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Group Title: Financial statements, University of Florida Athletic Association, Inc.
Title: Financial statements, University of Florida Athletic Association, Inc. 2006-2007.
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Title: Financial statements, University of Florida Athletic Association, Inc. 2006-2007.
Series Title: Financial statements, University of Florida Athletic Association, Inc.
Physical Description: Serial
Language: English
Creator: University Athletic Association, Inc.
Publisher: University Athletic Association, Inc.
Publication Date: 2006-2007
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Bibliographic ID: UF00086916
Volume ID: VID00003
Source Institution: University of Florida
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    Table of Contents
        Table of Contents
    Independent auditors' report
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    Required supplementary information
        Page 3
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    Basic financial statements
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        Page 33
        Page 34
    Report on internal control
        Page 35
        Page 36
Full Text

















THE UNIVERSITY ATHLETIC ASSOCIATION, INC.

FINANCIAL STATEMENTS

JUNE 30, 2007 AND 2006








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
JUNE 30, 2007 AND 2006
TABLE OF CONTENTS




Page(s)

Independent Auditors' Report 1-2

Required Supplementary Information
Management's Discussion and Analysis 3- 15

Basic Financial Statements
Statements of Net Assets 16
Statements of Revenues, Expenses, and Changes in Net Assets 17
Statements of Cash Flows 18- 19
Notes to Financial Statements 20 34

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 35- 36








JAMES MOORE & CO., P.L.
CllRTIFl F.I) PL'BI; A'CC :NTA.,NTS
AND C'ONS LTANTS




INDEPENDENT AUDITORS' REPORT




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


We have audited the accompanying 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, 2007 and 2006, as listed in the table of
contents. These financial statements are the responsibility of the Association's management. Our
responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits 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 audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of the Association as of June 30, 2007 and 2006, 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 September 7,
2007, 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 3 through 15 is not a required part of the basic
financial statements but is supplementary information required by accounting principles generally


-1-











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
September 7, 2007


-2-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2007 AND 2006


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 student-
athlete has every opportunity for athletic and academic success and each coach has challenging and
rewarding career opportunities. 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, 2007 and
2006. 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 16.

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:


-3-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2007 AND 2006
(Continued)


* An unprecedented sweep of the national titles for both the Gator football and men's basketball
teams led the University of Florida athletics program to sixth-place overall in the 2006-2007
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 States Sports Academy and USA Today. The finish marks Florida's 24th consecutive
finish 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.

* Florida's sixth place finish in the Director's Cup standings was the highest by any school in the
Southeastern Conference (SEC).

* The University of Florida men's basketball team became the first team in 15 years and just the
seventh ever to win back-to-back national championships, defeating Ohio State 84-75 in the 2007
title game. Florida finished a school-best 35-5, breaking the 2005-2006 squad's record for wins
(33). Florida men's basketball also claimed the 2007 SEC regular season and SEC Tournament
titles.

* With its 41-14 victory over Ohio State in the Tostitos BCS National Championship Game, the
University of Florida football team won its second national title in school history (1996, 2006).
The Gators won their first Southeastern Conference championship since 2000 and seventh in
program history with a 38-28 defeat of Arkansas on Dec. 2. Florida finished the season with a 13-
1 overall record and was 7-1 in SEC play. The 13 wins established a single-season school record
for victories.

* A total of 11 Gator athletic teams finished in the top 10 of their respective sports, including five
among the top five. Florida won a league-high six SEC Championships in 2006-2007, to raise its
total to 44 since the 1997-1998 academic year, the most by any conference school during the 10-
year span. The Gators won the SEC in men's basketball, football, gymnastics, soccer, volleyball
and shared the women's tennis title.

* Florida was also successful away from the athletic arena in 2006-2007, as the Gators had 187 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 $37.6 million since 1990 to
help fund University of Florida academic endeavors.

* Over one million fans attended 153 home events in 2006-2007. Four UF teams ranked among the
nation's top 10 in attendance.

* UF student-athletes, partnering with 35 schools, 24 civic organizations and 18 non-profit
organizations, participated in Goodwill Gator activities by volunteering more than 2,000 hours of
community service in 2006-2007.

* The Association has given nearly $40 million back to the University of Florida since 1990,
including a gift of $6 million subsequent to June 30, 2007 in support of the Florida Opportunity
Scholarship program.


-4-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2007 AND 2006
(Continued)


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.

Condensed Summary of Net Assets (thousands of dollars)
2007-2006 2006-2005
Increase Percent Increase Percent
2007 2006 (decrease) change 2005 (decrease) change

Assets:
Current assets $ 63,384 $ 53,337 10,047 18.84% $ 43,582 9,755 22.38%
Capital assets, net of depreciation 138,655 130,169 8,486 6.52% 125,358 4,811 3.84%
Other assets 40,530 34,763 5,767 16.59% 31,781 2,982 9.38%

Total assets 242,569 218,269 24,300 11.13% 200,721 17,548 8.74%

Liabilities:
Long-term debt outstanding 84,150 84,915 (765) (0.90)% 76,410 8,505 11.13%
Other liabilities 64,222 54,827 9,395 17.14% 49,996 4,831 9.66%

Total liabilities 148,372 139,742 8,630 6.18% 126,406 13,336 10.55%

Net assets:
Invested in capital assets, net of
related debt 55,131 46,628 8,503 18.24% 49,464 (2,836) (5.73)%
Restricted 5,896 984 4,912 499.19% 15 969 6,460.00%
Unrestricted 33,170 30,915 2,255 7.29% 24,836 6,079 24.48%


$ 94,197 $ 78,527 15,670 19.95% $ 74,315 4,212 5.67%


Total net assets








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2007 AND 2006
(Continued)


Highlights

Total assets of the Association increased by $24.3 million in 2007 and by $17.5 million in 2006.

In 2007, current assets increased $10.0 million due to a $1.7 million increase in cash and cash
equivalents, a $3.9 million increase in short term investments, a $4.8 million increase in accounts
receivable from home football game opponents and rights holders and a $0.4 million decrease in
restricted assets. In 2006, short term investments increased by $10.7 million, accounts receivable
from home football game opponents decreased by $2.0 million and restricted assets increased by
$1.1 million, for a net increase of $9.8 million.

The $8.5 million increase in capital assets in 2007 is primarily due to the purchase of new video
scoreboards in the O'Connell Center and other venues, the completion of the baseball project and
the construction of the football front door project. In 2006, capital assets increased $4.8 million
primarily due to the construction in progress on the baseball project.

Other assets increased by $5.8 million in 2007 and by $3.0 million in 2006 due to increases in the
value of long term investments.

In 2007, long term debt outstanding decreased by $0.8 million due to loan repayments. 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.

Other liabilities increased by $9.4 million in 2007 due to a $6.1 million increase in advanced
football ticket sales and deferred Gator Booster contributions related to the 2007 and future
football seasons, a $1.4 million decrease in other unearned income, a $4.3 million increase in
accounts payable and accrued expenses and a $0.4 million increase in compensated absences. In
2006, other liabilities increased by $4.8 million 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.

Total net assets increased by $15.7 million in 2007 and by $4.2 million in 2006. Unrestricted net
assets increased by $2.3 million and $6.1 million in 2007 and 2006, respectively.

In 2007, net assets invested in capital assets, net of related debt increased by $8.5 million due to
the payment of $0.8 million on long term debt, purchases of $14.9 million in fixed assets,
spending of the remaining $0.7 million of construction trust funds, disposals of $0.2 million in
fixed assets and the expensing of $6.3 million in depreciation. Net assets invested in capital assets,
net of related debt decreased by $2.8 million in 2006 due to the issuance of $10.0 million in
additional long term debt (less unspent construction trust funds of $0.7 million), payments of $1.5
million on long term debt, purchases of $11.4 million in fixed assets, disposals of $0.7 million in
fixed assets, the capitalizing of $0.2 million in bond issuance costs and the expensing of $5.9
million in depreciation.

Restricted net assets increased by $4.9 million in 2007 due to the receipt of temporarily restricted
contributions for future projects. In 2006, restricted net assets increased by nearly $1.0 million due
to the monthly funding of a debt service interest sinking fund and the receipt of temporarily
restricted contributions for future projects.


-6-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2007 AND 2006
(Continued)


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. Contributions to the University of Florida Foundation are transfers by the
Association to the athletic scholarship endowment.

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.


-7-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2007 AND 2006
(Continued)


Condensed Sunmry of Rewnues, expenses and
OCanges in Net Assets thousandss of dollars)


eratng revalues:
Football
men's basketball
Other sports
Auxiliaries
Camps
Other operatingrevenues


4627 2001


$ 49,626 $ 44,414


7,963
6%
15,703
2899
10,535


5,964
655
11,609
2,176
7,329


2007-206
Increase Percent
(decrease) change 200


5,212
1,999
41
4,094
723
3,206


11.74%
33.52%
6.26%
35.27%
33.23%
43.74%


$ 41,487
5,629
703
9,765
1,964
8,156


Total operatingevues 87,422 72,147 15,275 21.17% 67,704 4,443 6.56%

Nonoperatingrenues:
Student fees 2570 2,501 69 2.76% 2,417 84 3.48%
ImestnIt income, net 7,471 2642 4,829 182.78% 3,260 (618) (18.%)%0
Sales taxes retained 1,234 1,002 232 23.15% 884 118 13.35%
Qher mnoperatingirenues 452 452 0 0.00/0 452 0 0.00(/0


Total nnoperating
rexenues

Total revenues

peratingexenses:
Team expenses
Scholarships and support services
Ceneral and administrative
Auxiliaries
Camps
epreciation and anurization

Total opeating senses

Nnoeatng expenses

Total expenses


11,727 6,597 5,130 77.76% 7,013 (416) (5.93)%

99,149 78,744 20,405 25.91% 74,717 4,027 5.39%/0


34,200
18,252
18,636
4,807
2901
6,302


85,098


26,%9
15,173
17,629
4,414
2,145
5,858


72,188


7,231
3,079
1,007
393
756
444


26.81%
20.29%
5.71%
8.90%
35.24%
7.58%0


12910 17.88%


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%/0
7.79%/0
1.60/0


3.88%


2,%2 2,583 379 14.67% 2,213 370 16.72%

88,060 74,771 13,289 17.77% 71,706 3,065 4.27%


Capital contributions frn Gator
Boosters and others
Cotributions to Univrsity ofHorida
Contributions to Univsity ofHlrida
Foidation

Inciase in net assets

Net assets, nd ofyear


8,631 3,646
(3,336) (3,407)


4,985 136.73% 2,638 1,008 38.21%
71 (2.08)/% (1,775) (1,632) 91.94%


(714) 0 (714) > 10(0/ 0 0 0.00/o

15,670 4,212 11,458 272.03% 3,874 338 8.72%

$ 94,197 $ 78,527 15,670 19.95% $ 74,315 4,212 5.67%


-8-


2006-200
Increase Percent
decrease ) change


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


7.06%
5.95%
(6.83)%
18.88%
10.79%/
(10.14)%








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2007 AND 2006
(Continued)


Highlights

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

Football revenues increased by $5.2 million in 2007 due to the addition of a seventh home game
and a ticket price increase. In 2006, football revenues increased by $2.9 million due to a ticket
price increase and a contribution increase for the existing luxury seating areas.

Men's basketball revenue increased by $2.0 million in 2007 due to a ticket price increase, creation
of court side seating and additional contributions due to a new Gator Booster club level system for
men's basketball.

Auxiliaries revenue increased in 2007 by $4.1 million due to a $2.6 million increase in licensing, a
$0.8 million increase sportshop revenue, and a $0.7 million increase in TV and radio rights fee
revenues. Most of these increases were due to the football and men's basketball National
Championships. In 2006, auxiliaries revenue increased by $1.9 million due to increases in
licensing, sportshop, golf course, TV and radio rights revenues.

In 2007, other operating revenues increased by $3.2 million as result of increased sponsorships
and royalty revenue associated with the 100th anniversary of Florida football and concessions
revenue from the additional home football game.

Investment income increased in 2007 by $4.8 million and decreased in 2006 $0.6 million due to
investment performance fluctuations.

In both 2007 and 2006, sales taxes retained increased due to increases in home game ticket
revenue and the local tax rate.

In 2007, operating expenses increased by $12.9 million. The $7.2 million increase in team
expenses was primarily attributable to increased salary costs for football and men's basketball,
BCS football bowl expenses, costs associated with the baseball and women's basketball
transitions and the hosting of various NCAA championship events. Support expenses increased by
$3.1 million due to the expenses associated with the 100th anniversary of Florida football and the
cost for national championship celebrations for football and men's basketball. General and
administrative increased by $1.0 million due to administrative bonus' and related pension and
payroll taxes.

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.


-9-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2007 AND 2006
(Continued)


* Capital contributions are major gifts designated by the donors for facility construction,
renovations and equipment purchases. Capital contributions in 2007 totaled $8.6 million and
included $4.9 million for the football entrance project, $1.4 million designated for the baseball
project, $1.0 million for the naming of the softball stadium, $0.5 million for the naming of the
football stadium Champions club, $0.2 million for the naming of the golf course and other gifts
totaling $0.6 million. In 2006, capital contributions of $3.6 million included $1.4 million for the
naming of the football stadium Champions club, $0.4 million designated for the baseball project,
$0.4 million for a future team locker room at the golf course, $0.3 million for naming of the
football support facility at the practice field, $0.3 million designated for the football practice field
turf project, $0.2 million for the future football entrance project, $0.2 million for the naming of the
golf course, $0.2 million for the basketball practice facility and other gifts totaling $0.2 million.

*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 $3.3 million in 2007 and $3.4 million in 2006. See Note 9 in
the Notes to the Financial Statements for further details on contributions to UF.

* Contribution to the University of Florida Foundation (UFF) consisted of transfers by the
Association to the athletic endowment fund as part of the 100 year celebration and men's
basketball National Championship.


- 10-









THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2007 AND 2006
(Continued)




REVENUE 2006-2007


Nonoperating Revenue
12%


Camps
3%


Other Revenue
11%

Other Sports




Auxiliaries
16%

Men's Basketball
8%


Football
49%


REVENUE 2005-2006





Camps
Nonoperating Revenue 3%
8%


Other Revenue
9%

Other Sports 4
1% ft


Auxiliaries
15%


Football
56%


Men's Basketball
8%


-11-


I \









THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2007 AND 2006
(Continued)




EXPENSES 2006-2007


Depreciation
Auxiliaries 7%
6%
Nonoperating Expenses
3%





General & Admin'
23%


Support Services
13%


Football Team
19%




SMen's Baskeball Team
7%




Other Sports Teams
F 14%


Scholarships
8%


EXPENSES 2005-2006


Depreciation
8%
Auxiliaries
60%
Nonoperating Expenses
300%






General & Admin
26% o


Support Services
11%


Football Team
170


/en's BaskeballTeam
6%




otherr Sports Teams
14%


Scholarships
90


- 12-


a








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2007 AND 2006
(Continued)


Statement of Cash Flows

The final 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)
2007-2006 2006-2005
Increase Percent Increase Percent
2007 2006 (decrease) change 2005 (decrease) change

Cash flows from:
Operating activities $ 12,850 $ 11,095 1,755 15.82% $ 1,877 9,218 491.10%
Noncapital financing activities 303 1,949 (1,646) (84.45)% 2,031 (82) (4.04)%
Capital & related financing activities (9,936) (1,839) (8,097) 440.29% (6,938) 5,099 (73.49)%
Investing activities (1,545) (11,552) 10,007 (86.63)% (5,593) (5,959) 106.54%

Net change in cash and cash equivalents 1,672 (347) 2,019 (581.84)% (8,623) 8,276 (95.98)%
Cash and cash equivalents, end of year $ 5,705 $ 4,033 1,672 41.46% $ 4,380 (347) (7.92)%



Highlights

Cash flows from operating activities increased by $1.8 million in 2007 due to increased cash
receipts from royalties, right and sponsors and cash receipts from ticket holders. In 2006, cash
flows from operating activities increased by $9.2 million due to increased cash contributions from
Gator Boosters and cash receipts from ticket holders.

Cash provided by noncapital financing activities decreased by $1.6 million in 2007 and by $82
thousand in 2006 due to increased cash contributed to the University of Florida.

In 2007, cash used in capital and related financing activities increased by $8.1 million due to the
completion of the baseball project. 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.

Cash used in investing activities decreased by $10.0 million in 2007 due to increased cash receipts
from the sale and maturities of investment securities. In 2006, cash used in investing activities


-13-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2007 AND 2006
(Continued)


decreased by $6.0 million due to increased cash payments for the purchases 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. In 2003, revenue from the pre-sold Champions
Club level and additional suites was $5.5 million per year, which exceeded the estimated debt service on
the 2001 bonds. A total of $54.5 million and $55.3 million was outstanding at June 30, 2007 and 2006,
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, 2007 and 2006.

The 1990 tax-exempt revenue bonds remain outstanding ($19.6 million at June 30, 2007 and 2006). The
Association's total long term debt as of June 30, 2007 and 2006, was $84.2 million and $84.9 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 2007 and 2006.

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

Economic Outlook

The Association continues to be in excellent financial condition as a result of a supportive fan base and
successful Gator Booster organization. Operating revenues are expected to increase in fiscal 2007-2008
due to ticket price increases in football and men's basketball, an increase in the football Gator Booster
club level and per seat contributions and the Association's ability to capitalize on the National
Championship's in football and men's basketball. The 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.


- 14-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2007 AND 2006
(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 head coach was hired in June of 2007. The lacrosse timeline includes 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


-15-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
STATEMENTS OF NET ASSETS
FOR THE YEARS ENDED JUNE 30, 2007 AND 2006


ASSETS

Current assets
Cash and cash equivalents
Short-term investments
Accounts receivable, net
Inventories
Prepaid expenses and other current assets
Restricted cash and cash equivalents
Restricted short-term investments
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


Total assets


242,568,617 218,268,711


LIABILITIES


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

Noncurrent liabilities
Longevity incentive payable
Accrued compensated absences, less current portion
Deferred revenues, less current portion
Long-term debt, less current portion
Total noncurrent liabilities


Total liabilities


148,372,104 139,742,020


NET ASSETS


Net assets
Invested in capital assets, net of related debt


55,131,272 46,627,945


Restricted for:
Capital projects
Debt service
Other purposes


Unrestricted
Total net assets


5,495,216
400,724

5,895,940

33,169,301
$ 94,196,513

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


-16-


2007



$ 5,304,240
41,821,109
11,619,311
884,864
3,353,860
400,724

63,384,108


108
39,942,393
551,937
35,000
138,655,071
179,184,509


2006



$ 3,638,674
37,901,470
6,767,880
1,011,343
2,911,871
394,394
711,079
53,336,711


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


14,373,454
180,000
735,000
46,373,971
154,090
61,816,515


549,571
2,082,146
508,872
83,415,000
86,555,589


10,110,840
175,000
765,000
41,865,680
119,168
53,035,688


596,903
1,772,089
187,340
84,150,000
86,706,332


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

30,915,089
$ 78,526,691








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30, 2007 AND 2006


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


2007


$ 49,625,829
7,963,107
695,637
15,703,451
2,898,878
10,535,415
87,422,317


15,455,680
6,526,327
12,218,548
7,298,944
10,952,810
18,635,714
4,806,805
2,901,608
6,302,416
85,098,852


2006


$ 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


Operating income (loss)


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


2,323,465 (41,389)


2,570,113
7,471,259
1,234,152
(2,961,858)
451,805
8,765,471


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


Income before contributions

Capital contributions from Gator Boosters, Inc. and others

Contributions to the University of Florida

Contributions to the University of Florida Foundation, Inc.


Increase in net assets


Net assets, beginning of year


Net assets, end of year


11,088,936 3,972,568


8,631,358

(3,336,018)

(714,454)


15,669,822


78,526,691


3,646,120

(3,406,649)


4,212,039


74,314,652


$ 94,196,513 $ 78,526,691


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


- 17-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2007 AND 2006



2007 2006


Cash flows from operating activities
Contributions from Gator Boosters, Inc.
Receipts from ticket holders and others
Receipts from the Southeastern Conference and NCAA
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 Floride
and the State of Florida
Contributions to the University of Florida
Contributions to the University of Florida Foundation, Inc
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

Net increase (decrease) in cash and cash equivalents


$ 25,695,945
30,828,215
13,461,493
15,100,252
295,697
(31,925,439)
(33,071,881)
(7,534,651)
12,849,631



4,256,070
(3,238,307)
(714,454)
303,309


(14,854,374)

8,545,458
140,900
(765,000)
(2,974,500)
(35,588)

6,800
(9,936,304)


(70,174,302)
65,172,777
3,456,785
(1,544,740)

1,671,896


$ 25,638,282
25,851,315
11,429,574
11,071,974
174,617
(31,579,432)
(24,653,175)
(6,837,714)
11,095,441



3,955,358
(2,006,345)

1,949,013


(11,254,428)
10,000,000
3,646,120
60,000
(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)

(346,831)


Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year


4,033,068


$ 5,704,964 $ 4,033,068


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


- 18 -


4,379,899








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2007 AND 2006
(Continued)


2007 2006


Reconciliation of operating income (loss) to net cash
provided by operating activities
Operating income (loss)
Adjustments to reconcile operating income (loss) to
net cash provided by operating activities:
Depreciation and amortization
Loss on disposal of capital assets
Changes in assets and liabilities:
Accounts receivable
Inventories
Prepaid expenses and other current assets
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

Supplemental disclosure of noncash activity
Decrease in investments and longevity incentive payable
to reflect earnings on employee directed incentive balances

Cash and cash equivalents are presented on the Statements
of Net Assets as:
Cash and cash equivalents
Restricted cash and cash equivalents


$ 2,323,465 $ (41,389)


6,302,416
144,807

(4,856,630)
126,479
(434,871)

21,113
4,135,391
315,057
4,829,823
34,922
(92,341)
$ 12,849,631


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


$ 70,009 $ 16,209


$ 5,304,240
400,724
$ 5,704,964


$ 3,638,674
394,394
$ 4,033,068


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


- 19-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007


(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
(GASB), 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 -n,,,,gL iii, ,h', Discussion and Analysis for
State and Local Governments, capital contributions from Gator Boosters and others and
contributions to the University of Florida and University of Florida Foundation are not considered
operating revenues or expenses 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 course 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.


-20-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007


(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 sponsorship payments. The sponsorship amounts are recognized over the life of the
agreements, while the booster prepayments will be recognized in the applicable sports season.

(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.


-21-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007


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

(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 payments on the bonds, and other
funds 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) Sales taxes retained--In accordance with Chapter 1006, Section 71 of the Florida Statutes,
the Association retains an amount equal to sales taxes collected from ticket sales to athletic events
for use in the support of women's athletic programs.

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

(r) In-kind contributions--Donations of materials and services are recorded at their fair market
value at the date of donation.

(s) Reclassifications--In order to facilitate the comparison of financial data, certain June 30,
2006 account balances have been reclassified to conform to the current year reporting format.
These reclassifications had no effect on net assets.


-22-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007


(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,
2007 and 2006, were as follows:

2007 2006

Money market funds $ 5,507,212 $ 3,469,048
Cash in bank demand accounts (2,261,886) (2,751,643)
Cash held at the University of Florida 1,988,514 2,870,869
Cash on hand 70,400 50,400
Restricted cash in bank demand accounts 400,724 394,394
Cash and cash equivalents $ 5,704,964 $ 4,033,068

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, 2007 and 2006, were $1,363,902 and $679,029, 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 investment accounts with the State of Florida
Division of Treasury and State Board of Administration and are reported at fair value. Other investments
include mutual funds and commingled funds that are reported at fair value as determined by their net asset
values at year-end. 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.


- 23-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007


(2) Cash and Investments: (Continued)

As of June 30, 2007 and 2006, the Association had the following investments:

2007 2006


Short term investments:
External Investment Pools:
Florida State Treasury Special Purpose Investment Account
Investment Pool Florida State Board of Administration
Subtotal

Restricted short term investments:
Florida State Treasury Special Purpose Investment Account
Investments:
Domestic equity mutual funds and commingled funds
International equity mutual funds
Debt securities mutual fund
Employee directed investments
Subtotal
Total investments


$ 40,089,723
1,731,386
41,821,109


$ 37,901,470

37,901,470


- 711,079


21,255,293
9,569,375
8,761,154
356,571
39,942,393
$ 81,763,502


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


The Association's short term investments include pooled investments with the State of Florida Treasury
Investment Pool and the Florida State Board of Administration Investment Pool.

The Association's investment in the State Treasury Special Purpose Investment Account (SPIA)
represents ownership of a share of the pool, not the underlying securities. The State Treasury has 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
3.21 years and 2.72 years at June 30, 2007 and 2006, respectively. The Association relies on policies
developed by the State Treasury for managing interest rate risk or credit risk for this investment pool.

The Local Government Investment Pool is administered by State Board of Administration (SBA)
pursuant to Section 218.405, of the Florida Statues and is a Securities and Exchange Commission Rule
2a-7 like external investment pool, 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 nationally by a
recognized statistical rating agency as of June 30, 2007. The June 30, 2007 weighted average days to
maturity were 26.

Disclosures for the SPIA and SBA investment pools are included in the notes to the financial statements
of the State's Comprehensive Annual Financial Report.

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, 2007 and 2006, this fund was unrated, however, the
underlying investments in this fund had an average credit quality rating of AA+ and AAA, respectively,
and a weighted average duration to maturity of 5.07 and 5.3 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 investments.


-24-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007


(2) Cash and Investments: (Continued)

C. Restricted Assets:

The Association's restricted assets include cash and cash equivalents held for the payment of accrued
interest on the 1990, 2001 and 2005 series bonds, which is due in October. Additionally, in 2006,
restricted assets included the 2005 bond construction trust fund. Those funds were held in a short term
investment account with the State of Florida Division of Treasury. Restricted assets were included in both
the cash and cash equivalents and short term investments schedules, as applicable.


(3) Accounts Receivable:

Accounts receivable at June 30, 2007 and 2006, consist of the following:


2007 2006


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


$ 2,060,750
6,634,267
77,485
371,641
2,542,955
11,687,098
(67,787)
$ 11,619,311


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


(4) Accounts Payable and Accrued Expenses:

Accounts payable and accrued expenses consist of the following at June 30, 2007 and 2006:

2007 2006


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


$ 9,008,992
4,475,054
687,462
172,565
29,381
$ 14,373,454


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


-25-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007


(5) Capital Assets:

Capital asset activity for the year ended June 30, 2007, was as follows:


Beginning
Balance


Additions Decreases


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

Total capital assets
being depreciated, net


$ 567,039
10,542,875

11,109,914


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

161,832,599



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

42,773,745


119,058,854


9,544,771

9,544,771
9,544,771


1,001,276
17,083,204

18,084,480



233,616
1,554,852
4,513,948

6,302,416


11,782,064


$ $ 567,039
(12,688,313) 7,399,333

(12,688,313) 7,966,372


(124,585)
(772,667)


5,843,381
19,899,303
153,277,143


(897,252) 179,019,827


(117,906)
(627,127)


2,090,283
11,554,914
34,685,931


(745,033) 48,331,128


(152,219) 130,688,699


Capital assets, net


$130,168,768 $ 21,326,835 $(12,840,532) $138,655,071


-26-


Ending
Balance








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007


(5) Capital Assets: (Continued)

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


Beginning
Balance


Additions Decreases


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

Total capital assets
being depreciated, net


$ 567,039
1,536,640

2,103,679


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

164,143,478



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

40,889,082


123,254,396


10,228,670

10,228,670
10,228,670


1,066,312
1,340,073

2,406,385



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

5,858,002


(3,451,617)


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

(1,222,435) 11,109,914


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


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


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


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


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


(3,973,339) 42,773,745


(743,925) 119,058,854


Capital assets, net


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


At June 30, 2007, the Association has commitments
projects approximating $24,866,000.


to provide for additional capital improvement


-27-


Ending
Balance








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007



(6) Long-Term Obligations:

The change in long-term obligations for the year ended June 30, 2007, was as follows:


Beginning Ending
Balance Additions Reductions Balance


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


$ 1,947,089 $ 807,343 $ (492,286) $ 2,262,146 $


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


401,009 (423,341)
46,878,572 (42,048,749)
-(765,000)


$129,637,012 $48,086,924 $(43,729,376) $133,994,560 $ 47,438,971


The change 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


$ 1,685,683 $ 608,731 $ (347,325) $ 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 $52,995,620 $(42,173,135) $129,637,012 $ 42,930,680


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.


- 28 -


Amounts
Due Within
One Year


699,571
46,882,843
84,150,000


180,000

150,000
46,373,971
735,000


Amounts
Due Within
One Year


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


175,000

125,000
41,865,680
765,000








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007


(6) Long-Term Obligations: (Continued)

In October2001, 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 completed in October, 2006. Initially, the 2005 Bonds bear interest at the
Multiannual Rate.

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, 2007 and 2006, the 1990 Bonds bear interest based upon the following schedule:

June 30, 2007 June 30, 2006
Outstanding Interest Outstanding Interest
Amount Term Rate Amount Term Rate

$ 9,600,000 9/1/05- 10/1/09 3.40% $ 9,600,000 9/1/05- 10/1/09 3.40%
10,000,000 9/1/05 10/1/10 3.50% 10,000,000 9/1/05- 10/1/10 3.50%
$ 19,600,000 $ 19,600,000

At June 30, 2007 and 2006, the 2001 Bonds bear interest based upon the following schedule:

June 30, 2007 June 30, 2006
Outstanding Interest Outstanding Interest
Amount Term Rate Amount Term Rate

$ 11,705,000 Daily Rate Variable $ 11,705,000 Daily Rate Variable
14,335,000 10/1/03 10/1/08 2.80% 14,335,000 10/1/03 10/1/08 2.80%
14,275,000 10/1/04- 10/1/09 3.00% 14,275,000 10/1/04- 10/1/09 3.00%
14,235,000 10/1/06- 10/1/011 3.80% 15,000,000 10/1/01- 10/1/06 3.50%
$ 54,550,000 $ 55,315,000

The Daily Rate at June 30, 2007 and 2006 was 3.9% and 4.05%, respectively.


-29-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007


(6) Long-Term Obligations: (Continued)

At June 30, 2007 and 2006, the 2005 Bonds bear interest based upon the following schedule:

June 30, 2007 June 30, 2006
Outstanding Interest Outstanding Interest
Amount Term Rate Amount Term Rate

$ 10,000,000 9/1/05- 10/1/08 3.30% $ 10,000,000 9/1/05- 10/1/08 3.30%

Debt service requirements at June 30, 2007, were as follows:

2005 Bonds 2001 Bonds 1990 Bonds
Year Ended
June 30, Principal Interest Principal Interest Principal Interest

2008 $ $ 330,000 $ 735,000 $1,808,418 $ $ 676,200
2009 2,400,000 270,600 710,000 1,784,431 676,200
2010 600,000 235,950 790,000 1,758,644 4,000,000 572,700
2011 600,000 216,150 770,000 1,732,689 1,200,000 507,150
2012 600,000 196,350 755,000 1,707,278 1,200,000 465,750
2013 -2017 3,000,000 684,750 3,875,000 8,137,023 7,500,000 1,599,939
2018 2022 2,800,000 181,500 6,250,000 7,446,920 5,700,000 252,713
2023 -2027 18,230,000 5,181,154
2028 -2032 22,435,000 1,753,327-
$10,000,000 $ 2,115,300 $54,550,000 $31,309,884 $19,600,000 $ 4,750,652

The Association is subject to certain general and financial covenants related to the Bond agreements (the
Agreements). 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 4.69 and 2.19 in 2007
and 2006, 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, 2007, the required amount of
liquidity was $21,037,500 and the actual amount was in excess of $87,000,000. At June 30, 2006, the
required amount of liquidity was $21,228,750 and the actual amount was in excess of $75,500,000.

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
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


-30-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007



(6) Long-Term Obligations: (Continued)

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, 2007, was $85,243,950. The current letter of credit
expires on October 15, 2011. The Association pays a fee in order to retain the letter of credit which
currently equal to 0.18% of the outstanding letter of credit balance and is valid through September 30,
2007. The fee is scheduled to increase on October 1, 2007. 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, 2007 and 2006, are as follows:


2007


2006


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

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


$ 41.865.680 $ 39.072.457


18,733,255
26,477,772
1,025,982
132,691
46,369,700


(14,865,005)
(24,497,083)
(952,782)
(1,546,539)
(41,861,409)
$ 46,373,971


Balance, end of year


Changes in long term deferred revenues for June 30, 2007 and 2006, are as follows:


2007


14,865,005
24,497,083
957,053
1,546,539
41,865,680


(14,313,673)
(22,986,046)
(720,155)
(1,052,583)
(39,072,457)
$ 41,865,680



2006


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


$ 187.340 $ 1.272.693


418,872
90,000
508,872


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


(187,340)


(187,340)
$ 508,872


Balance, end of year


(154,353)
(160,000)
(771,000)
(1,085,353)
$ 187,340


-31-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007


(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 $1,704,742 and $2,310,083 (net of forfeitures of
$258,942 and $200,175, respectively) for the years ended June 30, 2007 and 2006, 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, 2007 and 2006, total pension applicable payroll for employees
covered under the plan was $17,329,183 and $15,078,930, which represented approximately 62% and
72% of total payroll for the years ended June 30, 2007 and 2006, 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 $33,610,966 and $27,116,732 were
recognized from Gator Boosters, Inc., for the years ended June 30, 2007 and 2006, respectively, and have
been included in the accompanying statements of revenues, expenses, and changes in net assets.
Additionally, beginning in 2004, the Association contracted to provide accounting and other support
services to Gator Boosters. The Association recognized contract revenue in the amount of $65,000 and
$53,000 for the year ended June 30, 2007 and 2006, 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, 2007 and
2006, is as follows:

2007 2006

Contributions to the Association, as reported in the financial
statements of Gator Boosters, Inc. $ 35,863,187 $ 28,473,414
Recognition of prior year amounts received from Gator
Boosters, Inc. that were previously deferred 24,684,422 23,327,742
Deferral of amounts received from Gator Boosters, Inc. in
the current year (26,936,643) (24,684,424)
Contributions from Gator Boosters, Inc., as recognized in the
accompanying statements of revenues, expenses, and
changes in net assets $ 33,610,966 $ 27,116,732


-32-








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007


(9) Contributions to the University of Florida:

Contributions to the University of Florida for the years ended June 30, 2007 and 2006, consisted of gifts
for the following purposes:

2007 2006

Opportunity scholarship program $ $ 1,100,000
Logo profits 2,524,376 1,326,665
Parking facilities 265,000 200,000
Broward teaching center (strategic plan support) 200,000 200,000
Registrar and financial aid positions 107,153 158,856
Salaries 154,155 134,628
AIM scholarship program grant 200,000
Library 50,000 50,000
General scholarships 2,000 3,166
Council for Economic Outreach 33,334 33,334
Total contributions to University of the Florida $ 3,336,018 $ 3,406,649

The Association has committed to contribute $265,000 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) Contributions to the University of Florida Foundation, Inc.:

The Association conducted several fund raising initiatives during the 2006-2007 fiscal year to celebrate
the 100 Years of Gator Football, including the sale of Gator Walk bricks. The profits of $528,653 from
the sale of these bricks were contributed to the University of Florida Foundation, Inc. and included in the
athletic scholarship endowment. Additionally, contributions in the amount of $102,529, received for the
100 Years of Gator Football were also contributed to the University of Florida Foundation, Inc. and
included in the athletic scholarship endowment. The Association sold pieces of the 2007 Men's
Basketball National Championship Final Four floor. The profits of $83,272 from the sale of the floor
pieces were contributed to the University of Florida Foundation, Inc. and included in the athletic
scholarship endowment.

(11) Operating Leases:

The Association leases various equipment and facilities under operating leases. Total rent expense for the
years ended June 30, 2007 and 2006, was $687,467 and $605,649, respectively. Included in rent expense
for the years ended June 30, 2007 and 2006, was $626,755 and $546,884, 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.


-33 -








THE UNIVERSITY ATHLETIC ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007


(11) Operating Leases: (Continued)

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


Year Ending
June 30,
2008
2009
2010
2011
2012


Amount

$ 231,861
8,164
8,164
8,164
8,164
$ 264,517


(12) 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, 2007, the total commitment for all contracts
for each of the next five years and in the aggregate is as follows:


Year Ending
June 30,
2008
2009
2010
2011
2012
2013 2018


Amount
$ 9,555,089
9,712,030
8,922,623
8,153,962
8,032,202
13,244,419
$ 57,620,325


(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 $678,915 and $462,600 for the years ended June 30, 2007 and 2006,
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.


-34-








JAMES MOORE & CO., P.L.
CIRTIFIFI) P'B1.(; A\C()\NTA ,\NTS
AN) ( ONStL.TANTS



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 A AUDITING STANDARDS



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


We have audited the financial statements of The University Athletic Association, Inc. (the Association) as
of and for the year ended June 30, 2007, and have issued our report thereon dated September 7, 2007. 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 as a basis for designing our auditing procedures for the purpose of expressing our opinion on the
financial statements but not for the purpose of expressing an opinion on the effectiveness of the
Foundation's internal control over financial reporting. Accordingly, we do not express an opinion on the
effectiveness of the Association's internal control over financial reporting.

A control deficiency exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent or detect
misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of
control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or
report financial data reliably in accordance with generally accepted accounting principles such that there
is more than a remote likelihood that a misstatement of the entity's financial statements that is more than
inconsequential will not be prevented or detected by the entity's internal control.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in
more than a remote likelihood that a material misstatement of the financial statements will not be
prevented or detected by the entity's internal control.

Our consideration of the internal control over financial reporting was for the limited purpose described in
the first paragraph of this section and would not necessarily identify all deficiencies in internal control
that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in
internal control over financial reporting that we consider to be material weaknesses, as defined above.

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


-35 -










results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Aditing Standards.

We noted certain matters that we reported to management of the Association in a separate letter dated
September 7, 2007.

This report is intended solely for the information and use of the Audit Committee 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
September 7, 2007


-36-




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