FY 2005 - University of Missouri System

N otes to Combined Financial StatementsF o r t h e y e a r s e n d e d J u n e 3 0 , 2 0 0 5 a n d 2 0 0 4Discretely Presented Component Unit – Medical AllianceBonds and Notes payable activity by series of issuance for the years ended June 30, 2005 and 2004, was as follows (inthousands of dollars):2005BeginningBalance Issuance Payments2005EndingBalanceHealth Facilities Revenue Bonds Series 1998, datedDecember 1, 1998 and maturing November 1, 2028,payable in graduated installments from November 1,1999 to November 1, 2028, bearing interest rangingfrom 3.35% to 5.30% $ 22,745 $ - $ (480) $ 22,265Health Facilities Revenue Bonds Series 2004, datedJune 1, 2004 and maturing November 1, 2029, payablein graduated installments from November 1, 2005 toNovember 1, 2029, bearing interest ranging from2.25% to 5.75% 17,500 17,50040,245 $ - $ (480) 39,765Less current maturities (480) (870)$ 39,765 $ 38,89520042004BeginningEndingBalance Issuance PaymentsBalanceHealth Facilities Revenue Bonds Series 1998, datedDecember 1, 1998 and maturing November 1, 2028,payable in graduated installments from November 1,1999 to November 1, 2028, bearing interest rangingfrom 3.35% to 5.30% $ 23,210 $ - $ (465) $ 22,745Health Facilities Revenue Bonds Series 2004, datedJune 1, 2004 and maturing November 1, 2029, payablein graduated installments from November 1, 2005 toNovember 1, 2029, bearing interest ranging from2.25% to 5.75% 17,500 17,50023,210 $ 17,500 $ (465) 40,245Less current maturities (465) (480)$ 22,745 $ 39,765In June 2004, Medical Alliance issued $17,500,000 of tax‐exempt Health Facilities Revenue Bonds Series 2004 thoughthe Health and Educational Facilities Authority of the State of Missouri. The bonds proceeds will be used primarily topay or reimburse the costs of acquiring, constructing and equipping certain health facilities of Medical Alliance and tofund the future debt service requirement fund for these Series 2004 bonds.Similar to the Series 1998 bonds, the Series 2004 bonds were issued pursuant to the Master Trust Indenture datedDecember 1, 1998, as supplemented on June 1, 2004. Under the terms of the Master Trust Indenture (the “MasterIndenture”), Medical Alliance is required to make payments of principal, premium, if any, and interest on the bonds.The Series 1998 and 2004 bonds are secured by the unrestricted receivables of Medical Alliance. In addition, theMaster Indenture contains certain restrictions on the operations and activities of Medical Alliance, including, amongother things, covenants restricting the incurrence of additional indebtedness and the creation of liens on property,except as permitted by the Master Indenture.The Master Indenture has mandatory sinking fund redemption requirements in which funds are required to be set asidebeginning in 2014 and 2025 for the Series 1998 bonds and Series 2004 bonds, respectively.Interest expense incurred on the bonds during the years ended June 30, 2005 and 2004 was $2,077,000 and $1,185,000,respectively, of which $737,000 was capitalized during the year ended June 30, 2005.2 0 0 5 F i n a n c i a l R e p o r t : U n i v e r s i t y o f M i s s o u r ia c o m p o n e n t u n i t o f t h e S t a t e o f M i s s o u r i 41