departments have been accounted for as
reductions of expenses and not revenues of those departments.

The University's principal operating activities consist of
instruction, research and public service. Operating revenues
and expenses generally include all fiscal transactions directly
related to these activities as well as administration, operation
and maintenance of capital assets, and depreciation on capital
assets. Nonoperating revenues include State appropriations,


A COMPONENT UNIT OF THE STATE OF FLORIDA







0 2005-06 ANNUAL FINANCIAL REPORT


Federal and State student financial aid, investment income and
revenues for capital construction projects. Interest on capital
asset-related debt is a nonoperating expense.

The Statement of Net Assets is presented in a classified format
to distinguish between current and noncurrent assets and
liabilities. When both restricted and unrestricted resources are
available to fund certain programs, 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
behalf of the student. The University applied "The Alternate
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, excluding 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 in compliance with GASB Statement No. 9, Reporting
Cash Flows for Proprietary and Non-Expendable Trust Funds.


I. Capital Assets

University capital assets consist of land, buildings, infrastructure
and other improvements, furniture and equipment, library
resources, property under capital lease and lease improvements,
works of art and historical treasures, computer software,
construction in progress, and other capital assets. These assets
are capitalized and recorded at cost at the date of acquisition or
at estimated fair value at the date received in the case of gifts or
purchases of State surplus property. Additions, improvements
and other outlays that significantly extend the useful life of
an asset are capitalized. Other costs incurred for repairs and
maintenance are expensed as incurred. The University has a
capitalization threshold of $1,00C f. .! r i.!. i1- p. i' -.1i property
and $100,000 for new buildings. For building improvements,
the threshold is $100,000, or less, if the amount expended is
at least 25% of the cost basis of the building. Depreciation
is computed on the straight-line basis over the following
estimated useful lives:


Buildings / Improvements 20 to 50 years,
depending on construction

Infrastructure and Other Improvements -
12 to 50 years

Furniture and Equipment 3 to 20 years

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

Computer Software 3 to 7 years

Library Resources- 10 years


J. Noncurrent Liabilities

Noncurrent liabilities include principal amounts of bonds and
revenue certificates payable, installment purchases agreements
payable, capital leases payable, compensated absences payable,
and liability for self-insured claims that are not scheduled to be
paid within the next fiscal year. Bonds and revenue certificates
payable are reported net of unamortized premium or discounts
and deferred losses on refundings. The University amortizes
bond premiums and discounts over the life of the bonds and
revenue certificates using the straight-line method. Deferred
losses on refundings are amortized over the life of the old
debt or new debt (whichever is shorter) using the straight-
line method. Issuance costs paid from the debt proceeds are
reported as deferred charges, and are amortized over the life
of the bonds and revenue certificates using the straight-line
method.


K. Other Significant Accounting Policies

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



M CASH AND CASH EQUIVALENTS

The amount reported by the University as cash and cash
equivalents consists of cash on hand and cash in interest
earning demand accounts. University cash deposits are held
in banks qualified as public depositories under Florida law.
All such deposits are insured by Federal depository insurance,
up to specified limits, or collateralized with securities held in
Florida's multiple financial institution collateral pool required
by Chapter 280, Florida Statutes. Cash and cash equivalents
that are externally restricted to make debt service payments,
maintain sinking or reserve funds, and to purchase or construct
capital assets are classified as restricted.


University of Florida







0 NOTES


- INVESTMENTS

Section 1011.42(5), Florida Statutes, authorizes universities
to invest funds awaiting clearing with the State Treasury and
State Board of Administration, and requires that universities
comply with the statutory requirements governing investment
of public funds by local governments. Accordingly, universities
are subject to the requirements of Chapter 218, Part IV,
Florida Statutes. Pursuant to Section 218.415(16), Florida
Statutes, the University is authorized to invest in the Local
Government Investment Pool, administered by the State Board
of Administration; interest-bearing time deposits and savings
accounts in qualified public depositories, as defined in Section
280.02, Florida Statutes; direct obligations of the United States
Treasury; obligations of Federal agencies and instrumentalities;
securities of, or interests in, certain open-end or closed-end
management type investment companies; Securities and
Exchange Commission registered money market funds with the
highest credit quality rating from a nationally recognized rating
agency; and other investments approved by the University's
Board of Trustees, as authorized by law. Investments set aside
to make debt service payments, maintain sinking or reserve
funds, or to purchase or construct capital assets are classified
as restricted. Investments of the University and its component
units at June 30, 2006 are reported at fair value and shown in
Tables 1 and 2.


Table 1. University Investments
Types of Investments


External Investment Pools:
Florida State Treasury Special Purpose Investment Account $
Florida State Board of Administration
Local Government Investment Pool
Florida State Board of Administration Debt Service Accounts
United States Government and Federally
-Guaranteed Obligations
Federal Agency Obligations
Repurchase Agreements
Bonds and Notes
Stocks
Certificates of Deposit
Money Market Funds

Total University Investments $


A. External Investment Pools


The University and its discretely presented compo
(See Note 1) reported investments at fair value
$7,955 and $47,429,801, respectively, at June 30, 2(
State Treasury Special Purpose Investment Accou
investment pool, representing ownership of a sh
pool, not the underlying securities. The State Tr


Fair Value

7,955
501,672,085

185,190
5,714,300

35,587,456
13,914,323
14,670,911
29,429,954
750,000
4,671,410

606,603,584




nent units
ie totaling
006, in the
nt (SPIA)
are of the
-easury has


Table 2. Component Units Investments
Types of Investments Fair Value


Total Component Units Investments


$ 47,429,801

28,308,023

68,631,237

33,994,200
89,541,272
585,948,038
5,942,414
113,941,789
716,011
94,910,625
475,336,326
191,472,929

$1,736,172,665


taken the position that participants in the pool should disclose
information related to interest rate risk and credit risk. The
SPIA carried a credit rating of AA-f by Standard and Poor's and
had an effective duration of 2.72 years at June 30, 2006. The
University relies on policies developed by the State Treasury
for managing interest rate risk or credit risk for this investment
pool. Disclosures for the State Treasury investment pool are
included in the notes to the financial statements of the State's
Comprehensive Annual Financial Report.

The University and its discretely presented component units
reported investments at fair value totaling $501,672,085
and $28,308,023, respectively, at June 30, 2006, in the Local
Government Investment Pool, administered by State Board
of Administration (SBA) pursuant to Section 218.405,
Florida Statutes. The University's investments in the Local
Government Investment Pool, a Securities and Exchange
Commission Rule 2a-7 like external investment pool, are
similar to money market funds in which shares are owned
in the fund rather than the actual underlying investments.
The SBA has taken the position that participants in the
pool are not required to disclose information related to
interest rate risk, custodial credit risk, concentration of
credit risk, and foreign currency risk. The investment pool
was not rated by a nationally recognized statistical rating
agency as of June 30, 2006.


B. Florida State Board of Administration Debt
Service Accounts

The University reported investments at fair value totaling
$185,190 at June 30, 2006, in the State Board of Administration
Debt Service Accounts. These investments are used to make


A COMPONENT UNIT OF THE STATE OF FLORIDA


External Investment Pools:
Florida State Treasury Special Purpose
Investment Accounts
Florida State Board of Administration Local Government
Investment Pool
United States Government and Federally
-Guaranteed Obligations
Federal Agency Obligations
Bonds and Notes
Investment Agreements
Real Estate Agreements
Stocks
Certificates of Deposit
Money Market Funds
Equity Mutual Funds
Bond Mutual Funds







0 2005-06 ANNUAL FINANCIAL REPORT


debt service payments on bonds issued by the State Board of
Education for the benefit of the University. The University's
investments consist of United States Treasury securities, with
maturity dates of six months or less. The University relies on
policies developed by the State Board of Administration for
managing interest rate risk or credit risk for these accounts.
Disclosures for the Debt Service Accounts are included in the
notes to the financial statements of the State's Comprehensive
Annual Financial Report.


C. Other Investments

In addition to external investment pools, the University and
its discretely presented component units invested in various
debt and equity securities, money market funds, mutual funds
and certificates of deposit. For the University, practically all of
the other investments are those reported by the University of
Florida Self-Insurance Program combined with the University
of Florida Healthcare Education Insurance Company, a blended
component unit (See Note 1). For the University's discretely
presented component units, other investments are those
reported primarily by the University of Florida Foundation,
Inc., University of Florida Research Foundation, Inc., The
University Athletic Association, Inc., Florida Clinical Practice
Association, Inc., and Shands Teaching Hospital and Clinics,
Inc. The following risks apply to University and discretely
presented component units investments other than external
investment pools:


Interest Rate Risk: Interest Rate Risk is the risk that
changes in interest rates will adversely affect the fair value
of an investment. Pursuant to Section 218.415(16), Florida
Statutes, the University's investments in securities must
provide sufficient liquidity to pay obligations as they come due.
Per the Statement of Investment Guidelines and Objectives
of the University of Florida Healthcare Education Insurance
Company, the weighted average duration of the fixed income
portfolio shall at all times be less than five years. Investments of
the University and its component units in debt securities and
bond mutual funds, and their future maturities at June 30, 2006
are shown in Tables 3 and 4, respectively.

Credit Risk: Credit Risk is the risk that an issuer or other
counterpart to an investment will not fulfill its obligations.
Obligations of the United States Government or obligations
explicitly guaranteed by the United States Government are
not considered to have credit risk and do not require disclosure
of credit quality. At June 30, 2006, the University and its
component units had bonds and notes, money market funds
and bond mutual funds, with quality ratings by nationally
recognized rating agencies (i.e., Moody's), as shown in Tables
5 and 6, respectively.

Custodial Credit Risk: Custodial credit risk is the risk that in
the event of the failure of the counterpart to a transaction,
the University will not be able to recover the value of its
investments or collateral securities that are in the possession
of an outside party. Exposure to custodial risk relates to


Table 3. University Debt Investment Maturities


Investment Maturities (in Years)


Types of Investments

United States Government and
Federally-Guaranteed Obligations
Federal Agency Obligations
Bonds and Notes

Total


Fair Value Less than 1

$ 5,714,300 $

35,587,456
14,670,911

$ 55,972,667 $


1-5

$


6-10

$ 548,858


24,563,075 10,401,418
10,776,199 3,894,712

$ 35,339,274 $ 14,844,988


More than 10

$ 5,165,442

622,963


$ 5,788,405


Table 4. Component Units Debt Investment Maturities


Investment Maturities (in Years)


Types of Investments

United States Government and
Federally-Guaranteed Obligations
Federal Agency Obligations
Bonds and Notes
Bond Mutual Funds


Fair Value

$ 68,631,237

33,994,200
89,541,272
191,472,929


Less than 1

$ 5,687,957


43,338,203
2,500,626


1-5

$ 30,675,540

30,169,609
30,933,332
54,038,506


6-10

$ 12,980,671

1,584,537
2,427,427
134,915,732


More than 10

$ 19,287,069

2,240,054
12,842,310
18,065


$ 383,639,638 $ 51,526,786 $ 145,816,987 $ 151,908,367 $ 34,387,498


University of Florida







0 NOTES


Table 5. University Debt Investments Quality Ratings


Types of Investments

Bonds and Notes
Money Market Funds

Total


Fair Value

$ 14,670,911
4,671,410

$ 19,342.321


AAA/Aaa

$ 847,722
4,671,410

$ 5.519.132


AA/Aa

$ 10,313,194

$ 10.313.194


A/Ba

$ 3,509,995

$ 3.509.995


Less than AIBa


Less than A/Ba
or Not Rated

$


Table 6. Component Units Debt Investments Quality Ratings


Types of Investments

Bonds and Notes
Money Market Funds
Bond Mutual Funds


Fair Value

$ 89,541,272
94,910,625
191,472,929


AAA/Aaa

$ 23,709,346

114,718,626


AA/Aa

$ 7,392,241

1,306,000


A/Ba

$ 37,335,532
14,775,605


Less than A/Ba
or Not Rated

$ 21,104,153
80,135,020
75,448,303


$ 375.924.826 $ 138,427,972 $ 8,698,241 $ 52,111,137 $ 176,687,476


investment securities that are held by someone other than the
University and are not registered in the University's name. The
University has no formal policy on custodial credit risk. The
component units manage their custodial credit risk based on
various investment policies, which may be obtained separately
from the component units.

Concentration of Credit Risk: Concentration of credit risk is
the risk of loss attributed to the magnitude of the University's
investments in a single issuer. The University has no formal
policy on concentration of credit risk. The component units
manage their concentration of credit risk based on various
investment policies, which may be obtained separately from
the component units.



M RECEIVABLES

A. Accounts Receivable

Accounts receivable represent amounts for contract and
grant reimbursements due from third parties, various sales
and services provided to students and third parties, student
tuition and fees, and interest accrued on investments and
loans receivable. These receivables, net of an allowance for
uncollectible accounts, are summarized in Table 7.


Table 7. Accounts Receivable


Contracts and Grants
Sales and Services of Auxiliary Enterprises
Student Tuition and Fees
Interest
Sales and Services of Educational Departments

Accounts Receivable, Net


$ 87,075,289
16,426,287
3,548,497
1,129,145
570,960

$ 108,750,178


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

Allowances for uncollectible accounts, and loans and notes
receivable, are recorded based upon management's best estimate
as of fiscal year-end, considering type, age, collection history,
and other factors considered appropriate. Accounts receivable
for student tuition and fees, various sales and services provided
to students and third parties, and interest are reported net of an
allowance of $8,703,874, which is 29% of total related accounts
receivable. Loans and notes receivable are reported net of an
allowance of $3,214,460, which is 8% of total related loans and
notes receivable. No allowance has been accrued for contracts
and grants receivable. University management considers these
to be fully collectible.



E DUE FROM STATE

This is the amount of Public Education Capital Outlay, Alec
P. Courtelis Capital Facility Matching Trust Fund, Capital
Improvement Fee Trust Fund and other allocations due to the
University for construction of University facilities.


A COMPONENT UNIT OF THE STATE OF FLORIDA


I







* 2005-06 ANNUAL FINANCIAL REPORT


a DUE FROM AND TO COMPONENT
UNITS/UNIVERSITY

The University's financial statements are reported for the fiscal
year ended June 30, 2006. The University's component units
financial statements are reported for the most recent fiscal year
for which an audit report is available. Some component units
have a fiscal year other than June 30. Accordingly, amounts
reported by the University as due from and to component
units on the Statement of Net Assets may not agree with
amounts reported by the component units as due from and to
the University.



- INVENTORIES

Inventories have been categorized into the following two types:

A. Departmental Inventories Those inventories maintained
by departments and not available for resale. Departmental
inventories are comprised of such items as classroom and
laboratory supplies, teaching materials, and office supply
items, which are consumed in the teaching and work process.
These inventories are normally expensed when purchased and
therefore are not reported on the Statement of Net Assets.


B. Merchandise Inventories Those inventories maintained
which are available for resale to individuals and 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.



U CAPITAL ASSETS

Capital assets activity for the fiscal year ended June 30, 2006 is
presented in Table 8.



M MUSEUM AND ART COLLECTIONS

The Florida Museum of Natural History, which is part of the
University, maintains a depository of biological, geological,
archaeological, and ethnographic materials. The Museum's
collections contain approximately 20 million 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.


Table 8. Capital Assets


Beginning
Description Balance


Capital Assets, Non-Depreciable:
Land
Construction in Progress
Works of Art and Historical Treasures

Total Capital Assets, Non-Depreciable


$ 10,369,253
172,560,857
413,062


Additions


$ 616,414
106,581,745
3,000


Ending
Reductions Balance


$ 63,140
196,675,107


$ 10,922,527
82,467,495
416,062


$ 183,343,172 $ 107,201,159 $ 196,738,247 $ 93,806,084


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
Computer Software
Other Capital Assets
Total Capital Assets, Depreciable


$ 1,229,099,910
68,800,967
542,874,953
229,338,761
9,815,002
521,931
31,829,623
2.305,435
2,114,586,582


Less: Accumulated Depreciation for:
Buildings 583,264,051
Infrastructure and Other Improvements 38,469,509
Furniture and Equipment 316,200,806
Library Resources 170,847,991
Property Under Capital Lease and Lease Improvements 693,750
Works of Art and Historical Treasures 197,045
Computer Software 7,632,919
Other Capital Assets 1,370,791
Total Accumulated Depreciation 1,118,676,862

Total Capital Assets, Depreciable, Net $ 995,909,720

(1) See Note ;.' -.. .. adjustment related to Shands' buildings accumulated depreciation.


$ 194,006,490
6,594,861
60,783,423
11,281,003

94,791
1,978,659
171,313
274,910,540


41,295,841
2,799,427
43,361,088
11,627,855
1,452,198
36,024
6,672,957
152.755
107,398,145

$ 167,512,395


$ 255,033

33,686,366
150,000

3,000
1,468,181
198,850
35,761,430


52,200,378 (1

26,092,532
(416,192)


929,705
57,439
78,863,862

$ (43,102,432)


$ 1,422,851,367
75,395,828
569,972,010
240,469,764
9,815,002
613,722
32,340,101
2,277,898
2,353,735,692


) 572,359,514
41,268,936
333,469,362
182,892,038
2,145,948
233,069
13,376,171
1,466,107
1,147,211,145

$ 1,206,524,547


University of Florida







C NOTES


WO DEFERRED REVENUES

Deferred revenues include amounts received prior to the end
of the fiscal year but related to subsequent accounting periods.
Deferred Revenues, as of June 30, 2006 are summarized in
Table 9.


Table 9. Deferred Revenues
Description Amount


Contracts and Grants
Sales and Services of Auxiliary Enterprises
Other Operating Revenue

Total Deferred Revenues


M LONG-TERM LIABILITIES

Long-term liabilities of the University at June 30,
bonds and revenue certificates payable, installme
agreements payable, capital leases payable, c
absences payable and liability for self-insured clai

Long-term liability activity for the fiscal year enc
2006 is presented in Table 10.


A. Bonds and Revenue Certificates Payable


$ 21,052,724
5,879,616
117,875

$ 27,050,215





2006 include
ent purchase
compensated
ns.

led June 30,


Bonds and revenue certificates were issued to construct
University facilities, including parking garages, student housing
facilities, 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 an assessed transportation fee
based on credit hours. Building and capital improvement fees,
collected as part of tuition and remitted to the State Board
of Education, are used to retire the revenue certificates of the


Table 10. Long-Term Liabilities


Beginning Ending Current
Balance Additions Reductions Balance Portion


Description


Capital Asset Related Debt:
Bonds and Revenue Certificates
Installment Purchase Agreements
Capital Leases

Total Capital Asset Related Debt

Other Long-Term Liabilities:
Compensated Absences
Liability for Self-Insured Claims

Total Long-Term Liabilities


$ 117,290,859
266,100
3,861,410

121,418,369


$ 44,684,640 $ 42,715,300
2,722,872 591,033
78,106

47,407,512 43,384,439


$ 119,260,199
2,397,939
3,783,304

125,441,442


129,285,894 230,778,598 220,165,676 139,898,816
65,202,520 26,301,281 15,244,323 76,259,478

$ 315.906.783 $ 304,487,391 $ 278,794,438 $ 341,599,736


$ 6,594,817
741,538
83,144

7,419,499

9,598,628
9,613,018

$ 26,631,145


A COMPONENT UNIT OF THE STATE OF FLORIDA


academic and student service facilities. The State Board of
Education and the State Board of Administration administer
the principal and interest payments, investment of sinking
fund resources, and compliance with reserve requirements.

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

On October 27, 2005, the University issued $37,610,000 of
University of Florida Housing Revenue Refunding Bonds,
Series 2005A, with interest rates ranging from 3.250 to
5.125 percent to advance refund callable portions of the
University's Housing Revenue Bonds, Series 1993 and 2000,
with rates from 5.0 to 7.0 percent. The refunding bonds were
issued to advance refund the $10,350,000 principal amount
of the Series 1993 bonds maturing on or after July 1, 2006,
and $26,070,000 principal amount of the Series 2000 bonds
maturing on or after July 1, 2011. The proceeds were used to
purchase U.S. Government securities, which were placed in
an irrevocable 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 bonds are not included
in the University's Statement of Net Assets. As a result of the
refunding, the University reduced its debt service requirement
by $3,491,349 over the next 25 years and obtained an economic
gain (difference between the present value of the debt service
payments on the old and new debt) of $2,166,783.

The Housing Revenue Bonds, Series 2000, are considered to be
in-substance defeated and the liabilities for the defeated bonds,
which total $26,070,000 at June 30, 2006, are not included in
the University's statement of net assets.

A summary of the University's bonds and revenue certificates
payable outstanding at June 30, 2006 appears in Table 11.

Annual requirements to amortize all bonded debt outstanding
as of June 30, 2006 appear in Table 12.







2005-06 ANNUAL FINANCIAL REPORT


Table 11. Bonds and Revenue Certificates Payable


Amount of
Original
Bond Series Issue

Student Housing Bonds:


$ 1,500,000
3,500,000
13,000,000
26,155,000
30,695,000
37,610,000
112,460,000



19,545,000
10,000,000
29,545,000


Parking Garage Bonds:


1993
1998
Subtotal


Academic and Student Services Facilities Bonds:
1997 11,349,317
1997A 4,723,765
1998 13,783,839
2001 4,259,373
2003A 12,359,757
2006A 8,470,880
Subtotal 54,946,931

Less: Unamortized Bonds Discounts


Plus: Unamortized Bond Premiums

Less: Unamortized Refunding Loss

Total Bonds and Revenue Certificates


$ 196,951,931


Total
Retired



$ 1,220,000
2,195,000
13,000,000
4,815,000
28,085,000
1,170,000
50,485,000



12,335,000
2,360,000
14,695,000


2,767,561
616,256
2,944,292
486,047
4,004,175

10,818,331


$ 75,998,331


Amount Outstanding
Principal Interest



$ 280,000 $ 12,750
1,305,000 181,950

21,340,000 11,256,499
2,610,000 353,750
36,440,000 25,470,151
61,975,000 37,275,100


7,210,000
7,640,000
14,850,000


8,581,756
4,107,509
10,839,547
3,773,326
8,355,582
8,470,880
44,128,600

(891,900)

1,062,645

(1,864,146)

$ 119,260,199


1,254,088
2,503,956
3,758,044


4,450,144
1,249,742
5,092,875
2,111,941
1,703,578
6.129,243
20,737,523


Bonds
Interest Maturity
Rate Date


3.000%
3.000%

4.200 to 5.000%
5.000 to 7.000%
3.250 to 5.125%


4.800 to 5.000%
3.875 to 4.750%



5.100 to 5.625%
4.400 to 5.000%
4.000 to 5.000%
4.000 to 5.000%
5.000%
4.000 to 5.000%


$ 61,770,667


B. Installment Purchase Agreements Payable

The University has entered into several installment purchase
agreements for the purchase of equipment reported at
$3,355,954. The stated interest rates ranged from 2.38%
to 8.90%. Future minimum payments remaining under the
agreements as of June 30, 2006 appear in Table 13.


C. Capital Leases Payable

On June 8, 1994, the former Board of Regents, on behalf 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
garage) located near the Health Science Center Administrative
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 acquired by the Foundation from
Shands Teaching Hospital and Clinics, Inc. (Shands), also
a component unit, and financed by the Foundation through
the issuance of a promissory note secured by a non-recourse
mortgage containing payment terms similar to those in the lease
agreement between the Foundation and the University. 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 Accounting
Standards Board (FASB) Statement No. 13, Accounting 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 Property 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


University of Florida


1959F
1984
1993
1998
2000
2005A
Subtotal







0 NOTES


Table 12. Bonded Debt Outstanding
Fiscal Year
Ending June 30 Principal Interest Total


$ 6,594,817
6,693,365
6,173,831
6,410,424
6,727,925
31,955,513
26,854,198
18,505,425
11,038,102
120,953,600


Less: Unamortized Bond Discounts (891,900)
Plus: Unamortized Bond Premiums 1,062,645
Less: Unamortized Refunding Loss (1.864.146)

Total $119,260,199


$ 5,823,385 $ 12,418,202
5,448,075 12,141,440
5,163,964 11,337,795
4,880,683 11,291,107
4,583,979 11,311,904
18,172,137 50,127,650
11,114,181 37,968,379
5,235,691 23,741,116
1,348,572 12,386,674
61,770,667 182,724,267

(891,900)
1,062,645
(1,864,146)

$ 61,770,667 $181,030,866


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 interest. For reporting
purposes, the lease is considered a capital lease under FASB
Statement No. 13, Accounting for Leases. The initial obligation
was discounted at an imputed interest rate of 6.45% and was
recorded at $2,981,939. The asset, "Leased Property Under
Capital Lease," was recorded at cost to Shands of $6,815,002.
A summary of pertinent information related to the two capital
leases appears in Table 14.

Future minimum payments under the capital lease agreements as
of June 30, 2006 are presented in Table 15.


D. Compensated Absences Payable


Table 13. Installment Purchase Agreements
Fiscal Year
Ending June 30 Principal Interest Total


$ 741,538
617,062
397,463
367,593
241,823
32,460

$ 2,397,939


$ 90,895
58,382
35,961
20,546
6,637
1,240

$ 213,661


$ 832,433
675,444
433,424
388,139
248,460
33,700

$ 2,611,600


Table 14. Capital Leases Payable


Capital Leases

Shands Garage (607 spaces)
Shands Garage (800 spaces)

Total


Outstanding
Interest Original Balance At
Rate Balances June 30, 2006

6.45% $ 1,382,470 $ 1,047,097
6.45% 2,981,939 2,736,207

$ 4,364,409 $ 3,783,304


Table 15. Capital Leases Principal and Interest


Principal Interest


$ 83,144
88,506
94,215
100,292
106,761
646,419
883,573
1,001,282
779,112

$3,783,304


$ 244,023
238,660
232,952
226,875
220,406
989,415
752,261
434,552
129,554

$3,468,698


Total

$ 327,167
327,166
327,167
327,167
327,167
1,635,834
1,635,834
1,435,834
908,666

$ 7,252,002


Employees earn the right to be compensated during absences
for annual leave (vacation) and sick leave earned pursuant
to Board of Governors Regulation 6C-5.920 and bargaining
agreements. Leave earned is accrued to the credit of the
employee, and records are kept on each employee's unpaid
(unused) leave balance. The University reports a liability for
the accrued leave; however, State appropriations fund only
the portion of accrued leave that is used or paid in the current
fiscal year. Although the University expects the liability to
be funded primarily from future appropriations, generally
accepted accounting principles do not permit the recording of a
receivable in anticipation of future appropriations. At June 30,
2006, the estimated liability for annual, sick, and compensatory
leave is $82,742,491, $56,821,684, and $334,641, respectively,
which includes the University's share of the Florida Retirement
System and FICA contributions. The current portion of the
compensated absences liability is the amount expected to be
paid in the coming fiscal year, and is based on actual payouts
over the last three years, calculated as a percentage of those
years' total compensated absences liability.



M 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 preparation totaled $90,628,955 for the fiscal year
ended June 30, 2006.


A COMPONENT UNIT OF THE STATE OF FLORIDA


2007
2008
2009
2010
2011
2012-2016
2017-2021
2022-2026
2027-2031
Subtotal


2007
2008
2009
2010
2011
2012-2016

Total


Fiscal Year
Ending June 30


2007
2008
2009
2010
2011
2012-2016
2017-2021
2022-2026
2027-2031

Total







1 2005-06 ANNUAL FINANCIAL REPORT


M FUNCTIONAL DISTRIBUTION OF
OPERATING EXPENSES

The functional classification of an operating expense
(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 departments for which the
primary departmental function 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 elements,
all expenses of those departments are reported under the
instruction classification. The operating expenses on the
Statement of Revenues, Expenses, and Changes in Net Assets
are presented by natural classifications. Table 16 presents those
same expenses in functional classifications as recommended by
NACUBO.


Table 16. Functional Expenses
Amount
Functional Classification (in thousands)

Instruction $ 534,863
Research 441,181
Public Service 134,959
Academic Support 109,949
Student Services 31,143
Institutional Support 95,643
Operations and Maintenance of Plant 90,644
Scholarships, Fellowships and Waivers 47,390
Auxiliary Operations 139,243
Depreciation 107,398

Total Operating Expenses $ 1,732,413


PE OPERATING LEASE COMMITMENTS


The University has long-term commitments for assets 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 when paid or incurred. Outstanding commitments
resulting from these lease agreements are contingent upon
future appropriations and not considered material.



PMI CONSTRUCTION COMMITMENTS

The University's major construction commitments at
June 30, 2006 are presented in Table 17.


University of Florida


En RETIREMENT PROGRAMS

A. Florida Retirement System

Most employees working in regularly established positions of
the University are covered by the Florida Retirement System
(FRS). The FRS is primarily a State-administered, cost-sharing,
multiple-employer, defined benefit retirement plan (Plan). FRS
provisions are established by Chapters 121 and 122, Florida
Statutes; Chapter 112, Part IV, Florida Statutes; Chapter 238,
Florida Statutes; and Florida Retirement System Rules, Chapter
60S, Florida Administrative Code, wherein Plan ..i,..i1ri,,.
contributions, and benefits are defined and described in detail.
Essentially, all regular employees of participating employers are
i.. Ii.- to enroll as members of the FRS.


Benefits in the Plan vest at 6 years of service. All members
are ..i.. ili,. 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 his or her normal retirement date. The
Plan provides retirement, disability, and death benefits, and
annual cost-of-living adjustments.

A Deferred Retirement Option Program (DROP), subject
to provisions of Section 121.091, Florida Statutes, permits
employees ..i1..1ii,. for normal retirement under the Plan to
defer receipt of monthly benefit payments while continuing
employment with an FRS employer. An employee may
participate in the DROP for a period not to exceed 60 months
after electing to participate. During the period of DROP
participation, deferred monthly benefits are held in the FRS
Trust Fund and accrue interest.


The State of Florida establishes contribution rates for
participating employers. Employer contribution rates (none
from employees) during the 2005-06 fiscal year are presented
in Table 18.


The University's liability for participation is limited to the
payment of the required contribution at the rates and frequencies
established by law on future payrolls of the University. The
University's contributions for the fiscal years ended June 30,
2004, June 30, 2005, and June 30, 2006, totaled $25,100,999,
$24,323,691, and $26,643,733, respectively, which were equal
to the required contributions for each fiscal year.







0 NOTES


Table 17. Construction Commitments


Project Name

O'Connell Center Fire Code Corrections
Cancer and Genetics Research Center
Broward Courts Phase II
Proton Therapy Institute located in Jacksonville, Florida
College of Medicine/JAX Biomedical Research Lab
Powell Structures & Materials Testing Laboratory
NIMET Nanoscale Research Facility (NRF)
George Steinbrenner Band Building
Kathryn Chicone Ustler Hall
Whitney Lab Marine Studies Classrooms
CREC Citrus Pathology Lab Renovations
Harrell Center Renovation
Murphree Hall Renovation
Hub Renovation
Indian River REC Biological and Agricultural Research
2004-05 PECO Maintenance, Repair, Life Safety, ADA, etc.
UF Brain Institute Renovations AMRIS Facility
2004-05 Utilities/Infrastructure/Capital Renewal/Roofs
Biomedical Sciences Building
HR Facility Renovation
Campus Security Lighting
Graham Center at Pugh Hall
J. Wayne Reitz Student Union Renovation and Repairs
2005-06 PECO Maintenance, Repair, Life Safety, ADA, etc. (Campus Planning)
2005-06 PECO Maintenance, Repair, Life Safety, ADA, etc. (IFAS)
2005-06 PECO Maintenance, Repair, Life Safety, ADA, etc. (PPD)
2005-06 Utilities/Infrastructure/Capital Renewal/Roofs
Eastside Campus Renovations

Total
Projects Under $1,000,000
Reversal of Accounts Payable at June 30, 2005

Total



Table 18. Florida Retirement System Rates
Class or Plan Percent of Gross Salary*


Florida Retirement System, Regular
Florida Retirement System, Senior Management Service
Florida Retirement System, Special Risk
Deferred Retirement Option Program-Applicable
to members from all of the above classes or plan


7.83%
10.45%
18.53%

9.33%


* Employer rates for each membership class include 1. 11% for the post-employment health
insurance subsidy (See Note 17). Also, employer rates, other than for DROP participants,
include. 05% for administrative costs of the Public Employee Optional Retirement Program.


Section 121.4501, Florida Statutes, provides for a Public
Employee Optional Retirement Program (PEORP). The
PEORP is a defined contribution plan alternative available
to all FRS members in lieu of the FRS defined benefit plan.
University employees already participating in the State
University System Optional Retirement Program or the DROP
are not ..i.i.i. to participate in this program. Employer
contributions are defined by law, but the ultimate benefit
depends in part on the performance of investment funds. The
PEORP is funded by employer contributions that are based


Current
Commitment


Expenses


Commitment
Balance


S 1.660.000 $ 1.470.963 $ 189.037


2,935,593
2,432,000
31,420,000
3,233,439
2,727,000
35,151,600
6,000,000
4,947,000
3,645,359
2,301,698
1,053,301
9,047,200
10,705,000
4,989,396
9,159,424
1,300,000
6,867,900
92,400,000
3,750,000
1,250,000
15,732,000
1,500,000
1,351,322
2,222,033
4,300,366
14,032,536
2,600,000

278,714,167
42,132,376


$ 320,846,543


2,935,593
2,158,858
17,880,678
110,553
2,692,165
2,119,908
112,680
4,022,622
2,974,099
549,229
704,887
6,945,334
3,337,022
34,446
4,604,505
1,080,000
3,499,431
675,451
45,597
13,631
25,000
200,000
224,917
1,053,775
950,067
531,288
2,530,436

63,483,135
31,395,696
(12,411,336)

$ 82,467,495


273,142
13,539,322
3,122,886
34,835
33,031,692
5,887,320
924,378
671,260
1,752,469
348,414
2,101,866
7,367,978
4,954,950
4,554,919
220,000
3,368,469
91,724,549
3,704,403
1,236,369
15,707,000
1,300,000
1,126,405
1,168,258
3,350,299
13,501,248
69,564

215,231,032
10,736,680
12,411,336

$ 238,379,048


on salary and membership class (Regular, Special Risk, etc.).
Contributions are directed to individual member accounts, and
the individual members allocate contributions and account
balances among various approved investment choices. There
were 1,087 University participants during the 2005-06 fiscal
year. Required contributions made to the PEORP totaled
$2,431,849.

Financial statements and other supplementary information
of the FRS are included in the State's Comprehensive
Annual Financial Report, which is available from the Florida
Department of Financial Services. An annual report on the FRS,
which includes its financial statements, required supplementary
information, actuarial report, and other relevant information,
is available from the Florida Department of Management
Services, Division of Retirement.


A COMPONENT UNIT OF THE STATE OF FLORIDA







D 2005-06 ANNUAL FINANCIAL REPORT


B. State University System Optional Retirement
Program

Section 121.35, Florida Statutes, provides for an Optional
Retirement Program (Program) for ..i.iil. university
instructors and administrators. The Program is designed to
aid State universities in recruiting employees by .tt. i i. more
portability to employees not expected to remain in the FRS for
six or more years.

The Program is a defined contribution plan, which provides
full and immediate vesting of all contributions submitted to
the participating companies on behalf of the participant.
Employees in ..i.iil. positions can make an irrevocable
election to participate in the Program, rather than the FRS,
and purchase retirement and death benefits through contracts
provided by certain insurance carriers. The employing
university contributes, on behalf of the participant, 10.43%
of the participant's salary. A small amount remains in the
Optional Retirement Program Trust Fund for administrative
costs. The remaining contribution is invested in the company
or companies selected by the participant to create a fund for
the purchase of annuities at retirement. The participant may
contribute, by salary deduction, an amount not to exceed the
percentage contributed by the University to the participant's
annuity account.

There were 5,110 University participants during the 2005-
06 fiscal year. Required employer contributions made to the
Program totaled $37,000,595 and employee contributions
totaled $18,337,460.


C. Institute of Food and Agricultural Sciences
Supplemental Retirement

In 1984, the Florida Legislature enacted the Institute of Food and
Agricultural Sciences Supplemental Retirement 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
University of Florida. The supplement is designated for IFAS
cooperative extension employees employed before 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 intended to compensate these IFAS employees
for the difference between their Civil Service benefit and
the benefits an FRS member receives, which include a social
security benefit. No additional persons can become ..-i. Ji-i. for
this supplement.


There were 83 University participants during the 2005-06
fiscal year. Required employer contributions made to the
program totaled $1,784,645 and employee contributions
totaled $470,406.


D. Other Retirement Programs

Some University employees participate in the Florida Teacher's
Retirement System and the U.S. Civil Service Retirement
System. Three employees were covered by the Florida Teacher's
Retirement System during the 2005-06 fiscal year. Employer
contributions totaled $35,957, and employee contributions
totaled $21,174. Fifteen employees were covered by the U.S.
Civil Service Retirement System during the 2005-06 fiscal
year. Employer contributions totaled $77,605, and employee
contributions totaled $77,605.



M POST-EMPLOYMENT BENEFITS

Pursuant to Section 112.363, Florida Statutes, the Florida
Legislature established the Retiree Health Insurance Subsidy
(HIS) to assist retirees of all State-administered retirement
systems in paying health insurance costs. During the 2005-06
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 retirement systems.
This assessment is included in the Florida Retirement System
contribution rates presented in Table 18.

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 2005-06 fiscal year, participants received an extra
$5 per month for each year of creditable service completed
at the time of retirement; however, no ..i,..iiV. 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.



E. RISK MANAGEMENT PROGRAMS

A. State Self-Insurance Funds

Pursuant to Section 1001.72(3), Florida Statutes, the
University participates in State self-insurance programs
providing insurance coverage for property and casualty, workers'
compensation, general liability, and fleet automotive liability.
During the 2005-06 fiscal year, the State retained the first $2


University of Florida







0% NOTES


million of losses for each occurrence with an annual aggregate
retention of $40 million for wind and flood and $5 million for
perils other than wind and flood. After the annual aggregate
retention, losses in excess of $2 million per occurrence were
commercially insured up to $50 million for wind, $50 million
for flood, and $200 million for perils other than wind and flood;
and losses exceeding those amounts were retained by the State.
Payments on tort claims are limited to $100,000 per person
and $200,000 per occurrence as set by Section 768.28(5),
Florida Statutes. Calculation of premiums considers the cash
needs of the program and the amount of risk exposure for each
participant. The $50 million wind coverage is $35 million less
than the coverage provided for the 2004-05 fiscal year. There
have been no other significant reductions in insurance coverage
from the prior year coverage. Settlements have not exceeded
insurance coverage during the past three years.

Pursuant to Section 110.123, Florida Statutes, University
employees may obtain health care services through
participation in the State's group health insurance plan or
through membership in a health maintenance organization
plan under contract with the State. The State's risk financing
activities associated with State group health insurance, such
as risk of loss related to medical and prescription drug claims,
are administered through the State Employees Group Health
Insurance Trust Fund. It is the practice 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 Florida Department of Management Services, Division of
State Group Insurance.


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 1004.24, Florida Statutes. The Self-Insurance
Programs provide general and professional liability protection
for the University on behalf of the six health colleges of
the JHMHC, that also include the Student Health Service
Auxiliary and the Veterinary Medical 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 is protected for losses, which are subject to Section
768.28, Florida Statutes, including legislative claims bills, that
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.

Pursuant to Board of Governors Regulation 6C-10.001(2),
the University of Florida Self-Insurance Program Councils
have created the University of Florida Healthcare Education
Insurance Company (HEIC), a captive insurance company
which is wholly owned by the State's Board of Governors and
domiciled in the State of Vermont. HEIC is managed by a
Board of Directors created by the Florida Board of Governors.
HEIC provides coverage for claims that are in excess of the
protections afforded by the JHMHC Self-Insurance Program
and the JHMHC/Jacksonville Self-Insurance Program at
limits of $4 million per-claim coverage for insured participants
subject to Section 768.28, Florida Statutes, and $3 million per
claim for insured participants that are not subject to Section
768.28, Florida Statutes. HEIC provides additional limits of
liability coverage of $50 million per claim and in the aggregate,
which is in excess of the coverages described above. The excess
insurance is paid to claimants on a first come-first serve basis.

Claims settlement and adjustment expenses are accrued as
expenses and liabilities of the University of Florida JHMHC
Self-Insurance Program, inclusive of the University of Florida
JHMHC Self-Insurance Program (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 that is reported as
a "Liability for Self-Insured Claims." The estimated settlement
value of claims was determined based on the judgment and
experience of management and the Self-Insurance Program


TABLE 19. Liability for Self-Insured Claims


Claims Liabilities
Beginning
of Year

$ 54,080,468
65 202 520


Current Claims/
Changes in
Estimates

$ 18,361,642
26301 281


Claims Payments

$ (7,239,590)
(15,244,323)


Claims
Liabilities
End of Year

$ 65,202,520
76 259 478


A COMPONENT UNIT OF THE STATE OF FLORIDA


Fiscal Year

2004-05
2005-06







* 2005-06 ANNUAL FINANCIAL REPORT


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 Programs at June 30, 2006 was $76,259,478
for compensatory losses and for allocated expenses. The
"Liability for Self-Insured Claims" was accrued at an
undiscounted present value.

The aggregate amount of claims liabilities for which annuity
contracts have been purchased in the claimants' names,
resulting in the removal of the related liabilities from
the Statement of Net Assets, totals $50,000 for the Self-
Insurance Programs at June 30, 2006. 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 Programs during the 2004-05 and 2005-06 fiscal
years are presented in Table 19.



M LITIGATION

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 legal counsel and
management, should not materially affect the University's
financial position.



HM PRIOR PERIOD ADJUSTMENTS

Adjustments to beginning net assets are reported in accordance
with Accounting Principles Board Opinion Nos. 9 and 20, and
FASB Statement No. 16. The following adjustment was made
to beginning net assets reported in the Statement of Revenues,
Expenses, and Changes in Net Assets to correct a prior year
accounting error:

The University of Florida leased certain buildings to Shands
pursuant to a capital lease agreement in 1979. These buildings
are recorded on the University's property records, although for
financial statement reporting purposes they are considered an
asset of Shands in accordance with governmental accounting
and reporting standards for lease agreements. During the 2005-
06 fiscal year, it was discovered that while the building cost
had been removed for reporting purposes, the accumulated
depreciation was still being reported by the University. The


accumulated depreciation was removed from the University's
reporting records, increasing the University's invested in
capital assets, net of related debt by $51,022,336.

Because comparative data is presented within these financial
statements, the depreciation expense reported for 2005 was
reduced by $1,925,204 and the beginning net assets for 2005
was increased by $49,097,132, reflecting the total retroactive
application of the prior period adjustment.



M RESTATEMENT OF PRIOR YEAR'S
OPERATING REVENUES AND
OPERATING EXPENSES

During 2005-06 management decided to classify revenues and
expenses of the Universityof FloridaSelf-Insurance Program (the
Program) and the University of Florida Healthcare Education
Insurance Company (HEIC) as from auxiliary enterprises,
rather than from educational departments. Operating revenues
and expenses for the 2004-05 fiscal year have been restated by
$23,979,817 and $25,847,687, respectively.



M COMPONENT UNITS

The University's component units, as discussed in Note 1,
comprise 100% of the transactions and account balances of
the aggregate discretely presented component units' columns
of the financial statements. Summary financial information
from the most recently available audited financial statements
for these component units is presented on the following pages
in Tables 20, 21, and 22.



M41 SEGMENT INFORMATION

A segment is defined as 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 related revenues, expenses,
gains, losses, assets, and liabilities are required to be accounted
for separately. 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. Several 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
financial activity for these segments is presented in Table 23.


University of Florida











Table 20. Direct-Support Organizations
(amounts expressed in thousands)









Condensed Statement of Net Assets
Assets
Due from Component Units/University
Other Current Assets
Capital Assets, Net
Other Noncurrent Assets


Total Assets


Liabilities
Due to Component Units/University
Other Current Liabilities
Noncurrent Liabilities

Total Liabilities


Net Assets


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


Total Net Assets


Condensed Statement of Revenues, Expenses,
and Changes in Net Assets
Operating Revenues
Operating Expenses


5,764
810,106
395,015
22,675


$ 1,233,560


46,628

984
58,550 30,915


$ 58,550 $ 78,527


$ 73,318 $ 49,265 $ 45,030
(94,476) (76,028) (72,188)


38
3,870


515


$ 4,423


1,048
2,042
3,081
1,241 1,366


$ 6,364 $ 2,414


$ 30,074 $ 1,254 $ 954
(2,409) (894) (1,030)


Operating Income (Loss)


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


120,738 6,070 2,642
88,646 -
798 (2,034)
(2,678) 30,762


875 532 50
12
204 19
(28,526)


Change in Net Assets


Net Assets, Beginning of Year


Net Assets, End of Year


1,048,012 78,445 74,315


$ 1,233,560 $ 58,550 $ 78,527


A COMPONENT UNIT OF THE STATE OF FLORIDA


4,397 5,268 2,421


$ 4,423 $ 6,364 $ 2,414


) NOTES


University
of Florida
Foundation
6/30/2006


$
85,356
32,074
1,218,641


1,336,071



63,953
9,151
29,407


102,511


University
of Florida
Research
Foundation
6/30/2006


$ 57,795
75,372


1,512

134,679



13,762
28,167
34,200


76,129


University
of Florida
Athletic
Association
6/30/2006


$ 2,892
50,465
130,170
34,742


218,269



119
54,689
84,934


139,742


Gator
Boosters
6/30/2006


$ 5,217
4,247
38
449


9,951



5,140
299
89


5,528


University
of Florida
Law Center
Association
6/30/2006


$ 4,995
1,074


338


6,407


43



43


Florida
Foundation
Seed
Producers
6/30/2006


$
2,382
1,048



3,430



979
37



1,016


(21,158)


(26,763)


(27,158)


27,665


185,548


(19,895)


4,212







* 2005-06 ANNUAL FINANCIAL REPORT


Southwest Citrus Florida Treasure Coast University
Florida Fla. Research Research and Leadership Agricultural of Florida
4-H Club and Education Education & Education Research Alumni
Foundation Foundation Foundation Foundation Foundation Association
3/31/2006 6/30/2006 6/30/2006 12/31/2005 6/30/2006 6/30/2006




$ 2,477 $ $ 24 $ 2,691 $ $
1,817 44 560 1,179 180
129 16 2
118 -

4,412 173 600 3,870 182 _


University
of Florida Total
Investment Direct
Corporation Support
6/30/2006 Organizations




$ $ 76,091
739 223,415
99 163,576
1,255,800

838 1,718,882


83,953
158 14 2 855 567 93,982
S- 173 148,803

158 14 2 855 740 326,738


2,404 2,232
1,243 -
607 30 582 783 180


$ 4,254 $ 159 $ 598 $ 3,015 $ 182 $


99 53,724
-820,654
-400,323
(1) 117,443

$ 98 $ 1,392,144


$ 2,087 $ 24 $ 429 $ 1,951 $ 35 $ 1,486 $ $ 205,907
(1,981) (51) (186) (2,107) (11) (4,164) (1,356) (256,881)

106 (27) 243 (156) 24 (2,678) (1,356) (50,974)



358 2 3 237 3 -12 131,522
215 12 88,885
22 46 (945)
2,678 1,361 3,597

701 (25) 246 93 73 17 172,085


3,553 184 352 2,922 109 81 1,220,059

$ 4,254 $ 159 $ 598 $ 3,015 $ 182 $ $ 98 $ 1,392,144


University of Florida







0 NOTES


Table 21. Health Science Center Affiliates
(amounts expressed in thousands)


Condensed Statement of Net Assets
Assets
Due from Component Units/University
Other Current Assets
Capital Assets, Net
Other Noncurrent Assets


$ 17,936
43,313
4,033
36,904


102,186


Total Assets


Liabilities
Due to Component Units/University
Other Current Liabilities
Noncurrent Liabilities


14,938
15,870


30,808


Total Liabilities


$ 5,063
53,984
7,970
132


67,149



7,129
19,443
16,089


42,661


1,047
6,519


7,566


$ 134
2,450


20


2,604


1,522 719
1,166


1,522 1,885


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


Total Net Assets


Condensed Statement of Revenues, Expenses, and Changes in Net Assets
Operating Revenues
Operating Expenses


Operating Income (Loss)


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


Change in Net Assets


Net Assets, Beginning of Year


Net Assets, End of Year


7,945


63,433


$ 71,378


3,258


21,230


4,772


$ 24,488 $ 6,044


A COMPONENT UNIT OF THE STATE OF FLORIDA


Florida
Clinical
Practice
Association
6/30/2006


University of
Florida
Jacksonville
Physicians
6/30/2006


Faculty
Associates
6/30/2006


Florida
Health
Professions
Association
6/30/2006


3,592


(3,274)


67,786


$ 71,378



$ 219,050
(151,746)


27,762


$ 24,488



$ 144,227
(147,941)


6,044


$ 6,044



$ 19,047
(11,134)


719


$ 719



$ 8,297
(3,094)


67,304


7,913


5,203


(3,714)


1,013
(3,793)
9,752


917
(85,790)
25,514


97
(8,602)
1,864


60
(42)
(4,956)


454


$ 719







Q 2005-06 ANNUAL FINANCIAL REPORT


Nursing
Faculty
Practice
Association
6/30/2006





$ 74
3,125


973


4,172


Pharmacy
Faculty
Practice
Association
6/30/2006





$ 823
198





1,021


Veterinary
Medicine
Faculty
Association
6/30/2006





$ 200
3,987





4,187


University of
Florida
Jacksonville
Healthcare
6/30/2006





$ 1,582
258
2,848



4,688


2,614
39 60 703 1,705



39 60 703 4,319



2,848


4,133 961 3,484 (2,479)


$ 4,133 $ 961 $ 3,484 $ 369



$ 881 $ 74 $ 5,354 $ 327
(504) (107) (928) (16,523)


377 (33) 4,426 (16,196)


Faculty
Clinic
6/30/2006


2,222
4,102
1,613


7,937



16
73
6,300


6,389



(2,198)
1,500
2,246


$ 1,548



$ 418
(1,204)


(786)


91 32 68 117
1 (4,290) (10) (191)
__11 16,206 887


469 10 204 27


3,664 951 3,280 369 1,521


$ 4,133 $ 961 $ 3,484 $ 369 $ 1,548


University of Florida


Jacksonville
Health
Education
Programs
(Unaudited)
9/30/2005


Total
Health
Science
Center
Affiliates





$ 26,859
116,056
18,953
39,642


201,510


9,759
39,202
- 39,425


- 88,386


$



$


(385)



(385)


385


$


968
1,500
110,656


$ 113,124



$ 397,675
(333,181)


64,494



2,395
(103,102)
49,278


13,065


100,059


$ 113,124


I







( NOTES


Table 22. Shands Teaching Hospital and Others
(amounts expressed in thousands)


Shands
Teaching Baby Gator
Hospital Childcare
& Clinics Center
6/30/2006 6/30/2006


University
Village
Apartments
6/30/2006


Condensed Statement of Net Assets
Assets
Due from Component Units/University
Other Current Assets
Capital Assets, Net
Other Noncurrent Assets


Total Assets


Liabilities
Due to Component Units/University
Other Current Liabilities
Noncurrent Liabilities


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


Total Net Assets



Condensed Statement of Revenues, Expenses,
and Changes in Net Assets
Operating Revenues
Operating Expenses


Operating Income (Loss)


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


$ 7,818 $ 217
563,877 114
639,138 32
266 700 -


1,477,533 363



8,207
234,860 70
461,784 -


704,851 70


220,671 32
155
3,167
548,689 261


$ 772,682 $ 293


$ 1,549,527 $ 1,111
(1,423,688) (1,143)


$ 54 $ 8,089
109 564,100
846 640,016
813 267,513


1,822


363
634


997


102



723


$ 825


1,479,718



8,207
235,293
462,418


705,918


220,805
155
3,167
549,673


$ 773,800


$ 1,218 $ 1,551,856
(1,308) (1,426,139)


125,839


125,717


18,420 12
985
(17,237)
(32,596)


4 18,436
985
(24) (17,261)
(32,596)


Change in Net Assets


Net Assets, Beginning of Year


Net Assets, End of Year


677,271 313


$ 772,682 $ 293


935 678,519


$ 825 $ 773,800


A COMPONENT UNIT OF THE STATE OF FLORIDA


Total
Shands
Teaching
Hospital
and Others


95,411


95,281







0 2005-06 ANNUAL FINANCIAL REPORT


Table 23. Segment Information


CONDENSED STATEMENT OF NET ASSETS
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

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


Transportation
and Parking Services



$ 4,504,519
30,963,724
3,362,760

38,831,003


4,611,608
16,556,263

21.167.871


12,448,432
3,014,215
2,200,485


Division of Housing



$ 11,915,584
60,329,936
5,149,025

77,394,545


5,531,422
59,247,672

64,779,094


5,088,565
3,831,653
3,695,233


$ 17,663,132 $ 12,615,451




$ 14,730,580 $ 36,456,873
(1,849,034) (3,665,579)
(10,716,623) (28,164,338)


Operating Income (Loss)

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

Net Nonoperating Revenues (Expenses)

Change in Net Assets


Net Assets, Beginning of Year

Net Assets, End of Year


17,118,912 15,190,520

$ 17,663,132 $ 12,615,451


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

Net Decrease in Cash and Cash Equivalents

Cash and Cash Equivalents, Beginning of Year

Cash and Cash Equivalents, End of Year


$ 3,948,433
(684,152)
(2,760,968)
(598,776)


(95,463)


97,863


$ 8,399,776
(3,695,429)
(9,361,057)
2,944,905


(1,711,805)


13,184,213


$ 2,400 $ 11.472.408


University of Florida


2,164,923


242,149
(985,517)
(132,686)

(744,649)


4,626,956


910,714
(2,405,244)
(2,499,562)
(3,185,817)
(22,116)


(7,202,025)

(2,575,069)


(1,620,703)


544,220







a SUPPLEMENTAL INFORMATION


Table 24. Financial Summary by Budget Entity For the Fiscal Year Ended June 30, 2006 (unaudited)
(amounts expressed in thousands)


Education and General
Restricted


Total Unrestricted


Health Science Center
Restricted


REVENUES
Student Tuition and Fees
Scholarship Allowance
Student Tuition and Fees, Net of
Scholarship Allowances
Federal Grants and Contracts
State and Local Grants and Contracts
Nongovernmental Grants and Contracts
Sales and Services of Auxiliary Enterprises
Sales and Services of Educational Departments
Interest on Loans and Notes Receivable
Other Operating Revenues


Total Operating Revenues


$ 234,047
(102,868)
131,179



7,432
1,489
100,980
31,854

299

273,233


$




66,500
(14,996)
71,416

178
573
373

124,044


$ 234,047
(102,868)
131,179

66,500
(7,564)
72,905
100,980
32,032
573
672

397,277


$ 21,044

21,044




3,740
32,566
18,376

(189)

75,537


$ $ 21,044

21,044


171,352
27,906
220,215

60
153
29

419,715


171,352
27,906
223,955
32,566
18,436
153
(160)

495,252


EXPENSES
Operating Expenses:
Personnel Services
Supplies and Other Services
Utilities and Communications
Scholarships, Fellowships and Waivers
Depreciation
Self-Insured Claims and Expenses


Total Operating Expenses

Operating Income (Loss)


NONOPERATING REVENUES (EXPENSES)
State Appropriations
Federal and State Financial Aid
Investment Income (Loss)
Interest on Capital Asset-Related Debt
Other Nonoperating Revenues (Expenses)

Net Nonoperating Revenues (Expenses)

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

Capital Appropriations
Capital Grants, Contracts and Donations
Transfers within University
Gain/(Loss) on Disposal of Capital Assets

Total Other Revenues Expenses, Gains, or Losses


Increase (Decrease) in Net Assets


463,685
138,330
49,819
23,737


675,571


(402,338)



374,098

7,063
(35)
(814)


92,620
64,678
1,684
31,897
76,307


(143,142)




96,956
8,931
(5,261)
(5,901)


380,312 94,725



(22,026) (48,417)


(166,985)



(166,985)


68,716
41,744
162,308
(2,370)

270,398


$ (189,011) $ 221,981


556,305
203,008
51,503
55,634
76,307



942,757

(545,480)



374,098
96,956
15,994
(5,296)
(6,715)

475,037



(70,443)

68,716
41,744
(4,677)
(2,370)


133,171
24,738
1,639
1,446

23,612

184,606

(109,069)


271,322
68,452
1,270
5,847
21,200


368,091 552,697


51,624


92,732


2,973
(27)
(277)


(8)
(256)


95,401 (207)


(13,668)


20,535



20,535


$ 32,970


51,417



1,264
(34,957)
(1,517)

(35,210)


$ 16,207


(57,445)



92,732
57
2,973
(35)
(533)

95,194



37,749



1,264
(14,422)
(1,517)

(14,675)


$ 23,074


A COMPONENT UNIT OF THE STATE OF FLORIDA


Unrestricted


404,493
93,190
2,909
7,293
21,200
23,612







4 2005-06 ANNUAL FINANCIAL REPORT


Institute of Food and Agricultural Science
Unrestricted Restricted


Unrestricted


Summary for University
Restricted


$ 282

282




1,292

2,355

23

3,952




125,814
17,882
9,037
3,310




156,043

(152,091)



129,484

159
(11)
3,808

133,440



(18,651)




23,786



23,786

$ 5,135


$ -$ 282

282

46,501 46,501
15,776 15,776
23,915 25,207

550 2,905

(2) 21

86,740 90,692




41,401 167,215
26,812 44,694
435 9,472
2,377 5,687
9,891 9,891



80,916 236,959

5,824 (146,267)


120

4

124



5,948




(4,687)
(775)


(5,462)

$ 486


129,484

279
(11)
3,812

133,564



(12,703)


$ 255,373
(102,868)
152,505



7,432
6,521
133,546
52,585

133

352,722




722,670
180,950
60,495
28,493

23,612

1,016,220

(663,498)



596,314

10,195
(73)
2,717

609,153



(54,345)


19,099 (122,664)
(775)

18,324 (122,664)

$ 5,621 $ (177,009)


University of Florida


$




284,353
28,686
315,546

788
726
400

630,499




405,343
159,942
3,389
40,121
107,398



716,193


(85,694)




97,013
9,051
(5,269)
(6,153)

94,642



8,948

68,716
43,008
122,664
(4,662)

229,726


$ 238,674


$ 255,373
(102,868)
152,505

284,353
36,118
322,067
133,546
53,373
726
533

983,221




1,128,013
340,892
63,884
68,614
107,398
23,612

1,732,413

(749,192)



596,314
97,013
19,246
(5,342)
(3,436)

703,795



(45,397)

68,716
43,008


(4,662)

107,062


$ 61,665







* SUPPLEMENTAL INFORMATION


FINANCIAL AID ADMINISTERED for the Fiscal Year Ended June 30, 2006 (unaudited)


2005-06
Number of
Recipients



7,793
1,888
2,722
66
18,014


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 Tuition Remission Waivers
General Scholarships
Total Institutional Grants


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


Aid
Disbursed


$ 20,067,707
2,283,670
8,203,712
456,243
151,238,346


30,483 $ 182,249,678


631
239
195
1,065



438
30,329
719
31 486


$ 574,794
390,380
547,826
1,513,000



503,599
76,092,424
1,198,042
77,794,065


32,551 $ 79,307,065


15,872
7,805
6,857
30,534


34,367,934
9,440,868
13,421,460
57,230,262


4,648 7,949,242


35,182 $ 65,179,504


Total Other Scholarships and Grants


Fee Waivers:
Non-Resident Tuition Waivers
Other Waivers


Total Fee Waivers Administered


Total Financial Aid Administered


1,309
9,562


$ 5,885,614
19,358,449


10,871 $ 25,244,063


$ 351,980,310


A COMPONENT UNIT OF THE STATE OF FLORIDA











UNIVERSITY OF FLORIDA

ANNUAL FINANCIAL REPORT 2005-06


UNIVERSITY OF FLORIDA BOARD OF TRUSTEES


Joelen Merkel
Ocean -,,d,. FL


Carlos J. Alfonso
Tampa, FL

C. David Brown II
Orlando, FL


John Boyles
University of Florida
Student ; President

J. Courtney Cunningham
Pinecrest, FL

Roland Daniels
Gainesville, FL

Manny A. Fernandez
Ft. Myers, FL

W. A. "Mac" McGriff III
1,.i ,, !. FL



EXECUTIVE OFFICERS
J. Bernard Machen
President

Jane Adams
Vice .. ;. 1. University Relations

Douglas J. Barrett
Senior Vice .. ;. 1 Health, i .


Kyle Cavanaugh
Vice. .. .. 1 Human Resources

Jimmy G. Cheek
Senior Vice .. ;. i Agriculture
and Natural Resources

Janie M. Fouke
Provost and Senior Vice President for
Academic Affairs

Jamie Lewis Keith
Vice President and General Counsel

Winfred M. Phillips
Vice President for Research

Ed Poppell
Vice .. ;. 1. Finance and Administration

Paul A. Robell
Vice i Development and
Alumni, I .

Patricia Telles-Irvin
Vice .. ;. ,. .i Student, 1 .


Dianna Fuller Morgan
Windermere, FL

Cynthia F O'Connell
Tallahassee, FL

Earl Powell
Miami, FL

Alfred C. Warrington IV
Freeport, TX


Danaya Wright
University of Florida
Faculty Senate Chair


PRINCIPAL FINANCE AND
ACCOUNTING OFFICIALS
Michael V. McKee
Assistant Vice President and University Controller

Greg DuBois
Senior Associate C i. !!.. University ..i, ,and
Disbursement Services

Stuart E. Hoskins
Senior Associate C i. !!.. I. University
Financial Services and T.. Management

Larry Reese
Senior Associate C i.H !!.. Operational Controls and


Gloria Sheffield
Senior Associate C !!.. .I General Accounting, University
S. !! Tax Services and Asset Management

Diego Vazquez
Senior Associate F' .. i Contract and Grant Accounting
Services























































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