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HomeMy WebLinkAboutMSU Audit 08-31-07 � I f�r th� ye�r �r�d�� ug��t 31 , 2��7 �� r �i� t t � � r � 1 E�Sl' l' T 1 � l! I� � T � � U 7' 31, 87 T 1� � T T �� � lr�d�per�d��t��ditcar's R� rt � �i���ci�� 5�tement�a Stafements t�f Fir�ancf�� Positi�r� 2 St�t�rttent� �f�ctiviti�� 3 �taterr���t� af���h �I�vvs � �Botes tc� Fin�ra�i�! �fi���m�r��� 5-12 ��p�lerrt�er�t�d Sched�ales: �ch���ie � —S�h�d�le of ��ven�e A�aiiable f�r Fix�d �harges 13 �ch�ul� II — Certifica�i�n of th� �Ax�d ���rge�s G��r�rage ��$i� 14 r�� �n . � ul�z, � , �ar�,: �s�o� �s7-���0 2525 �{s#6 �lvd,Suit�3fl5 �ic6�i�a �al6s,T� 76�t1�-'10�1 �ax: (94O) 3�7-8�0'� ln�� ead�nt Au��t�r'� ��o ��c��nber 31, 2007 - 1"ca the �o�rd of L�ir�ctvrs c�f T�xas S��d�nt Housing�orpe�ra�imn— �tl Fr�ject VEt� h�ve audited 4he accora��anyb�g s�atemen� �f#ir�ancaal posi4�c�n of �e�as Stud�nt �ousing C�rpora�ifl�r—Ar1St! �ra�ect{C9rpc�rafsar��as o�,��g�st 31, 2�07 ar�d the statements of ae#ivitie�, and c.�sh flows for th�year ther� �nded. �'hess finar�cial sfater�rents are tt�e resporasil�iliiy�f th� Ct�rpt�ra�mon's rr��nag�ment. t��� res�ansibili�yr is to �xpr�ss an opin'tc�n on fhese financiai ����er�rents based on a�r ��dit. �"he prior y��r surnrrr�riz�d carnparativ� information has been d�rived frorn the Texas St�td�nt Housing Corpor�tican — t�Sl! Praject's 2006 �ina�rcial s�aterr��r�ts. The firtanci�l s$ater�tents of the Tex�s 5tudent Nc�using Carp�r'a#i�n—htlSl! �rvject as af Augtas�31, 20�6�r�re audited by other audito�°s. Thtas� �udit�rs express�d �n u�aq�airfi�r� opini�n a�r tha�e fiic�a�cial s#�tern�e��s in their r�port dat�d .i�nuary 1�, 24f}7. t1Ve con�uct�d our audit in a�cc�rdance w�th ��aditin� s#ar�d�rds generail�accept�d dn the United Sta�es of Ameri�a. Thos� sta�sdards require th�t �r� plan �nd p�cf�rm the audit to ob#ai� reasar�able ass�aranc� about vuhsther the �c�anciai s�aternents are free of mat�r�al o�tis�t�tern�n�s. An �udi� in�l�de� ex�min�r�g, �n a ��sf b�sis, evidenc� s�pporting the amo�nts �nd disclos+�r�s in fhe �irtancial �tat�m�nfi�. Ar� �udifi i�►cl�ades asse�si�g the a�coun�ir� �rincip6�s used arad 5igraific�nt esfirvtates rnatie by rttan�gement, as w�ll as evaEuating the �v�r�A finarcial sta#em�r�t pr�s�r�tatioR. FAfe b�lieve fhat aur audif pr�ui�es a reasonabl� basis for t�ur opini�a�. In a�r opinior�, the fir�ar�taal sta�em�nts r�#erred �o abov� pr�sent fa�rly, in all material r�spects, th� �iraanciai pasition �f Texas Stud�nt Fiousing �orporation — i�SU Project as of August 3�, 20[37 arad the chang�s in i�s nef �ssets {deficit) �nd its c�sh flaws for the year th�� end�d in c�r�f�rmit�r urith a�caur�fiing prir�c�ples g�r�era9ly��c�pt�d 6n#he l�n6fed S�ates of�nerica. �ur audit wt�s conducted for the purp�se�f for�ie�e� �r� t�pini¢�r�on the b�sic fnancia6�ta�arn�nts t�ken as a �hc�le, The s�pplemental sched�les 3ist�d an �h� cont�n�s page are pres�r�t�d fo� purposes c�f additi�na� �nalysis and are r�ot r�quir�d �� part �f the ba�ic fin�ncial st�te€nents. �uch irefor►-nation has been subj�cted to auciit6ng pracecfures �ppiied in the audit af th� basic �rr�ncia� sf�t�r��nts and, i� our �pinio�t, is fairly sl�ted in af! €na�eri�i respe�ts ir� r�latit�r� t� the basi��inancia� st�tements tak�n as�whofe. �-- r 6 � �rar�don P. Sch�altz, �A, i�C 1 7�XAS Sl"UDENT FlOUSBP��CC)RP�RATION- �SU PROJECT' Sl'�4�"E�AEfdT O�FI�3A�1ClAL�C}SITIDi� August 31,2f}07,s�lh camparafive totats fior 20�6 ASSETS 2007 2�08 Currertt ass�ts: Cas9t and cash equivalents # d�9,7�� $ 324,048 Restr6cted cash anci investments �,396, 2 2,4�2,932 �ccoa�nt�rec�ivable �399 5 216,298 Pr�paid expense� �'T6 33,454 't0tal curre�tt ass�Ys 3,0�T,�4� 2,995,930 �roperty and equipm�nt: Buildierg 11,3�4,714 11,300,714 Fumiture,fixtures and equipm�ant 63�,g�� 633,399 L�ss-accure�uiated d�preciation {1,7 s027) -(1,378,85�) Tofa!land,t�uiiefing�equip�enf 10,77�,686 �60,615,859 C�eher a�sets: ��fer�ed flnancing costs 3�1,Q07 �t}1,79tf 1"vtal as5ets � 13,6�5,604 � 14.D13,579 L9AB[Lli'IE8 AtVD IVET A�SET� Curcent li�bi{it'ses: �4ccoun�s pay�abl� 5 14,09°I $ 23,327 Qther cur�ent IiaP�itities i3,(!S6 92,7'91 Def�rred revenue 66�,0�6 f13,054 Accrued interest-current p�rtion �,675 3,025 Bonds qayabie-current�ortion 170,(�04 ��5,000 Total current liabili4ies �6�,7�8 797,117 Long-f�rm liabi(ities Accrued inter�sf �53,�13 458>85a �ond payable 1�,675,�OS 13,821,214 7ota1 Bong-tee�r9 liabilties 1�,12�,A�16 14,280,{l64 f�et assets: Unrest�icfed - �emporarily restricted {7,�9,613} {1,�63,6�2) Total n�f.asseYS {�,3��,�'i3} (1,063�642) Tota!liabilities arod netasse#s $ �3,645,641 $ 14,013,579 �'h��c�aecrp�rsyirr��e�te�are��infe�r�i part of�t���fi��r�cial sta�emenfs. 2 T S Sl'l1�Et�T FiOU sING C�RPC?R4�lOht- P�ISU PRQJEGT ST�TEt�ENT C}F ACTIViT4E5 for th�year ended A�agus�31,2d�7,with compaeatiu�tcsta(s�or 20a6 T�tttpoe�rity tlrsr��tr�cE ��strict �40'l 2006 �tevenue: Rental incorrae $ - � �,644,421 S �, 9,427 $ i,5Z�,707 C7ther o�erating's�rcom� - 17,�34 �7,134 16,935 i�et asse4s releas�d from rest�ictions 1,��5,3�2 {�,0�5,392� a - Tataf re�eraue 19��5,��� i,9 1,�26,555 1,595,�2 E�enses: Personne! 154,�74� � 1�,��4 948,035 t�surance �3,��9 � 53,�� 53.538 �'�{ephone�ctammut�ication services ,� a 49, �8,4�9 Utilities ���9�39 - 'iS3, 9 241,5�1 F2epairs,maint��ance&sup�6a�s �2,�19 � �2,�19 51,2�7 C7ther c�perat�ng expsnses ,?�� � ,76� 82,�01 Issuer admir�istration fee 2�, � 25,Q00 2�,d00 t}therfees �,61� - �,6�2 8,934 k3ad deb$e�rertse 359515 - 35,�'�� - �epreciation 4�9,�'T3 � 43�,173 44Q,090 Tofal ex�ense� '9,��5,��2 - �,��5,��� 1,�99,1�6 Ofher income and(e�cp�ense): Interest income - �3,�72 �3,372 86,Q33 Interes�expense - S , p � , � (968,942} 1'otal ath�r incorn�and(e�p�nse} � {��7,7T�} (�67,174) �82,909 Change in net assets � (326,O�i� j3�2�s011) (386,�33) �et ass�ts,beginning caf�ear m ��,as�,�v2} {1,os�,�ozl (s77,���} f�ekassets,end�fiyear S � S . ��, �,�13� � __�1,389,61�� $ (1,063,602) �'he�ccora�panying notes are an iniegrai part of these fnanciat statem�nts. 3 T��S STUD�NT�i�USihJG�C}i�6�0 T10�- t�SU PF�e}JE�T �T�vTE�A�Nl'C!�CASN FL�t�!s for fh�year ee�ded Aug�s�31,2d07,wikh c�tmp�rative totals far 2a46 2{90T ZOt�6 �ash fi��s front oper�tirag�ctivi�ies: �hang�in n�t assets y �32�,41�} $ {3�6,Q�3) Adjustr�aer►ts ta�ecor�ci(e ehartg�in n�t ass�ts tca cash pr�vided by op�rating acYi�aties: C}epr�ciaikon 4�39,173 440,0� Amer�izati�� ,772 {64,�4}�} �ad r��bts 35,5�5 - {incr�as�)de�r�ase in operati��assets {Decr�as�}increase in liabiii�ies: R�str�cted cash and investmer�ts 25,490 2f,7�2 Ac�ount�receivab(� (��,794) {40,�0�i) I�P��i�lftSllFr'1RC� 32,�78 3�7 ,��unt�paya�i� �s,��s} �,��a C3ther currer�t li�bili�ies 375 1,316 �eferred revenu� 5�9�72 38,�7� Ac�rueci interest 3,��7 3,Ct25 P�et cash prc�vided by�p�rating activiYies 232,��7 18,723 Cash�l�swrs frts�rt investir�g��tiviti�s: P'urchase af�Srop�rty and equiprn�nt � �g� Net cash used tsy inv�stir�g acti�iti�s - 4,995 G�sh ftows frorn financing ackivities: Paym�nts an bands 1A�5,004 - htet cash used by financeng activities 1��,004 � tV�t increase in�sh ar�d cash eqt�ival�nts $7,1�7 1i,�28 ���h�s�d cc�sh�quivalents, begin�ir�g�f y�ar 324,0�� 3'92,324 Cash and cash equivale�rts, �nd of ye�r S �i�,i95 $ 324,{348 Suppiemer�#al disclosures�f cas3�flowr ir�#orreo�ti�n: �ash pai�during ttt�ysar for int�rest $ 999,763 $ 926,775 The accornpar�y�ng nates are an int�gr�i part af th�se�nancial staternen�s. � �r � � � i � �i - J � �O�'E�1'�Fi���CIAL��'�TE ��MTS August 31,2Q�7 �r�te 1 —��4�€"�J�E �F �U�BNE�S Te�cas �tc�ci�nt H�u�i�g �orpmratic�ra — �Sl� Pre�j��t (�c�rp�ratio�}, a Tex�s r�a�- pr��it e�rg�r�i��ican, �a� inc�rpt�r�t�d c�n April 22, 2002, �� a duly car�statu�ed a�th�rity �f th� To�rr� �f �hl��tlake, T�xa� p�srsu�nt tc� �ec�ior� 53.3�(b} c�f th� Te��s Ed��ati€�n Gc�d�9 as �m�c�d�d. Th� Corp�rati�r�'s prirn�ry purpc�s� ►��� �a� e�ns#r�ct, ��r► a�d �p�rate � s�ude�t hc�tasirag f�cQloty kna as 5un�a��h�r 1filE�g� {Prap��tty) €�� �he �arx��a�s of f�9id�e�t�rs� �t�te t1r�i��rr�ity {t��1J} in �i�hi�� F�fls, �ex��. Th� prc�per� �v�� cr�r���r�a�ted frrsrn the �roc��d� fr�r� the e�su�nce of Tex�s Stud�nt Hc��sin� Carprarafiior� m ��lJ F'roj�ct S��der�� Hausing Re��nu� ��s�d�, �erae� �O(32 ��t�eads}. Th� ��nds r�ere is���d �hra�ugh � 7'rust 9ndenture b� �nd bet�v��� the �arpc�r�tic�r� ar�d Th� ��k c�f t��� Yc�rk {Tr�st�e} d�t�d A�g�ast 1, 24��. Th� {ar�d or� a�h'sch �h� F�rc�p�rt� is loc�t�d (approxira�at�ly �t aeres� ss 6��s�d �nd th� �roperty i� op�r�t ar�d m�r��geci �rac4er th� terrns c�f�h� �r�u�d L�as� and �anag�rr���#P�gre��er�t b� and b��e�n th� �c��p�r�#ia� ��d ���. �lot� 2—SUt�1 AF��' Q� �i�N6FI�A�1"���QII�T'!NG P�Ll��ES A �urr�mary tc� the �c�rpc�ratic�rr'� sigr�ific��at ���aun�i�g pol�ci�� �or�si�fently �p�ali�d i� the prepar�ticsr� c��th� ���r�par��i�g�n�r�ci�l ���t�me�ts�oElo�s. ���is �f Accc�c�nti�� 'th� �ccc�asr��s ar� r��intao��c� and the fa��r���al s�at�r��n#� hav� beert pr�p�red �sir�g the ��crual baso� of acco�nting in �c�orda��e with acc�u�tir�� pri�ciple� ger�er�lly �c��pt�d in th� lJr�i�ed �t�t�� �f�r��r��a. l�s�of E�fiirx�at�� Th� preparatio� �f fin�ncia{ stat�mer�t� ir� cx.�n��rr�ity �ith a�c��n�i�g prira�iple� g�rter�lly �c��pt�d in t�� L1r�it�d ��at�s c�f Ae�erica req�sir�� m��ag�rv�e�t t� make e�tirnat�s and as�urnp�ions that aff�c� �ert�in r��arted arr�ou��s �n �h� fi�ar�cs�m �t�t�rr�e�t� ar�d �cc�rr��an�i�g ��fes. �c�u�l r�sult� ��u{d diff�r fr�� the�e estimat�s ar�d as�ur�ptior��. 5 T Tl1 7' I P TI — 4J J � N�T��T�F1 AN�I�L�l'AT'E EN'T'� �u��a��31,��07 t��te 2—�U�a1���Y �F ���h�6FCCANT A���9Jf�T��� ��LICBES ���NT'�.} �ash and �ash Eq�si�af�n�s T°h� Corpor�tior� �r�sid�rs a!I highl� liq�aid 'e�ve�ttn�nts �+ith rnaturi�y of thre� r�ear�ti�� or iess �rhen pa�r�hased tc� be cash �quivalent�. �t Aug�as� 31, 2007 the �or�car�tic�n h�� n€� s��h i�v��tr�ent� 6ncl�aded in ���h �r�d cash eq�i�alent�. F��stricted �ash �nd 6�vestrvaer�ts ���trict�d cash ar�d in�estm�nt� r��re�e�� �r���n�s h�td by the Tr�s�ee, ich �re r�strictec3 f�r�he p�yrrti��t a�F e�pe���� a� reqa�ir�d by th�Tra�s� Ir�der�t�r�, �►c�cour�t� Ftec�i��b(� ��co�r�t� r�ceivable ar� s����d a� �r���r��s rr�ar��g�me�t expec#s tr� coll�c� from out�t�c�din� b�lar�ces. �ar�agem�nt e+�rites aff u��9lecti�i� amo�snt� thra�a�h a red��t�ora ta reve�u� �nd a cr�dit t� acc��rtts r�cesu�bl� based an it� ass��srrrer�t �f th� ou��tand€n� r�;c�ivables. �4t y��r end �a�aagernen� a�s�sses the accourats recei��bl� ba{anee ar�d writ�s �ff �ny ba6a��e� deem�d �� be ur�colle�tib�e b�s�d on �7istorical e���rier�� ared an e�alu�tion of#he t�utst�r�ding balan��s. �rc���rty�r�d E����men�s Prs�perty and equipm�nt h��� beer� r�ccsrd�d at th�; ��te �# a�quisit€on �t cost. �xpend6�ure� direct6� r�l��ed to the irxapr€�verr�ent of property �re �api��li�ed �t �o�t. The �arporatior� ��pitali��s �he c�st af �aj�r pr�p�rt� iinprov�rrt�t�ts ar�d furr�iture, fi�ur�s �r�d equipmer�� af th� ur�i� ct�st �f the item is gre�t�r �ha� $2,�t�0. ���tine t��int��ar��� �r�d repair c�st� �r� exp��sed as i�curred. As ass�t� are re�ired or d°o�pc��ed �f, fP�e asst��iat�d �a�t t�f ass�ts r�tired ar�d �he r�l�ted accum�l�ted depreciati�r� are rer�orred f�om t�e accc}ca�ts. 6 1° T' 1� � �I — tJ J T hl��'E�T��'i����t�L�T,�T'E ���'� Aaagta�t 31 a�007 N�t� 2—�tJ� ��i�f C)F ����41FI���1T AC��Il�l�lNC� ��LI�lES (�t�i�T'D.} Th�r���re r�o re�irem�nts during the ���rs�nd�d Aug��t 3�, 2007. �e�r�ci�tior► i� ccar�aputed �asi�g th� straight-9ir�e rr�ethod �v�r the �stim�t�d �s�fu[ i6ves �s fall��r�: �uildir�g 30 y��a� �urr�it�re, fixt�r�s a�d equipment 1� year� �ef�rr�d Fir�ar�cin Gca��s ���ts ����i���d wi�h the �ss��n�e c�f b�r�ds �re d�ferred �r�d �r�orti�ed �o i�t�re�t �xpens� �u�r the ��crr� �f th� br�nd. Re�er�c�e �e�cagnifiican �r�tai ar�d other cap�rating ir�ec�m� i� recorded c�n th� �ccrua( meth�d �� �cc�a�nting and r�cagr�ized a� ear�ed. Th� �carpc�ratiora r�por�s pr�;paid r��ta[ ir�ccam� �s r�;ver�u� v�her� the r�r�t�l inc�me is d�e �r��n th� tenar�t. S�ch �mma�n�s r��eiv�d bvt r��t yet ��rr�ed �s of y��r �nd �re repc�r�ed as d��Ferred ��v�r�ue. ��nt�{ incca�xt� rec�ived firvm �he c�peratior� c�f the C�rporat��� i� r��trict�d by th� #�rr�s af �h� Tr��t ir�d�r�t�ar� for ��C� p�arpc�s� �f satis�yi�tg th� �rna�nt� �w�d by th� �c�rp�ratian t� th� b��cihalders and for fhe paym��t �f aperatian exp�t�s�s ir�curr�d by th� �c�r�sorat6�n. Qther c�per�tir�g �r��e�r�ae incl�ad�s varira�� ch�rg�s#a ter��nt�, �u�h �s forf�itur�s, d�rn�ge�, ar�d oth��. �dver�ssir�t� Ca��� AI� �du�r�i�ing �s�� �r� ��per� d �s the� �r� i��r��r . lr�cotn� Taxes Th� Corpr�ration is �� i�str�r��ntaii�y csf the To�n o��est9ake ar�d, theref�re, it� i�cc�rr�e i� r�e�t s�b;ec� t� feder�l �nc.�rr�e ta�ati�n pur��ant to �ectic�n 115 �f th� Int�rr�a� Rev�r�ue �esd� ar�d Gh�pt�r 53 �f th�Te�as Higher Educati�r� .4ct. 7 `T 'T 1' I T� �1 T ������'��t�A�G�A������ ���� August 3t,�OQ7 t��t� 2— �t���ARY�F 59��IFiCAF�T����tJt�T'INC �t�L1�6E� {G�M111"'�.} Fir��r�ci�l �taterr�ertt P�e�e�t�tic�r� 1'h� �orp�r�tiar� pr��ent� �h�ir fin��ci�l �#�$��er�fs ir� �c�csrd�r�c� r�eith Sta�err�ent af Ffr��nci�l �ccor�r�ti�g ��arrdards �S�A�) �Ja. 117, Fr`r���aci�l ata���rrertt�o�l�c�t fvr-Pro���o�pa��fic�r��. C�s�d�r SF�� �lo. 11�, th� C�rpc��a�i�r� is r�qt�ireef �o r����t i�tf€are�ato�e� r���r�6r�g �heir financial �sitirar� �r�d �c��Vitie� ac�ordinc� ta thr�e cl�s�es �# n�t �s���s: �ar�r�s�r�cted, terr�porariEy restrict�d, ar�d per�at�enfl� r�stricted. lr� �dditior�, t�� Car�ratic�n is requireci ta pr���n� a �#��er�rent c�f cash flow�. �l�at� 3— R.�ST�(GTE� ���Ft ��� E�EIIEST��NTS ���fricted cash repres���s ar�o�r�ts pla o� dept�si� in �n acc�unt held by#he T`rust��, �'sct� ar�d re�tr�c�ed for th� pa�r���t� of �xp�r��es as r�q�€ir�d by the Trust Ir�der�t�re. A# �u�us� 31, 2007, revtract�d �ash and inv�str�ents ccr��i�t �f th� �c�llc��i�g ��nd� �rod acc��nts: �undlAcctgunt �escri�stivr� 2007 F�eve���fu�d $ �6,�76 �per�ting fur�d �9 lnterest��d A�ST',��� Prie�ci{��I 170,00� �ebt s�rvice r�s�r�� 1,13�,327 Rep�ir� r�p6ac�m�r��$u�d �5�,649 �ubQrdir��t�d oper�ting ��p��s� f�r�d 19 Issu�r�dr�inistratit�r► �r�d 33,°��4. �raject�apitaB ianpc�verraer�#fur�� 2,�69 ��rplus fund 181,7�9 �asi� additit�nal ��yments fur�d 8,�9� �c�ns�r�ctior� �. a�qui�itio�fund 33,215 l"a� � �n��r�rac� fiur�d 49,7�� 1r�s�rar�ce and c�r�d�rr�n�ti�rt 1 T��al � 2,396,642 8 � � � t �� - � � ��`T��T�FIh1�N�(AL,�°T�7E ��'TS Acega�st 31, �0�'T �dt�t� 3— F�E�1"�9�TE� ���Fi �ePdC� EC�1�E�T�E��T� {C�iVT'D� T�� fiall��i�g is a br�ef de�criptio� of th� furad� ��d ar�a;oun�s m�king up fhe r�sfrict�d cash ar�d in�estrr�ents ba(ance at ye�r end, as d�fir�ed by th� Tr�st Indentur�. Rever�u� Fun� -- The reve�a�e fu�d w�as establish�d far rnonthiy de�osit� f�orn th� depcasstc�ry �cc�unt �h�t h+�lds g�r��ral rev��au�� of the �orporatiar�. �4i1 ma�[�� �re depc�sited �n �h� re���ue fund ar�c� th�r� prop�r�y disfributed �� fih� c�th�r funds, �� req�ir�d b� �h� 1'rust Indentur�. Arr���nts i�s this f�r�d a�y��r�r�d rep��se�t �m��nt�that hav� r��t beer� di�tribufied tt� t��e�th�r f�nds due tc� t�rr�ir�g �f th� in�erfund �rar�sf�r�. �p�ra��arg Furrd—Arr��ur�ts in fihe €��era�ir�� fu�c� are tc� be disbursed e��h moc�#h to ���! fc�r th� purp��e mf paying rnan�hly oper�#ang ar�d rnainfienance exp�nses ��t�ori��d und�r th�Ar�€��al �c�dget. f3c�nd ��n�— �'h� Tr�astee rr�ak�� manthly depcssits in the bond fu�ad pa�rsu�nt t� th� l'r�st (nde�tur�. Arr��ur��s Qn �he b�r�d f�r�d shail be �ased sr�l�iy to fur�e# th� payme�t of prir�cipal �r�� sn�er��t ae� th� B�nds, �ar the r�d�t�aptior� of the �e�nd� �t �r pri�r to mat�ri�, ��d �a pur�h��� ba��ds s�n the oper� �a�ket. I� the ev�r�� c�f def�ult, �rrar��rtts i� this f�nd m�y p�y fih� �ees �r�d exp����s Qf th� T'rt�ste� pri�r t� m�kr�g ��y payrn�r�ts to fh� bondhold�rs. l'h9s fur�d ��s f�ro �ccaaunt�, th� in��r��t�nd prin�i�al ac�o�r�ts. ��b� S�nr��e �es�rv� �crra�- 1"he amou�ats an depos�t in thos �cco�nt ar� tc� b� ���d fc�r th� purpose �f p�yir�g princi��l and i�t�r��f c�rt th� �ar�d� as the� be�or�� d�� ir� �he �v��t th�r� sht��ic� be €�su�ci�nt f�r�d� in the �ond F��d. ��pair- arrc� f��placem�nf �unc� —Am��snts in the �ep�ir �nd replacement fund rn��t be ��� ���d to pay �he maint�nart�� �r�d repair cost� rela�ed t� th� Proper�, �h6ch �he ��rpor��i�n is obligat�d fo pay pursu�rat�o th� �"ru�t le�denture ��d �b� transf�rred to the b4�d f�and to p�y prir�cip�l of c�r i�t�re�t �� tt�e �or�ds �� ti�� extc;r�t#her� �r� i�r�uffcier�� r�c�r�ge� in th� bo�d ��nd. �asic�Admitiarraf F'�ymer�ts Fun�—Arr�c�unts are dep��Q�ed �r� th� bas6c addition�l p��t�er��� f�r�d on a mo�thly bas�s �r�d ar� �r�ter�d�d t� pay th� f�es of �he 1`r�st�e and �a���g �gency. � T `f T 1 P T� — J �`T ��'TE�1'��6NA�C6 L Sl'�T� E T� Ata���t 31 g 2dQT �€�$e 3— �EST�ICT�� GA�H Ahl[� E��i��T E�1`fS ���NT"f�� �r�bore�inatecf �p�ra�in� �x�er�s� Fu�d—Arnount� 6n th� subordir�ated �p�r�ting ��pens� fund ar� to b� di�bursed t� ��13 f�r �r�y �p�rating �r►d rn�inter��nce ex�ense it�rn i�ciuded i� th� An�u�l �udg�t r�ot oth�rwi�� p�y�bl� f� the op�r�tir��fca�d. I�scr�r,4cft�i►al��r�tiara Fs�ra�'— �"h� amo�n�s in t�� �ccc�un# ar� tc� b� �s�d �� pay the �nr�u�l Less� Fe� oro �ept�r�ber 1 c�f �ac6� y��r until the �ands h�ve �s� p�id in ftafl. Surptus �urcc�— The `Trust�� �halE dep�sit �r�� rerr��irsirag ar�atant i� the re���ru� f�an� into th� ��arpl�as f�r�c�. �rna��r�ts an de��sit in the surplus ftat�d wi9! b� r�l�ased to the Uni�ersi�y if ce�t�in release t�sts are �atisfi�d. �f fhe release t�sts are ncat satisfied, the Tr�stee vv�li r�tain th� r�or�i�s an d�pc�si� g� the s�rpius�Fc�r�d. �ax �r�d lrasurance �und — Arn�unt� i� the t�x ar�d in�urae�c� f��d ar� #� b�: disb�r��ed f€�r the pa�+men� r�� �he c��ts t�f rr�aint�ini�g th� ir���r�r�c� or� th� Pr�jec#, p�y �d �aEorer� prop�rin� ��x��, if ar�y, ar payrv►�n�s in I�e� c�f t��es, if an�. trr��arar�ce �rad Corte�errrrz�#fcara Fcerad— This ��ca��t is to be ��ed to depeas€� n�� sn��r�n�e p�°r��ed� �r�d �et�r�derr�ra��ic�r� prac��d�, if�r�y. Co�t ��' fs�u��rc� Farrad — �r�our�ts d�p�sit�d '€n the �os� af issu�nc� fund �re i�t����d tc� pay the c�a�ts c�f issuing th� Bc�r�ds. �o�rstrcac�ian �r�d�ecpeets��ro� Fur�c�— �rn�i�nts d�posi��d in #h� constr���ic�� �nd �cquisition f��� �r�; int��d�d t� pay #h� cc��t� �f c�r�struc�ing �nd equ'sppB�g the Prraj�ct. �r�c►ject �apita� ftr��a'�v�rrr�r�� Furrd �- Am��ant� d�pe�s4t�d ir� �he pr�jec� �api��l ir�prc�v�m��t fur�d �r� ir�t��ded �a f�r�c� �r�y �pital iariprc�vernent ir�cluded `r� t�e Ct��'p�ratis��'s annu�l budg�t. �� T 'T T � T� — �1 T �`i����Fi A(�Ci �TATE����� �t�g�ssf 3�,2047 IVc�t� �—��I�C?� E���A�LE °�he ond� ar� tax-��ernpt gov�rr�m�n��i obligation� aar�d�r th� Int�r��l R�v�r��e Gode. Th� b�r�d� pay�bl� ��pre��nts �rnc�ur�ts d�e fim fih� bc�ndhold�r�, via th� Tru�te�, and p�yabl� u�d��� #h� terr�s of the �ru�t t�de�tur� d�t�d ��agusf 1, 20��. Th� �or�d� �r� payab9� �o6�ly �rorn t�e reveretae� ger�er�t�d �� the Pro�erty �r�d �r� seccared by th� r�v�r�t�e� pledg�d and �ssigr��d �nd�r the t�rms af the T�a�� �rodent�r�. �he bor�ds p��rak�le �s af A�gus� 3�, 2�47 �re a� f�alla�s: Gro�� b�or�d����abl� � 1 A�,28�,�C�d� L��s di�cr�ur�ts 439,7g7 T'c�tal � 13.�4�2�3 F�t�r� p�ymer���far bfl�d �rsr�c6��1 ar� a�follo�s: iiJV'4.Y . W I�V9�Vo 20fl9 20a,(}00 2t11� �1�,Qt�O 2411 220,(}Otl 2fl�2 23�,oao Th�rea�er 13,255,000 � ��.2��.aoo Th� b�rrds be�r inter��t a� th� rat�s per �nr�ur�, �s d�scribed b�lo�, c�r�pu#ed �n th� bas�s �� a 36�-day y�ar ��nsi��i�g �f t��E�� 3�-d�y ►nc�r�th�, pa��bl� �er��i-�rr���lly �� �ept�rnb�r 1 �nd �rch � �f �a�h ye�r. �r�tere�t r�t�s f�r th� E�a�r�d��re a�f�llc���: �a�u�ity Prir�ci��l i�t�rest �'e�r �mt�ut�t R�t� 201� 1,53�,�00 5.�°l0 202� 3,4��5,(3Q� 6.�°l0 2C134 9,525,Q0{} 6.5% 11 �r r� � i �t - J T' ����s T'��,���C�����AT����T� �a�gca�$39,2007 ��t� �— �c���s ������� {����°�} In��r�st exp�rts� 'sr�curred ar� #h� �t�nds for�he y���s e�sd�d August 31, 2007 w�� ��foCla�s: lnt�re���r� band� � 915,77� Arr�ac�iz�fic�r� of financirtg c�sts 20,782 Amor�i�tior� o�bc�nd discr��n� 23.9�� Tatal � 9�0 54� Th� �r�ds ha�� r�ume�c�us c�v�n��ts �hick� r��a�t be cornpli�d ra�ith annu�f(y �y �he C�rpo��tica�. �or th� �ear �nd�d �4�g�st 31, �0�97 all of the co�eraar��� have b��n ��ti�f�ctc�ri�� rnet. lV�TE �—TE�P�3 F�tL�{���T'Fi3�TEC3 lV�T �E�ICIT 1"er�pe�rarily restri�ted r�et deficit represe�ts the c�rr�ul�tiue exce�s exp�nses c�v�r r�ver���s_ At Auc��st 31, 2�Q7 the ���icit wa� $1,3$9,613. 1'he d�ficit is r�s�ric$ed f�r th� ap�r�tio�s of th� �r�ject a�d the r�paymer�# of �h� bvs�d prir��i�a! �nd i��er��t. �IOTE 6—CC��CE�1T T3�f� `Fh� Garp�r�tic�r� ouv�s r�ne pro�e� vvha�h �� ���ated �r� t�e ��rnpu� e�f h�a4J e� �i�hi�a F�IIs, T"���s. �'herefare, the �orpc�rafic�n is d�p�ndent �po� ���# for r�v�n u�. �OTE 7—��� IT ER�T/��M1�TI�C�ENCY F'ur�ua�at to �h� Agr�er�er�t, fihe C�rp�r�fii�r� rt��y ��e �!� an arr�ou�t anr���ily for th� gro�r�d I�ase. a payrn�nt� for th� c�ro�rtd le�s� t�ave b�er� rrtad� sir�� irtc�p��or�. Add�fiiana![y, na arnc��nts h�v� b��ra a�crued i� the �ccorra��n�ing st��erv��r�t� a�f fi��ncial positic�r� s�nc� �h� payrnen#s ar� co�ti�gen$ �f th� Gc�rpflr��i�n meeting it� b��d cc���nar�ts �nd havir�g s�rplaa�funds av�ilabl�. 1"he r���ir��m �m��ant of fu�ads �vailable to pay t�� grau�d !ea is �1��,7�9 ich is Yhe �maurr� Er� the ��rpl�� Fc�e�d �t A�gu�t 31, 2007. 12 TEX,4S�`fUDENT HOUSIF�{;CORPC�F�4TIt�h!- P+�Sl1�ROJECI" SCH��ULE�F F2EVEtVU�AVAILA��E FC�R FIXE[}CF�AR�ES A�� FiXE��HAi�GE�C�VEta,4GE T6C3 fo�th�year end�d�ugus#39,2t107,writh camparative t�tals�or 2006 �OQ7 2006 R�venu�avai6�bl�far�xed�har�es Revenue: �enfal incom� � 1,�09,��� $ 'E,57�,707 Ofh�r op�ratir�g incorrre t7,1 �6,935 lnter�st incoms 53,37� 56,033 1`otal revenue 1,719,927 �,6�1,675 �xp�t�s��: Persararr�l�xpense 1 ,47A� 1�8,035 Insur�nr� 53,539 53,539 1"ele�h�n��emmmuraication setvic�s 49,53� �4�,�9J Utili#ies i�3,53� ���,5�1 Repa6r5, main�enance and su�sp9ies 6�,21� 5�,287 C�ther crperating ex��nses 63,1�� 8Z,201 issu�r administratian fee ��,00� 25,C1C�0 C�ft�er fees �,61� �,934 T'ataE expenses 6�b,7�� 659,t}76 P�et rertenue 1,R09, 3 �f,022,539 Rcijustr�a�nts�n net r�venue Additions: ls�uer admiroistration fee 2�a400 25,�D4 S€�ba�di�ate expenses �2900�6 338,956 �ubtractir�ns: Annu�l r�;serve and r��i�c�rnent fcand additions �fi9$922) {6f7,�64} Trust�e�ee ��,250� 5,2� � T�t�l adjusfinent��o n�t�svenu� 27�,�7� 298,��2 Tt�t�l rev�nue available ffcor fix�d c�arges $ 1,���,�97 � t,324,7�1 Fixed charge� F�axirnum annuai tfebfi s�rviee{��Q6-2407 p�rym�nt�� � 1,06�,763 $ 1,t�3�,775 Fixe�charges coverag�ratio t.�0 1.27 Th����c��par�yirag r��t��ar��� ��t��r�i�ar�����t�s�f�€��ci�b s�ater��;r�#s. '€3 7° T T 1 � � — J � SCHE�l1�E fi —CE�dTFI��TI�E� C}F�"F�E �l�E� G�{A���� �0�� �E Tl� VV� �re pro�id6r�g �hos t�tt�r, �� r�q�ir��d by t�� T'ru�t ind�nt�r� by �nd b�t�+r��r� th� �rarpc�r�ti�r� ��d tfi�� �'ru�t�e, da�ed �ugt��t 1, 204�, r�f�ti�� tt� th� �onds t� ��r�ififiy th� Fix�d �h��g�s ��ver�ge R�#6� �� of�ug�ast�1, 2�07. T'he Fixed �h�rg�� Cc�v�r��e ��tio i� d�fr��d i� the I�d�nt�r� �� the ratio c�f �v�nu� �v�il�bte f�r Fix�d �harg�� to Fixed �harg��, F�rfher, fix�d charg�� are defi�i�d ;r� the indentc�r� �� the s�arr� 4� al6 ���h autflo�nrs r�iat�d t� th� F'resje�� th�t fhe Iss�er c���o� �void �ithout vi�9atEr�g lonc�-term cantractu�9 or 8eg�l eablig��mc�ns {tha�e ok�lg�a�ic�r�� ic� ex��r�d for � p�ricsd gre�#er th�r� an� year�, i��&�ding, be�t not lir�dt�d to, {i} i���resfi �n �nd�btedr���s s�ther t�ar� �ho�fi-t�rrn ir�s��b��dr�ess, �r�d {ii) s�hede�led paym�r�fs �f prirrcip�l �n �t�d�bt�dne�� oth�r �h�� sh�rt-terrvt indebt�dr��ss, pra�vided th� �xirna�r� �►nn�sal D�bt �ervice sha�l b� cas�d far��erp��es s�f cart�p�ting {i��nd 4ii� abc�ve. The audit�d fir�a�eci�l st��em�n�s ie�dic��e r�����a� ��ailabfe for �ixed �harg�s f�r th� iwelve r��nfh p�riad ended ��gust 3�, ��0� to be �1,3�8,�97. Th� ra�axirr�um �r�nual ��b� s�rvic� f�r the b�nds is ��,4�4,7�3. �ased mr� #he �bc�v� ��ven��� ��d �x�d �harge�, w� ��ic�la�e fha� the Fixed �h�rges �ov�r�ge R�ati� to b� �.30, which is b�� c�a� ��I�e rr�csr�th� of�per�t�on� th�r� ��ded, vvhich is on �arr���i�n�� with �he 1"r�a�t Ir�d�r�tur�. Purs��nt te th� Tru�t I�der�ta�r�, th� Fixed �h�rges �caver�ge Rati� must b� at le��t �.20. �4