UNIVERSITY OF CINCINNATI JUNE 30, 2008
F) OtherSubsequent to June 30, 2008, the University has issued $36 million in Series 2008E BANS to refinance
Series 2007B insured variable rate bonds. Series 2008E was issued at an interest rate of 2.75% and will
mature on July 21, 2009. In addition, the University has amended the Standby Bond Purchase Agreement
(SBPA) associated with the Series 2004B insured variable rate bonds to eliminate the potential of a
termination of the SBPA without notice to the bondholders. Both of these subsequent events have
substantially decreased the interest expense exposure to the University as a result of negative market
conditions relating to insured variable rate debt. In an effort to further improve interest rates, the University
is planning to issue Series 2008F variable rate bonds, which will be secured by a letter of credit that will
refinance the remaining Series 2004B insured variable rate bonds secured by the SBPA.
Interest expense incurred on indebtedness for the years ended June 30, 2008 and 2007, is $41,286,000 and
$40,245,000, respectively. In 2008, interest expense on construction-related debt of $9,246,000, net of
$2,156,000 interest earned on invested funds, was capitalized. In 2007, interest expense on construction-
related debt of $5,727,000, net of $2,125,000 interest earned on invested funds, was capitalized.
G) Long-Term Liability
Long-term liabilities as of June 30, 2008 and 2007 are as follows (in thousands)
Year Ended June 30, 2008
Balance
July 1, 2007
Additions
ReductionsBalance
June 30,2008Current
PortionNon-current
PortionBonds, notes and capital leases:
Bonds and notes payable $903,845 $267,643 $247,808 $923,680 $55,760 $ 867,920
Certificates of participation 90 - 90 - - -
Loans payable-equipment 6,439 - 1,371 5,068 1,290 3,778
Capital lease obligations 159,515 - 5,790 153,725 7,505 146,220
Premium net of unamortized
costs and loss on refunding
4,444
7,646
3,543
8,547
___848
7,699
Total bonds, notes and
capital leases
1,074,333
275,289
258,602
1,091,020
65,403
1,025,617
Other long-term liabilities:
Compensated absences 64,108 1,427 2,671 62,864 33,528 29,336
Refundable advances,
federal loans
26,311 18 53 26,276 - 26,276
Other 1,387 - 444 943 500 443
Deposits held in trust for others 10,076 66,911 73,759 3,228 - 3,228
Total other long-term liabilities 101,882 68,356 76,927 93,311 34,028 59,283
Total $1,176,215 $343,645 $335,529 $1,184,331 $99,431 $1,084,900Year Ended June 30, 2007
Balance
July 1, 2006
Additions
ReductionsBalance
June 30,2007Current
PortionNon-current
PortionBonds, notes and capital leases:
Bonds and notes payable $ 839,580 $214,235 $149,970 $903,845 $130,725 $773,120
Certificates of participation 180 - 90 90 90 -
Loans payable-equipment 4,616 2,800 977 6,439 1,371 5,068
Capital lease obligations 122,140 42,700 5,325 159,515 5,790 153,725
Premium net of unamortized
costs and loss on refunding
2,951
7,750
6,257
4,444
___835
3,609
Total bonds, notes and
capital leases
969,467
267,485
162,619
1,074,333
138,811
935,522
Other long-term liabilities:
Compensated absences 66,021 1,181 3,094 64,108 33,941 30,167
Refundable advances,
federal loans
25,987
324- 26,311
- 26,311
Other 1,814 - 427 1,387 500 887
Deposits held in trust for others 9,187 80,176 79,287 10,076 - 10,076
Total other long-term liabilities 103,009 81,681 82,808 101,882 34,441 67,441
Total $1,072,476 $349,166 $245,427 $1,176,215 $173,252 $1,002,963
- 26,311