Budget and Finance

UNIVERSITY OF CINCINNATI JUNE 30, 2008

$1,660,000, Series 2002G $1,020,000, Series 2003C $4,785,000, Series 2004A $6,975,000, Series 2004D

$955,000, Series 2004E $1,265,000, Series 2006A $2,040,000 and Series 2007A $430,000. The purpose of

the refunding was to increase the University’s Liquidity Reserve from short-term debt service savings by

slightly extending the average life of the University’s debt. Net proceeds of $35,496,090 were used to

purchase United States government securities that were placed in irrevocable trust with an escrow agent to

provide for the June 1, 2008 debt service payment for the above referenced bonds. The resulting loss on

refunding which reflects the difference between the refunding reacquisition price for Series 2008B and the

net carrying amount of the outstanding principal balances of the refunded debt issues was not significant.

Series 2008C general receipt bonds were issued February 6, 2008 in the amount of $39,280,000, for the
purpose of current refunding $40,000,000 of the Series 2004B variable rate auction reset mode bond
maturities. $32,250,000 of the Series 2004B variable rate auction reset mode bonds was called on February
14, 2008 and the remaining $7,750,000 of these bonds was called on March 20, 2008. The purpose of the
refunding was to current refund all of the Series 2004B auction rate reset mode bonds, due to deteriorating
conditions within the auction rate market. Net proceeds of $40,000,000 were used to provide for the
February 14, 2008 and March 20, 2008 calls for this series. The resulting deferred loss on refunding was not
significant.

C) Collateralization and Debt Reserves

The general receipts bonds and general receipts bond anticipation notes are collateralized by a pledge of

general receipts of the University. The Capital Lease Obligations and Capital Leases (Stetson and Turner) are

secured by base rent payments under the leases. The net book value of assets under Capital Lease

Obligations is $182,966,000. Payment of base rents is subordinate to debt service payments on the University’s

general receipt bonds and bond anticipation notes. Loans Payable – Equipment is collateralized by specified

equipment. At June 30, 2008, the required debt service reserve amounted to $8,679,000. As provided for in

the Amended and Restated Trust Agreement, this reserve is solely for the payment of debt service charges on

the pre-amended bonds, with the exception that excess amounts may be transferred pursuant to Section 4.03 of

the Amended and Restated Trust Agreement

D) Debt Service Commitments

For bonds and notes payable at June 30, 2008, scheduled annual debt service payments subsequent to
June 30, 2008 are as follows (in thousands):

Fiscal

Year Principal Interest Total

2009 $55,760 $ 49,039 $ 104,799

2010 32,520 46,890 79,410

2011 34,955 45,353 80,308

2012 37,985 43,648 81,633

2013 39,455 41,680 81,135

2014-2018 227,505 174,518 402,023

2019-2023 236,905 108,881 345,786

2024-2028 173,060 52,313 225,373

2029-2033 82,480 10,780 93,260

2034

3,055 153 3,208

Total $923,680 $573,255 $1,496,935

The University has $173.3 million of variable rate bonds; all which interest is reset weekly based on the

market with a maximum rate of 12% per year. The interest rate used to determine future interest payments

in the debt service repayment table above is the rate in effect at June 30, 2008 as follows: 9% for the 2004B

variable weekly rate; 10% for the 2007B variable weekly rate; and 3.508% for the portion of Series 2008B

associated with the swap and 1.59% for the portion of Series 2008B not associated with the swap. Series

2004B variable rate bonds were issued in February 2004 and since the date of issuance, the variable weekly

rate has ranged from .87% to 9%. Series 2007B variable rate bonds were issued in January 2007 and since