Midwestern State University

Transcription

1 Midwestern State niversity inancial eport (naudited) or he nded ugust 31, 2013

2 Midwestern State niversity able of ontents e er to versight gencies... 1 e er of ransmi al... 2 rganiza onal Data... 3 Management s Discussion & nalysis Basic inancial Statements: xhibit - ompara ve Statement of et osi on xhibit - ompara ve Statement of evenues, xpenses, and hanges in et osi on Matrix of pera ng xpenses eported by unc on xhibit - Statement of ash lows otes to the inancial Statements Schedules: Schedule 1 - Schedule of xpenditures of ederal wards Schedule 1B - Schedule of State Grant ass-hroughs rom/o State gencies Schedule 2 - Miscellaneous Bond nforma on Schedule 2B - hanges in Bonded ndebtedness Schedule 2 - Debt Service equirements Schedule 2D - nalysis of unds vailable for Debt Service Schedule 2 - Defeased Bonds utstanding Schedule 2 - arly x nguishment and efunding Schedule 3 - econcilia on of ash in State reasury nded (DD)

3 Midwestern State niversity GZ D ugust 31, 2013 H BD GS erm xpires May 31, 2014 Ms. Shelby Davis, Student egent etrolia erm xpires ebruary 25, 2014 Mr. harles. ngelman Wichita alls Mr. Shawn G. Hessing ort Worth Ms. Jane W. arnes Wichita alls erm xpires ebruary 25, 2016 Mr. Michael Bernhardt Wichita alls Mr. J. Kenneth Bryant Wichita alls Ms. iffany D. Burks Grand rairie erm xpires ebruary 25, 2018 Mr. Samuel M. Sanchez Keller Dr.. ynwood Givens lano Mr. Jeff Gregg Seymour Ms. Kathryn. Yeager, egent meritus SD Dr. Jesse W. ogers VSY S S Dr. Marilyn owlé Ms. Gail erguson Vice resident for Business ffairs & inance ontroller nded (DD) 3

4 Midwestern State niversity Management s Discussion & nalysis - naudited he objec ve of Management s Discussion and nalysis is to help readers of Midwestern State niversity s financial statements be er understand the financial posi on and opera ng ac vi es of the university for the fiscal years ended ugust 31, 2013 and Management has prepared the financial statements and the related footnote disclosures along with the discussion and analysis. esponsibility for the completeness and fairness of this informa on rests with the university administra on. he following discussion should be read in conjunc on with the accompanying transmi al le er, financial statements, and note disclosures. he following graph illustrates the comparison and movement of total student enrollment and full me equivalent () student growth since ncreased academic standards, a decline in local college age popula on, and a statewide consistent pa ern of very flat student enrollment explain this variance. Beginning in 2006, and again in 2011, the university changed its academic standards to ensure students were prepared to pursue higher educa on. he increase in standards has created growth in student reten on as more of our freshmen are be er prepared for college which also improves gradua on rates. Gradua on rates may become financially important to the university as future state appropria ons are con ngent on such successful outcomes. n addi on, the university is one of the few ins tu ons in exas capable of offering in-state tui on rates plus a $65.00/ semester credit hour assessment to all S ci zens, which is a great posi ve impact on future enrollment. all Headcount vs otal nrolled Semester redit Hours nrollment nded (DD) Y2009 Y2010 Y2011 Y2012 Y2013 4

5 Midwestern State niversity Management s Discussion & nalysis - naudited 31-ug ug-12 nded (DD) he Statement of et osi on By repor ng informa on on the university as a whole, these compara ve statements highlight for the reader whether or not the year s ac vi es strengthened or weakened the university s financial posi on. When revenues and other support exceed expenses, the result is an increase in net posi on. he rela onship between revenues and expenses may be thought of as the university s opera ng results. hese compara ve statements report the current status and changes to the university s net posi on. et posi on, the difference between assets and liabili es, is one way to measure the university s financial posi on. ncreases in net posi on show an improvement in financial health while decreases o en indicate declining financial stability. However, many other non-financial factors, such as the trend in admission applicants, enrollment, student reten on, and condi on of the buildings must be considered to accurately assess the overall health of the university urrent ssets $ 51,697, $ 46,011, oncurrent ssets: apital ssets 128,438, ,327, ther 30,884, ,422, otal ssets $211,020, $212,761, urrent iabili es $ 37,613, $ 35,051, oncurrent iabili es 76,403, ,844, otal iabili es 114,016, ,896, et osi on: nvested in apital ssets 48,934, ,204, estricted for: Debt e rement onexpendable 4,071, ,129, xpendable: apital rojects 4,558, ,408, estricted by ontributor 10,605, ,902, nrestricted 28,833, ,219, otal et osi on 97,003, ,864, otal iabili es and et osi on $211,020, $212,761,

6 Midwestern State niversity Management s Discussion & nalysis - naudited he following charts indicate the changes in net posi on for the year ended ugust 31, 2013 as compared to the previous year. nrestricted 29.72% et osition -ugust 31, 2013 nrestricted 29.44% et osition -ugust 31, 2012 estricted 19.83% nvested in apital ssets 50.45% estricted 18.19% nvested in apital ssets 52.37% he university reports unrestricted net posi on of 29.72% of total net posi on for the year ended ugust 31, 2013 and 29.44% for the prior year. lthough unrestricted, most of these funds have been designated for specific purposes. he following charts show how funds have been allocated: nded (DD) ther (nallocated) 35.62% nventories.48% ec enter eserves.99% Working apital 1.04% llocation of nrestricted et osition ugust 31, 2013 uture Budget 6.46% Student oans 1.70% Housing eserves 3.41% Quasiendowment 50.30% ec enter eserves.89% ther (nallocated) 39.13% llocation of nre stricted et osition ugust 31, 2012 Working apital 1.06% uture Budget 5.38% Student oans 3.73% Housing es erves 3.66% Quasiendowment 47.83% 6

7 Midwestern State niversity Management s Discussion & nalysis - naudited he niversity s esults of pera ons nded (DD) he statement of revenues, expenses, and changes in net posi on reflects the university s opera ng results for the fiscal years ended ugust 31, 2013 and he comprehensive statements indicate the financial condi on of the university, and compara vely analyze in what direc on the university is moving. he following statements reveal the opera ng results of the university, as well as the non-opera ng revenues and expenditures. pera ng revenues include all transac ons that result in the sales and/or receipts from goods and services such as tui on and fees, housing, and food services. ertain federal, state, and private grants are considered opera ng revenues if they are not for capital purposes and are considered a contract for services. nnual state appropria ons, while budgeted for opera ons, are considered non-opera ng revenues according to generally accepted accoun ng principles. he statement below compares the opera ng results of the university for the years ended ugust 31, 2013 and pera ng evenue: et tui on and fees $ 31,369, $ 29,393, Grants and contracts 4,711, ,327, Sales and Service of duca onal c vi es 1,218, ,166, Sales and Services of uxiliary nterprises 8,511, ,257, ther 1,533, ,586, otal pera ng evenue 47,344, ,731, otal pera ng xpenses (84,937,903.91) (81,183,164.56) pera ng oss (37,593,682.13) (36,451,973.56) onopera ng evenues (xpenses): State ppropria ons 16,619, ,762, ther State ppropria ons 4,535, ,423, egisla ve ppropria ons apsed ederal Grants 8,040, ,814, Gi s 8,829, ,722, ther onopera ng evenues (xpenses) 5, (2,489.70) nvestment ncome 684, , et ncrease (Decrease) in air Value of nvestments 567,653.01,284, et Book Value of apital sset Disposals (385,589.60) (45,501.36) nterest xpense on apital sset inancing (3,701,517.09) (3,575,660.07) otal onopera ng evenue (xpense) 35,196, ,237, ncome (oss) Before apital ontribu ons, ddi ons to (2,397,585.46) (1,214,548.50) ndowments, and Special tems apital ontribu ons, ddi ons to ndowments, & Special tems apital ontribu ons 755, ,999, H ppropria on 3,559, ,559, ddi ons to ndowments 165, , ransfers n 1, , ransfers ut (945,166.41) (933,170.53) ncrease (Decrease) in et osi on 1,139, ,966, et osi on, Beginning of 95,864, ,898, et osi on, nd of $ 97,003, $ 95,864,

8 Midwestern State niversity Management s Discussion & nalysis - naudited his chart iden fies the components of total revenue for the year ended ugust 31, uxiliary ctivities 9.48% Grants & ontracts 14.20% otal evenue - ugust 31, 2013 ther evenue 1.72% nvestment ncome 0.76% State ppropriations 23.56% Gifts 9.83% et uition & ees % H ppropriation & dditions to ndowments 4.15% ducational ctivities 1.36% his chart reflects the same informa on for the year ended ugust 31, otal evenue - ugust 31, 2012 Grants & ontracts 15.27% uxiliary ctivities 9.59% ther evenue 1.84% nvestment ncome 0.99% State ppropriations 24.61% Gifts 7.81% nded (DD) et uition & ees % H ppropriation & dditions to ndowments 4.39% ducational ctivities 1.35% 8

9 Midwestern State niversity Management s Discussion & nalysis - naudited otal opera ng expenses for the year ended ugust 31, 2013 were $84,937, as compared to $81,183, for the previous year. he following charts compare the distribu on of opera ng expenses between fiscal year 2013 and fiscal year rinting & eproducti on 0.19% epairs & Maintenance 2.95% Depreciation 11.77% entals & eases 0.61% ommunications & tilities 3.17% Materials & Supplies 6.41% otal perating xpenses -ugust 31, 2013 Bad Debt 0.54% nterest 0.00% Scholarships 11.41% rofessional ees & Services ravel 4.73% 1.71% otal perating xpenses -ugust 31, 2012 Salaries, Wages, & ringe Benefits 56.51% Depreciation rinting & 12.03% eproduction 0.14% entals & eases 0.77% epairs & Maintenance 2.49% Bad Debt 0.21% nterest 0.00% Scholarships 10.52% nded (DD) ommunications & tilities 3.66% Materials & Supplies 6.49% rofessional ees & Services 4.21% ravel 1.74% Salaries, Wages, & ringe Benefits 57.74% 9

10 Midwestern State niversity Management s Discussion & nalysis - naudited he niversity s ash lows he statement of ash lows represents the university s significant sources and uses of cash. t is designed to help users assess the university s ability to generate future cash flows, its ability to meet obliga ons as they come due, and its need for external financing. ash lows ash provided (used) by: pera ng ac vi es $(26,895,622.32) $(27,386,903.84) oncapital financing ac vi es 36,976, ,830, apital and related financing ac vi es (9,231,970.99) (5,633,486.97) nves ng ac vi es 299, , et increase (decrease) in cash 1,148, ,148, ash Beginning of year 6,836, ,687, ash nd of year $ 7,985, $ 6,836, here was a net increase in cash of $1,148, xhibit, the Statement of ash lows, shows that the major sources of funds for opera ng ac vi es are from student tui on and fees, grants and auxiliary enterprises. ui on and fees accounted for $30.4 million, grants accounted for $4.7 million and auxiliary enterprises, including housing and dining, accounted for $9 million. State appropria ons in the amount of $21.4 million were the primary sources of non-capital financing. lthough the university is dependent on these appropria ons to con nue the current level of opera ons, accoun ng standards require that this source of funding be reflected as non-opera ng. ther non-capital financing ac vi es include gi s in the amount of $8.3 million, addi ons to endowments in the amount of $165 thousand, and $8 million in ederal non-opera ng grants. he main uses of capital and related financing ac vi es came from the financing of renova ons to D.. igon oliseum. ash was used to purchase capital assets in the amount of $3.7 million and for the payment of principal and interest on capital debt in the amount of $8.8 million. nded (DD) 10

11 Midwestern State niversity Management s Discussion & nalysis - naudited apital ssets and Debt dministra on apital ssets s of ugust 31, 2013, the university had $128.4 million invested in capital assets. his figure is net of accumulated deprecia on and amor za on of $116.7 million. Deprecia on charges totaled $9.9 million for the current fiscal year. he category of other capital assets includes library holdings, artwork, and collec ons. ssets by classifica on are shown below: apital ssets Before ccumulated Deprecia on and and and mprovements $ 5,434, $ 4,693, onstruc on in rogress 859, ,437, Buildings and Building mprovements 187,171, ,895, nfrastructure 12,823, ,823, acili es mprovements 7,227, ,572, urniture and quipment 12,317, ,543, Vehicles 1,718, ,543, omputer So ware 2,165, ,165, ther apital ssets 15,394, ,255, otal $245,114, $241,931, ddi ons to assets of $4.6 million during fiscal year included: renova ons to D.. igon coliseum, the addi on of the northwest parking lots, and renova ons to the Mcoy School of ngineering and the Wichita alls Museum of rt at MS. he construc on in progress at the end of the year is the con nued renova on of the Wichita alls Museum of rt at MS, expansion of the Mcoy ngineering building, and addi ons to the Dalquest esearch Sta on. urther financial informa on about the university s capital assets is presented in ote 2 of the notes to the financial statements. nded (DD) 11

12 Midwestern State niversity Management s Discussion & nalysis - naudited Debt t year-end, the university had $115 million in outstanding debt. utstanding debt for the year ended ugust 31, 2012 was $123 million. he table below summarizes the amount of outstanding debt by type of instrument for the year ended ugust 31, 2013 compared with ugust 31, evenue Bonds $ 77,064, $ 80,365, General bliga on Bonds (H) 1,455, ,860, ccrued long term interest payable on bonds 36,357, ,696, otal $114,876, $123,922, Debt repayments made during the year included principal in the amount of $5,385, and interest in the amount of $3,306, Moody s nvestor Services has assigned an 1 bond ra ng to the university s bonds, and itch has assigned an - ra ng. More detailed bond informa on is disclosed in Schedule 2, 2B, 2, 2D, and 2. actors ffec ng the uture of Midwestern State niversity Midwestern State niversity (MS), like universi es throughout the nited States, faces numerous challenges in the future. MS has developed its strategic plan to provide a framework to address these challenges with an eye to the long-term prosperity of the university. SGHS he following are areas of strength that MS can use to advance itself toward its goals. osi ve reputa on MS has a posi ve reputa on and a loyal base of alumni. hese strengths enhance the ability to recruit students and to seek external gi s. MS has benefited substan ally from gi s from members of the local community. ouncil of ublic iberal rts olleges () membership MS is a member of, which complements the university s standing as a public liberal arts ins tu on. MS is commi ed to a strong liberal arts experience for students in all majors. values interdisciplinary opportuni es, close faculty and students interac ons, and opportuni es for faculty-supervised research. duca onal value MS, given its student orienta on and highly qualified faculty, is able to provide excellent educa onal outcomes at a moderate price. n 2013, MS was ranked a top college in exas for greatest life me return on investment by ffordableollegesnline.org ( nline). he ranking iden fied the 49 colleges in exas where degrees pay off the most and MS ranked o. 15 on the list. X VM number of pa erns in the opera ng environment will affect MS in the future. D S DMGHS he local area s popula on growth is expected to remain flat during the next 10 years. nded (DD) he propor on of the local popula on that will be college age in the next decade is declining. ensus data from 2000 and 2010 indicate that the number of 10- to 14-year-olds dropped from just more than 9,000 to just more than 8,000, and the number of 15- to 19-year-olds declined from approximately 12,000 to approximately 10,

13 Midwestern State niversity Management s Discussion & nalysis - naudited exas state popula on will con nue to grow into the next decade. he rate of growth may be slightly lower than in the past, but it will remain robust. Much of the popula on growth will occur in exas metropolitan areas including Dallas/ort Worth, us n, San ntonio, and Houston. SDS sizable propor on of students seeking admission to MS will con nue to be under-prepared for college-level work. exas ranks in the middle of states on measures of math and reading proficiency for fourth- and eighth-graders and mean S scores for exas indicate that exas students are under-performing compared to students throughout the nited States. Students admi ed to MS will con nue to be from groups for which reten on is challenging, including firstgenera on college students, students from low-wage families, and students with outside employment. HGY echnological change will con nue to be very rapid, requiring frequent updates and addi ons to keep pace with technological applica ons outside of the university. ntering students will expect the use of technology such as social networking, computer-based interac ve educa onal programs, webinars, and learning modules that can be downloaded to smart phones. equired investments in technology will not only be for discipline-specific purposes, but also for all areas of instruc- on. MS con nues to receive less than 25% of its funding from the State of exas, while costs increase. apital investment to keep pace with technology is needed and, as federal financial aid dollars are diminished, the demand for university financial aid support increases. Midwestern State niversity con nues to seek private funding to supplement tui on and fees and state funding in order to provide the rigorous educa on that will allow students to compete in an ever increasingly compe ve job environment. M ollowing two years of declining enrollment, MS contracted with oel-evitz, higher educa on consultants, to develop a strategic enrollment management plan. hanges have been made in prospec ng, recrui ng, and admi ng students to MS. s a result of these strategic ini a ves and the investment of significant private funds into scholarships, fall 2013 enrollment is rela vely stable and the beginning freshman class increased by 33% when compared to the fall esources have been invested to increase of the number of on-line course offerings at MS. t is an cipated that this will also have a posi ve effect on MS enrollment. verall enrollment during the next three years should begin to increase as smaller classes graduate and larger classes enter the university. nded (DD) 13

14 Midwestern State niversity naudited Midwestern State niversity xhibit ompara ve Statement of et osi on ugust 31 nded (DD) SSS urrent ssets: ash and ash quivalents: ash on Hand $ 16, $ 16, ash in Bank 3,596, ,793, ash in State reasury 4,508, ,581, Short-term nvestments 23,061, ,334, State ppropria ons 970, ,230, estricted: ash and ash quivalents: ash in Bank (135,942.49) (2,554,384.70) otes and oans eceivable 4, , et eceivables: Student eceivables 6,186, ,297, ederal eceivables 163, , ther ntergovernmental eceivables nterest and Dividends 39, , ther eceivables 1,534, ,416, ledges eceivable 2,895, ,360, onsumable nventories 266, , repaid xpenses 8,589, ,854, otal urrent ssets 51,697, ,011, oncurrent ssets: estricted: nvestments 5,018, ,098, oans and ontracts 63, , ther ong-term nvestments 23,317, ,002, ledges eceivable 1,383, ,110, Deferred inancing osts 1,100, ,155, apital ssets, on-depreciable: and and and mprovements $ 5,434, $ 4,693, onstruc on in rogress 859, ,437, ther apital ssets 3,549, ,844, ,502, ,633, apital ssets, Depreciable: Buildings & Building mprovements 187,171, ,895, ess ccumulated Deprecia on (85,602,208.51) 101,569, (78,319,852.23) 105,575, nfrastructure 12,823, ,823, ess ccumulated Deprecia on (5,440,981.36) 7,382, (4,980,900.06) 7,842, acili es and ther mprovements 7,227, ,572, ess ccumulated Deprecia on (3,972,930.76) 3,254, (3,643,822.19) 2,928, urniture and quipment 12,317, ,543, ess ccumulated Deprecia on (9,232,470.07) 3,085, (8,560,546.67) 2,983, Vehicles 1,718, ,543, ess ccumulated Deprecia on (903,263.74) 815, (1,040,575.62) 502, ther apital ssets 11,844, ,753, ess ccumulated Deprecia on (10,040,140.97) 1,804, (9,771,679.01) 1,981, ntangible apital ssets, mor zable: omputer So ware 2,165, ,165, ess ccumulated Deprecia on (1,483,366.67) 682, (1,286,642.11) 879, otal oncurrent ssets 159,323, ,750, otal ssets $211,020, $212,761,

15 BS urrent iabili es: ccounts ayable $ 2,400, $ 2,192, ccrued ayroll ayable 5,076, ,995, mployees' ompensable eave 156, , oom/roperty Deposits 70, , Deferred evenues 23,937, ,001, etainages and ontracts 27, , unds Held for thers 100, , apital ease 20, , Due to ther gencies (S oan) 256, , namor zed Discount on 2007 ev Bonds (12,344.13) (12,344.13) namor zed remium on 2008 ev Bonds 69, , evenue Bonds ayable 4,055, ,705, ons tu onal ppropria on Bonds 1,455, ,405, otal urrent iabili es 37,613, ,051, oncurrent iabili es: mployees' ompensable eave 1,309, ,325, oom/roperty Deposits 192, , apital ease 74, , Due to ther gencies (S oan) 1,785, ,041, namor zed Discount on ev Bonds (221,877.82) (234,221.95) namor zed remium on ev Bonds 253, , evenue Bonds ayable 73,009, ,660, ons tu onal ppropria on Bonds 1,455, otal oncurrent iabili es 76,403, ,844, otal iabili es 114,016, ,896, S et nvestment in apital ssets 48,934, ,204, estricted for: Debt e rement onexpendable 4,071, ,129, xpendable: apital rojects 4,558, ,408, estricted by ontributor 10,605, ,902, nrestricted 28,833, ,219, otal et osi on 97,003, ,864, otal iabili es and et osi on $ 211,020, $ 212,761, he accompanying otes to the inancial Statements are an integral part of this statement.

16 Midwestern State niversity nded (DD) naudited Midwestern State niversity xhibit ompara ve Statement of evenues, xpenses, and hanges in et osi on or the s nded ugust 31 pera ng evenues: Student ui on and ees (net of scholarship allowances of $9,889, and $11,250,249.37, respec vely) 2013 $ 31,369, $ 29,393, ederal Grants 716, ,398, ederal ass-hrough Grants 106, , State Grants ass-hrough from ther State gencies 3,113, ,554, ther Grants and ontracts 774, , Sales and Services of duca onal c vi es 1,218, ,166, Sales and Services of uxiliary nterprises 8,511, ,257, ther pera ng evenue 1,533, ,586, otal pera ng evenues 47,344, ,731, pera ng xpenses: Salaries and Wages 37,531, ,795, ayroll elated osts 10,468, ,076, rofessional ees and Services 4,014, ,391, ravel 1,455, ,413, Materials and Supplies 5,441, ,272, ommunica ons and li es 2,690, ,974, epairs and Maintenance 2,507, ,021, entals and eases 521, , rin ng and eproduc on 161, , ederal ass hrough xpenditures 28, Deprecia on 9,995, ,811, Bad Debt xpense 454, , nterest 1, Scholarships 9,692, ,537, otal pera ng xpenses 84,937, ,183, pera ng oss (37,593,682.13) (36,451,973.56) onopera ng evenues (xpenses): State ppropria ons 16,619, ,762, ddi onal State ppropria ons 4,535, ,423, egisla ve ppropria ons apsed ederal ass-hrough Grants 20, ederal Grants 8,040, ,793, Gi s 8,829, ,722, ther onopera ng revenues (expense) 5, (2,489.70) nvestment ncome 684, , et ncrease (Decrease) in air Value of nvestments 567, ,284, et Book Value of apital sset Disposals (385,589.60) (45,501.36) nterest xpense on apital sset inancing (3,701,517.09) (3,575,660.07) otal onopera ng evenues (xpenses) 35,196, ,237, ncome (oss) Before apital ontribu ons, ddi ons to ndowments, and Special tems 16 (2,397,585.46) (1,214,548.50)

17 apital ontribu ons $ 755, $ 4,999, H ppropria on 3,559, ,559, ddi ons to ndowments 165, , ransfer n 1, , ransfers ut (945,166.41) (933,170.53) ncrease (Decrease) in et osi on 1,139, ,966, et osi on, Beginning of 95,864, ,898, et osi on, nd of $ 97,003, $ 95,864, he accompanying otes to the inancial Statements are an integral part of this statement.

18 Midwestern State niversity naudited Midwestern State niversity Matrix of pera ng xpenses eported by unc on or the nded ugust 31, 2013 nded (DD) otal pera ng ublic cademic xpenses nstruc on esearch Service Support Salaries and Wages $37,531, $19,785, $ 351, $ 309, $2,843, ayroll elated osts 10,468, ,422, , , , rofessional ees and Services 4,014, , , , ,037, ravel 1,455, , , , , Materials and Supplies 5,441, , , , , ommunica ons and li es 2,690, , , , epairs and Maintenance 2,507, , , , entals and eases 521, , , , , rin ng and eproduc on 161, , , , , ederal ass hrough xpenditures Deprecia on 9,995, Bad Debt xpense 454, nterest 1, Scholarships 9,692, otal pera ng xpenses $84,937, $27,386, $550, $ 717, $5,786, Midwestern State niversity Matrix of pera ng xpenses eported by unc on or the nded ugust 31, 2012 otal pera ng ublic cademic xpenses nstruc on esearch Service Support Salaries and Wages $36,795, $19,849, $ 434, $ 498, $2,669, ayroll elated osts 10,076, ,308, , , , rofessional ees and Services 3,391, , , , , ravel 1,413, , , , , Materials and Supplies 5,272, , , , , ommunica ons and li es 2,974, , , , , epairs and Maintenance 2,021, , , , , entals and eases 629, , , , rin ng and eproduc on 110, , , , , ederal ass-hrough xpenditures 28, , Deprecia on 9,811, Bad Debt xpense 120, nterest Scholarships 8,537, otal pera ng xpenses $81,183, $27,111, $891, $ 931, $5,428,

19 Student ns tu onal pera on & uxiliary Services Support Maintenance Scholarships nterprises Deprecia on $ 5,404, $ 4,874, $ 2,482, $1,480, ,448, ,392, , , ,387, (82,345.66) 335, , , , , , ,116, , , ,721, , (38,942.97) 1,625, , , , ,024, , , , , (7,682.39) 107, (81,151.72) 1, , , $ 9,692, $ 9,995, $ 11,205, $ 7,353, $ 6,951, $ 9,692, $ 5,298, $ 9,995, Student ns tu onal pera on & uxiliary Services Support Maintenance Scholarships nterprises Deprecia on $ 5,240, $ 4,514, $ 2,368, $1,220, ,380, ,266, , , ,431, (450,423.86) 220, , , , , , , , , ,772, , (42,432.82) 1,852, , , , , , , , , , , (136,456.44) 2, , , $ 8,537, $ 9,811, $ 10,330, $ 6,284, $ 6,740, $ 8,537, $5,116, $ 9,811, he accompanying otes to the inancial Statements are an integral part of this statement.

20 Midwestern State niversity naudited Midwestern State niversity xhibit Statement of ash lows or the s nded ugust ash lows from pera ng c vi es: roceeds eceived from Students $30,458, $29,687, roceeds eceived for Sponsored rograms 4,733, ,410, roceeds eceived from uxiliary nterprises 9,059, ,320, roceeds rom oan rograms 11, , roceeds rom ther evenues 2,751, ,752, ayments to mployees (46,958,171.04) (46,265,317.33) ayments to Suppliers for Good and Services (16,545,277.74) (17,679,139.92) ayments for Scholarships (10,405,070.44) (8,642,610.16) ayments for oans rovided (1,756.05) (278.07) et ash rovided (sed) by pera ng c vi es (26,895,622.32) (27,386,903.84) ash lows from oncapital inancing c vi es: roceeds from State ppropria ons 21,415, ,963, roceeds from ndowment Gi s 165, , roceeds from Gi s 8,294, ,766, roceeds from ther oncapital inancing c vi es 5, (2,489.70) roceeds from onopera ng Grants 8,040, ,814, ransfers out to ther unds (945,166.41) (933,170.53) et ash rovided by oncapital inancing c vi es 36,976, ,830, ash lows from apital and elated inancing c vi es: roceeds from apital Gi s (262,816.00) 3,888, roceeds from H ppropria ons 3,559, ,559, roceeds rom nterest on apital nvestments , ayments for ddi ons to apital ssets (3,745,696.45) (4,616,734.77) rincipal aid on apital elated Debt (5,019,930.97) (4,932,550.65) nterest aid on apital elated Debt (3,763,895.89) (3,575,436.09) et ash rovided by apital and elated inancing c vi es (9,231,970.99) (5,633,486.97) ash lows from nves ng c vi es: roceeds from nterest and nvestment ncome 229, , roceeds from Sales and Maturi es of nvestments 8,806, ,072, ayments to cquire nvestments (8,736,910.32) (14,453,302.56) et ash rovided (sed) by nves ng c vi es 299, , ncrease (Decrease) in ash and ash quivalents 1,148, ,148, nded (DD) ash and ash quivalents, September 1, ,836, ,687, ash and ash quivalents, ugust 31, 2013 $ 7,985, $ 6,836,

21 econcilia on to ash and ash quivalents as Displayed on the Statement of et ssets: urrent ssets: ash n Hand $ 16, $ 16, ash n Bank 3,596, ,793, ash in State reasury 4,508, ,581, estricted: ash n Bank (135,942.49) (2,554,384.70) $ 7,985, $ 6,836, econcilia on of pera ng ncome (oss) to et ash rovided (sed) by pera ng c vi es: pera ng ncome (oss) $(37,593,682.13) $(36,451,973.56) djustments to econcile pera ng oss to et ash rovided (sed) by pera ng c vi es: mor za on and Deprecia on 9,995, ,811, Bad Debt xpense 454, , (ncrease) Decrease in eceivables (1,278,207.71) (136,496.53) (ncrease) Decrease in nventories (9,408.41) (ncrease) Decrease in repaid xpenses (734,649.51) (88,649.68) (ncrease) Decrease in oans 12, (5,177.42) ncrease (Decrease) in ayables 1,354, (1,362,394.34) ncrease (Decrease) in Deferred ncome 936, , ncrease (Decrease) in ther iabili es (32,668.13) 84, otal djustments 10,698, ,065, et ash sed by pera ng c vi es $(26,895,622.32) $(27,386,903.84) on ash ransac ons et ncrease (Decrease) in MV of nvestments $ 567, $ 1,284, (oss) Gain on sset Disposals (385,589.60) (45,501.36) Donated nvestment ssets 30, Donated apital ssets 745, ransfer n on Master ease urchase 1, , Borrowing nder apital ease urchase 126, he accompanying otes to the inancial Statements are an integral part of this statement.

22 Midwestern State niversity otes o he inancial Statements - naudited ote 1: Summary of Significant ccoun ng olicies ntroduc on Midwestern State niversity is a public ins tu on of higher educa on and is an agency of the State of exas. he university s Board of egents is appointed by the Governor of the State. ccordingly, the university s financial posi on is in the State of exas onsolidated nnual inancial eport. ransac ons with the State relate primarily to appropria ons for opera ons and capital improvements and grants from various state agencies. Basis of resenta on he financial statements of Midwestern State niversity have been prepared in accordance with the requirements established by the omptroller of ublic ccounts nnual inancial epor ng equirements. hese requirements follow, as near as prac cable, the generally accepted accoun ng principles as prescribed by the Governmental ccoun ng Standards Board (GSB), including Statement o. 34, Basic inancial Statements and Management s Discussion and nalysis for State and ocal Governments issued in June 1999, Statement o. 35, Basic inancial Statements and Management s Discussion and nalysis of ublic ollege and niversi es issued in ovember 1999, and Statement o. 63 inancial epor ng of Deferred u lows of esources, Deferred nflows of esources, and et osi on issued in June he financial statements also incorporate the requirements set forth in GSB Statement o. 62, odifica on of ccoun ng and inancial epor ng Guidance ontained in re-ovember 30, 1989 SB and ronouncements, which was issued by the GSB on December 30, 2010 and significantly reduces the need to rely on sources outside of the GSB s literature to locate the necessary accoun ng guidance for the governmental environment. he university does not apply SB pronouncements issued a er ovember 30, 1989 in the prepara on of the accompanying financial statements. he financial report will be considered for audit by the State uditor as part of the audit of the State of exas omprehensive nnual inancial eport; therefore, an opinion has not been expressed on the financial statements and related informa on contained in this report. he university follows the business-type ac vi es repor ng requirement of GSB Statement o. 34 that provides a comprehensive one-line look at the university s financial ac vi es. ccordingly, the university s financial statements have been presented using the economic resources measurement focus and the accrual basis of accoun ng. Basis of ccoun ng roprietary und ccoun ng roprietary fund repor ng focuses on the determina on of opera ng income, changes in net posi on, financial posi ons, and cash flows. he financial statements of the university have been prepared on the accrual basis. ccrual accoun ng a empts to record a transac on s financial effects in the period in which the transac on occurred, rather than when cash is received or paid. evenues are recorded when they are earned or when the university has a right to receive the revenues. xpenses are recognized when they are incurred. here are four essen al elements of accrual accoun ng. hey are: nded (DD) Deferral of expenditures and the subsequent amor za on of the deferred costs. Deferral of revenues un l they are earned. apitaliza on of certain expenses and the subsequent deprecia on of the capitalized costs. he accruals of revenues that have been earned and expenses that have been incurred. 22

23 Midwestern State niversity otes o he inancial Statements - naudited roprietary funds use the flow of economic resources measurement focus, which is similar to the focus used by commercial en es. roprietary funds focus on whether the enterprise is economically be er off as a result of the events and transac ons that occurred during the fiscal period reported. ransac ons and events that improved an enterprise s financial posi on are reported as revenues or gains. ransac ons and events that diminished the economic posi on of the enterprise are reported as expenses or losses. Both current and long-term assets and liabili es are shown on the statement of net posi on. he proprietary statement of revenues, expenses, and changes in net posi on is segregated into opera ng and nonopera ng sec ons. Generally, opera ng ac vi es are those that directly result from the provision of goods and services to customers or are directly related to the principal and usual ac vity of an enterprise. GSB 34 indicates that a considera on for defining a proprietary fund s opera ng revenues and expenditures is how individual transac ons would be classified for purposes of preparing a statement of cash flows according to GSB Statement o. 9. Since certain grants are actually contracts for services, they are classified as opera ng ac vi es. lthough loan ac vity would normally be classified as an inves ng ac vity, lending ac vi es in a university are directly related to the principal and usual ac vity of the university, and are classified as opera ng ac vi es. et osi on GSB Statement o. 63 reports equity as et osi on rather than et ssets, as previously required under GSB Statement o. 34. et posi on is classified according to external donor restric ons or availability of assets for sa sfac on of university obliga ons. estricted et osi on represents amounts over which third par es have imposed restric ons that cannot be changed by the Board, including amounts that the Board has agreed to set aside under contractual agreements with third par es. onexpendable restricted net posi on includes gi s that have been received for endowment purposes, the corpus of which cannot be expended. xpendable restricted net posi on represents funds that have been gi ed for specific purposes. estricted et osi on includes the university s permanent endowments and donor restricted funds. nrestricted et osi on are funds that are available for university use, and have been internally designated or reserved for specific purposes such as renewals and replacements, quasi-endowments, capital projects, student loans, budget commitments, and reserves for working capital. ash and ash quivalents ll highly liquid investments with a maturity of three months or less at the me of purchase are considered cash and cash equivalents. ash in the investment por olio is not included in cash and cash equivalents as it is held for inves ng purposes. nvestments he university reports investments at fair value in the Statement of et osi on. estricted ssets nded (DD) estricted assets are those assets that have third party restric ons or are restricted for specific uses by a contractual obliga on. estricted assets include donor restricted funds and proceeds from bond issuances that can only be used for capital projects. 23

24 Midwestern State niversity otes o he inancial Statements - naudited nventories nventories include both merchandise inventories on hand for sale and consumable inventories. nventories are valued at cost and u lize the last-in, first-out method. apital ssets roperty, plant and equipment are recorded at cost, or, if acquired by gi, at the fair market value as of the date of the acquisi on. Deprecia on is provided on physical proper es on a straight-line basis over the es mated useful life of the asset. ype of apital sset apitaliza on hreshold ange of seful ife (in months) and and and mprovements $0 0 onstruc on in rogress $0 0 Buildings and Building mprovements $100, nfrastructure, Depreciable $500, nfrastructure, on-depreciable $0 0 acili es and ther mprovements $100, urniture and quipment $5, Vehicles, Boats, and ircra $5, ther apital ssets $100, ther Significant ccoun ng olicies ther significant accoun ng policies are set forth in the financial statements and the notes thereto. nded (DD) 24

25 his age nten onally e Blank

26 2: apital ssets Midwestern State niversity otes o he inancial Statements - naudited summary of changes in apital ssets for the year ended ugust 31, 2013, is presented below. eclassifica ons BSSS-Y VS Balance djustment ompleted on-depreciable or on-mor zable ssets: and and and mprovements $ 4,693, /01/12 onstruc on in rogress 3,437, $(209,991.00) $ (4,294,668.63) ther angible apital ssets 3,502, otal on-depreciable ssets or on-mor zable ssets: 11,633, (209,991.00) (4,294,668.63) Depreciable ssets: Buildings and Building mprovements 183,895, ,639, nfrastructure 12,823, acili es and ther mprovements 6,572, , urniture and quipment 11,543, Vehicles 1,543, ther apital ssets 11,753, otal Depreciable ssets: 228,132, ,294, ess ccumulated Deprecia on for: Buildings and Building mprovements (78,319,375.90) nfrastructure (4,980,900.06) acili es and ther mprovements (3,643,822.19) urniture and quipment (8,560,546.67) Vehicles (1,040,575.62) ther apital ssets (9,771,679.01) otal ccumulated Deprecia on (106,316,899.45) nded (DD) Depreciable ssets, et 121,815, mor zable ssets - ntangible omputer So ware 2,165, otal mor zable ssets - ntangible 2,165, ess ccumulated mor za on for: omputer So ware (1,286,642.11) otal ccumulated mor za on (1,286,642.11) mor zable ssets - ntangible, et 879, Business-ype c vi es apital ssets, et $134,327, $(209,991.00) $

27 ddi ons Dele ons Balance 08/31/13 $ 741, $ 5,434, ,926, , , ,549, ,715, ,844, , $ (469,443.77) 187,171, ,823, ,227, ,045, (270,775.19) 12,317, , (409,244.99) 1,718, , (57,362.51) 11,844, ,883, (1,206,826.46) 233,103, (7,631,066.90) 348, (85,602,208.51) (460,081.30) (5,440,981.36) (329,108.57) (3,972,930.76) (942,698.59) 270, (9,232,470.07) (167,289.16) 304, (903,263.74) (325,824.47) 57, (10,040,140.97) (9,856,068.99) 980, (115,191,995.41) (7,972,276.44) (225,853.43) 117,911, ,165, ,165, (196,724.56) (1,483,366.67) (196,724.56) 0.00 (1,483,366.67) (196,724.56) , $ (5,453,208.14) $ (225,853.43) $128,438,881.90

28 Midwestern State niversity otes o he inancial Statements - naudited ote 3: Deposits, nvestments, and epurchase greements uthorized nvestments Midwestern State niversity is authorized to invest in obliga ons and instruments as defined in the ublic unds nvestment ct (Sec exas Governmental ode). Such investments include: 1. bliga ons of the nited States or its agencies, 2. Direct obliga ons of the State of exas or its agencies, 3. bliga ons of poli cal subdivisions rated not less than by a na onal investment ra ng firm, 4. er ficates of deposit, and 5. ther instruments and obliga ons authorized by statute. he university also employs four investment managers to manage the assets of the university's endowments which total $17,832, and are invested under a separate investment policy that permits equi es as well as fixed income and alterna ve assets. Deposits of ash in Bank t ugust 31, the carrying amount of the university s deposits is presented below: ash on Hand $ 16, $ 16, ash in Bank 3,460, ,238, ash in State reasury 4,508, ,581, otal ash and ash quivalents $ 7,985, $6,836, urrent ssets ash and ash quivalents ash on Hand $ 16, $ 16, ash in Bank 3,596, ,793, ash in State reasury 4,508, ,581, urrent ssets estricted ash and ash quivalents ash in Bank (135,942.49) (2,554,384.70) otal ash and ash quivalents $ 7,985, $6,836, ustodial redit isk for Deposits ustodial credit risk for deposits is the risk that, in the event of the failure of a depository financial ins tu on, the university will not be able to recover deposits or will not be able to recover collateral securi es that are in the possession of an outside party. he university's policies and State Statute require the university's deposits be deposited into authorized commercial banks and savings and loan associa ons. State statutes also require that these financial ins tu ons pledge securi es as collateral to secure university deposits if they are not fully insured by D. he university s bank balance at ugust 31, 2013 was $4,487, $250,000 of this amount was covered by D nsurance, and $4,237, was collateralized with securi es pledged by the bank gran ng the university a first priority security interest in the collateral which was held by the ederal eserve Bank of ew York ac ng as ustodian for the university and the bank (as defined above). nded (DD) 28

29 Midwestern State niversity otes o he inancial Statements - naudited nvestments t ugust 31, the fair value of the university s investments is presented below: S. Government gency bliga ons $ 7,622, $10,149, orporate Bonds 2,103, ,190, Municipal Bonds 278, qui es 15,426, ,714, ther ommingled unds - expool 8,093, ,074, ther ommingled unds - G 3,489, ,484, ther ommingled unds - Goldman Sachs 115, , ther ommingled unds - i bank 2,086, ,080, er ficates of Deposit - irst a onal Bank 6,293, ,211, er ficates of Deposit - irst nited Bank 2,014, ther er ficates of Deposit 490, ,490, Money Market - J Morgan hase 1,006, ,004, Money Market irst nited Bank 2,001, ther Money Market funds 52, ,431, lterna ve nvestments (including hedge funds) 324, , otal nvestments $51,398, $50,435, urrent ssets Short-erm nvestments $23,061, $20,334, on-urrent ssets estricted nvestments 5,018, ,098, on-urrent ssets ther ong erm nvestments 23,317, ,002, otal nvestments $51,398, $50,435, redit isk redit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obliga ons. s of ugust 31, 2013, the university s credit quality distribu on for securi es with credit risk exposure was as follows: nded (DD) nvestment ype BBB.S. Government gency bliga ons (M, HB, B, HM) $7,622, orporate Bonds $ 1,281, $ 593, omingled unds expool & G 11,582, Municipal Bonds $278, nvestment ype BB B ollateralized ot ated ther omingled unds Goldman Sachs $115, ther omingled unds i bank $2,086, er ficate of Deposit irst a onal Bank 6,293, er ficates of Deposit irst nited 2,014, er ficates of Deposit ther 490, orporate Bonds 227, Money Market J Morgan 1,006, Money Market irst nited Bank 2,001, ther Money Market 52, qui es 15,426, lterna ve nvestments (including hedge funds) ,508.80

30 ote 3: on nued Midwestern State niversity otes o he inancial Statements - naudited oncentra on of credit risk is the risk of loss a ributable to the magnitude of investment in a single issuer. s of ugust 31, 2013, the university s concentra on of credit risk is immaterial to any single issuer. nterest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. Dura on is a measure of the price sensi vity of a debt investment to changes arising from movements in interest rates. Dura on is the weighted average maturity of an instrument's cash flows, where the present value of the cash flows serves as the weight. he dura on of an instrument can be calculated by first mul plying the me un l receipt of cash flow by the ra o of the present value of that cash flow to the instrument's total present value. he sum of these weighted me periods is the dura on of the instrument. Modified dura on es mates the sensi vity of the university's investments to changes in interest rates. he university s investments exposed to interest rate risk as of ugust 31, 2013, were as follows: ote 4: Short-erm Debt ot pplicable nvestment ype air Value Modified Dura on.s. Government gency bliga ons $ 7,622, orporate Bonds $ 2,103, Municipal Bonds $ 278, ot available ote 5: ong-erm iabili es hanges in ong-erm iabili es During the year ended ugust 31, 2013, the following changes occurred in liabili es: mounts Due Balance Balance Within ne Business-ype c vi es estatement ddi ons educ ons evenue Bonds ayable $80,365, $10,224, * $13,525, $77,064, $4,055, namor zed remium on evenue Bonds 379, , , , namor zed Discount on evenue Bonds (246,566.08) (12,344.13) (234,221.95) (12,344.13) Subtotal 80,498, ,224, ,568, ,154, ,112, General bliga on Bond ayable 2,860, ,405, ,455, ,455, ompensable eave 1,505, , , ,466, , apital ease bliga ons 114, , , , nded (DD) S ederal evolving oan 2,293, , ,041, , otal $87,270, $0.00 $10,266, $15,324, $82,212, $6,001, *See ote 6 30

31 otes o he inancial Statements - naudited mployees' ompensable eave Midwestern State niversity Benefit eligible staff and 12-month faculty members can earn annual leave from eight to twenty-one hours per month depending on the respec ve employee's years of state employment. he State's policy is that an employee may carry his accrued leave forward from one fiscal year to another fiscal year with a maximum of hours up to 532 for those employees with thirty-five or more years of state service. state employee is en tled to be paid for all unused vaca on me accrued, in the event of the employee's resigna on, dismissal, separa on from State employment, or transfer to a posi on that no longer accrues vaca on, provided the employee has had con nuous employment with the State for six months. or proprietary fund types an expense and liability are recorded as the benefits accrue to the employee. he liability is determined through the summariza on of each employee's annual leave balance mul plied by their respec ve salary rate. he es mated cumula ve amount of this liability is $1,466,525. he niversity made lump sum payments totaling $290,694 for accrued vaca on to employees who separated from state service during the fiscal year ended ugust 31, 2013, and payments of $121,847 for ugust 31, he niversity has an undetermined and unrecorded liability for employee's earned sick leave. Sick leave accumula on of which is unlimited, is earned at the rate of eight hours per month and is paid only when an employee is absent due to illness or to the estate of an employee in the event of his/her death. he maximum sick leave that may be paid an employee's estate is one-half of the employee's accumulated en tlement or 336 hours, whichever is less. he niversity's policy is to recognize the cost of sick leave when paid. o liability is recorded for non-ves ng accumula ng rights to receive sick pay benefits. ote 6: Bonded ndebtedness evenue Bonds ayable Detailed supplemental bond informa on is disclosed in Schedule 2-Miscellaneous Bond nforma on, Schedule 2B-hanges in Bonded ndebtedness, Schedule 2-Debt Service equirements, Schedule 2D-nalysis of unds vailable for Debt Service and Schedule 2-Defeased Bonds utstanding. General informa on related to evenue inancing System bonds is summarized this page and on the following pages: evenue inancing System evenue Bonds, Series 2002 ssued by the exas ublic inance uthority () on behalf of the niversity. o pay for campus improvements in hea ng, ven la ng and air condi oning systems; chilled water distribu on; street drainage and paving; and other projects including mericans with Disabili es ct (D) accessibility, elevator improvements, safety, and security ligh ng ssued June 15, 2002 $8,965,000; all bonds authorized have been issued evenue Bond Business-ype c vi es Source of revenue for debt service ledged evenues, consis ng of unrestricted current funds revenues and unappropriated fund balances available, but not including remissions, governmental appropria ons and gi s, grants and contracts, Higher duca on ssistance unds, and student service fees and private gi s $4,600,000 of this 2002 series was refunded in ctober 2012 (see Series 2012) nded (DD) 31

32 otes o he inancial Statements - naudited ote 6: on nued evenue and efunding Bonds, Series 2003 Midwestern State niversity nded (DD) ssued by the exas ublic inance uthority () on behalf of the niversity. o pay for improving, enlarging and/or equipping university residence halls, including fire safety improvements and other general moderniza on improvements, and advance refunding Building evenue and efunding Bonds, Series 1996 ssued ugust 1, 2003 $13,180,000; all bonds authorized have been issued evenue Bond Business-ype c vi es Source of evenue for Debt Service ledged evenues, consis ng of unrestricted current funds revenues and unappropriated fund balances available, but not including remissions, governmental appropria ons and gi s, grants and contracts, Higher duca on ssistance unds, student service fees and private gi s $4,945,000 of the 2003 Series was advance refunded in ctober 2012 (see Series 2012B) evenue and efunding Bonds, Series 2007 ssued by the exas ublic inance uthority () on behalf of the niversity. o pay for construc ng, equipping and furnishing a student recrea on and health facility; improving, renova ng, enlarging and/or equipping owler Hall; improving, renova ng, enlarging and/or equipping D.. igon oliseum; and refunding a por on of the outstanding evenue efunding and mprovement Bonds, Series 1998 ssued ugust 1, 2007 $28,855,000; all bonds authorized have been issued evenue Bond Business-ype c vi es he discount on the bonds is being amor zed on a straight-line basis over the life of the debt. Source of evenue for Debt Service ledged evenues, consis ng of revenues, incomes, receipts, rentals, rates, charges, fees, and tui on levied or collected from any public or private source, including interest or other income from those funds and unrestricted fund and reserve balances available, but not including remissions, governmental appropria ons and gi s, grants and contracts, Higher duca on ssistance unds, student service fees and private gi s. he discount on the bonds is being amor zed on a straight line basis over the life of the debt evenue inancing System evenue Bonds, Series 2008 ssued by the exas public inance uthority () on behalf of the niversity. o pay for construc ng, equipping and furnishing an addi onal student housing facility; purchasing an exis ng student housing facility; improving, renova ng, enlarging and/or equipping D.. igon oliseum; construc ng, equipping and furnishing an instrumental music facility ssued July 1, 2009 $38,300,136; all bonds authorized have been issued evenue Bond Business-ype c vi es Source of evenue for Debt Service ledged evenues consis ng of nrestricted urrent unds evenues but do not include: remissions, governmental appropria ons and gi s, grants and contracts within the duca- onal and General und Group; Higher duca on ssistance unds; and, student service fees and private gi s in the uxiliary und Group he Bonds are issued in part as current interest bonds, $37,955,000, and in part as premium capital apprecia on bonds, $345,136 32

33 ote 6: on nued Midwestern State niversity otes o he inancial Statements - naudited remium apital pprecia on Bonds namor zed remium on B ombined otals nded (DD) Beginning rincipal (615,669.89) mor za on ntries Y13 (99,084.15) Balance at nd (714,754.04) evenue inancing System evenue Bonds, Series 2010 ssued by the exas public inance uthority () on behalf of the niversity. o pay for improving, renova ng, enlarging and/or equipping the niversity s exis ng D.. igon oliseum ssued pril 1, 2010 $6,700,000; all bonds authorized have been issued evenue Bond Business-ype c vi es Source of evenue for Debt Service ledged evenues consis ng of nrestricted urrent unds evenues but do not include: remissions, governmental appropria ons and gi s, grants and contracts within the duca onal and General und Group; Higher duca on ssistance unds; and, student service fees and private gi s in the uxiliary und Group evenue inancing System efunding Bonds, Series 2012 Beginning remium (379,373.31) (995,043.20) mor za on ntries Y13 55, (43,247.46) Balance at nd (323,536.62) (1,038,290.66) uture ntries: Y14 (115,030.44) uture ntries: Y14 69, (45,127.24) Y15 (133,543.12) Y15 86, (47,086.59) Y16 (155,035.16) Y16 105, (49,132.67) Y17 (86,637.24) Y17 61, (25,362.84) (490,245.96) 323, (166,709.34) Maturity Value (1,205,000.00) 0.00 (1,205,000.00) ssued by the exas ublic inance uthority () on behalf of the niversity. o finance the current refunding of $4,600,000 of the MS Building evenue and efunding Bonds, Series 2002, which were used to pay for campus improvements in hea ng, ven la ng and air condi oning systems; chilled water distribu on; street drainage and paving; and other projects including mericans with Disabili es ct (D) accessibility, elevator improvements, safety, and security ligh ng ssued September 15, 2012 $4,710,000; all bonds authorized have been issued efunding Bond Business-ype c vi es Source of evenue for Debt Service ledged evenues, consis ng of unrestricted current funds revenues and unappropriated fund balances available, but not including remissions, governmental appropria ons and gi s, grants and contracts, Higher duca on ssistance unds, student service fees and private gi s 33

34 Midwestern State niversity Management s Discussion & nalysis naudited ote 6: on nued evenue inancing System efunding Bonds, Series 2012B ssued by the exas ublic inance uthority () on behalf of the niversity. o finance the advance refunding of $4,945,000 of the MS Building evenue and efunding Bonds, Series 2003, which were used to pay for improving, enlarging and/or equipping university residence halls, including fire safety improvements and other general moderniza on improvements ssued September 15, 2012 $5,415,000; all bonds authorized have been issued efunding Bond Business-ype c vi es Source of evenue for Debt Service ledged evenues, consis ng of unrestricted current funds revenues and unappropriated fund balances available, but not including remissions, governmental appropria ons and gi s, grants and contracts, Higher duca on ssistance unds, student service fees and private gi s General informa on related to the ons tu onal ppropria on bond is summarized below: ons tu onal ppropria on Bond, Series 2004 ssued by the Board of egents of Midwestern State niversity. he proceeds of the Bonds are to be used to construct a Business dministra on classroom building for use by students of the niversity ssued ugust 1, 2004 $11,185,000; all bonds authorized have been issued General bliga on Bond Business-ype c vi es Source of evenue for Debt Service ayable and secured solely from a first lien on and pledge of up to one-half of the annual appropria on for and on behalf of the niversity, from the State reasury pursuant to the ons tu onal rovision and he xcellence in Higher duca on ct ote 7: Deriva ves ot pplicable. nded (DD) 34

35 Midwestern State niversity Management s Discussion & nalysis naudited ote 8: eases Midwestern State niversity has entered into a long-term lease for financing the purchase of a capital asset. Such leases are classified as capital leases for accoun ng purposes; therefore, such leases are recorded at the present fair value of the future minimum lease payments at the incep on of the lease. he following is the original capitalized cost of such property under lease in addi on to the accumulated deprecia on as of 8/31/13. Business-ype c vi es nded ugust 31, 2013 ssets under ccumulated lass of roperty apital ease Deprecia on otal Vehicles $132, ($39,435.52) $92, uture minimum lease payments under this capital lease, together with the present value of the net minimum lease payments at fiscal year-end, are as follows: rincipal nterest otal 2014 $20, $5, $26, , , , otal Minimum ease ayments $95, $8, $103, ess: mount epresen ng nterest at Various ates 8, resent Value of et Minimum ease ayments $95, pera ng eases uture minimum lease rental payments under non-cancellable opera ng leases having an ini al term in excess of one year are as follows: nded (DD) otal 2014 $134, , , , , otal uture Minimum ease ayments $407,