Finance and Administration - Board of Trustees - The University of ...

Finance and Administration Committee - V. Annual Report of the Treasurer, 2011 - InformationNote 6: Operating LeasesThe university has entered into various operating leases forbuildings and equipment. It is expected that in the normalcourse of business, such leases will continue to be required.Net expenses for rentals under leases were $8,325,216.92 forthe year ended June 30, 2011.The following is a schedule of future minimum rental paymentsrequired under noncancelable operating leases that have initialor remaining lease terms of more than one year at June 30, 2011.Only one such lease is currently in effect. Annual payments onthis particular lease fluctuate in direct proportion to changes in theConsumer Price Index as required by contractual agreement. Theschedule below is calculated based on the April 2011 ConsumerPrice Index (224.91).Table 6.1 Year Ending June 30, 20112012 $ 13,924.00Total minimum payments required $ 13,924.00Note 7: Accounts PayableAccounts payable included the following:Table 7.1 June 30, 2011Vendors payable $ 67,735,337.03Payroll deductions payable 20,951,454.56Total $ 88,686,791.593Note 8: Long-Term LiabilitiesLong-term liability activity for the year ended June 30, 2011,was as follows:Table 8.1Beginning Balance Additions Reductions Ending Balance Current PortionLong-term liabilitiesBonds $ 382,029,749.85 $ 136,087,007.66 $ 22,369,911.56 $ 495,746,845.95 $ 27,703,501.00Unamortized Bond Premium — 8,196,732.11 409,836.60 7,786,895.51 —Commercial paper 163,126,243.72 14,070,575.94 140,508,317.61 36,688,502.05 —Total TSSBA indebtedness $ 545,155,993.57 $ 158,354,315.71 $ 163,288,065.77 $ 540,222,243.51 $ 27,703,501.00Notes 12,027.59 — 12,027.59 — —Capital lease obligations 1,273,005.35 — 622,544.60 650,460.75 650,460.75Net OPEB obligation 55,258,636.30 24,105,000.00 12,802,330.26 66,561,306.04 —Compensated absences 75,499,906.90 43,956,213.52 43,443,501.98 76,012,618.44 43,443,501.98Total long-term liabilities $ 677,199,569.71 $ 226,415,529.23 $ 220,168,470.20 $ 683,446,628.74 $ 71,797,463.73Other noncurrent liabilitiesDeferred revenue 15,500,438.71 — — 15,500,438.71Due to grantors 36,066,487.07 835,494.00 700,967.67 36,201,013.40Annuities payable 5,784,480.00 936,319.14 1,213,584.49 5,507,214.65Totals $ 734,550,975.49 $ 228,187,342.37 $ 222,083,022.36 $ 740,655,295.50TSSBA DEBT – BONDSBonds, with interest rates ranging from 1.3% to 7.15%,were issued by the Tennessee State School Bond Authority(TSSBA). The bonds are due serially to 2040 and are securedby pledges of the facilities’ revenues to which they relate andcertain other revenues and fees of the university, including stateappropriations. (See Note 10 for further details.) The bondedindebtedness with the Tennessee State School Bond Authorityincluded in long-term liabilities on the statement of net assetsis shown net of assets held by the authority in the debt servicereserve and unexpended debt proceeds. The total bondedindebtedness at June 30, 2011, was $523,670,798.23. The debtservice reserve amount at June 30, 2011, was $21,373,942.45,and unspent debt proceeds were $6,550,009.83.The university’s debt service requirements to maturity for allbonds payable at June 30, 2011, include those listed in Table 8.21850