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Group Title: Financial statements, University of Florida Athletic Association, Inc.
Title: Financial statements, University of Florida Athletic Association, Inc. 2005-2006.
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Title: Financial statements, University of Florida Athletic Association, Inc. 2005-2006.
Series Title: Financial statements, University of Florida Athletic Association, Inc.
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Language: English
Creator: University Athletic Association, Inc.
Publisher: University Athletic Association, Inc.
Publication Date: 2005-2006
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Volume ID: VID00002
Source Institution: University of Florida
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Table of Contents
    Front Cover
        Front Cover
    Table of Contents
        Table of Contents
    Independent auditors' report
        Page 1
    Required supplementary information
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
    Basic financial statements
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
        Page 26
        Page 27
        Page 28
        Page 29
        Page 30
    Report on internal control
        Page 31
Full Text















THE UNIVERSITY ATHLETIC ASSOCIATION, INC.

FINANCIAL STATEMENTS

JUNE 30,2006 AND 2005








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
JUNE 30,2006 AND 2005
TABLE OF CONTENTS



Page(s)

Independent Auditors' Report 1

Required Supplementary Information
Management's Discussion and Analysis 2- 12

Basic Financial Statements
Statements of Net Assets 13
Statements of Revenues, Expenses, and Changes in Net Assets 14
Statements of Cash Flows 15 16
Notes to Financial Statements 17 30

Report on Internal Control over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing
Standards 31








JAMES MOORE & CO., P.L.
CERTIFIED PUBLIC ACCOUNTANTS
AND CONSULTANTS

INDEPENDENT AUDITORS' REPORT



The Audit Committee,
The University Athletic Association, Inc.:


We have audited the accompanying basic financial statements of The University Athletic Association,
Inc. (the Association), a direct support organization and component unit (for accounting purposes only) of
the University of Florida, as of and for the years ended June 30, 2006 and 2005, as listed in the table of
contents. These basic financial statements are the responsibility of the Association's management. Our
responsibility is to express opinions on these basic financial statements based on our audit.
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 basic financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the basic financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall basic financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the
financial position of the Association as of June 30, 2006 and 2005, and its revenues, expenses, and
changes in net assets and its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated August 30,
2006, on our consideration of the Association's internal control over financial reporting and on our tests
of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on the internal
control over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards and should be considered in assessing the results of our
audit.
The management's discussion and analysis on pages 2 through 12 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.



/
Gainesville, Florida
August 30, 2006






THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2006 AND 2005
(Continued)

Introduction

The University Athletic Association, Inc. (the Association), a not-for-profit corporation, is a Direct
Support Organization of the University of Florida (UF). The Association exists to advance UF's teaching,
research and service missions through the intercollegiate athletics program.

The Association's goal is to be the nation's finest intercollegiate athletics program, where each coach has
challenging and rewarding career opportunities and each student-athlete has every opportunity for athletic
and academic success. The Association recognizes its responsibility to UF to operate the Association in
an efficient manner using sound business principles within an ethical decision making process.

The tremendous success of the athletic program can be attributed to many factors: outstanding coaches
and support staff, extremely talented student-athletes, a great academic institution, a strong recruiting
base, university support and a commitment to each sport. The Association's financial strength is also a
key component in its success and is a major factor in maintaining or surpassing its current level of
achievement in all the Association's endeavors.

Overview of the Financial Statements and Financial Analysis

The Association is pleased to present its financial statements for the fiscal years ended June 30, 2006 and
2005. This Discussion and Analysis is a narrative explanation of the Association's financial condition and
operating activities for these years. The overview presented below highlights the significant financial
activities that occurred during the past two years and describes changes in financial activity from the prior
year. Please read this overview in conjunction with the comparative summaries of net assets and
revenues, expenses and changes in net assets and the Association's financial statements which begin on
Page 13.

Using these Financial Statements

This report consists of a series of financial statements, prepared in accordance with the Governmental
Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements and Management's
Discussion and Analysis -for State and Local Governments and Statement No. 35, Basic Financial
Statements and Management's Discussion and Analysis -for Colleges and Universities.

There are three financial statements presented: the Statements of Net Assets; the Statements of Revenues,
Expenses and Changes in Net Assets; and the Statements of Cash Flows.

The Association's net assets are one indicator of the improvement or erosion of its financial health when
considered with non-financial facts such as the overall academic and athletic success of the intercollegiate
athletic program and the condition of its facilities. This success is evidenced by:

A men's basketball national title and a runner-up finish by the men's golf team paced the
University of Florida athletics program to a fifth-place finish overall in the 2005-2006 Sports
Academy Directors' Cup competition. The national all-sports competition award is presented
annually by the National Association of Collegiate Directors of Athletics (NACDA), United
Sports Academy and USA Today. The finish marks Florida's 23rd consecutive position among
the nation's top-10 programs. Florida and UCLA are the only schools to finish in the top 10 in
national all-sports rankings every year since 1983-1984.







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30,2006 AND 2005
(Continued)

Florida's fifth place finish in the Director's Cup standings was the highest by any school in the
Southeastern Conference (SEC) and the first top-five finish by the Gators since 2001-2002.

The University of Florida men's basketball team set a school record with 33 wins in route to
capturing its first national title. The Gators opened the season with a 17-0 mark, the best start in
school history and when it was all said and done, the 2005-06 team tied or set 40 Florida, SEC
and NCAA individual and team records.
A total of ten Gator athletic teams finished in top 10 of their respective sports, including six
finishes in the top five. Florida won two SEC Championships in 2005-2006, to raise its total to 45
since the 1996-1997 academic year, the most by any conference school during the 10-year span.
The Gators won the SEC title in volleyball and women's tennis.

Florida was also successful away from the athletic arena in 2005-2006, as the Gators had 186 SEC
Academic Honor Roll accolades. The total ranks as the second-highest in school history.
In an era when the NCAA estimates that 70 percent of Division I schools are losing money on
intercollegiate athletics, the Association has contributed more than $35.7 million since 1990 to
help fund University of Florida academic endeavors.
In June 2006, University of Florida Athletic Director Jeremy Foley was named the 2006 Street &
Smith's SportsBusiness Journal's National Athletic Director of the Year.
Over 979,000 fans attended 162 home events in 2005-2006. Four UF teams ranked among the
nation's top 10 in attendance.

UF student-athletes, partnering with 35 schools, 24 civic groups and 18 non-profit organizations,
participating in Goodwill Gator activities by volunteering more than 2,900 hours of community
service.

Summary of Net Assets

The Statements of Net Assets present the assets, liabilities and net assets of the Association as of the end
of the last two fiscal years. A Statement of Net Assets is a point-in-time financial statement. Its purpose is
to present to the readers of the financial statements a fiscal snapshot of the Association. The Statements of
Net Assets present end-of-the-year data concerning Assets (what the Association owns and how much is
owed to the Association by others), Liabilities (what the Association owes to others and has collected
from others before the service has been provided), and Net Assets (Assets minus Liabilities). The
statements are prepared using the economic resources measurement focus and the accrual basis of
accounting, where revenues are recorded when they are earned and expenses are recognized when they
are incurred.

From the data presented, readers of the Statements of Net Assets are able to determine the assets available
to continue the operations of the Association. They are able to determine how much the Association owes
to vendors and lending institutions. Finally, the Statements of Net Assets provide a picture of the net
assets and their availability for expenditure by the Association.

Net Assets are divided into three major categories. The first category, "invested in capital assets, net of
related debt", presents the Association's equity in property, plant and equipment. The next net asset
category is "restricted" net assets. The Association's restricted net assets have constraints placed upon
their use by independent donors. The final category is "unrestricted" net assets. Unrestricted assets are
available to the Association for any legal use.







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2006 AND 2005
(Continued)

Condensed Summary of Net Assets (thousands of dollars)
2005-2006 2005-2004
Increase Percent Increase Percent
2006 2005 (decrease) change 2004 (decrease) change

Assets:
Current assets $ 53,337 $ 43,582 9,755 22.38% $ 40,148 3,434 8.55%
Capital assets, net of depreciation 130,169 125,358 4,811 3.84% 124,002 1,356 1.09%
Other assets 34,763 31,781 2,982 9.38% 30,007 1,774 5.91%
Total assets 218,269 200,721 17,548 8.74% 194,157 6,564 3.38%
Liabilities:
Long-term debt outstanding 84,915 76,410 8,505 11.13% 77,935 (1,525) (1.96)%
Other liabilities 54,827 49,996 4,831 9.66% 45,781 4,215 9.21%
Total liabilities 139,742 126,406 13,336 10.55% 123,716 2,690 2.17%
Net assets:
Invested in capital assets, net of
related debt 46,628 49,464 (2,836) (5.73)% 46,572 2,892 6.21%
Restricted 984 15 969 6,460.00% 354 (339) (95.76)%
Unrestricted 30,915 24,836 6,079 24.48% 23,515 1,321 5.62%
Total net assets $ 78,527 $ 74,315 4,212 5.67% $ 70,441 3,874 5.50%



Highlights

Total assets of the Association increased by $17.5 million in 2006 and by $6.6 million in 2005.

In 2006, current assets increased $9.8 million due to a $10.7 million increase in short term
investments, a $2.0 million decrease in accounts receivable from home football game opponents
and a $1.1 million increase in restricted assets. In 2005, cash and cash equivalents and short term
investments decreased by $2.1 million and accounts receivable from Gator Boosters and home
football game opponents increased by $5.6 million, for a net increase of nearly $3.5 million.

The $4.8 million increase in capital assets in 2006 is primarily due to construction in progress on
the baseball project. In 2005, capital assets increased $1.4 million primarily due to the purchase
of a 2002 Beech King Air B200 airplane and the completion of the football stadium expansion.

Other assets increased by $3.0 million in 2006 due to an increase in long term investments. In
2005, other assets increased by $1.8 million, due to an increase of $2.3 million in long term
investments and a $0.5 million reduction in assets held by the University of Florida Foundation.

Long term debt outstanding increased by $8.5 million in 2006 due to the issuance of $10.0 million
in tax-exempt revenue bonds in September and loan repayments totaling $1.5 million. In 2005,
long term debt outstanding decreased by $1.5 million due to loan repayments.

Other liabilities increased by $4.8 million in 2006 due to a $1.7 million increase in deferred Gator
Booster contributions related to the 2006 football season, a $2.5 million increase in accounts
payable and accrued expenses and a $0.6 million increase in compensated absences and employee
longevity incentives payable. In 2005, other liabilities increased by $4.2 million in 2006 due to an







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30,2006 AND 2005
(Continued)

increase in deferred Gator Booster contributions related to the 2005 football season and an
increase in accounts payable and accrued expenses.

Total net assets increased by $4.2 million in 2006 and by $3.9 million in 2005. Unrestricted net
assets increased by $6.1 million and $1.3 million in 2006 and 2005, respectively.

In 2006, net assets invested in capital assets, net of related debt decreased by $2.9 million due to
the issuance of $10.0 million in additional long term debt, payments of $1.5 million on long term
debt, purchases of $11.4 million in fixed assets and the expensing of $5.8 million in depreciation.
Net assets invested in capital assets, net of related debt increased by $2.9 million in 2005 due to
payments of $1.5 million on long term debt, purchases of $7.2 million in fixed assets, including
the purchase of a 2002 Beech King Air B200 airplane and the completion of the football stadium
expansion and expensing $5.8 million in depreciation.

Restricted net assets increased by $969 thousand in 2006 due to the monthly funding of a debt
service interest sinking fund and the receipt of temporarily restricted contributions for future
projects. In 2005, restricted net assets decreased by $339 thousand due to the reduction of assets
held by the University of Florida Foundation.

Summary of Revenues, Expenses and Changes in Net Assets

The Statements of Revenues, Expenses and Changes in Net Assets present the revenues and expenses
incurred during each year. Revenues and expenses are reported as operating and nonoperating. In general,
operating revenues are received for providing goods and services to the Association's various customers
and constituencies. Operating expenses are those expenses paid to acquire or produce goods and services
provided in return for the operating revenues, and to carry out the mission of the Association. The
utilization of long-lived assets, referred to as Capital Assets, is reflected in the financial statements as
depreciation, which amortizes the cost of an asset over its expected useful life.

Nonoperating revenues are revenues received for which goods or services are not provided. The GASB
requires that state appropriations, student athletic fees and other revenues which are not payment for
services be classified as nonoperating revenues. Because these significant, recurring revenues are
budgeted to fund operating expenses, classifying them as nonoperating can cause the reporting of an
operating loss. For this reason, the Association believes that income before contributions (which includes
nonoperating revenues and expenses) provides the most appropriate measure of its financial results.
Nonoperating expenses include interest on capital asset-related debt.

Capital contributions are considered neither operating nor nonoperating and are reported after "Income
before contributions". Contributions to the University of Florida include unrestricted gifts for the
academic mission of the University, contributions for designated purposes, and costs contributed by the
Association for UF projects.

Changes in Total Net Assets as presented on the Statements of Net Assets are based on the activity
presented in the Statements of Revenues, Expenses and Changes in Net Assets. The purpose of the
Statements of Revenues, Expenses and Changes in Net Assets is to present the operating and
nonoperating revenues received by the Association and the operating and nonoperating expenses paid by
the Association, and any other revenues, expenses, gains and losses received or spent by the Association.








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2006 AND 2005
(Continued)

Condensed Summary of Revenues, Expenses and
Changes in Net Assets (thousands of dollars)


Operating revenues:
Football
Men's basketball
Other sports
Auxiliaries
Camps
Other operating revenues


2006 2005


$ 44,414 $ 41,487
5,964 5,629
655 703
11,609 9,765
2,176 1,964
7,329 8,156


2006-2005
Increase Percent


(decrease) change 2004


2,927
335
(48)
1,844
212
(827)


7.06% $ 41,242
5.95% 5,213
(6.83)% 519
18.88% 9,617
10.79% 1,927
(10.14)%/ 6,424


2005-2004
Increase Percent
(decrease) change


245
416
184
148
37
1,732


0.59%/
7.98%
35.45%
1.54%
1.92%
26.96%


Total operating revenues

Nonoperating revenues:
Student fees
Investment income, net
Sales taxes retained
Other nonoperating revenues

Total nonoperating
revenues

Total revenues

Operating expenses:
Team expenses
Scholarships and support services
General and administrative
Auxiliaries
Camps
Depreciation and amortization

Total operating expenses

Nonoperating expenses

Total expenses

Capital contributions from Gator
Boosters and others
Contribution to University of Florida


Increase in net assets

Net assets, end of year


72,147 67,704 4,443 6.56% 64,942 2,762 4.25%


2,501
2,642
1,002
452


2,417
3,260
884
452


84
(618)
118
0


3.48%
(18.96)%
13.35%
0.00%


2,454
3,785
812
452


(37)
(525)
72
0


(1.51)%
(13.87)%
8.87%
0.00%


6,597 7,013 (416) (5.93)% 7,503 (490) (6.53)%

78,744 74,717 4,027 5.39% 72,445 2,272 3.14%


26,969
15,173
17,629
4,414
2,145
5,858

72,188


27,471
14,074
16,116
4,076
1,990
5,766

69,493


(502)
1,099
1,513
338
155
92

2,695


(1.83)%
7.81%
9.39%0
8.29/%
7.79%
1.60%

3.88%


23,436
12,856
14,711
3,900
1,893
5,234

62,030


4,035
1,218
1,405
176
97
532


17.22%
9.47%
9.55%
4.51%
5.12%
10.16%


7,463 12.03%


2,583 2,213 370 16.72% 2,055 158 7.69%

74,771 71,706 3,065 4.27% 64,085 7,621 11.89%


3,646 2,638 1,008 38.21% 3,252 (614) (18.88)%
(3,407) (1,775) (1,632) 91.94% (2,932) 1,157 (39.46)%

4,212 3,874 338 8.72% 8,680 (4,806) (55.37)%

S 78,527 $ 74,315 4,212 5.67% $ 70,441 3,874 5.50%/


Highlights

The Condensed Statements of Revenues, Expenses and Changes in Net Asset present three
consecutive years with an increase in Net Assets at the end of each year.

Football revenues increased by $2.9 million in 2006 due to a ticket price increase and a
contribution increase for the existing luxury seating areas.


-6-






THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30,2006 AND 2005
(Continued)

* Men's basketball.revenue increased in 2005 due to a ticket price increase.

* Other sports revenue increased in 2005 due to hosting the NCAA Men's Baseball Regionals &
Super Regionals.

* Auxiliaries revenue increased in 2006 by $1.9 million due to increases in licensing, sportshop,
golf course, TV and radio rights revenues.

* In 2005, other operating revenues increased by $1.7 million as result of increased sponsorship
revenue and the sale of aircraft.

* Investment income decreased in 2006 and 2005 by $618 thousand and $525 thousand,
respectively, due to investment performance fluctuations.

* In both 2006 and 2005, sales taxes retained increased due to increases in home game ticket
revenue and the local tax rate.

* Operating expenses increased by $2.7 million in 2006. Scholarship expenses increased primarily
due to in-state and out-of-state tuition increases. Administrative and support expenses increased
due to increases in utility costs and budgeted salary increases and the related pension and payroll
taxes.

* In 2005, operating expenses increased by $7.5 million. The $4.0 million increase in team
expenses was primarily attributable to the costs associated with the football staff transition.
Scholarship increases were the result of increased costs for preseason, postseason and training
table meals and in-state and out-of-state tuition. Administrative and support expenses increased
due to national and local market salary adjustments, the payment of a one-time bonus for all
employees as approved by the State legislature and the related pension and payroll taxes.
Additionally, maintenance costs increased due to hurricanes, expiration of new construction
warranties in football stadium expansion areas and continued repairs to the concrete structure of
the football stadium bowl.

Capital contributions are major gifts designated by the donors for facility construction,
renovations and equipment purchases. In 2006, capital contributions of $3.6 million included $1.4
million for the naming of the football stadium Champions club, $402 thousand designated for the
baseball project, $369 thousand for a future team locker room at the golf course, $299 thousand
for a naming of the football support facility at the practice field, $275 thousand designated for the
football practice field turf project, $205 thousand for the future football entrance project, $200
thousand for the naming of the golf course, $168 thousand for the basketball practice facility,
$158 thousand for the athletic office renovation and $150 thousand for the naming of the
basketball practice courts. Capital contributions in 2005 totaled $2.6 million and included $460
thousand for the basketball practice facility, $230 thousand for the football stadium expansion,
$130 thousand for the athletic office renovation, $480 thousand for the naming of the track and
soccer stadium, $300 thousand for the football practice field turf project and $1.0 million for the
purchase of a Beech King Air airplane.

Contributions to the University of Florida (UF) include unrestricted gifts for the academic mission
of the University, contributions for designated purposes, and costs incurred by the Association for
UF projects. Total contributions were $3.7 million in 2006 and $1.8 million in 2005. See Note 9
in the Notes to the Financial Statements for further details on contributions to UF.








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2006 AND 2005
(Continued)


REVENUE 2005-2006


Nonoperating Revenue
8%


Other Revenue
9%

Other Sports
I %


Auxiliaries
15%


Football
56%


Men's Basketball
8%


REVENUE 2004-2005


Nonoperating Revenue
9%


Camps
3%


Other Revenue
11%


Other Sports "'


Auxiliaries
13%


Men's Basketball
8%


-8-


Football
55%









THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2006 AND 2005
(Continued)



EXPENSES 2005-2006


Depreciation
8%
Auxiliaries
6%
Nonoperating Expenses
3%
3% Camps

3%






General & Admin
24%


Football Team
16%



Men's Basketball Team
6%




Other Sports Teams
14%


Support Services
11%


EXPENSES 2004-2005


Depreciation
8%
Auxiliaries
6%
Nonoperating Expenses
3%
3% Camps
3%





General & Admin
22% Y


Football Team
19%




Men's Baskeball Team
5%



Other Sports Teams
14%


S Scholarships
Support Services 9%
11%


Scholarships
9%







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30,2006 AND 2005
(Continued)


Statement of Cash Flows

The fmal statements presented include Statements of Cash Flows. The primary purpose of the Statements
of Cash Flows is to provide relevant information about the cash receipts and cash payments of the
Association during the years shown. The statements classify cash receipts and cash payments as they
result from operating, noncapital financing, capital and related financing, or investing activities. The first
section, cash flows from operating activities, presents the cash effects of transactions and other events that
enter into the determination of the Association's operating income. The second section, cash flows from
noncapital financing activities, shows the cash received and spent for nonoperating, noninvesting, and
noncapital financing purposes and includes contributions to and from UF and the State of Florida. The
next section, cash flows from capital and related financing activities, provides information about cash
used for the acquisition and construction of capital and related items and cash received from contributions
specifically designated for capital purposes. The fourth section, cash flows from investing activities,
details the purchases, proceeds and interest received from investing activities. The final section reconciles
the net cash provided (used) by operating activities to the operating income reflected on the Statements of
Revenues, Expenses, and Changes in Net Assets.

Condensed Summary of Cash Flows (thousands of dollars)
2006-2005 2005-2004
Increase Percent Increase Percent
2006 2005 (decrease) change 2004 (decrease) change
Cash flows from:
Operating activities $ 11,095 $ 1,877 9,218 491.10% $ 6,408 (4,531) (70.71)%
Noncapital financing activities 1,949 2,031 (82) (4.04)% 817 1,214 148.59%
Capital & related financing activities (1,839) (6,938) 5,099 (73.49)% (10,603) 3,665 (34.57)%
Investing activities (11,552) (5,593) (5,959) 106.54% (2,111) (3,482) 164.95%
Net change in cash and cash equiv (347) (8,623) 8,276 (95.98)% (5,489) (3,134) 57.10%
Cash and cash equivalents, end of year $ 4,033 $ 4,380 (347) (7.92)% $ 13,003 (8,623) (66.32)%




Highlights

Cash flows from operating activities increased by $9.2 million in 2006 due to increase cash
contributions from Gator Boosters and cash receipts from ticket holders. In 2005, cash flows from
operating activities decreased by $4.5 million due to increased cash payments for scholarships and
increased cash payments to suppliers and employees.

Cash provided by noncapital financing activities decreased by $82 thousand in 2006 and increased
by $1.2 million in 2005 due to fluctuations in cash contributed to the University of Florida.

Cash used in capital and related financing activities increased by $5.1 million in 2006 due to the
issuance of additional capital debt and the purchase of capital assets. In 2005, cash used in capital
and related financing activities decreased by $3.7 million due to the completion of the football
stadium expansion project.


-10-






THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30,2006 AND 2005
(Continued)


Cash used in investing activities decreased by $6 million in 2006 due to increased cash payments
for the purchases of investment securities. In 2005, cash used in investing activities decreased by
$3.5 million due to a reduction in cash received from the sales and maturities of investment
securities.

Capital Asset and Debt Administration

A major renovation and expansion of the west side of Ben Hill Griffin Stadium was completed in August,
2003. The project was started in May, 2001. The expansion included a new club level, the Champions
Club, and additional suites as well as expanded and renovated Bull Gator, Press and President's decks.
The total cost of the football stadium expansion was approximately $55.0 million of which $5.0 million is
being funded from private contributions and $50.0 million from the 2001 bond issue.

In October, 2001, the Association issued $57.4 million in tax-exempt revenue bonds. Proceeds of the
bond issue were used to retire the outstanding 1994 Capital Improvement Revenue bonds and to pay costs
associated with bond issuance and to fund a portion of the new basketball facility. The remaining
proceeds were used for the football stadium expansion. Revenue from the Champions Club level and
additional suites, which had already been sold, was $5.5 million per year which exceeds the estimated
debt service on the 2001 bonds. A total of $55.3 million and $56.0 million was outstanding at June 30,
2006 and 2005, respectively.

In September, 2005, the Association issued $10.0 million in tax-exempt revenue bonds. Proceeds were
used to finance the construction of improvements and the expansion of McKethan Stadium at Perry Field,
the construction of a new football equipment storage facility/restroom/training room and renovation and
improvements to the Lemerand Athletic Center. The total issue of $10.0 million was outstanding at
June 30, 2006.

The 1990 tax-exempt revenue bonds remain outstanding ($19.6 million at June 30, 2006 and
$20.4 million at June 30, 2005). The Association's total long term debt as of June 30, 2006 and 2005,
was $84.9 million and $76.4 million, respectively.

All bonds are secured by the gross revenues of the Association and backed by an irrevocable letter of
credit as collateral for their payment. The bond covenants include minimum requirements for net
revenues and liquidity. These requirements were met in 2006 and 2005.

For additional information on Capital Assets and Long Term Obligations, see Notes 5 and 6 in the Notes
to the Financial Statements.

Economic Outlook

Operating revenues are expected to increase in fiscal year 2006-2007 due to ticket price increases in
football and men's basketball, the addition of a Gator Booster club level system in men's basketball and
the addition of a twelfth football game to be played at home. The twelfth game will also increase
operating expenses. The net revenue from the twelfth game has been reserved to cover the costs of
adding an additional women's sport. The remaining revenue increases will allow the Association to
continue to operate its programs at the highest level, focusing on student athletes, teams, coaches and staff
and maintaining facilities of the highest quality.


- 11 -







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30,2006 AND 2005
(Continued)


New Women's Sport

The Association's Board of Directors approved the addition of women's lacrosse at their June 14, 2006
meeting. The lacrosse timeline includes the hiring of a coaching staff in the 2007-2008 fiscal year, the
completion of facilities in the 2008-2009 fiscal year and competition in the 2009-2010 fiscal year.

Contacting Management

This financial narrative is designed to provide the reader with a general overview of the University
Athletic Association, Inc.'s finances and to show the Association's accountability for the money it
receives. If you have questions about this report or need additional financial information, contact the
Association's Business Office at Ben Hill Griffin Stadium, Gainesville, Florida:

The University Athletic Association, Inc.
Attn: Assistant Athletics Director/Controller
PO Box 14485
Gainesville, FL 32604-2485
(352) 375-4683


-12-







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
STATEMENTS OF NET ASSETS
FOR THE YEARS ENDED JUNE 30,2006 AND 2005


ASSETS


Current assets
Cash and cash equivalents
Short-term investments
Accounts receivable, net
Inventories
Prepaid expenses and other current assets
Restricted assets (including $394,394 of cash and cash equivalents)
Total current assets

Noncurrent assets
Assets held by the University of Florida Foundation, Inc.
Investments
Unamortized bond costs
Other assets
Capital assets, net of accumulated depreciation
Total noncurrent assets


2006



$ 3,638,674
37,901,470
6,767,880
1,011,343
2,911,871
1,105,473
53,336,711


21,221
34,056,060
595,951
90,000
130,168,768
164,932,000


2005



$ 4,379,899
27,183,725
8,763,790
676,004
2,578,217

43,581,635


21,221
31,136,549
473,619
150,000
125,358,075
157,139,464


Total assets


LIABILITIES


Current liabilities
Accounts payable and accrued expenses
Accrued compensated absences
Long-term debt current portion
Deferred revenues current portion
Agency funds payable
Total current liabilities

Noncurrent liabilities
Longevity incentive payable
Deferred revenues
Long-term debt
Total noncurrent liabilities


218,268,711 200,721,099


Total liabilities


139,742,020 126,406,447


NET ASSETS


Net assets
Invested in capital assets, net of related debt


Restricted for:
Capital projects
Debt service
Other purposes


46,627,945 49,463,561


574,536
394,394
14,727
983,657

30,915,089
$ 78,526,691


Unrestricted
Total net assets


14,727
14,727

24,836,364
$ 74,314,652


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


-13-


10,110,840
1,947,089
765,000
41,865,680
119,168
54,807,777


596,903
187,340
84,150,000
84,934,243


7,601,920
1,685,683
1,495,000
39,072,457

49,855,060


363,694
1,272,693
74,915,000
76,551,387







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30,2006 AND 2005



2006 2005


Operating revenues
Football
Men's basketball
Other sports
Auxiliaries
Camps
Sponsorships and other
Total operating revenues

Operating expenses
Football team expenses
Men's basketball team expenses
Other sports team expenses
Scholarships
Support services
General and administrative
Auxiliaries
Camps
Depreciation and amortization
Total operating expenses


Operating loss


Nonoperating revenues (expenses)
Student fees
Investment income, net
Sales taxes retained
Interest on capital asset related debt
Other nonoperating revenues
Net nonoperating revenues (expenses)


Income before contributions


Capital contributions from Gator Boosters, Inc. and others


Contributions to the University of Florida


Increase in net assets


Net assets, beginning of year

Net assets, end of year


$ 44,414,059
5,963,584
655,146
11,609,096
2,176,014
7,328,726
72,146,625


12,037,217
4,787,528
10,144,190
6,913,881
8,259,190
17,629,280
4,413,983
2,144,743
5,858,002
72,188,014

(41,389)


2,501,292
2,641,710
1,002,261
(2,583,111)
451,805
4,013,957

3,972,568


3,646,120

(3,406,649)


4,212,039


74,314,652


$ 41,487,149
5,628,720
703,345
9,764,891
1,964,175
8,155,431
67,703,711


13,800,055
3,564,438
10,107,134
6,522,916
7,550,647
16,115,853
4,075,361
1,990,275
5,765,843
69,492,522

(1,788,811)


2,417,063
3,259,608
884,459
(2,213,360)
451,805
4,799,575

3,010,764


2,637,838


(1,774,872)

3,873,730


70,440,922


$ 78,526,691 $ 74,314,652


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


-14-







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30,2006 AND 2005



2006 2005


Cash flows from operating activities
Contributions from Gator Boosters, Inc.
Receipts from ticket holders and others
Receipts from the Southeastern Conference
Receipts from rights, royalties, and sponsors
Other receipts
Payments to suppliers and others
Payments to employees
Payments for scholarships
Net cash provided by operating activities


Cash flows from noncapital financing activities
Statutory distributions from the University of Florida
and the State of Florida
Contributions to the University of Florida
Net cash provided by noncapital financing activities

Cash flows from capital and related financing activities
Purchase of capital assets
Proceeds from capital debt
Capital contributions from Gator Boosters, Inc.
Capital contributions from others
Principal paid on bonds
Interest paid on bonds
Prepaid bond remarketing fee
Bond cost of issuance
Proceeds from sale of capital assets
Net cash used in capital and related financing activities

Cash flows from investing activities
Purchases of investment securities
Proceeds from sale and maturities of investment securities
Interest and dividends received
Net cash used in investing activities


$ 25,766,590
25,578,994
11,429,574
11,071,974
174,617
(31,435,419)
(24,653,175)
(6,837,714)
11,095,441



3,955,358
(2,006,345)
1,949,013


(11,254,428)
10,000,000
3,706,120

(1,495,000)
(2,604,236)
(73,500)
(137,045)
18,764
(1,839,325)


(60,416,158)
46,896,638
1,967,560
(11,551,960)


$ 19,995,128
20,948,800
10,911,671
9,920,732
699,374
(29,058,050)
(25,059,504)
(6,481,711)
1,876,440



3,753,327
(1,722,003)
2,031,324


(7,211,319)

1,676,894
1,065,000
(1,525,000)
(2,150,405)
(49,962)

1,256,627
(6,938,165)


(46,708,867)
39,616,862
1,499,248
(5,592,757)


Net decrease in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year


(346,831) (8,623,158)


4,379,899


13,003,057


$ 4,033,068 $ 4,379,899


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


-15-







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30,2006 AND 2005
(Continued)


2006


Reconciliation of operating loss to net cash
provided by operating activities
Operating loss
Adjustments to reconcile operating loss to
net cash provided by operating activities:
Depreciation and amortization
Forgiveness of notes receivable
Loss (gain) on disposal of capital assets
Changes in assets and liabilities:
Accounts receivable
Inventories
Prepaid expenses and other current assets
Agency funds
Assets held by the University of Florida
Foundation, Inc.
Accounts payable and accrued expenses
Accrued compensated absences
Deferred revenues
Agency funds payable
Longevity incentive payable
Net cash provided by operating activities


$ (41,389) $ (1,788,811)


5,858,002

704,927

2,015,319
(335,339)
(308,375)



781,852
261,406
1,707,870
119,168
332,000
$ 11,095,441


5,765,843
42,560
(1,167,408)

(5,519,677)
(163,444)
80,500
129,460

441,016
2,070,720
187,705
2,851,169
(129,460)
(923,733)
$ 1,876,440


Supplemental disclosure of noncash activity
Decrease in investments and longevity incentive payable
to reflect earnings on employee directed incentive balances $ 16,209 $ (45,080)






















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


-16-


2005







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2006 AND 2005


(1) Summary of Significant Accounting Policies:

The following is a summary of the more significant accounting policies of the University Athletic
Association, Inc. (the Association), which affect significant elements of the accompanying basic financial
statements.

(a) Reporting Entity-The Association is a not-for-profit entity organized in 1929 for the
purpose of conducting various intercollegiate athletic programs for and on behalf of the University
of Florida. The Association operates for the service and convenience of the University of Florida
and is a direct support organization and component unit (for accounting purposes only) of the
University of Florida.

(b) Measurement focus, basis of accounting, and financial statement presentation-The
financial statements of the Association have been prepared using the economic resources
measurement focus and the accrual basis of accounting. Under this method, revenues are recorded
when earned and expenses are recognized when they are incurred.

The Association follows all pronouncements of the Governmental Accounting Standards Board,
and has elected not to follow Financial Accounting Standards Board pronouncements issued after
November 30, 1989.

The Association distinguishes operating revenues and expenses from nonoperating items. Operating
revenues and expenses for the Association are those that result from the operation of the University
of Florida's intercollegiate athletic programs. It also includes all revenue and expenses not related
to capital and related financing, noncapital financing, or investing activities. As required by GASB
Statement No. 34, Basic Financial Statements and Management's Discussion and Analysis for
State and Local Governments, contributions to permanent endowments are not considered operating
revenues and are reported after nonoperating revenues and expenses in the accompanying
statements of revenues, expenses, and changes in net assets.

(c) Cash and Cash Equivalents-Cash and cash equivalents include cash in banks and money
market funds available for immediate use.

(d) Accounts receivable-Accounts receivable are stated at the amount management expects to
collect from balances at year-end. Based on management's assessment of the credit history with
organizations and individuals having outstanding balances and current relationships with them, it
has concluded that realization losses on balances outstanding at year-end will be immaterial. The
Association has no policy requiring collateral or other security to support its accounts receivable.

(e) Inventories-Inventories consist of items held for sale at the Gator Sportshop, golf course
pro shop and snack bar. Inventory items at the Gator Sportshop and the golf pro shop are recorded
at the lower of cost or market using the average cost method. All other inventory items are recorded
at the lower of cost or market as determined by using the first-in, first-out (FIFO) method.


-17-







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2006 AND 2005


(1) Summary of Significant Accounting Policies: (Continued)

(f) Capital Assets-Capital assets purchased with an original cost of $500 or more are recorded
at cost and depreciated utilizing the straight-line method over the estimated useful lives of assets
(generally 5 years for permanent equipment and 10 to 15 years for capital improvements, except for
improvements to buildings which range from 50 to 60 years). Costs to maintain or repair these
assets are expensed as incurred.

(g) Assets Held by the University of Florida Foundation, Inc.-Assets held by the University
of Florida Foundation, Inc. (the Foundation) consist of pooled investments and real estate.
Substantially all investments are stated at fair value.

(h) Agency Funds-The Association acts as an agent for the control and distribution of cash from
the sale of Gator Growl tickets for the University of Florida. Such amounts are not included in the
statements of revenues, expenses and changes in net assets.

(i) Unamortized Bond Costs-Unamortized bond costs consist of prepaid bond issuance and
remarketing costs. These costs are being amortized utilizing the straight-line method over the term
of the bonds or the length of the remarketing period.

(j) Accrued Compensated Absences-Eligible employees are entitled to vacation and sick leave
with pay. Employees are not limited in the amount of annual and sick leave accrued during the
fiscal year. For annual leave, however, only a maximum of 352 hours can be carried forward from
one fiscal year to the next or paid upon termination provided the employee has completed six
months of continuous service. Any amounts accrued over the maximums convert to sick leave at
the end of the year on an hour for hour basis. Additionally, sick leave amounts paid upon
termination are limited to the lesser of 480 hours or 1/4 of the employee's sick leave balances for
those employees who have completed ten years of continuous service. Vacation pay and sick leave
payments are expensed as earned by the employee.

(k) Deferred Revenues-Current deferred revenues consist of advance sales of football tickets,
related scholarship contributions, and miscellaneous other unearned fees received. The deferred
items are recognized as revenue when the related football games are played, when the related
scholarship expenses are incurred, and when the service is performed or event occurs for which
miscellaneous fees were received.

Additionally, deferred revenues included in other liabilities consist of booster prepayments and
advance royalty and sponsorship payments. The royalty and sponsorship amounts are recognized
over the life of the agreements, while the booster prepayments will be recognized in the applicable
sports season.


-18-







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2006 AND 2005


(1) Summary of Significant Accounting Policies: (Continued)

(1) Longevity Incentive Payable-These balances represent amounts due to various coaches
and employees as specified in their employment contracts. Such amounts are accrued based upon
schedules included in the respective employment contracts. In some circumstances, the coach or
employee's employment contract may require the Association to make specified deposits into an
employee directed investment account until such time as the coach or employee has reached the
stay period specified in their contract. These investment balances would transfer to the coach or
employee at the end of the stay period and are included in investments in the accompanying
statements of net assets. In other circumstances, the Association is obligated to pay certain amounts
to the coach or employee which are not paid until the end of the stay period. The Association
accrues for these amounts ratably over the contract period. No payments are made to the coach or
employee until they have reached the stay period specified in their contract.

(m) Net assets-Net assets are classified and displayed in three components:

Invested in capital assets, net of related debt consists of capital assets, net of accumulated
depreciation, reduced by the outstanding balances of any debt that is attributable to those
assets.
Restricted consists of assets that have constraints placed upon their use either by external
donors or creditors or through laws, regulations or constraints imposed by law through
constitutional provisions or enabling legislation, reduced by any liabilities to be paid from
these assets.
Unrestricted consists of net assets that do not meet the definition of "restricted" or
"invested in capital assets, net of related debt."

When both restricted and unrestricted net assets are available for use, it is the Association's policy
to use restricted resources first, then unrestricted resources as they are needed.

(n) Restricted Net Assets-Restricted net assets consist of capital contributions received for
specific future capital projects, funds held by the bond trustee for payment of bond interest and
funds held by the Foundation which have been restricted as to their use by donors.

(o) Functional Allocation of Expenses-The costs of providing various programs and other
activities have been summarized by program in the accompanying statements of revenues,
expenses, and changes in net assets. However, certain costs categorized as Support Services and
General and Administrative are not specifically identifiable with men's and women's programs and
are not allocated. As a result, no distinction between men's and women's programs has been made
within these expense classifications.

(p) Income Taxes-The Association is generally exempt from Federal income taxes under the
provisions of Section 501(c)(3) of the Internal Revenue Code.

(q) In-Kind Contributions-Donations of materials and services are recorded at their fair
market value at the date of donation.

(r) Reclassifications-In order to facilitate the comparison of financial data, certain June 30,
2005 account balances have been reclassified to conform to the current year reporting format.
These reclassifications had no effect on net assets.






THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2006 AND 2005


(2) Cash and Investments:

A. Cash and Cash Equivalents:

The amounts reported as cash and cash equivalents include cash on hand, cash in bank demand accounts,
cash held at the University of Florida and money market funds. Cash and cash equivalents at June 30,
2006 and 2005, were as follows:
2006 2005

Money market funds $ 3,469,048 $ 2,766,315
Cash in bank demand accounts (2,751,643) (1,742,223)
Cash held at the University of Florida 2,870,869 3,285,657
Cash on hand 50,400 70,150
Restricted cash in bank demand accounts 394,394 -
Cash and cash equivalents $ 4,033,068 $ 4,379,899

Cash in bank demand accounts is held in a regional and a national bank. Bank account balances for these
bank demand accounts as of June 30, 2006 and 2005, were $679,029 and $1,234,408, respectively.
Deposits are uncollateralized and are insured up to $100,000 by the Federal Deposit Insurance
Corporation. Money market funds are uninsured and collateralized by securities held by the institution,
not in the Association's name. For deposits, custodial credit risk is the risk that in the event of a bank
failure, the Association's deposits may not be returned to it. The Association does not have a policy for
custodial credit risk.

B. Investments:

The Association follows the provisions of GASB Statement No. 31 Accounting and Financial Reporting
for Certain Investments and for External Investment Pools. This statement requires that government
entities report investments at fair value, except that money market investments that have a remaining
maturity at the time of purchase of one year or less, may be reported at amortized cost provided that the
fair value of those investments is not significantly affected by the impairment of the credit standing of the
issuer or by other factors. For purposes of GASB Statement No. 31, money market investments are
defined as short-term, highly liquid debt instruments including commercial paper, banker's acceptance,
and U.S. Treasury and agency obligations.

Short-term investments are comprised of mutual funds and an investment account with the State of
Florida Division of Treasury and are reported at fair value. Other investments include equity securities
and open-end mutual fund investments that are reported at fair value as determined by quoted market
prices or the mutual fund's current share price. The classification of investments between short-term and
long-term is based on management's anticipated cash flow needs. However, the needs of the organization
may require the sale or retention of investment balances which differ from the classifications reflected in
the accompanying statements of net assets.

The Association's corporate investment policy divides the Association's assets into two portfolios, the
long-term portfolio and the short-term portfolio. The policy states that the short-term portfolio invests in
cash and equivalents and the long-term portfolio invests in a diversified portfolio of commingled and/or
mutual funds in the following classes: Domestic Large Cap Equity, Domestic Small Cap Equity,
International Equity and Fixed Income.


-20-







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2006 AND 2005


(2) Cash and Investments: (Continued)

As of June 30, 2006 and 2005, the Association had the following investments:


Short term investments:
Investment account held with the State of Florida Division
of Treasury

Restricted short term investments:
Investment account held with the State of Florida Division
of Treasury


2006 2005

$ 37,901,470 $ 27,183,725



711,079


Investments:
Domestic equity mutual funds
International equity mutual funds
Debt securities mutual fund
Employee directed investments
Subtotal
Total investments


18,073,000
7,221,762
8,326,395
434,903
34,056,060
$ 72,668,609


16,852,456
4,867,260
9,148,139
268,694
31,136,549
$ 58,320,274


The Association's short term investments includes a pooled investment with the State of Florida Division
of Treasury's Treasury Investment Pool. The Treasury Investment Pool is rated by Standard and Poors.
The current rating at June 30, 2006 and 2005, was AA-f. The effective weighted average duration to
maturity of the Treasury Investment Pool was 2.72 and 2.22 years at June 30, 2006 and 2005,
respectively.

The Association's long term investments include an investment in a bond mutual fund, the PIMCO Total
Return Fund Institutional Class: As of June 30, 2006 and 2005, this fund was unrated, however, the
underlying investments in this fund had an average credit quality rating of AAA and a weighted average
duration to maturity of 5.3 and 4.05 years, respectively. Long term investments also include employee
directed investments. Several coaches have a longevity plan built into their employment contract,
whereby a specified amount is deposited into an investment account of their choice.

The Association does not have a policy for credit risk or interest rate risk associated with its investment.

C. Restricted Assets:

The Association's restricted assets include cash and cash equivalents for the accrued interest on the 1990,
2001 and 2005 series bonds due October 2006, as well as a construction trust fund held in a short term
investment account with the State of Florida Division of Treasury. They are included in both the cash and
cash equivalents and short term investments schedules.


-21-







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2006 AND 2005


(3) Accounts Receivable:

Accounts receivable at June 30, 2006 and 2005, consist of the following:


2006 2005


Ticket accounts receivable
Due from Gator Boosters, Inc.
Due from SEC and NCAA
Royalties and sponsorships
Other receivables
Total accounts receivable
Less allowance for doubtful accounts
Total accounts receivable, net


$ 220,482
5,096,832
57,592
1,258,460
200,226
6,833,592
(65,712)
$ 6,767,880


$ 2,159,359
5,763,805
177,187
144,183
592,612
8,837,146
(73,356)
$ 8,763,790


Accounts Payable and Accrued Expenses:


Accounts payable and accrued expenses consist of the following at June 30, 2006 and 2005:


Vendors
Salaries and benefits
Accrued interest
Gator Boosters, Inc.
Other
Total accounts payable and accrued expenses


2006

$ 5,610,313
3,527,417
683,157
256,913
33,040
$ 10,110,840


2005

$ 4,152,984
2,804,123
469,348
112,900
62,565
$ 7,601,920


(5) Capital Assets:

Capital asset activity for the year ended June 30, 2006, was as follows:


Capital assets not being
depreciated:
Land
Construction in progress
Total capital assets not
being depreciated

Capital assets being
depreciated:
Buildings and
improvements
Furniture and equipment
Leasehold improvements
Total capital assets
being depreciated


Beginning
Balance


$ 567,039
1,536,640


Additions


Decreases


Ending
Balance


$ $ $ 567,039
10,228,670 (1,222,435) 10,542,875


2,103,679 10,228,670


5,843,381
21,075,394
137,224,703

164,143,478


1,066,312
1,340,073

2,406,385


(1,222,435)


(3,119,094)
(1,598,170)


11,109,914


5,843,381
19,022,612
136,966,606


(4,717,264) 161,832,599


-22-







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2006 AND 2005


(5) Capital Assets: (Continued)


Beginning Ending
Balance Additions Decreases Balance


Less accumulated
depreciation for:
Buildings and
improvements
Furniture and equipment
Leasehold improvements
Total accumulated
depreciation

Total capital assets
being depreciated, net


1,623,051
11,631,766
27,634,265


233,616
1,580,394
4,043,992


(3,094,192)
(879,147)


1,856,667
10,117,968
30,799,110


40,889,082 5,858,002 (3,973,339) 42,773,745


123,254,396


(3,451,617)


(743,925) 119,058,854


Capital assets, net


$125,358,075 $ 6,777,053 $ (1,966,360) $130,168,768


Capital asset activity for the year ended June 30, 2005, was as follows:


Capital assets not being
depreciated:
Land
Construction in progress
Total capital assets not
being depreciated

Capital assets being
depreciated:
Buildings and
improvements
Furniture and equipment
Leasehold improvements
Total capital assets
being depreciated


Beginning
Balance



$ 567,039
1,899,668

2,466,707


5,843,381
17,959,541
133,901,366

157,704,288


Additions



$1
1,981,864
1,981,864


4,251,010
3,323,337


Ending
Decreases Balance



$ $ 567,039
(2,344,892) 1,536,640

(2,344,892) 2,103,679


(1,135,157)


5,843,381
21,075,394
137,224,703


7,574,347 (1,135,157) 164,143,478


-23 -







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2006 AND 2005


(5) Capital Assets: (Continued)


Less accumulated
depreciation for:
Buildings and
improvements
Furniture and equipment
Leasehold improvements
Total accumulated
depreciation

Total capital assets
being depreciated, net
Capital assets, net


Beginning
Balance


1,389,435
11,128,027
23,651,715

36,169,177


121,535,111
$124,001,818


Additions


233,616
1,549,677
3,982,550

5,765,843


1,808,504
$ 3,790,368


Ending
Decreases Balance


(1,045,938)


1,623,051
11,631,766
27,634,265


(1,045,938) 40,889,082


(89,219) 123,254,396
$ (2,434,111) $125,358,075


At June 30, 2006, the Association has commitments
projects approximating $5,885,000.


to provide for additional capital improvement


(6) Long-Term Obligations:

Changes in long-term obligations for the year ended June 30, 2006, was as follows:


Beginning Ending
Balance Additions Reductions Balance


Accrued compensated
absences
Longevity incentive
payable
Deferred revenues
Long-term debt
Total long-term
liabilities


Amounts
Due Within
One Year


$ 1,685,683 $ 433,731 $ (172,325) $ 1,947,089 $ 1,947,089


373,694
40,345,150
76,410,000


521,209
41,865,680
10,000,000


(173,000)
(40,157,810)
(1,495,000)


$118,814,527 $52,820,620 $(41,998,135) $129,637,012 $ 44,702,769


Change in long-term obligations for the year ended June 30, 2005, was as follows:


Beginning Ending
Balance Additions Reductions Balance


Accrued compensated
absences
Longevity incentive
payable
Deferred revenues
Long-term debt
Total long-term
liabilities


Amounts
Due Within
One Year


$ 1,497,978 $ 422,659 $ (234,954) $ 1,685,683 $ 1,685,683


1,252,347
37,454,925
77,935,000


1,033,355 (1,912,008)
39,414,150 (36,523,925)
(1,525,000)


373,694
40,345,150
76,410,000


$118,140,250 $40,870,164 $(40,195,887) $118,814,527 $ 42,263,140


-24-


721,903
42,053,020
84,915,000


125,000
41,865,680
765,000


10,000
39,072,457
1,495,000







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2006 AND 2005


(6) Long-Term Obligations: (Continued)

A. Long-term Debt

In February 1990, the Association issued $10,715,000 in tax-exempt revenue bonds. Proceeds of
$10,559,000 were used to retire the outstanding 1982 and 1985 Stadium Revenue Bonds and pay accrued
interest and costs associated with issuance. In December 1990, the Association issued an additional
$17,300,000 in tax-exempt revenue bonds. Proceeds of the December 1990 issue were used to finance the
construction cost of the North End Zone, and pay accrued interest and costs associated with issuance.
Initially, the 1990 Bonds bore an interest at the Daily Rate.

In August 1994, an additional $5,000,000 in tax-exempt revenue bonds was issued by the Association.
Proceeds of the 1994 issuance were used to finance the construction of a volleyball practice gymnasium
and to renovate the athletic field house. Both the 1990 and 1994 Series bonds were scheduled to mature in
the year 2020 and were secured by the gross revenues of the Association.

In October 2001, the Association issued $57,400,000 in tax-exempt revenue bonds. Proceeds of
$4,688,193 were used to retire the outstanding 1994 Capital Improvement Revenue Bonds and pay costs
associated with issuance. The remaining proceeds are being used to finance the construction cost of the
Basketball Practice Facility and the expansion of Ben Hill Griffin, Jr. Stadium. Construction of the
Basketball Practice Facility was completed in 2002 and construction on the stadium was completed in
2004. The 2001 Series Athletic Program Revenue Bonds mature in the year 2031 and initially bore an
interest at the Multiannual Rate.

In September 2005, the Association issued $10,000,000 in tax-exempt revenue bonds. Proceeds were
used to finance the construction of improvements and the expansion of McKethan Stadium at Perry Field,
the construction of a new football equipment storage facility/restroom/training room and the renovation
and improvements to the Lemerand Athletic Center (collectively, the "2005 Project"). Construction on
the 2005 Project was in process at June 30, 2006 and scheduled for completion in November, 2006.
Initially, the 2005 Bonds bear interest at the Multiannual Rate. The initial Multiannual Rate Period was
9/1/05 through 10/1/08 and the initial Multiannual Rate is 3.30%.

Also in September 2005, the Association redeemed $800,000 of the Series 1990 Capital Improvement
Revenue Bonds and converted all the remaining, outstanding 1990 Bonds ($19,600,000) to bear interest at
the Multiannual Rate.

In October 2005, the Association converted a portion ($11,705,000) of the 2001 Bonds to the Daily Rate
(as specified by the remarketing agent).

At June 30, 2006 and 2005, the 1990 Bonds bear interest based upon the following schedule:

June 30, 2006 June 30, 2005
Outstanding Interest Outstanding Interest
Amount Term Rate Amount Term Rate

$ 9,600,000 9/1/05 10/1/09 3.40% $ 20,400,000 Daily Rate Variable
10,000,000 9/1/05 10/1/10 3.50% -
$ 19,600,000 $ 20,400,000


-25-







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2006 AND 2005


(6) Long-Term Obligations: (Continued)

At June 30, 2006 and 2005, the 2001 Bonds bear interest based upon the following schedule:


June 30, 2006
Outstanding
Amount Term


Interest
Rate


June 30, 2005
Outstanding Interest
Amount Term Rate


$ 11,705,000
14,335,000
14,275,000
15,000,000
$ 55,315,000


Daily Rate
10/1/03 10/1/08
10/1/04- 10/1/09
10/1/01- 10/1/06


Variable
2.80%
3.00%
3.50%


$ 12,400,000
14,335,000
14,275,000
15,000,000
$ 56,010,000


10/1/02- 10/1/05
10/1/03 10/1/08
10/1/04 10/1/09
10/1/01 10/1/06


The Daily Rate at June 30, 2006 and 2005 was 4.05% and 2.53%, respectively.

Debt service requirements at June 30, 2006, were as follows:


2005 Bonds


2001 Bonds


1990 Bonds


Year Ended
June 30, Principal Interest Principal Interest Principal Interest


$ 330,000 $ 765,000
330,000 735,000
270,600 710,000
235,950 790,000
216,150 770,000
783,750 3,895,000
278,850 3,775,000
17,485,000
21,520,000
4,870,000


$1,592,970
1,571,364
1,550,521
1,528,114
1,505,561
7,183,300
6,634,618
5,027,062
2,169,696
35,429


$ 676,200
676,200
676,200
4,000,000 572,700
1,200,000 507,150
7,000,000 1,854,376
7,400,000 464,026


$ 10,000 $ 2,445,300 $55,315,000 $28,798,635 $19,600,000 $ 5,426,852

The Association is subject to certain general and financial covenants related to the Bond agreements (the
Agreements). The original financial covenants in the 1990 & 1994 bonds required the Association to
generate net revenues, as defined in the Agreements, equal to at least the three year rolling average of the
Bonds' principal and interest requirements.

The covenants changed for all issues with the issuance of the 2001 Bonds and the subsequent issuance of
the 2005 Bonds. The first financial covenant requires the Association to maintain a Net Revenues to Debt
Service ratio, as defined in the Agreements, of greater than 1.1:1, tested annually at the end of each fiscal
year. The Association's ratio of net revenues to required principal and interest was 2.19 and 2.61 in 2006
and 2005, respectively. The second financial covenant requires the Association to maintain unrestricted
cash, marketable securities and investments in an amount greater than twenty-five percent (25%) of its
total indebtedness measured at the end of the fiscal year. At June 30, 2006, the required amount of
liquidity was $21,228,750 and the actual amount was in excess of $75,500,000. At June 30, 2005, the
required amount of liquidity was $19,102,500 and the actual amount was in excess of $62,700,000.

In conjunction with the Agreements, the Association entered into an irrevocable letter of credit agreement
with the insurer of the bonds as collateral for their payment. The irrevocable letter of credit has been


-26-


2.20%
2.80%
3.00%
3.50%


2007
2008
2009
2010
2011
2012-2016
2017-2021
2022 -2026
2027 -2031
2032


$

2,400,000
600,000
600,000
3,000,000
3,400,000







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2006 AND 2005


(6) Long-Term Obligations: (Continued)

amended and restated with each bond issue The current letter of credit agreement was dated September 1,
2005 and was issued in an initial amount not to exceed $86,722,930 ("Stated Amount"), of which an
amount not to exceed $85,610,000 ("Principal Component") may be drawn upon with respect to the
payment of the unpaid principal and an amount not to exceed $1,112,930 ("Interest Component") may be
drawn upon with respect to the payment of interest. The Interest Component is an amount equal to 39
days of interest on the bonds' outstanding principal at a rate of 12%, computed on the basis of a 360-day
year. The balance on the letter of credit at June 30, 2006, was $86,018,895. The current letter of credit
expires on October 15, 2010. The Association pays a fee in order to retain the letter of credit equal to
0.18% of the outstanding letter of credit balance. The fee is paid in arrears on the first day of each
quarterly period.

B. Deferred Revenues

Changes in current deferred revenues for June 30, 2006 and 2005, are as follows:

2006 2005


$ 39,072,457 $ 35,290,288


Balance, beginning of year
Additions:
Advance football ticket sales
Unearned booster contributions
Unearned other income
Total additions

Deductions:
Earned football revenue
Earned booster contributions
Earned other income
Total deductions


14,865,005
25,454,136
1,546,539
41,865,680


(14,313,673)
(23,706,201)
(1,052,583)
(39,072,457)
$ 41,865,680


Balance, end of year


14,313,673
23,706,201
1,052,583
39,072,457


(11,701,931)
(21,929,342)
(1,659,015)
(35,290,288)
$ 39,072,457


Changes in long term deferred revenues for June 30, 2006 and 2005, are as follows:

2006 2005


$ 1,272,693 $ 2,164,637


Balance, beginning of year
Additions:
Unearned booster contributions
Total additions


Deductions:
Booster contributions reclassified to current
Sponsorships recognized
Royalties recognized
Total deductions


(154,353)
(160,000)
(771,000)
(1,085,353)


341,693
341,693


(302,637)
(160,000)
(771,000)
(1,233,637)


Balance, end of year


$ 187,340 $ 1,272,693


-27-






THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2006 AND 2005


(7) Pension Plan:

In 1979, the Association established The University Athletic Association, Inc. Employees' Money
Purchase Pension Plan and Trust, a defined contribution pension plan covering substantially all full-time
employees. Total pension expense for the plan was $1,604,177 and $1,653,977 (net of forfeitures of
$200,175 and $211,264, respectively) for the years ended June 30, 2006 and 2005, respectively.
Contributions are made by the Association to the pension plan based on 12% of an eligible employee's
earnings. During the years ended June 30, 2006 and 2005, total payroll for employees covered under the
plan was $15,078,930 and $15,594,106, which represented approximately 72% and 69% of total payroll
for the years ended June 30, 2006 and 2005, respectively.

(8) Related-Party Transactions:

Gator Boosters, Inc. receives contributions from the general public and remits the majority of these funds
(less their operating expenses) to the Association. Contributions of $27,116,732 and $23,277,639 were
recognized from Gator Boosters, Inc., for the years ended June 30, 2006 and 2005, respectively, and have
been included in the accompanying statements of revenues, expenses, and changes in net assets.
Additionally, in 2004, the Association contracted to provide accounting and other support services to
Gator Boosters. The Association recognized contract revenue in the amount of $53,000 and $50,000 for
the year ended June 30, 2006 and 2005, respectively.

Gator Boosters, Inc. recognizes contribution expense for amounts remitted to the Association in the year
in which such amounts are remitted. The Association, however, does not recognize these amounts as
revenue until the year in which the related athletic event is held or the year when the related scholarship
expenses are incurred. A reconciliation of contribution revenues from Gator Boosters, Inc. as recognized
in the accompanying statements of revenues, expenses, and changes in net assets to contributions expense
as reflected in the financial statements of Gator Boosters, Inc. for the years ended June 30, 2006 and
2005, is as follows:

2006 2005

Contributions to the Association, as reported in the financial
statements of Gator Boosters, Inc. $ 28,473,414 $ 25,036,177
Recognition of prior year amounts received from Gator
Boosters, Inc. that were previously deferred 23,327,742 21,569,204
Deferral of amounts received from Gator Boosters, Inc. in
the current year (24,684,424) (23,327,742)
Contributions from Gator Boosters, Inc., as recognized in the
accompanying statements of revenues, expenses, and
changes in net assets $ 27,116,732 $ 23,277,639


-28-







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006 AND 2005


(9) Contributions to the University of Florida:

Contributions to the University of Florida for the years ended June 30, 2006 and 2005, consisted of gifts
for the following purposes:
2006 2005

Opportunity scholarship program $ 1,100,000 $

Logo profits 1,326,665 1,026,361
Parking facilities 200,000 200,000
Broward teaching center (strategic plan support) 200,000 200,000
Registrar and financial aid positions 158,856 127,686
Salaries 134,628 63,325
AIM scholarship program grant 200,000
Library 50,000 75,000
General scholarships 3,166 11,166
Council for Economic Outreach 33,334 33,334
Band trip 38,000
Costs incurred on behalf of University of Florida projects
Total contributions to University of the Florida $ 3,406,649 $ 1,774,872

The Association has committed to contribute $250,000 for 2007 and 2008, for parking facilities usage for
athletic events. In 2001, the Association agreed to contribute $33,334 per year for five years for the
Council for Economic Outreach. In 2006, the Association agreed to continue to contribute $33,334 per
year for an additional five years for the Council for Economic Outreach. The final contribution will be
made during fiscal year 2010.

(10) Operating Leases:

The Association leases various equipment and facilities under operating leases. Total rent expense for the
years ended June 30, 2006 and 2005, was $605,649 and $576,953, respectively. Included in rent expense
for the years ended June 30, 2006 and 2005, was $546,884 and $519,733, respectively, in rent paid to the
University of Florida for rental of the O'Connell Center and recreational sports fields. In addition, the
Association has a long-term lease between the Association and the University of Florida Board of
Trustees for the lease of various other athletic facilities on the University campus. There are no rental
payments due under the lease.

Future minimum lease payments under noncancelable operating lease agreements for the next five years
are as follows:

Year Ending
June 30, Amount
2007 $ 280,917
2008 224,299
2009
2010
2011 -
$ 505,216


-29-







THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2006 AND 2005


(11) Commitments Under Employment Contracts:

The Association has entered into employment contracts with certain employees expiring in years through
2014 that provide for a minimum annual salary. At June 30, 2006, the total commitment for all contracts
for each of the next five years and in the aggregate is as follows:

Year Ending
June 30, Amount
2007 $ 7,175,709
2008 6,021,806
2009 5,032,768
2010 2,919,865
2011 2,905,178
2012 2014 2,842,301
$ 26,897,627

(12) Contingencv:

The Association is the only remaining defendant in a wrongful death lawsuit filed by the parents of a
former University of Florida football student athlete. The case has been mediated and the Association
was unsuccessful in resolving the case with the family. The case is set for trial in December 2006.
Outside counsel for the Association has advised that at this stage in the proceedings, they cannot offer an
opinion as to the probable outcome. The Association believes the suit is without merit and is vigorously
defending its position.

(13) Risk Management:

The Association purchased conventional commercial insurance coverage for potential exposures in the
areas of property, workers' compensation, automobile liability and physical damage, and other general
liability exposures. This insurance was purchased from various independent carriers and is designed to
insure against such risks and minimize the Association's financial exposure. The Association also
participates with the employees in the purchase of group health, dental and life insurance for its
employees and their families.

The Association has also purchased commercial insurance to cover injuries to student athletes received
during practice or play. This policy requires a $10,000 deductible per athlete per incident. Any amounts
paid by the athletes' private insurance carriers can be applied to the Association's deductible. Total
athlete medical expenses were $462,600 and $512,666 for the years ended June 30, 2006 and 2005,
respectively. Estimated liabilities relating to unpaid and incurred but not reported claims were considered
immaterial, and therefore have not been reported in the accompanying financial statements.

The Association is not involved in any risk pools with other governmental entities.


-30-








JAMES MOORE & CO., P.L.
CERTIFIED PUBLIC ACCOUNTANTS
AND CONSULTANTS


REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON
AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS



To the Board of Directors,
The University Athletic Association, Inc.:


We have audited the financial statements of the The University Athletic Association, Inc. (the
Association) as of and for the year ended June 30, 2006, and have issued our report thereon, dated August
30, 2006. 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.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered the Association's internal control over financial
reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the
financial statements and not to provide an opinion on the internal control over financial reporting. Our
consideration of the internal control over financial reporting would not necessarily disclose all matters in
the internal control that might be material weaknesses. A material weakness is a reportable condition in
which the design or operation of one or more of the internal control components does not reduce to a
relatively low level the risk that misstatements caused by error or fraud in amounts that would be material
in relation to the financial statements being audited may occur and not be detected within a timely period
by employees in the normal course of performing their assigned functions. We noted no matters involving
the internal control over financial reporting and its operation that we consider to be material weaknesses.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Association's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.

This report is intended solely for the information and use of the board of directors and management of the
Association, and the board of trustees and management of the University of Florida and is not intended to
be and should not be used by anyone other than these specified parties.



Gainesville, Florida (
August 30, 2006


-31-




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