FY 2005 - University of Missouri System

Management’s Discussion and Analysis (unaudited)F 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 4Total Liabilities increased $25.5 million over the prior year. Significant changes in Current Liabilities include a$20.4 million increase in Collateral for Securities on Loan from $61.2 million as of June 30, 2004, to $81.6 million asof June 30, 2005, and a $10.4 million increase in Accrued Liabilities primarily related to accrued self-insurance.During fiscal year 2005, Bonds and Notes Payable, net of premium/discount and deferred losses on defeasance,decreased $11.1 million. The following is a summary of the long-term debt by type of debt instrument (in thousands ofdollars).Fiscal Year2005Fiscal Year2004Fiscal Year2003System Facilities Revenue Bonds $ 400,025 $ 408,295 $ 297,210Health Facilities Revenue Bonds 165,200 168,550 171,750Notes Payable 273Unamortized Premium/Discount and Losson Defeasance 312 (171) (3,968)565,537 576,674 465,265Capital Lease Obligations 10,171 10,532 10,864$ 575,708 $ 587,206 $ 476,129The Net Assets of the University increased in total by $225.0 million, excluding any changes in the University ofMissouri Retirement Trust. An explanation of these changes, based on the four net asset categories, is as follows:• Invested in Capital Assets, Net of Related Debt, represents capital holdings, net of accumulated depreciation andoutstanding debt financing related to the acquisition, construction or improvement of those assets. The increase of$79.5 million to $1.23 billion is due to net additions to capital assets.• Restricted Nonexpendable Net Assets are subject to externally imposed stipulations that they be maintainedpermanently by the University. This category of net assets represents the historical value (corpus) of gifts to theUniversity’s permanent endowment. The increase of $71.3 million over fiscal year 2004 to $555.7 million at fiscalyear end 2005 is primarily a result of private funding for endowment purposes.• Restricted Expendable Net Assets are subject to externally imposed stipulations governing their use. This categoryof net assets includes net assets restricted for operations and endowment purposes of $239.6 million, facilitiesof $20.2 million and student loan programs of $75.7 million. Restricted Expendable Net Assets increased $29.8million over fiscal year 2004 to $335.5 million at fiscal year end 2005 primarily due to an increase in restricted giftincome.• Unrestricted Net Assets increased $44.4 million to $685.9 million at fiscal year end 2005. This category of netassets is not subject to externally imposed stipulations, although may be designated for specific purposes by actionof management or the Board of Curators. Unrestricted Net Assets are used primarily for academics and generaloperation of the University and consist of $479.4 million for this purpose, as well as $81.3 million for capital projectsand $3.4 million for student loan programs. In addition, Unrestricted Net Assets include funds functioning asendowment of $121.8 million.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