THE UNIVERSITY ATHLETIC ASSOCIATION, INC. FINANCIAL STATEMENTS JUNE 30, 2015 AND 2014

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1 FINANCIAL STATEMENTS

2 TABLE OF CONTENTS Page(s) Independent Auditors Report 1 2 Required Supplementary Information Management s Discussion and Analysis 3 17 Basic Financial Statements Statements of Net Position 18 Statements of Revenues, Expenses, and Changes in Net Position 19 Statements of Cash Flows Notes to Financial Statements 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 36 37

3 INDEPENDENT AUDITORS REPORT To the Board of Directors, The University Athletic Association, Inc.: Report on the Financial Statements: 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, 2015 and 2014, and the related notes to the financial statements, which collectively comprise the Association s basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements The Association s management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility 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 audits to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion

4 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, 2015 and 2014, and the changes in financial position and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management s discussion and analysis on pages 3 through 17 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 4, 2015, 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Association s internal control over financial reporting and compliance. Gainesville, Florida September 4,

5 MANAGEMENT'S DISCUSSION AND ANALYSIS 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 strategic purpose focuses on providing a championship experience with integrity on and off the field for student-athletes and the Gator Nation. The Association s vision is to be the model collegiate athletics program, combining excellence and integrity in academics, athletics, and fan engagement to elevate the UF brand. 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, supportive alumni and friends, 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, 2015 and 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 position and revenues, expenses and changes in net position and the Association s financial statements which begin on Page 18. 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 Position; the Statements of Revenues, Expenses and Changes in Net Position; and the Statements of Cash Flows. The Association s net position is 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, and is a key indicator of the overall health of the Association and its programs. The success of the intercollegiate athletic program for the current year is evidenced by the information displayed on the following page

6 MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) - 4 -

7 MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) Summary of Net Position The Statements of Net Position present the assets, liabilities and net position of the Association as of the end of the last two fiscal years. A Statement of Net Position 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 Position 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 position (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 Position 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 Position provide a picture of the net position and their availability for expenditure by the Association. Net Position is divided into three major categories. The first category, net investment in capital assets, presents the Association s equity in property, plant and equipment. The next net position category is restricted net position. The Association s restricted net positions have constraints placed upon their use by independent donors. The final category is unrestricted net position, which is available to the Association for any legal use. Condensed Summary of Net Position (thousands of dollars) Increase Percent Increase Percent (decrease) change 2013 (decrease) change Assets: Current assets $ 81,975 $ 74,576 $ 7, % $ 72,308 $ 2, % Capital assets, net of depreciation 174, ,919 2, % 175,054 (3,135) (1.79)% Other assets 60,313 58,074 2, % 52,668 5, % Total assets 316, ,569 12, % 300,030 4, % Liabilities: Long-term debt outstanding 80,630 84,710 (4,080) (4.82)% 88,795 (4,085) (4.60)% Other liabilities 71,119 67,048 4, % 69,039 (1,991) (2.88)% Total liabilities 151, ,758 (9) (0.01)% 157,834 (6,076) (3.85)% Net position: Net invetment in capital assets 93,951 87,209 6, % 86, % Restricted 23,844 15,122 8, % 12,235 2, % Unrestricted 47,325 50,480 (3,155) (6.25)% 43,702 6, % Total net position $ 165,120 $ 152,811 $ 12, % $ 142,196 $ 10, % - 5 -

8 MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) Highlights The Association s total assets increased by $12.3 million and $4.5 million in 2015 and 2014, respectively. The fluctuation in total assets between 2014 and 2013 was primarily due to fluctuations in the market value of investments and accounts receivable. In 2015, the increase was also due to increases in the market value of investments. Current assets increased in 2015 by $7.4 million due to a $7.2 million increase in short-term investments and a $0.2 million increase in accounts receivable. Capital assets, net of depreciation increased in 2015 by $2.7 million due to asset additions exceeding depreciation expense. In 2015, other assets increased by $2.2 million due to fluctuations in the value of long term investments and increased in 2014 by $5.4 million due to an increase in the amount due from Gator Boosters. Long-term debt outstanding decreased by $4.1 million in 2015 and 2014 due to principal payments on outstanding bonds. Other liabilities increased by $4.1 million in 2015 due to a $6.3 million increase in contracts payable, a $2.0 million decrease in deferred SEC Network distributions, a $1.1 million decrease in deferred royalties, a $1.9 million decrease in advanced football ticket sales and deferred Gator Booster contributions related to the 2015 and future football seasons, and a $2.8 million increase in accounts payable and accrued expenses. Total net position increased by $12.3 million and by $10.6 million in 2015 and 2014, respectively. Unrestricted net position decreased by $3.2 million in 2015 and increased by $6.8 million in In 2015, net position invested in capital assets, net of related debt increased by $6.7 million due to payments of $4.1 million on long-term debt, purchases of $1.4 million in capital assets, spending of $11.0 million in construction trust funds, disposal of $0.5 million in capital assets and the expensing of $9.3 million in depreciation. Restricted net position increased by $8.7 million in 2015 and $2.9 million in 2014 primarily due to receipt of contributions related to future projects in the Stephen C. O Connell Center and the Farrior Hall Academic Center. Summary of Revenues, Expenses and Changes in Net Position The Statements of Revenues, Expenses and Changes in Net Position 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, and reduces operating income, by the cost of an asset over its expected useful life

9 MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) Nonoperating revenues are revenues received for which goods or services are not provided, such as investment income. Nonoperating expenses include interest on capital asset related debt and contributions to the University of Florida (UF) and the University of Florida Foundation (UFF). Contributions to UF 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 UFF are transfers by the Association to the athletic scholarship endowment. Capital contributions are considered neither operating nor nonoperating and are reported after Income before capital contributions. Changes in total net position as presented on the Statements of Net Position are based on the activity presented in the Statements of Revenues, Expenses and Changes in Net Position. The purpose of the Statements of Revenues, Expenses and Changes in Net Position 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. Condensed Summary of Revenues, Expenses and Changes in Net Position (thousands of dollars) Increase Percent Increase Percent (decrease) change 2013 (decrease) change Operating revenues: Football $ 78,034 $ 67,384 $ 10, % $ 71,293 $ (3,909) (5.48)% Other sports 14,888 10,781 4, % 10, % Royalties and sponsorships 22,090 18,769 3, % 18,785 (16) (0.09)% Auxiliaries, camps, student fees and other 12,130 11, % 10,043 1, % Total operating revenues 127, ,805 18, % 110,300 (1,495) (1.36)% Nonoperating revenues 2,128 10,056 (7,928) (78.84)% 7,908 2, % Total revenues 129, ,861 10, % 118, % Operating expenses: Team expenses 60,214 43,605 16, % 43,857 (252) (0.57)% Scholarships and support services 27,392 25,087 2, % 24,071 1, % General and administrative 29,237 25,965 3, % 24,341 1, % Auxiliaries, camps and depreciation 12,834 12, % 12, % Total operating expenses 129, ,118 22, % 104,341 2, % Nonoperating expenses: Interest on capital related debt 1,782 2,035 (253) (12.43)% 2,088 (53) (2.54)% Contributions to University of Florida and UF Foundation 6,124 4,345 1, % 7,596 (3,251) (42.80)% Total nonoperating expenses 7,906 6,380 1, % 9,684 (3,304) (34.12)% Total expenses 137, ,498 24, % 114,025 (527) (0.46)% Capital contributions from Gator Boosters and others 20,622 5,252 15, % 11,298 (6,046) (53.51)% Increase (decrease) in net position 12,309 10,615 1, % 15,481 (4,866) (31.43)% Net position, beginning of year 152, ,196 10, % 126,715 15, % Net position, end of year $ 165,120 $ 152,811 $ 12, % $ 142,196 $ 10, % - 7 -

10 MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) Highlights Football revenues increased in 2015 by $10.7 million primarily due to an increase in SEC network revenue, which launched in August 2014, and revenue from participation in a bowl game during the 2014 season. Other sports revenues increased in 2015 by $4.1 million primarily due to new revenue from the SEC Network. Royalties and sponsorships increased by $3.3 million in 2015 due to a one time increase of $1.5 million in multimedia rights and a $2.0 million signing bonus on a new Nike equipment contract. Nonoperating revenue decreased by $7.9 million in 2015 and increased by $2.1 million in 2014 due to investment performance fluctuations. In 2015, operating expenses increased by $22.6 million due to the following: o Team expenses increased by $16.6 million primarily due to one-time coaching staff transition expenses in football and men s basketball. These expenses included over $6.9 million in termination settlements, which includes the full payout to former football and men s basketball coaching staffs. As well as a one-time expense of $5.1 million to fully recognize the contractual buyout agreements and signing bonuses for the football and men s basketball coaches. As well, the football team did not participate in a bowl game in the 2013 season, but did in the 2014 season for an increase in cost of $1.8 million. There was also an increase of $2.4 million in team expenses due to increases in charter aircraft costs and post season travel, along with increased coaching salaries for other sports. o Scholarships and supports services increased by $2.3 million primarily due to an increase in scholarship costs, student athlete tutoring and student athlete medical expenses. o General and administrative expenses increased by $3.3 million primarily due to an increase of $1.0 million in administrative support to the University, $0.6 million increase in employee health insurance expenses, $0.3 million in utility expenses and an increase of $1.0 million in maintenance project expenses, as well as, salary increases of 3.5% for all full time employees. o Auxiliaries, camps and depreciation expenses increased primarily due to an increase of $0.3 million in depreciation. Operating expenses for 2014 increased by $2.8 million primarily due to a $1.0 million increase in scholarships and support services and a $1.6 million increase in general and administrative expenses. Most of this increase was due to a budgeted merit salary increase for substantially all employees. Additionally, marketing expenses increased due to new branding initiatives, ticket office expenses increased due to a new consulting contract related to ticket sales services and termination settlements increased due to the retirement of a long time coach. Contributions to the University of Florida and to the University of Florida Foundation increased by $1.8 million in 2015 and decreased by $3.3 million in Contributions to the University of Florida include unrestricted gifts for the academic mission of the University, contributions for designated purposes and costs incurred by the Association for UF projects. See Note 7 in the Notes to the Financial Statements for further details on the Association s contributions to the University of Florida. Contributions to the University of Florida Foundation consisted of transfers by the - 8 -

11 MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) Association to the Athletic Endowment Fund from profits from the Gator Walk brick program. See Note 8 in the Notes to the Financial Statements for further details on the Association s contributions to the University of Florida Foundation. Capital contributions are major gifts designated by the donors for facility construction, renovations and equipment purchases. The amount will fluctuate from year to year based on giving schedules. In 2015, capital contributions totaled $20.6 million and included $14.0 million for the renovation of The Hawkins Center at Farrior Hall, $5.0 million for the renovation of the Stephen C. O Connell Center, $1.0 million for the Gateway of Champions football front door project, and $0.1 million for various other projects. In 2014, capital contributions totaled $5.3 million and included $2.6 million for the renovation of the Stephen C. O Connell Center, $1.0 million for the Gateway of Champions football front door project, $0.5 million for renovation of the Carse swim dive facility, $0.4 million for the lacrosse stadium and $0.8 million for various other projects

12 MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) Student Fees 2% Revenue Other 5% Nonoperating Revenues 2% Royalties and Sponsorshps 17% Camps 1% Auxiliaries 1% Other Sports 2% Football 60% Men's Basketball 10% Student Fees 2% Other 5% Revenue Nonoperating Revenues 8% Royalties and Sponsorships 16% Camps 2% Auxiliaries 1% Other Sports 1% Men's Basketball 8% Football 57%

13 MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) Camps 1% Auxiliaries 1% Depreciation and Amortization 7% Expenses Nonoperating Expenses 6% Football Team 24% General and Administrative 21% Men's Basketball Team 6% Support Services 11% Scholarships 9% Other Sports Teams 15% Camps 2% Auxiliaries 1% Depreciation and Amortization 8% Expenses Nonoperating Expenses 6% Football Team 16% Men's Basketball Team 7% General and Administrative 23% Other Sports Teams 13% Support Services 12% Scholarships 10%

14 MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) Annual Contributions to UF $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $

15 MANAGEMENT'S DISCUSSION AND ANALYSIS (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 Association s cash receipts and cash payments 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 the University of Florida, the University of Florida Foundation 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 income 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 Position. Condensed Summary of Cash Flows (thousands of dollars) Increase Percent Increase Percent (decrease) change 2013 (decrease) change Cash flows from: Operating activities $ 11,004 $ 5,540 $ 5, % $ 3,669 $ 1, % Noncapital financing activities (6,140) (5,844) (296) (5.07)% (4,134) (1,710) (41.36)% Capital & related financing activities 2,337 (6,782) 9, % (4,442) (2,340) (52.68)% Investing activities (7,047) 4,301 (11,348) (263.85)% 10,899 (6,598) (60.54)% Net change in cash and cash equivalents 154 (2,785) 2, % 5,992 (8,777) (146.48)% Cash and cash equivalents, beginning of year 7,981 10,766 (2,785) (25.87)% 4,774 5, % Cash and cash equivalents, end of year $ 8,135 $ 7,981 $ % $ 10,766 $ (2,785) (25.87)% Highlights Cash provided by operating activities increased by $5.5 million in 2015 due to increased cash contributions from Gator Boosters of $3.6 million, increased cash receipts from ticket holders of $0.5 million, increased cash receipts from the Southeastern Conference of $14.4 million, increased cash receipts from rights, royalties and sponsors of $0.1 million, increased cash used for payments to suppliers of $6.8 million, decreased cash used for scholarships of $0.5 million and increased cash used for payments to employees of $19.5 million

16 MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) Cash used in capital and related financing activities increased in 2015 by $9.1 million primarily due to a $6.5 million decrease in the purchase of capital assets, a $15.4 million increase in capital contributions from Gator Boosters. In 2014, cash used in capital and related financing activities increased by $2.3 million due to a $6.9 million decrease in the purchase of capital assets, a $6 million increase in capital contributions from Gator Boosters, and a $2.9 million increase in the proceeds from the sale of capital assets. Cash used in investing activities increased by $11.3 million in 2015 due to a $32.9 million increase in cash payments for the purchase of investment securities and a $20.5 million reduction in cash proceeds from the sale and maturities of investment and a $1.1 million reduction in interest and dividends received. In 2014, cash used in investing activities increased by $6.6 million due to a $39.5 million reduction in cash payments for the purchase of investment securities, a $46.1 million reduction in cash proceeds from the sale and maturities of investment securities. Net Cash Flow Activities $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $- $(2,000) $(4,000) Operating Activities Noncapital Financing Activities Capital & Related Financing Activities Investing Activities $(6,000) $(8,000)

17 MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) Capital Asset and Debt Administration The Athletic Association is financially responsible for all major capital projects and improvements. The Association coordinates all capital projects under University construction guidelines and with University personnel, but has full financial responsibility of the cost of the projects. The Association has a rich history of financing these projects through a combination of major capital gifts, UAA operating funds, and tax exempt debt. See exhibits below: Annual Capitalized Projects Total of $140,284,164 Operating Funds $50,526,666 36% Private Capital Contributions $54,757,498 39% Bond Issuance $35,000,000 25% $25,000,000 $20,000,000 $15,000,000 Operating Funds Bond Issuance $10,000,000 $5,000,000 Private Capital Contributions $

18 MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) As of June 30, 2015, the Association has a total of $80,630,000 in outstanding debt. This debt was used to finance a number of different athletic facilities, including a 1990 expansion of the north end zone of Ben Hill Griffin Stadium, a 2001 expansion of the Ben Hill Griffin Stadium Skybox and press box complex, a 2005 expansion and renovation of the baseball stadium and locker room, a 2007 expansion and renovation of the football offices and student athlete strength and conditioning center, a 2011 expansion of the west concourse of Ben Hill Griffin Stadium, an expansion and renovation of the gymnastics practice facility and an expansion and renovation of the men s and women s indoor tennis facility. Subsequent to year end, in July 2015, the Association issued a new bond for $15 million. The proceeds from this bond will be used to construct a football indoor practice facility and renovate and expand the Hawkins Center for Academic and Personal Excellence. This issuance will bring the Association s total outstanding debt to $95.6 million. Below is a schedule of the outstanding debt and amortization schedule as of July 2015: University of Florida Athletic Association Outstanding Principal Payments after Series 2015 Issue 5 Year Fixed Rate at 1.97% with 5 Year Fixed Rate at 1.91% with SunTrust, Weekly Variable Rate 5 Year Fixed Rate at 1.60% with PNC, mandatory JP Morgan Chase and manadatory 15 Year Fixed Rate at 3.83% with SunTrust mandatory tender 10/1/18 with US Bank tender 10/01/16 tender 10/1/20 Total Series Series Series Total 1990 Series 2001 Total Series 2001 Series 2007 Series 2011 Series 2015 Date Principal Principal Principal Balance Principal Principal Principal Balance Principal Balance Principal Balance Principal Balance Principal Balance Principal Balance 10/1/ ,195, ,950,000-14,235,000 6,500,000-12,750, ,630,000 10/1/15 730, ,000 1,330,000 20,865,000 1,600,000-1,600,000 23,350,000-14,235, ,000 6,000, ,000 12,000,000-15,000,000 4,180,000 91,450,000 10/1/16 735, ,000 1,335,000 19,530,000 1,700,000-1,700,000 21,650,000-14,235, ,000 5,500, ,000 11,250, ,000 14,250,000 5,035,000 86,415,000 10/1/17 740, ,000 1,340,000 18,190,000 1,800,000-1,800,000 19,850,000-14,235, ,000 5,000, ,000 10,500, ,000 13,500,000 5,140,000 81,275,000 10/1/18 750, ,000 1,350,000 16,840,000 1,900,000-1,900,000 17,950,000-14,235, ,000 4,500, ,000 9,750, ,000 12,750,000 5,250,000 76,025,000 10/1/19 765, ,000 1,365,000 15,475,000 2,000,000-2,000,000 15,950,000-14,235, ,000 4,000, ,000 9,000, ,000 12,000,000 5,365,000 70,660,000 10/1/20 785,000 1,000,000 1,785,000 13,690, ,950,000-14,235, ,000 3,500, ,000 8,250, ,000 11,250,000 3,785,000 66,875,000 10/1/21 3,210,000-3,210,000 10,480, ,950,000-14,235, ,000 3,000, ,000 7,500, ,000 10,500,000 5,210,000 61,665,000 10/1/22 3,350,000-3,350,000 7,130, ,950,000-14,235, ,000 2,500, ,000 6,750, ,000 9,750,000 5,350,000 56,315,000 10/1/23 3,490,000-3,490,000 3,640, ,950,000-14,235, ,000 2,000, ,000 6,000, ,000 9,000,000 5,490,000 50,825,000 10/1/24 3,640,000-3,640, ,950,000-14,235, ,000 1,500, ,000 5,250, ,000 8,250,000 5,640,000 45,185,000 10/1/ ,005,000 2,005,000 13,945,000 1,790,000 12,445, ,000 1,000, ,000 4,500, ,000 7,500,000 5,795,000 39,390,000 10/1/ ,090,000 2,090,000 11,855,000 1,865,000 10,580, , , ,000 3,750, ,000 6,750,000 5,955,000 33,435,000 10/1/ ,175,000 2,175,000 9,680,000 1,945,000 8,635, , ,000 3,000, ,000 6,000,000 6,120,000 27,315,000 10/1/ ,270,000 2,270,000 7,410,000 2,025,000 6,610, ,000 2,250, ,000 5,250,000 5,795,000 21,520,000 10/1/ ,365,000 2,365,000 5,045,000 2,115,000 4,495, ,000 1,500, ,000 4,500,000 5,980,000 15,540,000 10/1/ ,470,000 2,470,000 2,575,000 2,200,000 2,295, , , ,000 3,750,000 6,170,000 9,370,000 10/1/ ,575,000 2,575,000-2,295, , ,000 3,000,000 6,370,000 3,000,000 10/1/ ,000 2,250, ,000 2,250,000 10/1/ ,000 1,500, ,000 1,500,000 10/1/ , , , ,000 10/1/ , ,000-18,195,000 4,000,000 22,195,000 9,000,000 15,950,000 24,950,000 14,235,000 6,500,000 12,750,000 15,000,000 95,630,000 UAA Outstanding Debt After Series 2015 Bonds % Total Amount 23% $22,195, year fixed rate at 3.83% with SunTrust leasing 26% 24,950,000 5 year fixed rate at 1.91% with SunTrust, mandatory tender 10/01/18 20% 19,250,000 5 year fixed rate at 1.60% with PNC, mandatory tender 10/01/16 15% 14,235,000 Direct placement weekly variable rate with US Bank 16% 15,000,000 New issue - 5 Year Fixed Rate with JP Morgan Chase mandatory tendor 10/01/20 100% $95,630,000 UAA Outstanding Debt After 10/01/15 % Total Amount Structure 23% $20,865, year fixed rate at 3.83% with SunTrust leasing 26% 23,350,000 5 year fixed rate at 1.91% with SunTrust, mandatory tender 10/01/18 20% 18,000,000 5 year fixed rate at 1.60% with PNC, mandatory tender 10/01/16 16% 14,235,000 Direct placement weekly variable rate with US Bank 16% 15,000,000 New issue - 5 Year Fixed Rate with JP Morgan Chase mandatory tendor 10/01/20 100% $91,450,

19 MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) Economic Outlook The UAA s vision is to be the model collegiate athletics program by combining excellence and integrity in academics, athletics, and fan engagement to elevate the UF brand. The UAA continues to be in good condition financially, through a supportive fan base, a successful Gator Booster organization, and as a member of the Southeastern Conference (SEC). The launch of the SEC Network has been financially successful and has increased visibility of our league and will continue to be a significant revenue source along with the bowl agreements the league has entered into under the College Football Playoff format. The NCAA s culture is evolving to allow institutions to provide more assistance to student-athletes and has brought student-athlete safety to the forefront. This trend will increase the UAA s expenditures but will provide an opportunity to further support our vision. We must continue to seek donors for major gifts and endowments. The major gifts allow us to have some of the finest facilities in the country and the scholarship endowment (currently at $53.2 million) protects our future. Raising dollars for endowment is a major priority for the UAA and Gator Boosters. The financial success of the UAA will allow our student-athletes and our respective programs to compete and succeed at the highest level. 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: Associate Athletics Director Business Manager PO Box Gainesville, FL (352)

20 STATEMENTS OF NET POSITION ASSETS Current assets Cash and cash equivalents $ 8,135,034 $ 7,980,766 Short-term investments 53,470,607 46,187,899 Accounts and other receivables, net 4,868,733 4,069,515 Due from Gator Boosters, Inc., current portion 13,782,257 14,575,082 Inventories 52,027 42,429 Prepaid expenses and other assets, current portion 1,666,355 1,720,679 Total current assets 81,975,013 74,576,370 Noncurrent assets Investments 58,808,477 56,900,246 Due from Gator Boosters Inc., less current portion 1,450,964 1,065,964 Prepaid expenses and other assets, less current portion 53, ,227 Capital assets not being depreciated 14,324,612 3,947,452 Capital assets being depreciated, net of accumulated depreciation 160,256, ,971,599 Total noncurrent assets 234,894, ,992,488 Total assets $ 316,869,377 $ 304,568,858 LIABILITIES Current liabilities Accounts payable and accrued expenses $ 8,840,917 $ 6,073,519 Accrued compensated absences, current portion 369, ,000 Contracts payable, current portion 1,868,058 83,333 Longevity incentive payable, current portion 87,500 - Long-term debt, current portion 4,180,000 4,080,000 Deferred revenues, current portion 51,095,546 55,193,494 Agency funds payable 12,947 - Total current liabilities 66,453,968 65,664,346 Noncurrent liabilities Accrued compensated absences, less current portion 1,294,977 1,473,462 Contracts payable, less current portion 4,669, ,657 Longevity incentive payable, less current portion 361, ,334 Deferred revenues, less current portion 2,518,800 3,346,117 Long-term debt, less current portion 76,450,000 80,630,000 Total noncurrent liabilities 85,295,005 86,093,570 Total liabilities $ 151,748,973 $ 151,757,916 NET POSITION Net position Net investment in capital assets $ 93,951,309 $ 87,209,051 Restricted for: Capital projects 23,844,351 15,121,770 Unrestricted 47,324,744 50,480,121 Total net position $ 165,120,404 $ 152,810,942 The accompanying notes to financial statements are an integral part of these statements

21 STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FOR THE YEARS ENDED Operating revenues Football $ 78,034,139 $ 67,383,840 Men s basketball 12,587,724 9,978,197 Other sports 2,299, ,527 Auxiliaries 1,125,812 1,018,445 Camps 1,872,982 1,936,326 Royalties and sponsorships 22,090,484 18,768,621 Student fees 2,438,374 2,438,135 Other 6,693,209 6,478,902 Total operating revenues 127,142, ,804,993 Operating expenses Football team expenses 21,750,830 18,352,110 Football coaching staff transition expenses 11,168,334 - Men s basketball team expenses 8,794,612 8,614,870 Other sports team expenses 18,499,727 16,637,783 Scholarships 11,832,487 11,315,976 Support services 15,559,723 13,770,659 General and administrative 29,237,289 25,965,091 Auxiliaries 1,649,544 1,529,465 Camps 1,871,828 1,945,653 Depreciation and amortization 9,312,457 8,985,548 Total operating expenses 129,676, ,117,155 Operating income (loss) (2,534,321) 1,687,838 Nonoperating revenues (expenses) Investment income, net 2,127,936 10,055,552 Interest on capital asset related debt (1,781,853) (2,034,440) Contributions to the University of Florida (6,100,292) (4,305,881) Contributions to the University of Florida Foundation, Inc. (23,695) (39,321) Net nonoperating revenues (expenses) (5,777,904) 3,675,910 Income (loss) before capital contributions (8,312,225) 5,363,748 Capital contributions from Gator Boosters, Inc. and others 20,621,687 5,251,660 Increase in net position 12,309,462 10,615,408 Net position, beginning of year 152,810, ,195,534 Net position, end of year $ 165,120,404 $ 152,810,942 The accompanying notes to financial statements are an integral part of these statements

22 STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED Cash flows from operating activities Contributions from Gator Boosters, Inc. $ 32,008,098 $ 28,430,297 Receipts from ticket holders and others 31,312,268 30,820,650 Receipts from the Southeastern Conference and NCAA 34,607,428 20,259,843 Receipts from rights, royalties, and sponsors 18,426,013 18,295,149 Receipts from the University of Florida and the State of Florida for women's athletics 1,856,122 1,870,307 Other receipts 654, ,495 Payments to suppliers and others (32,047,236) (38,853,994) Payments to employees (63,956,265) (44,569,509) Payments for scholarships (11,856,845) (11,324,338) Net cash provided by operating activities 11,003,889 5,539,900 Cash flows from noncapital financing activities Contributions to the University of Florida (6,100,292) (5,805,881) Contributions to the University of Florida Foundation, Inc. (39,321) (38,022) Net cash used in noncapital financing activities (6,139,613) (5,843,903) Cash flows from capital and related financing activities Purchase of capital assets (12,394,442) (5,853,446) Capital contributions from Gator Boosters, Inc. 20,621,687 5,251,660 Principal paid on bonds (4,080,000) (4,085,000) Interest paid on bonds (1,811,502) (2,100,781) Proceeds from sale of capital assets 1,472 5,275 Net cash provided by (used in) capital and related financing activities 2,337,215 (6,782,292) Cash flows from investing activities Purchases of investment securities (71,655,124) (38,826,118) Proceeds from sale and maturities of investment securities 61,853,271 41,441,933 Interest and dividends received 2,754,630 1,685,618 Net cash provided by (used in) investing activities (7,047,223) 4,301,433 Net increase (decrease) in cash and cash equivalents 154,268 (2,784,862) Cash and cash equivalents, beginning of year 7,980,766 10,765,628 Cash and cash equivalents, end of year $ 8,135,034 $ 7,980,766 The accompanying notes to financial statements are an integral part of these statements

23 STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED (Continued) Reconciliation of operating income (loss) to net cash provided by operating activities Operating income (loss) $ (2,534,321) $ 1,687,838 Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation and amortization 9,312,457 8,985,548 (Gain) loss on disposal of capital assets 418,255 (2,602) Changes in assets and liabilities: Accounts and other receivables (812,998) (238,238) Due from Gator Boosters, Inc. 407,825 (4,477,751) Inventories (9,598) (5,668) Prepaid expenses and other assets 107,937 18,428 Accounts payable and accrued expenses 2,812, ,061 Accrued compensated absences (43,485) 97,249 Longevity incentive payable (19,167) 263,334 Contract payable 6,276,502 (83,333) Deferred revenues (4,925,265) (991,163) Agency funds payable 12,947 (22,803) Net cash provided by operating activities $ 11,003,889 $ 5,539,900 The accompanying notes to financial statements are an integral part of these statements

24 NOTES TO FINANCIAL STATEMENTS (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. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Net Position presents increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. 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, capital contributions from Gator Boosters and others and contributions to the University of Florida and University of Florida Foundation, Inc. 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 position. (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 allowance for doubtful accounts was $25,062 and $22,540 as of June 30, 2015 and 2014, respectively. 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 golf course pro shop and snack bar. Inventory items at 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

25 NOTES TO FINANCIAL STATEMENTS (1) Summary of Significant Accounting Policies: (Continued) (f) Capital assets Capital assets purchased with an original cost of $1,000 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). Interest incurred during the construction phase of capital assets is included as part of the capitalized value of assets constructed. Costs to maintain or repair these assets are expensed as incurred. (g) 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 position. (h) Accrued compensated absences Eligible employees are entitled to annual vacation and sick leave with pay. The Association accrues accumulated unpaid annual vacation and sick leave and associated employee-related costs, these amounts are included in the accompanying statements of net position. Vacation pay is expensed when earned by the employee up to the maximum payout. Sick leave payments are expensed when earned up to the maximum payout only for eligible employees. (i) Deferred revenues Current deferred revenues consist of advance sales of football, men s and women s basketball, volleyball gold and platinum card tickets, related football and men s basketball contributions, and miscellaneous other unearned fees received. The deferred items are recognized as revenue when the related games are played 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 and royalty payments. The sponsorship and royalty amounts are recognized over the life of the agreements, while the booster prepayments will be recognized in the applicable sports season. (j) Longevity incentive payable The Association accrues longevity incentives due to various employees as specified in their employment contracts. In some circumstances, the employee s employment contract may require the Association to make specified deposits into an employee directed investment account until such time as the employee has reached the stay period specified in their contract. These investment balances would transfer to the employee at the end of the stay period and are included in investments or short term investments in the accompanying statements of net position. In other circumstances, the Association is obligated to pay certain amounts to the employee at the end of the stay period. The Association accrues for these amounts ratably over the contract period. No payments will be made to the employee until they have reached the stay period specified in their contract. (k) Net position Net position is classified and displayed in three components: Net investment in capital assets 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. Restricted net position consists of capital contributions received for specific future capital projects. Unrestricted consists of assets that are available to the Association for any legal use