*- Indicates possible action item for the Board.

1- Indicates a committee action approved by the Executive Committee.

UWF Foundation, Inc. Board of Directors Meeting

UWF Conference Center, Pensacola Campus 3:30 p.m. – 5:00 p.m., September 29, 2016

Agenda

Opening Remark/ Introduction Gordon Sprague, BOD Chair

Call to Order / Agenda Roll Call / Quorum / Approval of Minutes* Richard Peterson, BOD Secretary

Information Reports

University Update Judy Bense, UWF President

Advancement Report Brendan Kelly, UWFF President/VP for Advancement

Alumni Brett Barrow, Alumni Assoc. President

CFO’s Report Dan Lucas, Chief Financial Officer

Committee/Officers Reports Executive Committee Gordon Sprague, BOD Chair Actions of the Executive Committee*

Investment Committee Gail Dorsey, BOD Vice Chair

Investment Pool Performance Report Actions of the Investment Committee

Changes to Investment Policy*

Audit Budget Committee David Hightower, BOD Treasurer Budget to Actual Reports – Housing & Foundation Unspent Budget Report Actions of the Audit Budget Committee Audited Financial Statements* Bond Re-Funding Proposal* Grant Committee Update Meeting – Friday, December 2, 2016 Nominating Committee Update John L. Hutchinson, BOD Immediate Past Chair Meeting – Thursday, November 10, 2016 Other Business

50th Anniversary Update Brendan Kelly, UWFF President/VP for Advancement Announcements Adjourn

Opening Remark / Introduction

UWF Foundation, Inc.

Board of Directors Meeting

UWF Conference Center

Pensacola, FL

Minutes of June 14, 2016

Present

Members: BOD Chair John Hutchinson, Dr. Judy Bense, Ms. Linda Brotherton, Mr. Brett Barrow, Mr. Dave Cleveland,

Mrs. Gail Dorsey, Mr. Doug Dobson, Richard Fountain, Mr. David Hightower, C. Ray Jones, Mr. James Hosman (by

telephone), Dr. John Platt, Mr. Gordon Sprague, and Mr. Brian Wyer

Staff: Dr. Brendan Kelly and Ms. Patricia Barlow

Guests: Mrs. Martha Lee Blodgett, Mrs. Missy Grace, Ms. Jan Butts, and Dr. Ruth Davison

Call to Order: Mr. Hutchinson called the meeting to order at 3:30 p.m. and welcomed everyone.

Roll Call and Approval of the Minutes: Staff verified that a quorum had been established. The Board reviewed the

minutes of the Board of Directors meeting held on March 23, 2016. Mr. Wyer made a motion to approve the minutes as

submitted. Mr. Dobson seconded the motion, with all voting to approve the motion.

Information Reports:

University Update: Dr. Bense presented the update on the University. She reported that summer enrollment was up

6.4%. Fall enrollment was also up and was anticipated to be between 2-3% higher than Fall 2015 enrollment. A 2016-

2017 work plan detailing UWF’s goals related to enrollment, graduation rate, and other performance indicators has been

developed and submitted to the Board of Trustees for review and approval. The BOT-approved work plan will be

presented to the Florida Board of Governors at its next meeting June 21-23, 2016, in Orlando. Dr. Bense also reported

that an agreement had been signed between FSU and UWF that will allow for the completion of the athletic building in

University Park. Work will begin in late 2016 or early 2017. The building will include the football-specific athletic

facilities on the first floor and two (2) large classrooms and the offices of the College of Health and FSU College of

Medicine Pensacola Regional Medical School Campus on the 2nd floor. Portable trailers have also been purchased and

will house football meeting rooms and coaches offices. A facilities consultant has been secured to assess processes

related to university facilities and administration. The consultant will make recommendations reflective of contemporary

best practices that are intended to increase efficiency.

Advancement Report: Dr. Kelly presented the Advancement Report. He shared information about several gifts

including a $125,000 commitment to the lighting and projection exhibit at the T. T. Wentworth Museum; a

sponsorship gift of $28,500 from Jani-King towards Athletics; a $25,000 gift to establish the Cybersecurity

Scholarship Endowment from the Gulf Coast Chapter of the National Defense Industrial Association; and a $3 million

charitable gift annuity with a future gift value of $1.26 million for the Stanley Schmerken Scholars, a need based

scholarship program created by Stanley Schmerken. Dr. Kelly announced that as of June 13, 2016, $40,572,549 had

been received in gifts, pledges, and planned gifts toward the 50th Anniversary Campaign.

Alumni Report: Mr. Barrow presented the Alumni Association report. A major focus of the Alumni Board throughout

the academic year has been restructuring the board and committees for effective governance. Mr. Barrow reported that

great progress has been made in this regard. Additionally, alumni events held throughout the year have seen increased

participation and engagement from alumni. Finally, he shared that the Alumni Board and staff are monitoring social

media statistics and are working to increase alumni presence on Facebook, Twitter, and LinkedIn.

CFO’s Report: Dr. Kelly presented the CFO’s report on behalf of Dan Lucas. He shared that the implementation of the

centralized scholarship platform, Academic Works, continues to proceed very smoothly. Audit season has begun, with

the auditors scheduled to be onsite in August. Finally, Dr. Kelly reported that the Form 990 and 990T had been completed

and submitted.

Reports of Board Officers & Committees:

UWF Foundation, Inc. Page 2

Board of Directors Meeting

Minutes of June 14, 2016

Executive Committee: Mr. Hutchinson shared that the Executive Committee had taken action on two items at its last

meeting and the full Board needed to validate those actions. First, he shared that the Board for the Pensacola Museum

of Art (PMA) had voted to move the PMA under the governance of the University of West Florida. As part of the plan

for donation, the PMA is gifting its historic building, art collection, and its cash, securities, and assets to the UWF

Foundation. According to the Foundation’s gift acceptance policy, the Foundation Board and the UWF Board of

Trustees must approve the real estate gift since the value of the real estate exceeds $1,000,000. Mr. Hutchinson made a

motion that the full Board approve the recommendation of the Executive Committee; Mr. Jones seconded the motion;

the motion carried with all voting in favor of the motion. The Board of Trustees would vote on the PMA gift

acceptance at its meeting to be held on June 15, 2016.

The Chair reported that property adjacent to the UWF Arcadia Mill site in Milton had recently been donated to UWF.

In most instances when real estate gifts are offered, an environmental survey is ordered. However, since the property

has an older survey that is clean and is directly adjacent to property already owned by UWF that also has a clean

environmental report, legal counsel for UWF and for the Foundation agree that any risk to UWF is very low. Mr.

Hutchinson stated that the Executive Committee approved a waiver of the environmental survey and made a motion

that the Board approve the recommendation of the Executive Committee; Mr. Jones seconded the motion; the motion

carried with all voting in favor of the motion to waive the environmental survey.

Finally, Mr. Hutchinson reported that as part of its annual due diligence, the Executive Committee reviewed the

compensation of key employees, Jan Butts and Dan Lucas, and determined that the compensation is well within the

ranges for similar positions within the State University System (SUS) and at UWF.

Investment Committee: Mr. Sprague presented the Investment Committee report. As of March 31, 2016, the investment

value (minus reserves) was $75,566,062. Returns for the first quarter were -0.28% compared to the balanced index of

0.40%. He shared that managers from Harbert Private Equity, Portfolio Advisors, and Stepstone Private Equity had

presented to the committee at its last meeting to discuss their strategies and recent performance. Mr. Sprague reported

that the Investment Committee had voted to invest up to $1,000,000 in a new Portfolio Advisors fund targeting

mezzanine debt.

Mr. Sprague reported that a subcommittee of the Investment Committee had reviewed alternative investments as

fulfillment of oversight responsibilities for this asset class. No concerns had been identified. Mr. Sprague also shared

that upon review of the National Association of College and University Business Officers (NACUBO) survey results,

the Investment Committee concluded the UWF Foundation is in line with its peer institutions in terms of asset

allocation, spending rate, and investment pool performance.

Audit/Budget Committee: Mr. Hightower presented the Audit Budget Committee report. He reported that the

committee had reviewed the Housing and Foundation’s operating budgets for the quarter ending March 31, 2016. No

significant variances were noted in either budget. He reported that the committee had reviewed the Foundation and

Housing budgets for FY 2016-2017. He gave an overview of the budgets, particularly as they differed from the previous

year. Dr. Davison shared information about the results of the air quality report completed on the Southside Residences

in Spring 2016. The report indicated some water intrusion issues that that resulted in some mold allergen concerns. As a

result of concerns, these residences will be offline in 2016-2017. A contractor has been secured to assess the situation

and present options to address the renovations/repairs. Dr. Davison confirmed that the 2016-2017 Housing budget

reflects the impact of the Southside Residence Halls being offline.

Following the review of the budgets and Dr. Davison’s report, Mr. Dobson made a motion to approve the Housing

budget; Mr. Barrow seconded the motion. The motion carried with all voting in favor of Housing budget approval. Mr.

Wyer made a motion to approve the Foundation’s 2016-2017 budget; Ms. Brotherton seconded the motion, with all

voting in favor of approval of the Foundation’s budget.

UWF Foundation, Inc. Page 3

Board of Directors Meeting

Minutes of June 14, 2016

Nominating Committee: Mr. Jones presented the incoming Board members as follows: Rick Byars, John Gormley,

Todd Zaborski, and Bill Rone. He also reported that David Hightower and Ray Flores had agreed to be appointed to new

terms. The new SGA representative is Kishane Patel. Officers are Chair, Gordon Sprague; Vice Chair, Gail Dorsey;

Treasurer, David Hightower; Secretary, Richard Peterson; and Immediate Past Chair, John Hutchinson. Mr. Jones made

a motion to approve the new Board members and officers; Mr. Sprague seconded the motion; the motion passed with all

voting in favor.

Mr. Jones briefly presented the results of the board engagement survey. He stated that there had been a good response

to the survey and hoped that the survey had been easier for board members to complete. He reported that the results

would be reviewed by the Nominating Committee with recommendations to be presented to the Board following the

committee’s review.

Other Business: On behalf of Mr. Jason Crawford, the Foundation’s representative to the Presidential Search

Committee, Mr. Hutchinson presented the update on the UWF Presidential Search. He shared that a 20-member Search

Committee appointed by the Chair of the Board of Trustees has been meeting regularly since early spring. A search firm,

Greenwood/Asher, has been secured; the position description and announcement have been finalized and disseminated;

and feedback sessions with members of the UWF and local communities have been held. Additional opportunities for

feedback and participation from the community will be available when candidates are onsite for interviews in late

August. All board members were encouraged to take advantage of open forum opportunities as a means of participating

in the selection of the next UWF president.

Resolutions, Recognition, and Expressions of Thanks

Mr. Hutchinson recognized the outgoing Board members whose terms had ended and presented each one a gift of

appreciation from the Foundation for their service. Outgoing board members are Dan McMillan, Richard Fountain,

Melinda Webb-Schwartz, Brian Wyer, Jacob Hebert, and C. Ray Jones. In recognition of C. Ray Jones’ departure, as

former Chair of the Board, Mr. Hutchinson read the following proclamation and presented a copy to Mr. Jones:

WHEREAS, Mr. C. Ray Jones, as the Immediate Past Chair, Chair, and a Director, has served as a member of the

University of West Florida Foundation Inc., Board of Directors and dutifully on the Executive Committee, Nominating

Committee, and Investment Committee,

WHEREAS, Mr. Jones has served the UWF Foundation, the University of West Florida, and community

organizations by providing dedication, commitment, and expert leadership, and

WHEREAS, Mr. Jones will relinquish his title of Immediate Past Chair as of June 30th of this year, and

WHEREAS, Mr. Jones has shown himself to be a constant and positive force in support of the Foundation and the

mission of the University of West Florida,

NOW, THEREFORE, BE IT RESOLVED, that the University of West Florida Foundation Board of Directors at its

regular meeting on the 14th day of June, 2016 does hereby recognize and commend Mr. Jones for his outstanding

contributions to the Foundation and the University, and

BE IT FURTHER RESOLVED, that this resolution be included in the minutes of this meeting and an original be

presented to Mr. Jones as a token of the Board’s appreciation and sincere thanks.

Adjournment: Mr. Hutchinson thanked the Board members and staff for their participation in the meeting. There being

no further business, the meeting was adjourned at 5:15 p.m.

Minutes recorded by Patricia Barlow on June 14, 2016

Information Reports

Committee / Officers Reports

Executive Committee Reports

UWF FOUNDATION, INC.

EXECUTIVE COMMITTEE MEETING

Florida Public Archaeology Network Classroom

August 31, 2016, Minutes

Present

Members: Mr. Gordon Sprague, Dr. Judy Bense, Mr. Dave Cleveland, Mr. John Hutchinson, Mrs. Gail

Dorsey, and Mr. David Hightower

Staff: Dr. Brendan Kelly, Mr. Dan Lucas, and Ms. Patricia Barlow

Guests: Mrs. Pat Lott and Ms. Jan Butts

Call to Order: Mr. Sprague called the meeting to order at 3:35 p.m. Staff confirmed a quorum.

Minutes: The committee members reviewed the minutes of the May 12, 2016, meeting. Mr.

Hutchinson made a motion to accept the minutes as presented. Mr. Hightower seconded the motion,

and the motion carried with all voting in favor.

University Update: President Bense presented the University update, beginning with an overview of

the first two weeks of classes. She stated that while other universities are seeing declining enrollment,

UWF has record enrollment in Fall 2016. The staff have been working particularly hard on improving

retention of sophomores, a key metric, and it appears that the work has been paying off. A preliminary

review of the upcoming performance-based metrics scores indicate strong results. While it is not certain

that UWF will earn additional funds, it is unlikely that UWF will lose any part of its base with the scores

that are projected. UWF will break ground soon on a new building that will house UWF Football as well

as the College of Health administration offices and the FSU Medical School Pensacola Campus.

Advancement Report: Dr. Kelly shared development highlights including the transfer of assets from

the Pensacola Museum of Art (approximately $4.5 million); Stanley Schmerken planned gift

(approximately $1.2 million), and two (2) $100,000 gifts to UWF Football. A major gift announcement

from Pen Air would be made in early September. Additionally, the Ribbon Cutting for the Commanding

Officer’s Quarters exhibit for the UWF Historic Trust will take place September 9, 2016. He reported

that Dr. Meredith Brunen had been hired as the Associate Vice President for Advancement. She will

start at the first of November. The 50th Anniversary Campaign is entering the public phase, with a Gala

Event scheduled for November 16, 2016. Additional events will occur throughout the 50th Anniversary

Celebration period which ends on December 31, 2017.

CFO’s Report: Mr. Lucas presented the CFO’s Report. He reported that the Foundation received an

unqualified audit for FY 2016. The university is continuing the implementation of Academic Works

software to help departments, financial aid, admissions, and the Foundation to manage available

scholarships. The software was successfully used to award scholarships in the College of Education and

Professional Studies (CEPS) and will be used next with the Hal Marcus College of Science and

Engineering (HMCSE). Online Express is also implemented to make online processing of gifts faster

and easier for donors and staff. Additionally, Online Express will make it possible for staff to collect

donations in the field at events using iPads.

Executive Committee Meeting Minutes of August 31, 2016

UWF Foundation, Inc. Page 2 of 2

Investment Committee: Mrs. Dorsey provided a report on the second quarter 2016 investment pool

performance. As of June 30, 2016, the investment value was $77,206,315. Returns for the fiscal year to

date are -3.06%, compared to the balanced index of -2.10%. The returns for the 2nd quarter were 2.23%

compared to the balanced index of 2.08%. All categories are in line with policy guidelines for allocations.

The Investment Committee voted to begin to invest in international small caps, specifically the T. Rowe

Price International Discovery Fund. This decision required a change to the Investment Policy by adding

the International Small Cap as an asset class. The minimum investment will be 2.5% and the maximum

will be 7.5%; the target will be 5.00%. Mrs. Dorsey also reported that the Investment Committee agreed

to liquidate its participation in Specialty Strategies.

Audit Budget Committee: Mr. Hightower presented the Audit Budget Committee report, noting that

the auditors from Saltmarsh, Cleaveland & Gund attended the meeting for the closing audit conference.

The Audit Budget Committee recommended that the financial statements be accepted pending the receipt

of financial information related to an alternative investment. The Executive Committee agreed that the

audited financial statements be accepted and presented to the Board of Directors on September 29, 2016.

Mr. Hightower reported that the committee had reviewed the Foundation’s operating budget for the

quarter ending June 30, 2016. No significant variances were noted. Housing also finished strong for FYE

2016 with a surplus of $1,347,478 for the year. The housing budget for FYE 2017 is projected based on

occupancy of 99%, with current Fall 2016 occupancy at 99%+. Housing reported to the committee the

capital expenditures that were completed for the year. Notable was a major capital expenditure necessary

to fix structural deficiencies on some walkways in Village East. This action was required this past

summer because of safety concerns.

At its meeting, the Audit Budget Committee considered a proposal to re-fund current housing bonds for

a gross savings of approximately $4 million. The re-funding would also have a positive impact on the

debt service coverage ratio. The Audit Budget Committee was recommending to the Executive

Committee that the proposal be forwarded to the Full Board for review. The proposal has been reviewed

and approved by the Board of Trustees Finance and Facilities Committee and has been approved as to

structure by the Florida Board of Governors staff and the Florida Division of Bond Finance staff. Mr.

Hightower made a motion to present the bond refunding proposal to the full Board; Mr. Hutchinson

seconded the motion; all voted in favor of the motion.

There being no further business, the meeting was adjourned at 4:25 p.m. Minutes recorded by Patricia Barlow on August 31, 2016.

Investment Committee

Reports

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University of West Florida Foundation Second Quarter 2016

1

THIS REPORT IS BASED ON TRANSACTION RECORDS, PORTFOLIO VALUATIONS, AND PERFORMANCE SUPPLIED BY THE CLIENT, THE CUSTODIAN, THE INVESTMENT MANAGER, AND INVESTMENT DATABASES INCLUDING BLOOMBERG AND

MORNINGSTAR. DUE TO THE TIMELINESS OF THIS REPORT PERFORMANCE INFORMATION MAY BE PRELIMINARY AND THEREFORE SUBJECT TO AUDIT. THIS REPORT IS COMPLETE

AND ACCURATE TO THE BEST OF OUR KNOWLEDGE.

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FORM ADV, PART II). IF YOU WOULD LIKE A COPY, PLEASE CONTACT YOUR RAYMOND JAMES REPRESENTATIVE.

2

Q2 2016 Market Commentary  

After trending positive for most of the quarter, major global markets fell sharply after the UK’s surprise Brexit vote then snapped back strongly after the initial reaction

A fairly benign quarter quickly became very volatile when the UK decided to leave the European Union (EU) in a referendum vote on June 23. After a steep two day decline, most risk assets quickly rebounded and recovered most, if not all, of their losses

As a result of Brexit related market volatility and renewed dollar strength, the probability of additional Fed rate increases decreased significantly with no more rate hikes expected during 2016. Markets believe there is now a greater probability that policy makers will cut rates in upcoming meetings than raise them

The S&P 500 ended the quarter on a positive note, staging a strong rebound after the Brexit vote and ending the quarter with a gain of +2.5%. The S&P 500 is now up +3.8% year-to-date

o Energy was the strongest sector in the S&P, ending the quarter up +11.6% o As investors searched for yield, the Telecomm and Utilities sectors continued their rally and were

up +7.1% and 6.8% respectively. They are both up more than +23% year-to-date MLPs & REIT indexes were up +19.7% and +7.0% respectively in Q2

o Technology shares sold off during the quarter, with that sector down -2.8% in Q2 Fixed income returns were strong again in Q2 with the Barclays Aggregate Bond Index ending the

quarter up +2.2%. Year-to-date the index is now up +5.3% o The 10-year treasury yield fell sharply again during the second quarter, ending at 1.49%, down

from 1.78% at the end of Q1 o Globally, more than $10 trillion of debt is trading with negative yields

While economic indicators were mixed, the U.S. economy continued to plug along; o U.S. GDP for Q1 came in at +1.1%. Consensus expectations for the full year 2016 remain

centered around the 2 - 3% level o The U.S. manufacturing sector expanded in June at the fastest rate in over a year o The University of Michigan Consumer Sentiment Index rose in June to 93.5 – up slightly from

March’s reading of 91.0 Expectations for calendar year 2016 S&P 500 earnings growth declined from +1.8% at the start of the

quarter to +0.6% now. Earnings growth, however, is expected to accelerate in the second half of 2016 o Despite falling slightly, profit margins still remain near a cyclical peak o The current 12-month forward P/E ratio is 16.4x (vs. a 10-year average of 14.3x)

Developed International equity markets were volatile while Emerging Markets showed increased stability in the face of market turmoil

Developed international equities, as measured by the MSCI EAFE Index, ended the quarter down -1.5% o Performance across regions was mixed with most European countries down while Asian markets

were flat to slightly positive o The Pound Sterling was particularly weak after the Brexit vote, falling to $1.31 vs. the U.S.

Dollar, a 31 year low for the British currency o European Financials were hardest hit in Q2 with many names in the sector falling significantly

With the exception of Emerging Europe, most countries in the MSCI Emerging Markets Index were up during the quarter, with the index ending with a +0.7% gain

o The Czech Republic, Greece, Hungary, and Poland were all down during the quarter o Most Latin American countries, led by Peru (+18.2%) and Brazil (+13.9%) were up during Q2 o Russia (+4.1%) and India (+3.7%) were up modestly, while China (+0.1%) was flat

The U.S. Dollar was positive versus a basket of trade weighted currencies during the quarter mostly due to Pound and Euro weakness following the Brexit vote

Major risks center on Brexit / central bank policy / geopolitics / terrorism

Unforeseen fallout from the Brexit vote Geopolitical uncertainty / Terrorism Weakness in China / commodities sector Increasing uncertainty from the rapidly approaching U.S. Presidential election

Footnotes: Returns are Index level, computed from Morningstar Direct and include the S&P 500, Barclays Capital Aggregate Bond Indexes, Barclays Capital High Yield Index, MSCI EAFE Index(net), MSCI Emerging Markets Index(net) Economic data is taken from The Federal Reserve, Bureau of Labor Statistics, Bureau of Economic Analysis, Institute for Supply Management and FactSet

4

Portfolio Mix 1

Source: ACG, WhatUKThinks.org

UK’s “Brexit” Vote

• Despite polling in the months leadingup to the Brexit that suggested a slightedge to the remain campaign, at theend of June the UK voted 52% to 48%to leave the EU

• Amongst voters there were vastdifferences based on age andlocation. Younger voters and citydwellers were in favor of remain,while older and more rural voters werein favor of leaving the EU

5

Portfolio Mix 1

Source: ACG, Morningstar

The Market’s Reaction to the Brexit

5.5% 5.3%

1.1%

-1.2%

-4.8% -5.3%-6.5% -7.0%

-9.8%

-0.3% -0.6%

0.0%

4.5% 5.1% 5.0% 5.4% 5.8% 5.8%

Gold Long-term USTreasuries

BarclaysAggregate

REITs MSCI EmergingMarkets

S&P 500 MLPs Russell 2000 MSCI EAFE

Brexit Fallout – Various Asset ClassesJune 24 & 27 June 28-29-30

• As with most events that surprise the market, the reaction to the Brexit vote was swift with the MSCIEAFE Index and other risk assets falling sharply in the two days following the Brexit

• The rebound, however, was strong with most asset classes recovering most, if not all, of their losses

• MSCI EAFE was the only major asset class to end the full second quarter with a loss

6

Federal Reserve Policy

Source: ACG, Federal Reserve, Bloomberg

• The odds of future increases declined quite a bit during Q2 due primarily to the fallout after the Brexit vote

• The odds of a Fed rate cut are actually now higher than the odds of another rate hike before September

7

Global Interest Rates: Going Lower

Source: ACG, GFIM, Bloomberg

• While more than $18 trillion ofglobal debt trades at yieldsless than 1.0%, less than $2trillion trade with yields over2.0%

Global Fixed income Debt(Positive Yielding vs. Negative Yielding)

• After the Brexit at the end ofJune, approximately or 38% ofglobal sovereign debt nowtrades with negative yields

8

Despite Headwinds, U.S. Economy Looks Resilient

Source: ACG, BofA Merrill Lynch, JP Morgan

• The percentage of companies withnegative expected earnings is at thehighest level since 2009. But, much ofthis is due to fallout from the Energysector which has since improved

• While some econometric models show anincrease in the probability of a recessionin the next 12 months, the percentage isstill significantly below the oddspreceding past recessions

Percent of S&P 500 Companies(Expected vs. actual negative earnings)

Odds of a Recession in Next 12 Months(JP Morgan Economic Model)

9

U.S. Economy Poised for a Solid Second Half

Source: ACG, Atlanta Federal Reserve, Factor Investor

• In mid-May, the Atlanta Federal Reserve’s GDP Now (a well recognized real-time GDP tracker) turned more positive in Q2, suggesting a U.S. recession is less likely

• Earnings comparisons in the second half of 2016 become more favorable suggesting a return to earnings and revenue growth in the second half of 2016

10

Energy Sector Fundamentals Improving

Source: ACG, Fundstrat, Bloomberg

• Earnings estimates for the Energy sector reflect little improvement in the sectordespite the strong rebound in the price of oil since mid-February

Energy sector consensus earnings vs. Oil price

11

Style: Value vs. Growth

* Note: The value factor is defined as the historical relative outperformance of value stocks. Value stocks typically trade at discounts to book value or tangible book value,

have high dividend yields, have low price-to-earning multiples or have low price-to-book ratios.

• Despite value’s style leadership so far in2016, the current cycle has been aparticularly prolonged growth cycle

• When the current cycle corrects, historysuggest value has a lot of potential in theeventual style recovery

*

Source: ACG, Cortina Asset Management

12

Capitalization: Small Cap vs. Large Cap

Source: ACG, Russell Investment Group

• The relative valuation discount (using P/E ratios) of small cap to large cap equitiesis near historical highs

P/E Ratio of Large & Small Cap Stocks(Relative Ratio on right scale)

13

Presidential Election

Source: ACG, Strategas, InvesTech

• Stock market performance in the three months leading up to the U.S. election hasbeen very predictive of the eventual election outcome. Since the 1920s, if themarket was up during the three months preceding the election, the incumbent partywon the election 19 out of 22 times (86%)

14

Value Performance Year-To-Date

• The abnormally low interest rate environment has contributed to outsized (and unsustainable)year-to-date returns in a few key sectors in the Russell 1000 Value Index

• The “R.U.S.T.” Sectors (REITs, Utilities, Staples, and Telecomm) have all had large YTD gains• Utilities & Consumer Staples, for example, are trading at P/E multiples of 18.4x and 21.1x

versus 10 year historical average multiples of 14.5x and 16.7x

• Many Value managers have avoided these sectors as they are trading at historical premiums• This has led to many value managers trailing the value index on a year-to-date basis

Source: ACG, Morningstar, Factset

Russell 1000 Value Index01/01/2016 Through 06/30/2016

SectorBenchmark Weight (%)

Benchmark Return (%)

Basic Materials 2.7 14.8Telecomm Services 3.1 22.9Consumer Cyclical 4.6 -3.2Consumer Staples 7.8 10.7Energy 12.9 15.4Financials 23.8 -6.2Healthcare 12.0 7.5Industrials 10.5 8.1Real Estate (REITs) 4.7 11.9Technology 11.2 4.0Utilities 6.7 23.7

Highlighted sectors (yellow) 22.2 16.5

R1000 Value 100.0 6.3

Strong YTD Returns driven by low interest rates / investor hunt for yield

15

Growth Performance Year-To-Date

• Strong secular growth within tech, healthcare, and discretionary have historically been coreareas for the growth portfolios

• Valuations are generally attractive for fast growers. Investors are paying up to own stable butlittle to no growth names in high dividend yielding Staples, Utilities, etc... as a result of the lowinterest rate environment

Source: ACG, Wells Fargo

PEG Ratio = PE Ratio / EPS Growth Rate

16

Market Indices (%)

Ending June 30, 2016

S&P 500 0.26 2.46 3.84 3.99 11.66 12.10 7.42Dow Jones Industrial Average 0.95 2.07 4.31 4.50 8.99 10.41 7.66Nasdaq Composite -2.13 -0.56 -3.29 -2.89 12.48 11.79 8.35MSCI EAFE -3.36 -1.46 -4.42 -10.16 2.06 1.68 1.58Russell 2000 -0.06 3.79 2.22 -6.73 7.09 8.35 6.20Dow Jones U.S. Total Stock Market 0.19 2.61 3.55 2.05 11.00 11.55 7.49

Russell Indices

Russell 1000 0.23 2.54 3.74 2.93 11.48 11.88 7.51Russell 1000 Growth -0.39 0.61 1.36 3.02 13.07 12.35 8.78Russell 1000 Value 0.86 4.58 6.30 2.86 9.87 11.35 6.13Russell Midcap 0.46 3.18 5.50 0.56 10.80 10.90 8.07Russell Midcap Growth -0.02 1.56 2.15 -2.14 10.52 9.98 8.12Russell Midcap Value 0.91 4.77 8.87 3.25 11.00 11.70 7.79Russell 2000 Growth -0.46 3.24 -1.59 -10.75 7.74 8.51 7.14Russell 2000 Value 0.30 4.31 6.08 -2.58 6.36 8.15 5.15

Sector Indices

S&P Basic Materials -0.89 3.71 7.46 -2.04 8.71 5.77 6.28S&P Consumer Discretionary -1.18 -0.91 0.68 3.78 13.24 16.13 10.68S&P Consumer Staples 5.18 4.63 10.46 18.66 14.37 15.05 11.66S&P Energy 3.28 11.62 16.10 -3.92 -1.27 0.77 4.26S&P Financials -3.21 2.12 -3.05 -4.17 7.67 10.45 -1.27S&P Health Care 1.02 6.27 0.42 -2.02 16.54 17.29 11.16S&P Industrials 0.99 1.40 6.46 7.04 12.11 11.22 7.21S&P Information Technology -2.76 -2.84 -0.32 4.79 15.27 13.42 10.02S&P Telecommunication Services 9.34 7.06 24.85 25.14 10.26 11.72 8.49S&P Utilities 7.81 6.79 23.41 31.47 15.97 13.82 9.21

International Indices

MSCI Emerging Markets 4.00 0.66 6.41 -12.06 -1.56 -3.78 3.54MSCI EAFE ex Japan -3.63 -2.19 -4.08 -10.54 1.86 0.98 1.99MSCI Europe -4.45 -2.69 -5.13 -11.22 1.96 1.02 1.52MSCI Pacific -1.37 0.87 -2.94 -8.19 2.16 2.98 1.72MSCI AC World Ex U.S. -1.53 -0.64 -1.02 -10.24 1.16 0.10 1.87MSCI EAFE Small Cap -5.28 -2.60 -3.18 -3.67 7.26 4.84 3.57MSCI Frontier Markets -3.48 0.47 -0.47 -12.09 1.00 1.45 0.18

Bond Indices

Citigroup Treasury Bill 3-Month 0.02 0.06 0.12 0.14 0.07 0.06 0.96Barclays Capital Municipal Bond 1.59 2.61 4.33 7.65 5.58 5.33 5.13Barclays Capital Aggregate Bond 1.80 2.21 5.31 6.00 4.06 3.76 5.13Barclays Capital U.S. Gov/Credit 2.20 2.67 6.23 6.70 4.20 4.11 5.22Barclays Capital U.S. Gov/Credit Intermediate 1.43 1.59 4.07 4.33 2.95 2.90 4.48Barclays US Corporate High Yield 0.92 5.52 9.06 1.62 4.18 5.84 7.56Citigroup World Government Bond 3.69 3.41 10.74 11.26 2.65 1.18 4.22

Other Indices

HFRI Fund Of Funds Diversified -0.62 0.22 -2.64 -5.11 1.95 1.79 1.68HFRI Fund Of Funds Conservative -0.34 0.66 -1.44 -3.21 1.98 1.94 1.38HFRI Fund Of Funds Strategic -0.79 0.76 -3.63 -7.75 1.73 1.46 1.58Wilshire Liquid Alternative 0.36 1.03 0.96 -2.53 0.59 1.18 1.40FTSE EPRA Global 3.75 3.74 9.38 12.57 8.94 8.62 5.00FTSE EPRA International 0.08 0.68 5.91 1.40 4.26 4.97 3.12Alerian MLP 5.13 19.70 14.71 -13.11 -5.38 3.24 9.48Bloomberg Commodity 4.13 12.78 13.25 -13.32 -10.55 -10.82 -5.59

*Sources: Morningstar Direct and HFR. Returns include dividends; 3-year, 5-year, and 10-year returns are annualized.Indices are unmanaged. You cannot invest directly into an index. Past performance is not indicative of future results.

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10 YearsLatest

Month

Quarter

to DateYTD 1 Year 3 Years 5 Years

17

Asset class and reference benchmarks:

Alerian MLP: The Alerian MLP Index is the leading gauge of large- and mid-cap energy Master Limited Partnerships (MLPs). The float-adjusted, capitalization-weighted index, which includes 50 prominent companies and captures approximately 75% of available market capitalization, is disseminated real-time on a price-return basis (AMZ) and on a total-return basis (AMZX).

Bloomberg Commodity Total Return Index: Formerly the Dow Jones-UBS Commodity Index TR (DJUBSTR),is composed of futures contracts and reflects the returns on a fully collateralized investment in the BCOM. This combines the returns of the BCOM with the returns on cash collateral invested in 3 Month U.S. Treasury Bills. Barclay 10-Year Municipal: A rules-based, market-value weighted index engineered for the long-term tax-exempt bond market. This index is the 10 year (8-12) component of the Municipal Bond Index. Barclay 10-Year U.S. Treasuries: Measures the performance of U.S. Treasury securities that have a remaining maturity of 10 years. Barclays U.S. Aggregate Index: Represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment-grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. Barclays Global Aggregate ex-U.S. Dollar Bond Index: Tracks an international basket of bonds that currently contains 65% government, 14% corporate, 13% agency and 8% mortgage-related bonds. Barclays High Yield: Covers the universe of fixed-rate, non-investment grade debt. Pay-in-kind (PIK) bonds, Eurobonds, and debt issues from countries designated as emerging markets (e.g., Argentina, Brazil, Venezuela, etc.) are excluded, but Canadian and global bonds (SEC-registered) of issuers in non-EMG countries are included. Original issue zeroes, step-up coupon structures and 144-As are also included. Barclays U.S. Corporate High Yield: Composed of fixed-rate, publicly issued, non-investment grade debt.

ASSET CLASS BENCHMARK

U.S. Equity Russell 3000 TR

Non-U.S. Equity MSCI ACWI ex US NR

U.S. Fixed Income Barclays U.S. Aggregate Bond TR

Global Real Estate (prior to 2008) NASDAQ Global Real Estate NR

Global Real Estate (2008-present) FTSE EPRA/NAREIT Global Real Estate NR

Commodities Bloomberg Commodity TR USD

Cash & Cash Alternatives Citi Treasury Bill 3 Mon USD

INDEX DESCRIPTIONS

18

Bloomberg Commodity Index: The index is made up of 22 exchange-traded futures on physical commodities. The index currently represents 20 commodities, which are weighted to account for economic significance and market liquidity.

Citi 3-Month Treasury-Bill Index: This is an unmanaged index of three-month Treasury bills.

The Dow Jones Industrial Average is an unmanaged index of 30 widely held securities.

Dow Jones U.S. Total Stock Market Index, which comprises all U.S. equity securities with readily available prices.

FTSE EPRA/NAREIT Global Real Estate Index: Designed to represent general trends in eligible listed real estate stocks worldwide. Relevant real estate activities are defined as the ownership, trading and development of income producing real estate.

Gross Domestic Product (GDP) is the annual market value of all goods and services produced domestically by the US.

HFRI Fund of Funds Conservative: FOFs classified as 'Conservative' exhibit one or more of the following characteristics: seeks consistent returns by primarily investing in funds that generally engage in more 'conservative' strategies such as Equity Market Neutral, Fixed Income Arbitrage, and Convertible Arbitrage; exhibits a lower historical annual standard deviation than the HFRI Fund of Funds Composite Index. A fund in the HFRI FOF Conservative Index shows generally consistent performance regardless of market conditions.

HFRI Fund of Funds Diversified: FOFs classified as 'Diversified' exhibit one or more of the following characteristics: invests in a variety of strategies among multiple managers; historical annual return and/or a standard deviation generally similar to the HFRI Fund of Fund Composite index; demonstrates generally close performance and returns distribution correlation to the HFRI Fund of Fund Composite Index. A fund in the HFRI FOF Diversified Index tends to show minimal loss in down markets while achieving superior returns in up markets.

HFRI Fund of Funds Strategic: FOFs classified as 'Strategic' exhibit one or more of the following characteristics: seeks superior returns by primarily investing in funds that generally engage in more opportunistic strategies such as Emerging Markets, Sector specific, and Equity Hedge; exhibits a greater dispersion of returns and higher volatility compared to the HFRI Fund of Funds Composite Index. A fund in the HFRI FOF Strategic Index tends to outperform the HFRI Fund of Fund Composite Index in up markets and underperform the index in down markets.

MSCI All Country World Index Ex-U.S Index.: A market-capitalization-weighted index maintained by Morgan Stanley Capital International (MSCI) and designed to provide a broad measure of stock performance throughout the world, with the exception of U.S.-based companies. It includes both developed and emerging markets.

MSCI EAFE Index (Europe, Australasia, Far East): A free-float adjusted market capitalization index that is designed to measure developed market equity performance, excluding the United States and Canada. The EAFE consists of the country indices of 21 developed nations.

MSCI EAFE Growth Index: Represents approximately 50% of the free-float adjusted market capitalization of the MSCI EAFE index, and consists of those securities classified by MSCI as most representing the growth style.

MSCI EAFE Small-Cap Index: An unmanaged, market-weighted index of small companies in developed markets, excluding the U.S. and Canada.

MSCI EAFE Value: Represents approximately 50% of the free-float adjusted market capitalization of the MSCI EAFE index, and consists of those securities classified by MSCI as most representing the value style.

INDEX DESCRIPTIONS (continued)

19

MSCI Emerging Markets Index: Designed to measure equity market performance in 25 emerging market indexes. The three largest industries are materials, energy and banks.

MSCI Local Currency Index: A special currency perspective that approximates the return of an index as if there were no currency valuation changes from one day to the next.

The NASDAQ Composite Index is an unmanaged index of all stocks traded on the NASDAQ over-the-counter market.

Price Earnings Ratio (P/E) is the price of the stock divided by its earnings per share.

Russell 1000 Index: Measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 90% of the investible U.S. equity market.

Russell 1000 Value Index: Measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values.

Russell 1000 Growth Index: Measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.

Russell Mid-Cap Index: Measures the performance of the 800 smallest companies of the Russell 1000 Index, which represent approximately 30% of the total market capitalization of the Russell 1000 Index.

Russell Mid-Cap Value Index: Measures the performance of those Russell Mid-cap companies with lower price-to-book ratios and lower forecasted growth values.

Russell Mid-Cap Growth Index: Measures the performance of those Russell Mid-cap companies with higher price-to-book ratios and higher forecasted growth values.

Russell 2000 Index: Measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represent approximately 8% of the total market capitalization of the Russell 3000 Index.

Russell 2000 Value Index: Measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values.

Russell 2000 Growth Index: Measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values.

Russell 3000 Index: Measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market.

Standard & Poor’s 500 (S&P 500): Measures changes in stock market conditions based on the average performance of 500 widely held common stocks. Represents approximately 68% of the investable U.S. equity market.

S&P 500 Consumer Discretionary: Comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer discretionary sector.

S&P 500 Consumer Staples: Comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer staples sector.

S&P 500 Energy: Comprises those companies included in the S&P 500 that are classified as members of the GICS® energy sector.

INDEX DESCRIPTIONS (continued)

20

S&P 500 Financials: Comprises those companies included in the S&P 500 that are classified as members of the GICS® financials sector

S&P 500 Health Care: Comprises those companies included in the S&P 500 that are classified as members of the GICS® health care sector.

S&P 500 Industrials: Comprises those companies included in the S&P 500 that are classified as members of the GICS® industrials sector.

S&P 500 Information Technology: Comprises those companies included in the S&P 500 that are classified as members of the GICS® information technology sector.

S&P 500 Materials: Comprises those companies included in the S&P 500 that are classified as members of the GICS® materials sector.

S&P 500 Telecom Services: Comprises those companies included in the S&P 500 that are classified as members of the GICS® telecommunication services sector.

S&P 500 Utilities: Comprises those companies included in the S&P 500 that are classified as members of the GICS® utilities sector.

Wilshire Liquid Alternative Index: The Wilshire Liquid Alternative IndexSM measures the collective performance of the five Wilshire Liquid Alternative strategies that make up the Wilshire Liquid Alternative Universe. The Wilshire Liquid Alternative Index (WLIQA) is designed to provide a broad measure of the liquid alternative market by combining the performance of the Wilshire Liquid Alternative Equity Hedge IndexSM (WLIQAEH), Wilshire Liquid Alternative Global Macro IndexSM (WLIQAGM), Wilshire Liquid Alternative Relative Value IndexSM (WLIQARV), Wilshire Liquid Alternative Multi-Strategy IndexSM (WLIQAMS), and Wilshire Liquid Alternative Event Driven IndexSM (WLIQAED).

Opinions expressed are not necessarily those of Raymond James & Associates or your financial advisor. The author's opinions are subject to change without notice. Information contained in this report was received from sources believed to be reliable, but accuracy is not guaranteed. Past performance is not indicative of future results. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success. It is not possible to invest directly in an index. The S&P 500 is an unmanaged index of 500 widely held stocks. Investments in the energy sector are not suitable for all investors. Further information regarding these investments is available from your financial advisor. Investing in small and mid cap stocks are riskier investments which include price volatility, less liquidity and the threat of competition. International investing involves additional risks such as currency fluctuations, differing financial accounting standards, and possible political and economic instability. These risks are greater in emerging markets. VIX is the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market's may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification.

INDEX DESCRIPTIONS (continued)

© 2016 Raymond James & Associates, Inc., member New York Stock Exchange/SIPC

21

University of West Florida Foundation Performance Summary

June 2016

We started the quarter with a market value of $75,645,436 and we ended the quarter with a value of $77,206,315. For the quarter ending June 2016, the Foundation returned 2.23% versus 2.08% for a balanced index that reflects the underlying asset allocation of the total fund. The outperformance for the quarter was attributable to Conestoga Small Cap, DFA Emerging Markets, and Specialty Strategies.

Large Cap Equity: Eagle Capital underperformed for the quarter (1.94% vs. 2.46%) while the Vanguard 500 Index performed in line. Eagle Capital is trailing over a three year time period. We recommend placing them on “caution status”.

Small Cap Equity: Our small cap managers were split versus the Russell 2000 for the quarter. Conestoga outperformed the index (5.74% vs. 3.79%) while SouthernSun slightly underperformed (3.52% vs. 3.79%).

International Equity: Our international managers were split versus the benchmark for the quarter. William Blair returned -0.48% and Dodge & Cox returned -1.20% while the MSCI ACWI ex US returned -0.64%. Dodge & Cox is trailing over a three year time period. We recommend placing them on “caution status”.

Emerging Markets Equity: DFA Emerging Markets outperformed the MSCI Emerging Markets Index for the quarter (2.22% vs. 0.66%).

Master Limited Partnerships: Tortoise, our MLP manager, performed in line with the Alerian Index for the quarter (19.66% vs. 19.70%).

Fixed Income: Our fixed income manager, Barrow Hanley, slightly outperformed the Barclays Aggregate Index for the quarter (2.30% vs. 2.21%). They continue to lag on a three year basis and are outperforming on a five year basis. We recommend maintaining “caution status”.

Alternatives: For the quarter, Archstone performed in line while Ironwood outperformed versus their respective benchmarks. Archstone returned 0.49% vs. 0.50% while Ironwood returned 0.96% vs. 0.62%. We recommend maintaining “caution status” for Archstone and Ironwood for their negative one year return. The Liquid Alternatives outperformed the HFRI Fund of Funds Diversified benchmark for the quarter (1.76% versus 0.43%). Outperformance can be attributed to RS Global Natural Resources, PIMCO All Asset All Authority, Avenue Credit and FPA New Income.

Summary: A fairly benign quarter quickly became very volatile when the UK decided to leave the European Union (EU) in a referendum vote on June 23. After a steep two day decline, most

22

risk assets quickly rebounded and recovered most, if not all, of their losses. The S&P 500 ended the quarter on a positive note, staging a strong rebound after the Brexit vote and ending the quarter with a gain of +2.5%. The S&P 500 is now up +3.8% year-to-date. Fixed income returns were strong again in Q2 with the Barclays Aggregate Bond Index ending the quarter up +2.2%. Year-to-date the index is now up +5.3%. While economic indicators were mixed, the U.S. economy continued to plug along. Expectations for calendar year 2016 S&P 500 earnings growth declined from +1.8% at the start of the quarter to +0.6% now. Earnings growth, however, is expected to accelerate in the second half of 2016.

23

University of West FloridaReport Period Ending June 30, 2016

Fiscal Year Ends: June

QTD

Market Current Latest 03/31/2016 Fiscal Latest Latest 2 Latest 3 Latest 5 Latest 10 Latest 15 Inception Inception

Value Allocation Month 06/30/2016 YTD YTD Year Years Years Years Years Years to Date Date

Total Composite $77,206,315 100.00% 0.19% 2.23% -3.06% 2.06% -3.06% -0.41% 5.05% 5.17% 4.26% 4.67% 4.40% 03/31/1999Balanced Index 0.49% 2.08% -2.10% 2.42% -2.10% -0.16% 5.05% 5.26% 4.41% 4.81% 4.39%

Large Cap Equity

Eagle Capital Management $8,827,063 11.43% -1.66% 1.94% -2.39% -1.18% -2.39% 3.53% 9.90% N/A N/A N/A 12.42% 10/01/2012S&P 500 0.26% 2.46% 3.99% 3.84% 3.99% 5.69% 11.66% N/A N/A N/A 12.88%

Vanguard 500 Index $9,121,539 11.81% 0.26% 2.45% 3.96% 3.82% 3.96% 5.67% 11.62% N/A N/A N/A 12.91% 09/28/2012S&P 500 0.26% 2.46% 3.99% 3.84% 3.99% 5.69% 11.66% N/A N/A N/A 12.93%

Small Cap Equity

Conestoga Small Cap Fund $4,135,138 5.36% 3.52% 5.74% 1.67% 2.10% 1.67% 4.70% N/A N/A N/A N/A 2.49% 04/01/2014Russell 2000 -0.06% 3.79% -6.73% 2.22% -6.73% -0.34% N/A N/A N/A N/A 0.01%

AMG SouthernSun US Equity $4,281,741 5.55% -0.56% 3.52% -5.83% 9.34% -5.83% N/A N/A N/A N/A N/A -0.95% 10/07/2014Russell 2000 -0.06% 3.79% -6.73% 2.22% -6.73% N/A N/A N/A N/A N/A 5.51%

International Equity

William Blair Intl Growth CL I $5,678,367 7.35% -1.82% -0.48% -9.35% -3.86% -9.35% -4.76% 2.90% 3.15% 3.05% N/A 5.70% 03/31/2004MSCI ACWI ex US - Net -1.53% -0.64% -10.24% -1.02% -10.24% -7.78% 1.16% 0.10% 1.87% N/A 4.81%

Dodge & Cox International Stock $5,740,841 7.44% -3.69% -1.20% -18.84% -4.88% -18.84% -11.55% 0.39% 1.06% N/A N/A -0.32% 12/31/2007MSCI ACWI ex US - Net -1.53% -0.64% -10.24% -1.02% -10.24% -7.78% 1.16% 0.10% N/A N/A -1.32%

Emerging Markets

DFA Emerging Markets Core I $4,261,860 5.52% 5.54% 2.22% -9.41% 8.87% -9.41% -7.52% -0.40% N/A N/A N/A 2.00% 12/16/2011MSCI Emerging Mkt - Net 4.00% 0.66% -12.06% 6.41% -12.06% -8.66% -1.56% N/A N/A N/A 0.74%

MLP & MLP Related

Tortoise MLP & Pipeline Fnd Instl $3,058,198 3.96% 6.73% 19.66% -14.60% 27.62% -14.60% -13.99% N/A N/A N/A N/A -6.78% 04/11/2014Alerian MLP 5.13% 19.70% -13.11% 14.71% -13.11% -16.53% N/A N/A N/A N/A -10.75%

Fixed Income

Barrow, Hanley $10,739,996 13.91% 1.67% 2.30% 5.77% 5.45% 5.77% 3.55% 3.97% 3.83% 5.24% N/A 4.53% 04/30/2003Barclays Aggregate 1.80% 2.21% 6.00% 5.31% 6.00% 3.91% 4.06% 3.76% 5.13% N/A 4.49%

Alternative Investments

Archstone Offshore LTD $7,194,020 9.32% -1.45% 0.49% -9.60% -4.30% -9.60% -3.99% 0.56% 2.08% 3.00% N/A 3.76% 03/31/2005HFRI Fund of Funds -0.55% 0.50% -5.45% -2.63% -5.45% -0.85% 1.90% 1.62% 1.58% N/A 2.36%

Ironwood International LTD $7,552,009 9.78% -0.65% 0.96% -3.88% -2.35% -3.88% 0.77% 4.23% 4.88% 3.30% N/A 3.99% 03/31/2005

HFRI FOF Conservative -0.37% 0.62% -3.24% -1.48% -3.24% -0.31% 1.97% 1.94% 1.37% N/A 1.99%

$1,480,578 1.92% 0.09% 1.76% -4.35% 2.32% -4.35% -3.86% 0.65% N/A N/A N/A 0.34% 03/31/2013Specialty StrategiesHFRI FOF Diversified -0.44% 0.43% -4.90% -2.43% -4.90% -0.62% 2.03% N/A N/A N/A 1.92%

24

University of West FloridaReport Period Ending June 30, 2016

Fiscal Year Ends: June

QTD

Market Current Latest 03/31/2016 Fiscal Latest Latest 2 Latest 3 Latest 5 Latest 10 Latest 15 Inception Inception

Value Allocation Month 06/30/2016 YTD YTD Year Years Years Years Years Years to Date Date

Real Estate

Harbert Real Estate IV $236,349 0.31% 2.85% 2.85% 38.26% 3.95% 38.26% 36.97% 34.01% 29.44% N/A N/A 21.17% 12/31/2008FTSE NAREIT Equity 6.98% 6.96% 24.04% 13.38% 24.04% 13.76% 13.58% 12.64% N/A N/A 17.13%

Harbert Real Estate V $1,754,103 2.27% 2.36% 2.36% 26.11% 7.48% 26.11% 19.61% N/A N/A N/A N/A 14.74% 11/01/2013FTSE NAREIT Equity 6.98% 6.96% 24.04% 13.38% 24.04% 13.76% N/A N/A N/A N/A 14.66%

Private Equity

Portfolio Advisors V $539,000 0.70% 0.00% 0.00% 6.07% 0.00% 6.07% 5.09% 9.75% 9.75% N/A N/A 6.49% 12/31/2008Cambridge PE Index 0.00% 0.00% -0.98% 0.00% -0.98% 3.91% 9.70% 10.45% N/A N/A 12.88%

Portfolio Advisors VII $648,745 0.84% 0.00% 0.00% 5.79% 0.00% 5.79% 5.55% 9.56% N/A N/A N/A 9.56% 04/22/2013Cambridge PE Index 0.00% 0.00% -0.98% 0.00% -0.98% 3.91% 9.70% N/A N/A N/A 10.14%

StepStone Pioneer Capital III $941,287 1.22% 0.00% 0.00% 6.63% 0.00% 6.63% 9.80% 12.48% 13.70% N/A N/A 15.69% 12/15/2009Cambridge PE Index 0.00% 0.00% -0.98% 0.00% -0.98% 3.91% 9.70% 10.45% N/A N/A 13.74%

Cash/Short Term Fixed Income

PIMCO Short Term Instl $1,009,513 1.31% -0.35% 0.88% N/A N/A N/A N/A N/A N/A N/A N/A 0.95% 01/29/2016Citi 3 Month T-Bill 0.02% 0.06% N/A N/A N/A N/A N/A N/A N/A N/A 0.11%

Cash & Equivalents

Cash $5,968 0.01% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 12/31/2013Citi 1 Month T-Bill N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

The Balanced Index is calculated using composite market values by asset class, assigning these weights to the appropriate index for comparison. These weights are adjusted historically based on month by month changes in your asset allocation. The Balanced Index weights as of 06/30/16 are: 1% Citi 3 Month T-Bill, 14% MSCI ACWI ex US - Net, 4% Alerian MLP, 3% Cambridge PE Index, 2% FTSE NAREIT Equity, 2% HFRI FOF Diversified, 10% HFRI FOF Conservative, 9% HFRI Fund of Funds, 15% Barclays Aggregate, 6% MSCI Emerging Mkt - Net, 11% Russell 2000, 23% S&P 500

**items highlighted represent managers on cautionary status.

****All returns are net of management fees

*StepStone Pioneer Capital's inception return is stated as an IRR.

25

Report Period: 06-30-2016Fiscal Year Ends: JuneAsset Composition By Account and Style

AccountMarketValue

% ofTotal

Eagle Capital Management 8,827,063 11.16Vanguard 500 Index 9,121,539 11.53Conestoga Small Cap Fund 4,135,138 5.23AMG SouthernSun US Equity 4,281,741 5.41William Blair Intl Growth CL I 5,678,367 7.18Dodge & Cox International Stock 5,740,841 7.26DFA Emerging Markets Core I 4,261,860 5.39Tortoise MLP & Pipeline Fnd Instl 3,058,198 3.87Barrow, Hanley 10,739,996 13.58Archstone Offshore LTD 7,194,020 9.09Ironwood International LTD 7,552,009 9.55Specialty Strategies 1,480,578 1.87Harbert Real Estate IV 236,349 0.30Harbert Real Estate V 1,754,103 2.22Portfolio Advisors V 539,000 0.68Portfolio Advisors VII 648,745 0.82StepStone Pioneer Capital III 941,287 1.19PIMCO Short Term Instl 1,009,513 1.28Cash 5,968 0.01Cash Reserves 1,897,620 2.40

Total $79,103,935 100%

Manager StyleMarketValue

% ofTotal

Large Cap Equity 17,948,602 22.69Small Cap Equity 8,416,878 10.64MLP & MLP Related 3,058,198 3.87International Equity 11,419,208 14.44Emerging Markets 4,261,860 5.39Fixed Income 10,739,996 13.58Alternative Investments 16,226,608 20.51Real Estate 1,990,452 2.52Private Equity 2,129,032 2.69Cash/Short Term Fixed Income 1,009,513 1.28Cash & Equivalents 1,903,588 2.41

Total $79,103,935 100%

Items highlighted represent managers on cautionary status.

University of West FloridaTotal Composite

26

Report Period: 06-30-2016Fiscal Year Ends: JuneAsset Composition By Account and Style

AccountMarketValue

% ofTotal

Eagle Capital Management 8,827,063 11.43Vanguard 500 Index 9,121,539 11.81Conestoga Small Cap Fund 4,135,138 5.36AMG SouthernSun US Equity 4,281,741 5.55William Blair Intl Growth CL I 5,678,367 7.35Dodge & Cox International Stock 5,740,841 7.44DFA Emerging Markets Core I 4,261,860 5.52Tortoise MLP & Pipeline Fnd Instl 3,058,198 3.96Barrow, Hanley 10,739,996 13.91Archstone Offshore LTD 7,194,020 9.32Ironwood International LTD 7,552,009 9.78Specialty Strategies 1,480,578 1.92Harbert Real Estate IV 236,349 0.31Harbert Real Estate V 1,754,103 2.27Portfolio Advisors V 539,000 0.70Portfolio Advisors VII 648,745 0.84StepStone Pioneer Capital III 941,287 1.22PIMCO Short Term Instl 1,009,513 1.31Cash 5,968 0.01

Total $77,206,315 100%

Manager StyleMarketValue

% ofTotal

TargetAlloc %

MinAlloc %

MaxAlloc %

Large Cap Equity 17,948,602 23.25 22.50 20.00 30.00Small Cap Equity 8,416,878 10.90 10.00 7.50 15.00MLP & MLP Related 3,058,198 3.96 5.00 0.00 10.00International Equity 11,419,208 14.79 15.00 10.00 20.00Emerging Markets 4,261,860 5.52 5.00 2.50 7.50Fixed Income 10,739,996 13.91 12.50 10.00 25.00Alternative Investments 16,226,608 21.02 20.00 10.00 25.00Real Estate 1,990,452 2.58 5.00 0.00 15.00Private Equity 2,129,032 2.76 5.00 0.00 10.00Cash/Short Term Fixed Income 1,009,513 1.31 0.00 0.00 5.00Cash & Equivalents 5,968 0.01 0.00 0.00 5.00

Total $77,206,315 100% 100%

Items highlighted represent managers on cautionary status.

University of West FloridaTotal Composite

27

STATEMENT OF POLICY AND INVESTMENT OBJECTIVES

UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. November 2004 Revised March 2005 Revised June 2005 Revised August 2006 Revised January 2007 Revised August 2008 Revised December 2008 Revised February 2009 Revised September 2009 Revised December 2009 Revised December 2010 Revised March 2011 Revised December 2011 Revised November 2012 Revised July 2013 Revised February 2014 Revised March 2014 Revised June 2014 Revised August 2016

TABLE OF CONTENTS

PAGE

I. INTRODUCTION 1 II. INVESTMENT OBJECTIVES 1 III. TIME HORIZON 2 IV. RISK TOLERANCE 2 V. PROCEDURES 2 VI. ASSET ALLOCATION & STYLE DIVERSIFICATION 3

A. Summary of Asset Allocation 3 B. Rebalancing Procedures 4

VII. SELECTION & RETENTION CRITERION FOR INVESTMENTS 4 A. Investment Management 4 B. Individual Security Investment Guidelines 5

i. Equity Holdings 5 ii. Fixed Income Holdings 6 iii. Alternative Investments 7

VIII. PERFORMANCE OBJECTIVES 8 A. Total Fund 9 B. Equity Segment 9 C. Fixed Income Segment 10 D. Alternative Investments 10

IX. CONTROL PROCEDURES 11 X. COMMUNICATIONS 13 Addendum 15

1

I. INTRODUCTION The purpose of these assets is to further the over all mission of the University of West Florida. This Investment Policy Statement establishes a clear understanding between the Investment Committee of the University of West Florida Foundation, Inc., the Investment Management Consultant and the Investment Managers as to the investment objectives and policies applicable to the foundation’s investment portfolio. This Investment Policy Statement will:

• establish reasonable expectations, objectives and guidelines in the investment of the assets;

• set forth an investment structure detailing permitted asset classes and expected allocation among asset classes;

• encourage effective communication between the Investment Consultant, the Investment Manager(s) and the Investment Committee;

• create the framework for a well-diversified asset mix that can be expected to generate acceptable long-term returns at a level of risk suitable for these assets.

It shall serve the Investment Manager(s) as the principal source for developing an appropriate strategy. In addition, it shall serve as the basis for performance evaluation. Any changes in this Investment Policy Statement will be in writing and will be communicated to the Investment Managers. II. INVESTMENT OBJECTIVE The objectives of the assets are the enhancement of capital and real purchasing power while limiting exposure to risk of loss. Real purchasing power or real rate of return will be defined as returns in excess of inflation as defined by Consumer Price Index. At a minimum, long-term rates of return should be equal to an amount sufficient to maintain the purchasing power of these assets and provide necessary capital to fund the foundation’s allocation policy. Maintaining the real purchasing power of the Endowment, the portfolio’s return would need to be equal to or greater than the instituted spending policy plus the current rate of inflation. As such, the desired minimum rate of return is equal to the Consumer Price Index (CPI) plus 400 basis points (4%) on an annualized basis. The spending from an endowment should be established with consideration to today’s beneficiaries in addition to future beneficiaries. Neither generation should receive a greater benefit from the endowment at the expense of the other. Details regarding the foundation’s spending and allocation policy are found in a separate document outside this investment policy statement titled “Endowment Allocations and Administrative Fees Policy”. In light of this return requirement, the portfolio should be constructed using a total return approach with a significant portion of the funds invested to seek growth of principal over time.

2

The assets are to be invested for the long term, and a higher short-term volatility in these assets is to be expected and accepted.

III. TIME HORIZON The time horizon for these assets is perpetual. For strategic planning purposes, a minimum of five years will be considered for decision-making purposes. Capital values do fluctuate over shorter periods and the Investment Committee recognizes that the possibility of capital loss does exist. However, historical asset class return data suggest that the risk of principal loss over a holding period of at least three to five years can be minimized with the long-term investment mix employed under this Investment Policy Statement.

IV. RISK TOLERANCE The Investment Committee recognizes prudent investing requires taking reasonable risks in order to raise the likelihood of achieving the targeted investment returns. Research has demonstrated that portfolio risk is best minimized through diversification of assets. The portfolio of funds will be structured to maintain prudent levels of diversification. In terms of relative risk, the volatility of the portfolio should be in line with general market conditions. The Investment Committee recognizes that over the long term, the risk of owning equities has been, and should continue to be rewarded with a somewhat greater return than that available from fixed income investments. The role of fixed income investments is to reduce the volatility of the overall portfolio while providing a predictable stream of income. V. PROCEDURES The Investment Committee is charged with the oversight of the investment of the endowed, restricted, unrestricted and operating assets of the University of West Florida. The roles of the Investment Committee, the Investment Consultant, and the Investment Manager(s) with regard to the assets are delineated as follows. The Investment Committee, with active assistance and recommendations from the Investment Consultant, shall have responsibility for the following:

Establishing overall financial objectives and setting investment policy; Setting parameters for asset allocation; Establishing a process and criteria for the selection and termination of

investment program managers, custodians Selecting a qualified investment management consultant Selecting qualified investment manager(s); Selecting a qualified custodian; Monitoring investment results quarterly to assure that objectives are being

3

met and that policy and guidelines are being followed; Communication on a structured and ongoing basis with those persons responsible

for investment results.

The Investment Consultant will be proactive in advising and making recommendations to the Investment Committee regarding:

Investment Policy Asset Allocation Manager Selection Performance Evaluation Other Investment Matters

The Investment Manager(s) will be responsible for the following:

Determining investment strategy; Implementing security selection and timing within policy guideline

limitations. VI. ASSET ALLOCATION AND STYLE DIVERSIFICATION Research suggests that the decision to allocate total assets among various asset classes will far outweigh security selection and other decisions that impact portfolio performance. The Investment Committee recognizes the strategic importance of asset allocation and style diversification in the investment performance of the assets over long periods of time. Domestic and international equities both large and small capitalization, fixed income, cash equivalent securities, real estate and fund of funds hedge funds in the form of diversified fund of funds have been determined to be acceptable vehicles for these assets. Additional asset classes and style strategies may be incorporated into the investment philosophy in the future. A. Summary of Asset Allocation Guidelines: After reviewing the long-term performance and risk characteristics of various asset classes, the following asset allocation strategy is incorporated to achieve the objectives of these assets:

Asset Category Minimum Target Maximum Cash 0.00% 0.00% 5.00% Fixed Income 10.00% 12.50% 25.00% Equity 45.00% 57.50% 65.00%

Large Cap 20.00% 22.50% 30.00% Small Cap 7.50% 10.00% 15.00% International 5.00% 10.00% 15.00% Emerging Markets 2.50% 5.00% 7.50%

4

International Small Cap 2.50% 5.00% 7.50% MLP and MLP related 0.00% 5.00% 10.00% Alternative Assets 15.00% 30.00% 35.00% Real Estate (Private and/or Public)

0.00% 5.00% 15.00%

Hedge Funds Fund of Funds / Specialty Strategies

10.00% 20.00% 25.00%

Private Equity 0.00% 5.00% 10.00% There is no set minimum cash requirement; however adequate liquidity should be maintained. It is intended that Investment Managers will be given ample notice for any withdrawals to reduce the probability of adversely affected the portfolio. Additionally, any withdrawals will be funded on a pro-rata basis to ensure that the asset allocation after the withdrawals is within the investment guidelines as listed above. B. Rebalancing Procedures From time to time, market conditions may cause the investment in various asset classes to vary from the established allocation. At least on an annual basis, the Investment Committee and their Investment Consultant will review both the specific asset allocation (equity versus fixed) and the style targets for possible rebalancing back to the target allocation, to ensure consistency with the asset allocation guidelines established by this investment policy. If the actual weighting goes above / below the maximum / minimum weighting intra-year, rebalancing may be recommended.

VII. SELECTION AND RETENTION CRITERION FOR INVESTMENTS A. Investment Management Investment Manager(s) (including mutual funds) shall be chosen using the following criteria:

• The investment style and discipline of the proposed manager; • The size of the organization as measured by the amount of assets under management

with respect to the investment style under consideration; • Experience of the organization as measured by the tenure of the professionals with

respect to the investment style under consideration; • Past performance, considered relative to other investments having the same investment

objective. Consideration shall be given to both performance rankings over various time frames and consistency of performance

• The historical volatility and down-side risk of each proposed investment • How well each proposed investment complements other assets in the portfolio

5

B. Individual Securities The Investment Committee desires to permit investment managers flexibility to maximize investment opportunities. However, it is cognizant of its responsibility to practice prudent management in order to conserve and protect the assets and to prevent exposure to undue risk. Exceptions to the guidelines stated below may be made upon special written approval of the Investment Committee and shall be subject to annual review. The Investment Committee foresees the possibility of using mutual funds / collective trust funds / limited partnerships in the form of fund of funds hedge funds and understands that they would not have any control over the management of such funds with regard to guidelines and restrictions. However, when possible, they intend to utilize funds that generally comply with the investment guidelines stated in this Investment Policy Statement. i.) Equity Holdings: Security Types: Equity securities shall consist of common stocks and equivalents (ADRs, issues convertible into common stock, etc.), and Master Limited Partnerships (MLPs). Issues traded on the New York Stock, Over the Counter, and regional and foreign exchanges are appropriate. There are no specific constraints as to earnings record and dividend policy. For Investment Managers who manage international developed market equity portfolios, up to 25% of the market value of the portfolio may be invested in emerging markets. Diversification: No more than ten percent (10%) of the market value of the equity portfolio shall be in one issue. (If more than one investment manager manages equities, this restriction shall apply separately to each equity portfolio.) Quality:

There are no qualitative guidelines with regard to equity ratings, etc., except that prudent standards should be developed and maintained by the investment manager(s). No more than the greater of thirty-five percent (35%) or two times the sector weighting in the appropriate index can be invested in any one sector. Restrictions: Investment in the following requires written documentation and approval by the Investment Committee:

6

Derivative investments (futures or option contracts) for speculative purposes (as opposed to protection of asset value: Covered call writing is permissible)

Direct ownership of letter stock Restricted stock Venture capital Short sales Margin purchases or borrowing money Stock loans

ii.) Fixed Income Holdings: Security Types: Investment in obligations of the U.S. Government, including Treasury Inflation-Protected Securities (TIPS), U.S. Government Agencies, U.S. Corporate entities, Mortgage Backed Securities (MBS), Preferred Stock, Collateralized Mortgage Obligations, Asset Backed Securities, Taxable Municipal securities, Commercial Mortgage Backed securities (CMBS), REIT debt and dollar denominated foreign bonds is permitted unless otherwise prohibited by investment restrictions. Diversification: With the exception of U.S. Treasury and Agency obligations, no more than two percent (2%) of the fixed income portfolio at market shall be invested in a single issue or corporate entity. If more than one investment manager manages fixed income, these restrictions apply separately to each portfolio. Maturity: The Investment Managers shall have responsibility for setting the appropriate maturity schedule for their portion of the assets based on the fund's investment objectives, risk profile and stated mandate (i.e. low duration, core, etc.) Based on current and expected market conditions, the Investment Manager should determine the structure that will yield optimal performance. Quality: Each debt instrument selected for investment shall be subjected to credit analysis by the Investment Manager prior to inclusion in the portfolio. The minimum acceptable quality is investment grade at the time of purchase by Moody's Investor Service (Baa) or Standard and Poor's (BBB) with the exception of up to 15% of the fixed income portfolio which can be invested in below investment grade securities. The weighted average quality of the fund shall be A or better. If the rating agencies have split ratings on an issue, the higher rating will apply in determining compliance with these guidelines.

7

In the event that an issue is downgraded below investment grade, the Investment Manager will review the situation with the Investment Committee and Investment Consultant and discuss the rationalization for holding the security and explanation for a course of action. Restrictions: Investment in the following is prohibited without written permission: Private Placements (However, private placement medium term notes and securities issued

under SEC Rule 144A are permitted) Municipal or other tax exempt securities Margin purchases or borrowing money to effect leverage into the portfolio Inverse floater, interest only and principal only mortgage structures

iii.) Alternative Investments: Real Estate – The Investment Committee may time to time elect to purchase real estate assets if it is determined that such purchases are intended to be, but not guaranteed to be, in the best interest of the Foundation and the University community as the primary beneficiary over the long term. Such assets will be valued at the lesser of purchase price or fair market value and should at no time comprise more than 15% of the total market value of the Foundation’s assets. There are no specific guidelines regarding the characteristics necessary for purchase; however, the Investment Committee should work closely with the Executive Committee in making any acquisitions, evaluating the status of the property with respect to environmental issues, assessing the impact of any contingent liabilities, determining the impact of holding costs and financing options. In the event that a real estate asset is sold, the Foundation may provide financing, which will be held as an asset of the overall fund. These notes will be monitored in terms of balance, principal repayment and interest payments to reflect the income generated on the overall fund. Real estate investments may include both private and public real estate and may be in the form of limited partnerships and real estate investment trusts. Hedge Funds – Fund of Funds Hedge Funds will be held in the forms of professionally managed pooled limited partnership investments offered by professional investment managers with proven records of superior performance over time. Fund of Fund Hedge Funds are subject to the same due diligence process as traditional investments, however due to their unique nature, additional criteria is to be considered. Additional criteria include, but are not limited to:

• Transparency of the underlying hedge funds and to some degree their individual positions;

8

• Liquidity terms of the fund of funds to include lock-up period and frequency of withdrawals;

• No significant degree of leverage utilized at the limited partnership level; • Financial commitment of the General Partner in the fund; • Length of actual performance track record (no back tested results); • Sufficient documentation for due diligence, on-going monitoring and financial controls.

Specialty Strategies - Given the investor suitability or high investment minimums associated with certain private partnerships, liquid alternative vehicles (Specialty Strategies) may be employed to earn risk adjusted returns comparable to hedge funds. These vehicles may include a combination of individual hedge fund partnerships with liberal liquidity terms (i.e. no lock-up and monthly liquidity) and mutual funds under the Investment Advisers Act of 1940 that employ non-traditional strategies. Strategies utilized by these vehicles may include, but are not limited to: long/short equity, equity market neutral, merger arbitrage, convertible arbitrage, credit opportunities, commodities, currencies, volatility, absolute return oriented, tactical asset allocation and alternative beta. Private Equity – Investments in non-public equities is permissible in the form of limited partnerships. The Investment Committee will consider certain criteria including, but not limited to, the following in its evaluation of a fund:

• Experience, qualifications, and responsibilities of the General Partner; • Past investment results of the General Partner; • Financial commitment of the General Partner in the fund; • Special expertise of the General Partner in targeted areas of investment; • Diversification by geography, industry orientation, funding stage, vintage year, and size; • Sufficient documentation for due diligence, on-going monitoring and financial controls.

Joint Ventures: If the Foundation's equity interest in a joint venture is so small that it is more in the nature of an investment interest rather than an active participation, it is not necessary to have initiation and veto powers, although it should nevertheless seek to protect its charitable interests to the extent possible. While there is no specific IRS benchmark for evaluating when an interest is small enough to constitute only an investment interest, an equity interest in a joint venture of less than 20% can generally be properly characterized as an investment rather than active participation. Such joint ventures should be considered on a case-by-case basis.

VIII. PERFORMANCE OBJECTIVES The overall fund performance will be reviewed on a quarterly basis, with long term emphasis placed on results achieved over a three to five year period. Objectives will be reviewed annually and adjusted, if necessary, after consultation with the Investment Committee, Investment Consultant and Investment Managers. A. Total Fund:

9

Overall fund performance will be compared to the performance of a similarly structured balanced index in line with the target allocation in each strategy. This custom index will be comprised of the S&P 500 Index (or Russell 1000 Index), Russell 2000 Index, EAFE International Index, MSCI Emerging Markets Index, Barclays Capital U.S. Aggregate Bond Index, Merrill Lynch 1-3 Year Treasury Index, 50% Alerian MLP / 50% ML High Yield, and Citigroup One-Month Treasury Bill Index and/or other appropriate indices. The Fund should at least equal the performance of the custom balanced index. The volatility of investment returns, as measured by the standard deviation of quarterly returns, should be comparable to that of the custom index. Volatility greater than the benchmark is acceptable so long as returns are commensurate. B. Equity Segment: The performance of the domestic large cap equity portion is expected to meet or exceed the performance of S&P 500 Composite Index or the S&P 500/Citigroup Growth/Value Index/Russell 1000 Growth/Value, depending on the manager's investment style. The returns of the large capitalization equity portion should rank in the top thirty-three percent (33%) of a nationally recognized evaluation service's universe for comparable funds and investment styles over rolling three to five year time periods. The performance of the small capitalization equity portion should meet or exceed the performance of the Russell 2000 Small Stock Index or the Russell 2000 Value / Growth Index, depending on the manager's investment style. The returns of the small capitalization equity portion should rank in the top thirty-three percent (33%) of a universe for comparable funds over a rolling three to five year time periods. The performance of the international developed markets equity portion should meet or exceed the performance of the Morgan Stanley Capital International's Europe Australia Far East (EAFE) Index or another appropriate index. The returns of the international developed markets equity portion should rank in the top thirty-three percent (33%) of a universe for comparable funds over a rolling three to five year time periods. The performance of the emerging markets equity portion should meet or exceed the performance of the Morgan Stanley Capital International's Emerging Markets Index. The returns of the emerging markets equity portion should rank in the top thirty-three percent (33%) of a universe for comparable funds over a rolling three to five year time periods. The International Small Cap equity portion of the portfolio is expected to exceed the performance of the MSCI All Country World (ACWI) ex US Small Cap Index. The returns

10

should rank in the top thirty-third percent (33%) of a universe for comparable funds over a rolling three to five year time periods. The MLP portion of the portfolio is expected to produce returns similar to a blended index consisting of 50% Alerian MLP and 50% ML High Yield while exhibiting less volatility. Therefore, risk adjusted returns will be evaluated. The volatility of investment returns, as measured by the standard deviation of quarterly returns, should be comparable to that of the segment’s appropriate index. Volatility greater than the benchmark is acceptable so long as returns are commensurate. C. Fixed Income Segment: The performance of the core fixed income portion is expected to meet or exceed the performance of the Barclays Capital U.S. Aggregate Bond index or other appropriate index or mix of indices, which reflect the fixed income portion of the portfolio. The returns of the fixed income portion should rank in the top forty percent (40%) of a universe for comparable fixed income funds over a three to five year time period. The performance of the low duration fixed income portion is expected to meet or exceed the performance of the Merrill Lynch 1 – 3 Year Treasury index, Citigroup 3 Month Treasury Bill index or other appropriate index or mix of indices, which reflect the fixed income portion of the portfolio. The cash equivalent investment performance results will be compared against the yield on one month Treasury Bill securities, MFR All Taxable Money Market index, and are expected to exceed the annualized rate of the Consumer Price Index (CPI). The volatility of investment returns, as measured by the standard deviation of quarterly returns, should be comparable to that of the segment’s appropriate index. Volatility greater than the benchmark is acceptable so long as returns are commensurate. D. Alternative Investments: The Investment Committee recognizes that benchmarks for alternative investments, more specifically hedge fund of funds, are relatively new in their creation and there is no perfect benchmark in existence for these types of investments. Hedge fund indexes are created from hedge fund databases. There is no complete database because inclusion in these databases is voluntary and they are subject to survivorship bias. Additionally, each hedge fund, including fund of funds, has diverse investment objectives and characteristics making like comparisons difficult. To aid in the on-going evaluation of the alternative investment portion of the portfolio, Fund of Funds Hedge Fund investments will be compared to the following benchmarks:

The appropriate HFRI Fund of Funds Index

11

Other benchmark designated by fund of funds manager and agreed upon by the Investment Consultant and the Investment Committee

The performance of the Specialty Strategies portion of the portfolio will be compared to the following benchmarks:

Appropriate HFRI Fund of Funds Index Other benchmark agreed upon by Committee and Consultant

While emphasis will be placed on the performance of the Specialty Strategies portion as a whole, the Investment Consultant will be responsible for monitoring the underlying funds comprising the Specialty Strategies portion to insure they are meeting their individual objectives. Real estate investments are expected to meet or exceed the performance of the NCREIF Property Index (private), NAREIT Index (public) or other appropriate index which reflects the real estate portion of the portfolio. The Investment Committee recognizes private equity returns are not meaningful in the early years of investment and that the evaluation of this type of investments should be considered over the long-term; a ten year time horizon. To aid in the on-going evaluation of private equity investments, they will be compared to the Thompson VentureXpert Private Equity Index.

IX. CONTROL PROCEDURES A. Review and Evaluation of Investment Objectives: The achievement of investment objectives will be reviewed on an annual basis by the Investment Committee. This review will focus on the continued feasibility of achieving the objectives and the continued appropriateness of the investment policy statement. It is not expected that the investment policy statement will change frequently. In particular, short-term changes in the financial markets should not require an adjustment in the investment policy statement. B. Review and Evaluation of Investment Manager(s): The Investment Committee will meet at least annually with the Investment Manager(s) or their representative(s). Additionally, with or without the Investment Manager(s), the Investment Committee will review investment results quarterly. These reviews will focus on: The Investment Managers' adherence to the policy guidelines; Comparison of the Investment Managers' results to the objectives established for each

Investment Manager; Comparison of the Investment Managers' results against universe of comparable funds

investment styles;

12

Opportunities available in both the equity and bond markets; and, Material changes in the Investment Managers' organizations, such as philosophical or

personnel changes.

The Investment Committee may discharge or replace an Investment Manager at any time it deems such action necessary and appropriate. Guidelines for evaluation, retention, and replacement of Investment Managers will be as follows: Establish appropriate benchmark/index to which to compare Investment Managers’

performance. Establish performance target: To outperform benchmark/index and to achieve investment

returns: in the top thirty-third percentile (33%) of peer universe groups for equities

over a three to five year period in the top fortieth percentile (40%) of peer universe groups for fixed

income over a three to five year period Monitor Investment Managers’ performance on a quarterly basis and

compare to selected index and peers with similar styles and objectives. An Investment Manager will be rated in a “Favorable Status” if they are delivering favorable performance and there are no outstanding organizational issues. An Investment Manager will be in a “Caution Status” if: For Equities:

Investment Manager’s three year performance is below the 50th percentile of their peer universe, or they are trailing the style benchmark, or

Investment Manager’s five plus year performance is below the 33rd

percentile of their peer universe, or they are trailing the style benchmark

For Fixed Income: Investment Manager’s three year performance is below the 50th percentile

of their peer universe, or they are trailing the style benchmark, or Investment Manager’s five plus year performance is below the 40th

percentile of their peer universe, or they are trailing the style benchmark.

• For Alternative Investments Fund of Funds Hedge Funds

13

Investment Manager’s one year performance is negative, failing to preserve capital, or

Investment Manager’s three year performance is below any of the indexes as listed below and in the Investment Consultant’s opinion, represents sub par results, or o For Fund of Fund Hedge Funds The appropriate HFRI Fund of Funds Index Other benchmark designated by the fund manager and agreed upon

by the Investment Consultant and Investment Committee Investment Committee has concerns resulting from the review of on-going

documentation.

Specialty Strategies While emphasis will be placed on the performance of the Specialty Strategies portion as a whole, the underlying funds comprising the Specialty Strategies portion will also be compared to their individual stated objectives. An underlying Specialty Strategies fund may be placed on caution status if the Investment Consultant determines that the fund is not achieving its stated objective.

Real Estate and Private Equity Since these types of investments are illiquid and long-term in nature, there are no specific performance criteria for watch status. A manager managing these types of investments may be put on watch status if in the Investment Committee or Consultant’s opinion the watch status is warranted.

An Investment Manager will also be considered on “Caution Status” if there is a material change in the ownership structure of their organization, or there is a departure of key investment professionals. An Investment Manager that falls in “Caution Status” should undergo a formal review by the Investment Consultant. The review will address how the Investment Manager will move back to “Favorable Status” or recommend termination. An Investment Manager can move back to “Favorable Status” by improving its performance above the criteria as listed above. Highest priority will be given to those failing to meet the five-year target and next to those failing to meet the three-year target. There may be situations where immediate problems, questions or short-term performance issues arise regarding an Investment Manager and the priority will shift to review these situations first. In addition to the above, immediate termination of managers should be considered: When they deviate from the Investment Committee’s instructions; When they deviate substantially from their investment disciplines and process; When Investment Committee members have any material problem or concerns regarding

the Investment Manager.

14

X. COMMUNICATIONS Month-end accounting of transactions and portfolio holdings, ending portfolio and holdings values will be provided by the custodian(s). Quarter-end regular accounting of transactions, portfolio holdings, yields, current market values, summary of cash flows, calculations of the portfolio's total rate of return on a latest quarter, year-to-date and since inception basis will be provided by each Investment Manager. The Investment Managers will maintain communication with the Foundation and the Investment Consultant with as reasonable frequency as market conditions and the portfolio warrant. Major market conditions and major portfolio changes should be called to the attention of the Foundation and the Investment Consultant by the Investment Managers. Significant changes within the Investment Managers’ operations of personnel and the anticipated impact on the assets should be brought to the attention of the Foundation and the Investment Consultant immediately. Proxies must be voted by the Investment Manager in compliance with the values and philosophy of The University of West Florida Foundation. The Investment Consultant will provide comparative performance evaluation reports quarterly. Accepted by: __________________________ __________________ Date

15

ADDENDUM Deposit and Investment Risks As a component unit of the University of West Florida, the University of West Florida Foundation, Inc. (the Foundation) is required under GASB 40 to make certain disclosures related to deposit and investment risk. Deposit and investment resources of the Foundation represent significant resources necessary for the delivery of educational services and programs. Financial statement users should know that risks are inherent in all deposits and investments and this element of risk could affect the Foundation’s ability to provide resources and impact services. By nature of its function, the Foundation’s risk exposure is significantly greater than the deposit and investment risks of the University of West Florida. In general, the common deposit and investment risks are related to credit risk, concentration of credit risk, interest rate risk, and foreign currency risk. Deposit and Investment Policy: The Foundation has deposit and investment policies related to each of these risks. The policy states that the Investment Committee of the Board of Directors will meet no less than quarterly to review investment performance with our investment consultant. The policy provides guidelines for the evaluation, retention, and replacement of individual investment managers, establishes appropriate benchmarks/indices used to evaluate each investment managers’ performance, and establishes performance asset allocation targets and investment quality measures. Risk Categories Credit risk: The custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the Foundation would not be able to recover deposits or would not be able to recover collateral securities that are in the possession of an outside party. Therefore, the Foundation shall monitor deposits on account so as to avoid deposits that are not covered by depository insurance or are uncollateralized. In compliance with GASB and FASB standards, to the extent required, the Foundation will disclose in its annual financial statements the credit quality ratings of any external investment pools, money market funds, bond mutual funds, and other pooled investments of fixed-income securities in which they invest. Concentration of Credit Risk: The Foundation, with the assistance of its investment advisor, shall implement policies and procedures to ensure adequate portfolio diversification. It is the Foundation’s policy that, with the exception of U.S. Treasury and Agency obligations, no more than two percent (2%) of the fixed income portfolio at market shall be invested in a single issue or corporate entity. If more than one investment manager manages fixed income, these restrictions apply separately to each portfolio. Furthermore, the Foundation and its investment advisor monitor the asset allocation to ensure investments are within established targets for quality and investment balances remain within the established target range for each asset category.

16

Interest Rate Risk: As an element of interest rate risk, GASB requires disclosures of investments that have fair values that are highly sensitive to changes in interest rates. The allocation of the Foundation’s portfolio in Fixed Income investments susceptible to interest rate risk will be monitored not to exceed established targets in the approved investment policy. In cooperation with the investment advisor and the investment manager of the Fixed Income investments, the interest rate risk information will be organized by investment type and amount using one of the following methods: a. Segmented time distribution b. Specific identification c. Weighted average maturity d. Duration e. Simulation model. Foreign Currency Risk: The Foundation is required to disclose any investment denominated in a foreign currency. The Foundation has limited its exposure to foreign currency risk by limiting the asset allocation in international investments in accordance with the established targets in the approved investment policy.

The University of West Florida Foundation, Inc.

Earnings vs Expenses Obligated

As of June 30, 2016

Investment Earnings 09.30.15 12.31.15 03.31.16 06.30.16 To Date

Interest Income 87,542.53$ 81,335.52$ 101,170.33$ 80,820.35$ 350,868.73$

Dividend Income 105,594.52 382,815.59 108,048.62 153,403.61 749,862.34

Unrealized Gain/Loss (5,725,767.89) 714,415.76 (226,406.91) 1,560,381.36 (3,677,377.68)

Realized Gain/Loss 226,620.56 523,705.59 121,654.09 (74,912.86) 797,067.38

Rental Income - - - - -

Investment Fees (36,678.59) (37,087.69) (48,700.84) (66,757.07) (189,224.19)

Consultant Fees - (35,784.49) (17,645.71) (18,891.52) (72,321.72)

Other Charges & Fees (352.57) (6,797.00) (3,570.11) (9,669.75) (20,389.43) Total (5,343,041.44)$ 1,622,603.28$ 34,549.47$ 1,624,374.12$ (2,061,514.57)$

Expenses Obligated

Spending Rate @

4.00%

FY 15/16

Spending Rate @

4.00%

FY 14/15

Spending Rate @

4.00%

FY 13/14

Investment Earnings $ (2,061,514.57) $ 1,869,144.65 $ 10,284,904.12

Dept. Allocated Spending 2,169,804.07 2,061,362.98 1,878,353.76

Operating Budget 1,249,987.00 1,195,873.00 1,159,569.00

Non-Endowed Budget 429,000.00 393,000.00 355,000.00

Total Committed Expenses 3,848,791.07 3,650,235.98 3,392,922.76

Income Versus Expenses (5,910,305.64)$ (1,781,091.33)$ 6,891,981.36$

Other UWF Foundation Assets

Charitable Gift Annuity

Definition: A charitable gift annuity enables you to transfer cash or marketable securities to the charitable

organization issuing the gift annuity in exchange for a current income tax deduction and the organization's

promise to make fixed annual payments to you for life. Annuity payments can begin immediately or can be

deferred to some future date.

Current Assets held by the UWF Foundation as of 06/30/2016:

Cornerstone 2,964,575.58$

`

Annuitant 1 53,031.00$

Annuitant 2 15,633.21$

Annuitant 3 2,895,911.38$

Annuity Commitments as of 6/30/2016:

Commitment ** Age

Annuitant 1 75,503.41$ 98 @ 06.30.16

Annuitant 2 7,212.71$ 86 @ 06.30.16

Annuitant 3 1,743,947.48$ 90 @ 06.30.16

**6.30.16 FASB Balances adjusted for Annuity Payments; alignment of calculation done by Cornerstone

fiscal year end.

InsuranceInsurance Commitments as of 6/30/2016 ***

Face Value Cash Value Interest Credit Cost Per Year

Insurant 1 100,000$ 40,735.67$ 1,568.51$ 870.80$

Insurant 2 25,000$ 7,457.53$ -$ 600.00$

Insurant 3 100,000$ 13,158.56$ 725.69$ 827.76$

Insurant 4 1,000,000$ 245,570.72$ -$ 65,000.00$

***Numbers represent 6.30.16 balances as information is only supplied at year end from insurance

companies.

Audit Budget Committee

Reports

UNIVERSITY OF WEST FLORIDA FOUNDATION, INC.

A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

PENSACOLA, FLORIDA

FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

UNIVERSITY OF WEST FLORIDA FOUNDATION, INC.

A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

PENSACOLA, FLORIDA

FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

CONTENTS PAGE Audited Financial Statements: Independent Auditor’s Report 1 Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 3 Statements of Financial Position 5 Statements of Activities 6 Statements of Cash Flows 7 Notes to Financial Statements 9 Supplementary Information: Schedules of Student Housing System Revenues and Expenses 44 Schedules of Financial Position (Excluding the Student Housing System) 45 Schedules of Functional Expenses 46 Chairs Under Eminent Scholars Program - Schedule of Receipts, Expenses and Endowment Balances, certified by management 47 Major Gifts Program - Schedule of Receipts, Expenses and Endowment Balances, certified by management 48

INDEPENDENT AUDITOR’S REPORT To the Board of Directors University of West Florida Foundation, Inc. Pensacola, Florida Report on the Financial Statements We have audited the accompanying financial statements of the University of West Florida Foundation, Inc. (the “Foundation”) (a component unit of the University of West Florida), which comprise the statements of financial position as of June 30, 2016 and 2015, and the related statements of activities and cash flows for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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Board of Directors University of West Florida Foundation, Inc. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Foundation as of June 30, 2016 and 2015, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Other Information Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying supplementary information as listed in the table of contents is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The Schedules of Student Housing System Revenues and Expenses, Financial Position (Excluding the Student Housing System), and Functional Expenses have been subjected to the auditing procedures applied in the audits of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. The accompanying Schedules of Receipts, Expenses and Endowment Balances for the Chairs Under Eminent Scholars Program and the Major Gifts Program have not been subjected to the auditing procedures applied in the audits of the financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated August 31, 2016, on our consideration of the Foundation’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Foundation’s internal control over financial reporting and compliance. Pensacola, Florida August 31, 2016

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Board of Directors University of West Florida Foundation, Inc. Pensacola, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the University of West Florida Foundation, Inc. (the “Foundation”) (a component unit of the University of West Florida), which comprise the statement of financial position as of June 30, 2016, and the related statements of activities, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated August 31, 2016. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Foundation’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Foundation’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Foundation’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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Board of Directors University of West Florida Foundation, Inc. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Foundation’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Pensacola, Florida August 31, 2016

Cash and cash equivalents $ 1,833,360 $ 1,592,636 Restricted cash equivalents 12,009,423 12,454,548Contributions receivable, net 2,802,212 2,170,155 Other receivables, net 206,595 148,922 Due from University 278,696 379,616Prepaid expenses 194,195 126,949 Long-term investments 75,880,105 73,557,825 Property and equipment, net 50,694,794 52,245,390 Assets held under split interest agreements 3,121,850 295,598 Other assets 353,073 255,066

Total Assets $ 147,374,303 $ 143,226,705

Liabilities: Accounts payable and accrued expenses $ 650,797 $ 736,115Liabilities held under split interest agreements 1,795,555 198,375 Due to West Florida Historic Trust 1,157,601 1,238,099Bonds payable, net 47,956,174 50,256,521

Total liabilities 51,560,127 52,429,110

Commitments and Contingencies -- --

Net Assets: Unrestricted -

Undesignated 1,802,410 1,962,380 Board designated 2,035,286 1,877,694Student Housing System 12,329,976 10,985,957

Total unrestricted 16,167,672 14,826,031Temporarily restricted 24,550,946 26,024,342Permanently restricted 55,095,558 49,947,222

Total net assets 95,814,176 90,797,595

Total Liabilities and Net Assets $ 147,374,303 $ 143,226,705

LIABILITIES AND NET ASSETS

2016 2015

UNIVERSITY OF WEST FLORIDA FOUNDATION, INC.

STATEMENTS OF FINANCIAL POSITIONJUNE 30, 2016 AND 2015

ASSETS

A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

The accompanying notes are an integral part of these financial statements.

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This page intentionally left blank.

Revenue, Support and Reclassifications: Contributions $ 934,358 $ - $ 6,640,128 $ 4,846,621 $ 12,421,107 Interest and dividends 4,126 - 1,087,761 - 1,091,887 Net unrealized and realized gain (loss)

on long-term investments 872,837 - (3,656,364) - (2,783,527) Student housing system - 12,004,897 - - 12,004,897 Other income 218,712 - - - 218,712 Reclassification of net assets - - (303,215) 303,215 - Net assets released from restrictions 5,241,706 - (5,241,706) - -

Total revenue, support and reclassifications 7,271,739 12,004,897 (1,473,396) 5,149,836 22,953,076

Expenses: Direct program services -

Scholarships 1,025,649 - - - 1,025,649 Other program services 3,986,413 - - - 3,986,413 Student housing system - 10,660,878 - - 10,660,878

Total direct program services 5,012,062 10,660,878 - - 15,672,940

Supporting services - Fundraising 376,122 - - - 376,122 General and administrative 1,885,933 - - - 1,885,933

Total supporting services 2,262,055 - - - 2,262,055

Total expenses 7,274,117 10,660,878 - - 17,934,995

Loss from cancelled restricted contributions - - - 1,500 1,500

Total expenses and losses 7,274,117 10,660,878 - 1,500 17,936,495

Change in Net Assets (2,378) 1,344,019 (1,473,396) 5,148,336 5,016,581

Net Assets, Beginning of Year 3,840,074 10,985,957 26,024,342 49,947,222 90,797,595

Net Assets, End of Year $ 3,837,696 $ 12,329,976 $ 24,550,946 $ 55,095,558 $ 95,814,176

A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

Student Unrestricted

2016

UNIVERSITY OF WEST FLORIDA FOUNDATION, INC.

STATEMENTS OF ACTIVITIESYEARS ENDED JUNE 30, 2016 AND 2015

Temporarily PermanentlyTotalFoundation Restricted RestrictedHousing

$ 893,763 $ - $ 2,309,147 $ 1,403,098 $ 4,606,008 21,547 - 994,289 - 1,015,836

712,404 - 389,302 - 1,101,706 - 11,919,522 - - 11,919,522

179,844 - - - 179,844 - - 106,099 (106,099) -

4,963,180 - (4,963,180) - -

6,770,738 11,919,522 (1,164,343) 1,296,999 18,822,916

1,124,533 - - - 1,124,533 3,165,448 - - - 3,165,448

- 11,236,326 - - 11,236,326 4,289,981 11,236,326 - - 15,526,307

386,453 - - - 386,453 1,771,062 - - - 1,771,062 2,157,515 - - - 2,157,515

6,447,496 11,236,326 - - 17,683,822

- - - 1,024,842 1,024,842

6,447,496 11,236,326 - 1,024,842 18,708,664

323,242 683,196 (1,164,343) 272,157 114,252

3,516,832 10,302,761 27,188,685 49,675,065 90,683,343

$ 3,840,074 $ 10,985,957 $ 26,024,342 $ 49,947,222 $ 90,797,595

2015Unrestricted

Student Temporarily Permanently

The accompanying notes are an integral

part of these financial statements.

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Foundation Housing Restricted Restricted Total

Cash Flows From Operating Activities: Change in net assets $ 5,016,581 $ 114,252 Adjustments to reconcile change in net assets to

net cash provided by operating activities -Net unrealized and realized gain (loss) on long-term investments 2,783,527 (1,101,706) Contributions restricted for long-term purposes (4,846,621) (1,403,098) Bad debt expense (recovery) 49,687 (3,634) Loss from cancelled restricted contributions 1,500 1,024,842 Loss from property abandonment 140,380 - Loss on bond defeasance - 341,042 Change in fair value of -

Contributions receivable (180,417) (77,490) Split interest agreements (1,229,072) 15,912 Cash surrender value of insurance policies (98,007) (64,940)

Depreciation and amortization 2,813,518 2,772,363Net amortization of bond discount 11,197 8,313 Change in operating assets and liabilities -

Contributions receivable (454,878) 132,830 Other receivables (105,622) 28,736 Due from University 100,920 (13,818) Prepaid expenses (67,246) 18,458 Accounts payable and accrued expenses (85,318) 41,155

Net cash provided by operating activities 3,850,129 1,833,217

Cash Flows From Investing Activities: Purchases of investments (11,995,496) (15,635,497) Proceeds from sales, maturities, and distributions of investments 6,889,689 14,797,347 Acquisition of property and equipment (1,342,550) (1,325,179) Due to West Florida Historic Trust (80,498) 2,195

Net cash used in investing activities (6,528,855) (2,161,134)

Cash Flows From Financing Activities: Proceeds from bond issuance - 14,393,280 Defeasance of bond - (14,880,000) Bond principal payments (2,254,934) (1,446,000) Bond issuance costs (117,362) (122,051) Contributions to permanent endowments 4,846,621 1,403,098

Net cash provided by (used in) financing activities 2,474,325 (651,673)

Net Decrease in Cash and Cash Equivalents (204,401) (979,590) Cash and Cash Equivalents at Beginning of Year 14,047,184 15,026,774

Cash and Cash Equivalents at End of Year $ 13,842,783 $ 14,047,184

YEARS ENDED JUNE 30, 2016 AND 2015STATEMENTS OF CASH FLOWS

UNIVERSITY OF WEST FLORIDA FOUNDATION, INC.

2016 2015

A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

The accompanying notes are an integralpart of these financial statements.

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Analysis of Cash and Cash Equivalents: Cash and cash equivalents $ 1,833,360 $ 1,592,636 Restricted cash equivalents 12,009,423 12,454,548

$ 13,842,783 $ 14,047,184

Supplemental Disclosure of Cash Flow Information: Interest paid $ 2,200,604 $ 2,696,218

Supplemental Disclosure of Noncash Investing Activities: Abandonment of construction in progress $ 140,380 $ -

2016 2015

(Continued)

UNIVERSITY OF WEST FLORIDA FOUNDATION, INC.A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

STATEMENTS OF CASH FLOWSYEARS ENDED JUNE 30, 2016 AND 2015

The accompanying notes are an integralpart of these financial statements.

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Purpose:

The University of West Florida Foundation, Inc. (the “Foundation”) was organized as a Florida not-for-profit corporation in 1965 for the purpose of soliciting, receiving, and administering gifts and bequests of property and funds for scientific, educational, and charitable purposes, all for the advancement of the University of West Florida (the “University”) and its objectives. The Foundation is a direct-support organization of the University, as provided for in Section 1004.28, Florida Statutes, and Rule 6C-9.011, Florida Administrative Code, and therefore is considered a component unit of the University. The Foundation owns the Student Housing System and is responsible for the management thereof, along with the associated revenues, expenses and debt related to the operation of these projects as further described in Note 12 to the financial statements.

Basis of Accounting: The Foundation follows standards of accounting and financial reporting prescribed for not-for-profit organizations. It uses the accrual basis of accounting, which recognizes revenue when earned and expenses as incurred.

Basis of Presentation: Net assets, revenues, expenses, gains and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Foundation and changes therein are classified and reported as follows: Permanently restricted net assets - Net assets subject to donor-imposed stipulations that the corpus be maintained permanently by the Foundation. The donors of these assets permit the Foundation to use all of the investment return on these assets. Such assets primarily include the Foundation’s permanent endowment funds. Temporarily restricted net assets - Net assets subject to donor-imposed stipulations that can be fulfilled by actions of the Foundation pursuant to those stipulations or that expire by the passage of time. Such assets are available for use by the various colleges and departments of the University, as designated by the donors to the Foundation. Unrestricted net assets - Net assets not subject to donor-imposed stipulations. Unrestricted net assets may be designated for specific purposes by the action of the governing board, including quasi-endowments, or may otherwise be limited by contractual agreements with outside parties.

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Basis of Presentation (Continued):

Unrestricted net assets - student housing system - Unrestricted net assets designated through bond covenant restrictions for the specific purpose of bond repayment for the Student Housing System.

Contributions: Contributions are reported as temporarily restricted if the donor limits the use of the donated assets. When the restrictions expire, these temporarily restricted net assets are reclassified to unrestricted net assets and are reported in the statement of activities as net assets released from restrictions. Contributions of endowments are reported as permanently restricted since the corpus is invested in perpetuity. All other contributions having no restrictions are reported as unrestricted. The Foundation has elected to record unconditional promises to give at fair value. Management believes the use of fair value reduces the cost of measuring unconditional promises to give in periods subsequent to their receipt and provides equal or better information to users of its financial statements than if those promises were measured using present value techniques at historical discount rates. An allowance for uncollectible pledges is provided based on management’s evaluation of potential uncollectible pledges receivable at year-end. Conditional promises to give are not recorded in the financial statements. In the event a donor makes changes to the nature of a restricted gift which affect its classification among the net asset categories, such amounts are reflected as net assets released from restrictions in the revenues section of the statement of activities. Non-cash contributions are recorded at fair market value at the time of donation. Each state university board of trustees is authorized to permit the use of property, facilities, and personal services at any state university by any university direct support organization per Section 1004.28, Florida Statutes. Administrative and fiscal services, office space, and other miscellaneous support services are provided to University direct support organizations by the University. As discussed in Note 7, FASB ASC 958, Not-for-Profit Entities, requires the recognition and measurement for services received from affiliated not-for-profit organizations when not charged.

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Cash and Cash Equivalents:

The amount reported as cash and cash equivalents consists of cash on hand, cash in demand accounts, and a portion of cash placed with the State Treasury Special Purpose Investment Account (“SPIA”). In March 2015, SPIA enacted liquidity requirements limiting the amount of money SPIA participants could withdraw from their accounts. The portion considered liquid is calculated as forty percent of the previous three months’ average daily balance. For the purpose of reporting cash flows, the Foundation considers all highly liquid investments with original maturities of three (3) months or less to be cash equivalents. Under this definition, the Foundation considers the liquid portion of SPIA deposits to be cash equivalents.

Restricted Cash Equivalents: Restricted cash equivalents represent a portion of SPIA, and funds held by bond trustees for construction of on-campus housing, debt service, and maintenance of reserves required under the bond indentures. With the newly enacted liquidity requirements, SPIA established a minimum balance for each account. Each SPIA participant is required to give six months’ notice for all withdrawals below the floor, which is calculated as sixty percent of the previous three months’ average daily balance.

Investments: The Foundation has created various pools for the investment of funds on a consolidated basis. All investments are reported at fair value. Investment income (interest, dividends, realized and unrealized gains or losses) from endowment and restricted operating funds is recognized as temporarily restricted investment income in accordance with donor stipulations. Income from all other operating funds is recognized as unrestricted investment income. There are no permanent restrictions on investment income.

Property and Equipment: Property and equipment consists of office equipment and property held for lease, future use, or sale. Purchased assets are recorded at cost, while donated assets are recorded at fair market value at the date of donation. Depreciation is allocated over the estimated useful lives of the respective assets on a straight-line basis. Where a contributed asset has an uncertain fair market value due to deed restrictions, the Foundation records no value for the property.

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Property and Equipment (Continued):

The Foundation capitalizes interest costs on borrowing incurred during the construction of qualifying assets. The capitalized interest is amortized over the life of the borrowing.

Collections: The Foundation has capitalized its collections since its inception. Collections consist of paintings donated to the Foundation. Works of art are stated at the estimated fair market value at the time of donation. Gains and losses on the deaccession of donated collection items are classified in the statement of activities based on the absence or existence and nature of donor restrictions placed on the item at the time of donation.

Split-Interest Agreements: The Foundation serves as trustee for split-interest agreements classified as charitable gift annuities and charitable remainder unitrust. Assets received under these agreements are recorded at fair market value and the liabilities to make future payments under these agreements are recorded at present value, with the difference reported as a gain or loss. These assets and liabilities are adjusted to reflect changes in their fair market value and present value. The determination of the present value of liabilities under split-interest agreements is based on discount rates and mortality tables established by the Internal Revenue Code and Regulations.

Bond Discounts: Bond discounts are amortized over the terms of the bonds using the straight-line method since the difference between this method and the effective interest method is not material to the financial statements. Bond discounts are presented as a reduction of the face amount of bonds payable.

Compensated Absences: Employees of the Foundation are entitled to paid vacation and sick days depending on job classification, length of service and other factors. Upon termination of employment, an employee will be paid for accumulated annual leave. In addition, an employee with ten or more years of service may be paid for a portion of their accumulated sick leave. At June 30, 2016 and 2015, accrued compensated absences totaling $258,247 and $243,114 were reported as a component of accrued expenses in the accompanying financial statements.

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Other Program Services:

Other program services consist of expenditures released from temporarily restricted net assets based on donor-imposed stipulations to support the objectives of the University and/or its various colleges and departments.

Income Taxes: The Foundation is a nonprofit organization exempt from federal income tax under Section 501 (c) (3) of the Internal Revenue Code. However, income from certain investment activities not directly related to the Foundation’s tax-exempt purpose is subject to taxation as unrelated business income. In addition, the Foundation qualifies for the charitable contribution deduction under Section 170(b)(1)(A)(vi) and has been classified as an organization other than a private foundation under Section 509(a)(1).

Estimates: The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Retirement Plan: As discussed in more detail in Note 11, Foundation employees may elect to participate in the Florida Retirement System consisting of a defined benefit plan; the Deferred Retirement Option Program, an alternative method for retirement payment; and the Public Employee Optional Retirement Program, a defined contribution plan. These plans have vesting and service requirements. Certain eligible faculty and administrators may also elect to participate in the Optional Retirement Program, a defined contribution plan which provides full and immediate vesting of contributions. Certain key University personnel participate in a money-purchase retirement savings plan with specific vesting schedules.

Reclassifications: Certain amounts in the 2015 financial statements have been reclassified to conform to the 2016 presentation.

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Subsequent Events:

Management has evaluated subsequent events through August 31, 2016, the date which the financial statements were available for issue.

Recent Accounting Standards: During the year ended June 30, 2016, the Foundation elected to early adopt and retrospectively apply FASB Accounting Standards Update No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”), which requires that debt issuance costs be presented as a direct deduction from the carrying amount of the debt rather than as an asset, consistent with debt discounts. The June 30, 2015 balance sheet previously reported bonds payable of $51,231,817 in liabilities, with the associated $975,296 unamortized debt issuance costs included in bond issue costs, net. There was no impact on the results of operations as a result of the adoption of ASU 2015-03.

NOTE 2 - RESTRICTED CASH EQUIVALENTS Restricted cash equivalents at June 30 consist of the following:

Housing operating reserves $ 1,192,064 $ 1,173,603 Housing replacement reserves 1,028,595 1,049,230 Housing contingency and improvement reserve 7,287,042 6,924,267Courtelis reserve 772,444 861,986 SPIA operating reserves 728,135 1,444,832 2009 bond issuance -

Special interest checking 1,001,134 1,000,623 2010 bond interest 6 6 2011 bond issuance -

Principal 1 1 2015 bond issuance -

Principal 2 -

$ 12,009,423 $ 12,454,548

20152016

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 3 - CONTRIBUTIONS RECEIVABLE

The Foundation records unconditional promises to give using fair value adjusted for the current year end discount rates, ranging from 0% to 20%, based on the prevailing five-year Treasury constant maturities. The current year fair value adjustment to contributions revenue for temporarily and permanently restricted was $42,183 and $160,846 respectively. For the year ending June 30, 2015, the fair value adjustment to contributions revenue for temporarily and permanently restricted was $55,497 and $327,949, respectively. Multi-year contributions receivable are classified within Level 3 of the fair value hierarchy because determination of the present value of future cash flows is based on little or no market data and requires management to develop their own assumptions. In 2016 and 2015, there were no transfers of contributions receivable into or out of Level 3. Unconditional promises to give at June 30 are due as follows:

In one year or less $ 568,066 $ 461,161 Between one and five years 1,026,014 541,361 Greater than five years 1,416,250 1,552,930

Total contributions receivable, gross 3,010,330 2,555,452 Less discounts to net fair value 203,029 383,446 Less allowance for doubtful accounts 5,089 1,851

Net contributions receivable, fair value $ 2,802,212 $ 2,170,155

2016 2015

The table below presents information about unconditional promises to give measured at fair value at June 30, 2016:

Temporarily PermanentlyRestricted Restricted

Promises measured at Fair ValuePromised cash flows $ 1,131,733 $ 1,878,597 Fair value estimate $ 1,089,549 $ 1,717,752 Measurement basis Level 3 Level 3Contribution revenue $ 42,184 $ 160,845

Total changes included in the statement of activities $ 42,184 $ 160,845

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 3 - CONTRIBUTIONS RECEIVABLE (Continued)

The table below presents information about unconditional promises to give measured at fair value at June 30, 2015:

Temporarily PermanentlyRestricted Restricted

Promises measured at Fair ValuePromised cash flows $ 606,375 $ 1,949,077 Fair value estimate $ 550,878 $ 1,621,128 Measurement basis Level 3 Level 3Contribution revenue $ 55,497 $ 327,949

Total changes included in the statement of activities $ 55,497 $ 327,949

Changes in unconditional promises to give for the year ended June 30, 2016 are as follows:

Temporarily PermanentlyRestricted Restricted

Beginning Balance, July 1, 2015 $ 550,878 $ 1,621,128 New promises received 788,450 368,102 Collections (263,093) (438,581) Contribution revenue 13,314 167,103

Ending Balance, June 30, 2016 $ 1,089,549 $ 1,717,752

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 3 - CONTRIBUTONS RECEIVABLE (Continued)

Changes in unconditional promises to give for the year ended June 30, 2015 are as follows:

Temporarily PermanentlyRestricted Restricted

Beginning Balance, July 1, 2014 $ 484,288 $ 2,767,984 New promises received 309,775 318,000 Collections (328,532) (431,999) Contribution revenue (9,653) 87,143 Management and general (write-offs) - (1,025,000) Change in pledge terms 95,000 (95,000)

Ending Balance, June 30, 2015 $ 550,878 $ 1,621,128

Conditional promises to give amounted to $2,438,052 at June 30, 2016 for state matching funds from the State of Florida Major Gifts Trust Fund. The funds will be forwarded to the Foundation in the event that future appropriations are made by the state legislature.

NOTE 4 - OTHER RECEIVABLES Other receivables at June 30 consist of the following:

Student loan fund $ 62,879 $ 62,119Rent, less allowance of $205,565

in 2016 and $157,616 in 2015 126,070 71,476Other 17,646 15,327

Net other receivables $ 206,595 $ 148,922

2016 2015

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 4 - OTHER RECEIVABLES (Continued)

The Student Loan Fund, established through contributions, provides low-interest, short-term loans to students. All transactions are conducted through the University’s cashiers’ office. The Student Loan Program is made up of accounts receivable for loans to students, funds held at the University available for loans to students, and funds invested in a quasi-endowment at the Foundation. The Foundation holds $185,578 that is invested in a quasi-endowment. Earnings in the quasi-endowment are transferred to the University, as needed, to support the Student Loan Program.

NOTE 5 - LONG-TERM INVESTMENTS Investments in the long-term pool are carried at fair value and consist of the following:

June 30, 2016:Equity securities -

Common stock and mutual funds $ 43,910,566 $ 46,386,579 $ 2,476,013 Debt securities 10,131,886 10,686,444 554,558 Alternative investments -

Fund of fund hedge funds 11,005,742 14,746,138 3,740,396 Private equity investments 1,716,730 2,148,431 431,701 Real estate investment trust 1,778,429 1,912,513 134,084

Total investments $ 68,543,353 $ 75,880,105 $ 7,336,752

June 30, 2015:Equity securities -

Common stock and mutual funds $ 38,276,175 $ 43,878,543 $ 5,602,368 Debt securities 10,129,034 10,332,591 203,557 Alternative investments -

Fund of fund hedge funds 11,005,742 15,815,353 4,809,611 Private equity investments 1,659,878 2,032,648 372,770 Real estate investment trust 1,434,679 1,498,690 64,011

Total investments $ 62,505,508 $ 73,557,825 $ 11,052,317

Gain (Loss)CostUnrealized

Fair Value

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 5 - LONG-TERM INVESTMENTS (Continued)

Wells Fargo is the custodian for the Foundation’s equity securities, debt securities and fund of fund hedge funds. As further discussed in Note 10, the fair market value of all endowed investments was at a level above the minimum required by donor stipulations, totaling $4,731,745. However, individual donor-restricted endowment funds were deficient, totaling $773,888, where the fair value of the investments at June 30, 2016 was less than the level required by the donor stipulations. The net return on investments was as follows:

Year Ended June 30, 2016 - Dividends and interest $ 4,126 $ 1,087,761 Net realized gain on investments 3,040 778,101Unrealized gain (loss) on investments 869,797 (4,434,465)

Total return on investments $ 876,963 $ (2,568,603)

Year Ended June 30, 2015 - Dividends and interest $ 21,547 $ 994,289 Net realized gain on investments 55,225 2,502,871Unrealized gain (loss) on investments 657,179 (2,113,569)

Total return on investments $ 733,951 $ 1,383,591

TotalUnrestricted Restricted

Temporarily

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 6 - PROPERTY AND EQUIPMENT

Property and equipment is comprised of the following at June 30:

Land $ 1,454,483 $ 1,454,483Property held under capital lease 74,278,716 73,324,046Office equipment and software 486,017 465,051

76,219,216 75,243,580 Less accumulated depreciation 27,571,267 24,818,502

48,647,949 50,425,078Construction in progress 1,123,712 954,362Idle property, net 923,133 865,950

$ 50,694,794 $ 52,245,390

20152016

Depreciation and amortization expense for the years ended June 30, 2016 and 2015 was $2,752,766 and $2,705,239, respectively. Property held under capital lease represents the University’s Student Housing System, which consists of the following: the South Side facilities constructed in 1966 and 1972; the Villages Phase I (West) and II (East), completed in 1997 and 1999, respectively; the first (Martin Hall), the second (Pace Hall), and the third (Argo Hall) portions of Phase III completed in 2000, 2001, and 2004, respectively; and the first (Heritage Hall) and the second (President’s Hall) portions of Phase IV completed in 2010 and 2012, respectively. The buildings under capital lease are depreciated over the lease term, which is effectively 30 years, and the furniture, fixtures, and equipment are depreciated over their useful life of 5 - 10 years. Amortization of property under capital lease is included in depreciation expense. At June 30, 2016 and 2015, amortization of the property under capital lease totaled $2,716,340 and $2,668,812, respectively. See Note 12 for further capital lease disclosure. The Foundation routinely evaluates the carrying value of its long-lived assets. The Foundation records impairment losses on long-term assets when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If such assets are considered to be impaired, the charge to operations is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. As of June 30, 2016, none of the Foundation’s long-lived assets were considered to be materially impaired.

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 7 - RELATED PARTY TRANSACTIONS

At June 30, 2016 and 2015, the Foundation and the University jointly determined an amount for the Foundation to deposit with the University to be used to manage and pay expenses for the Foundation’s operations. Payroll, other University departments, and program expenses that are funded from the Foundation are paid through the University utilizing these funds. At June 30, 2016 and 2015, the cash balances held by the University were $278,696 and $379,616 respectively, and were included in due from University. In March of 2013, the Foundation entered into a Memorandum of Understanding with the University of West Florida Historic Trust (“WFHT”), another DSO of the University, where WFHT may transfer current cash assets to the Foundation to invest on their behalf. These funds are invested as a Quasi-Endowment with the Foundation and will be part of the overall investment pool subject to spending and investment policies of the Foundation as agreed to in the memorandum. Funds invested by WFHT in the Foundation’s investment pool totaled $1,157,601 and $1,238,099 at June 30, 2016 and 2015, respectively, and are included in due to WFHT. As a direct support organization, the Foundation received support from the University in performance of its mission. FASB ASC 958, Not-for-Profit Entities, requires recognition and measurement for services received from affiliated non-for-profit organizations when not charged. Salaries and benefits of University employees providing such support total approximately $773,000 and $764,000 in 2016 and 2015, respectively, and are included in general and administrative expenses. The University also provides centralized payroll processing and IT support that management estimates as immaterial to these financial statements.

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 8 - BONDS PAYABLE

Revenue Bonds consist of the following at June 30:

$14,393,280 Dormitory Refunding Revenue Bonds,Series 2015, due in annual installments of$709,936 to $1,120,171, from June 1, 2016through June 1, 2031 with an interest rate of3.10% due semiannually, June 1and December 1 $ 13,683,344 $ 14,393,280

$15,000,000 Dormitory Revenue Bonds, Series 2009, due in annual installments of$487,000 to $1,190,000, from June 1, 2011through June 1, 2029 with an interest rate of 5.09% due semiannually, June 1 and December 1 11,680,000 12,304,000

$9,226,000 Dormitory Refunding Revenue Bonds,Series 2010, due in annual installmentsof $591,000 to $830,500, from June 1, 2016through June 1, 2028 with an interest rate of2.75% due semiannually, June 1 and December 1 8,635,000 9,226,000

$16,525,000 Dormitory Revenue Bonds,Series 2011, due in annual installments of$300,000 to $1,120,000, from June 1, 2013through June 1, 2040 with interest rangingfrom 3.00% to 5.875% due semiannually,June 1 and December 1 15,265,000 15,595,000

Bonds payable 49,263,344 51,518,280 Less unamortized discount and issue costs 1,307,170 1,261,759

Bonds payable, net of unamortized discount and issue costs $ 47,956,174 $ 50,256,521

2016 2015

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 8 - BONDS PAYABLE (Continued)

Interest of $173,269 and $191,149 was accrued on the bonds as of June 30, 2016 and 2015, respectively. Maturities of the Revenue Bonds are as follows:

For the year ending2017 $ 2,346,044 2018 2,424,497 2019 2,517,196 2020 2,611,371 2021 2,710,073

Thereafter 36,654,163

$ 49,263,344

During fiscal year 2015, the Foundation advance refunded the 2005 Dormitory Refunding Revenue bonds with a private placement bond sponsored through the Escambia County Housing Finance Authority. The transaction reduced total debt service payments by approximately $2,169,000, a net present value savings of approximately 11.17% or $1,661,000. As a result, the transaction is accounted for as an extinguishment of debt under FASB ASC 470, Debt. The refunding resulted in a difference between the reacquisition price and the net carrying amount of $341,042 and is recorded in Student Housing expenses in the accompanying financial statements. The 2009 Dormitory Revenue bonds, sponsored by the Escambia County Housing Finance Authority, were issued to provide financing for the construction of student housing facilities. The 2010 Dormitory Refunding Revenue bonds, sponsored by the Escambia County Housing Finance Authority, were issued to refund $11.5 million from the 1998 Dormitory Revenue bonds. During the year ended June 30, 2016, the Foundation obtained an interest rate reduction sponsored by the Escambia County Housing Finance Authority. This reduced the debt service payments by approximately $746,000, a net present value savings of approximately 6.6% or $607,000. As a result, the transaction is accounted for as a loan modification under FASB ASC 470, Debt. The modification resulted in capitalization of bond issuance costs of $117,362. The 2011 Dormitory Revenue bonds, sponsored by the Escambia County Housing Finance Authority, were issued to provide financing for the construction of student housing facilities.

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 8 - BONDS PAYABLE (Continued)

The bonds are secured by mortgages on the student housing facilities in addition to a pledge of revenues earned from their operation. The bonds require the Foundation to maintain various covenants, including one that requires student housing room rates to be maintained at a level that provides net revenues at least equal to 120% of annual debt service. The debt service ratio for the year ended June 30, 2016 was 155%. The Foundation is not aware of any violations of the covenants at June 30, 2016.

NOTE 9 - NET ASSETS Temporarily restricted net assets at June 30 are available for the following purposes:

Scholarships, student awards and loan funds $ 5,724,917 $ 6,881,474 Faculty support, professorships and chairs 3,657,002 4,576,236 Foundation reserve fund 2,665,802 3,535,700 Programs and other 12,503,225 11,030,932

Total temporarily restricted net assets $ 24,550,946 $ 26,024,342

2016 2015

Permanently restricted net assets consist of endowment fund assets to be held in perpetuity, with only the income to be expended. The following is a summary of permanently restricted net assets at June 30, 2016 and 2015, categorized by the purpose for which the income is expendable:

Scholarships, student awards and loan funds $ 25,049,854 $ 22,634,860 Faculty support, professorships and chairs 11,763,613 11,763,604 Programs and other 18,282,091 15,548,758

Total permanently restricted net assets $ 55,095,558 $ 49,947,222

2016 2015

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 10 - ENDOWMENTS

The Foundation’s endowments consist of 255 individual funds established for a variety of purposes. The endowments include both donor-restricted endowment funds and funds designated by the governing board to function as endowments. As required by accounting principles generally accepted in the United States of America, net assets associated with endowment funds, including funds designated by the governing board to function as endowments, are classified and reported based on the existence or absence of donor-imposed restrictions. Interpretation of Relevant Law -

The Foundation’s governing board with guidance from legal counsel has interpreted the Florida Uniform Prudent Management of Institutional Funds Act (“Florida UPMIFA”) as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the Foundation classifies as permanently restricted net assets (a) the original value of the gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment fund that is not classified as permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the Foundation in a manner consistent with the standard of prudence prescribed by the Florida UPMIFA. In accordance with the Florida UPMIFA, the Foundation’s governing board considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds:

1. The duration and preservation of the fund 2. The purposes of the Foundation and the donor-restricted endowment fund 3. General economic conditions 4. The possible effect of inflation and deflation 5. The expected total return from income and the appreciation of investments 6. Other resources of the Foundation 7. The investment policies of the Foundation

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 10 - ENDOWMENTS (Continued)

Funds with Deficiencies -

From time to time, the fair value of assets associated with individual donor-restricted endowment funds may fall below the level that the donor or the Florida UPMIFA requires the Foundation to retain as a fund of perpetual duration. In accordance with accounting principles generally accepted in the United States of America, deficiencies of this nature are reported as a loan from unrestricted net assets. For the period ending June 30, 2016 and 2015, the amount of the loan was $156,283 and $15,355, respectively. The loan is offset against the net assets released from restrictions on the statement of activities. These deficiencies resulted from unfavorable market fluctuations and continued appropriation for certain programs that was deemed prudent by the governing board.

Return Objectives and Risk Parameters -

The Foundation’s governing board has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowments while seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor-restricted funds that the Foundation must hold in perpetuity or for a donor-specified period(s) as well as board-designated funds. Under this policy, as approved by the governing board, the endowment assets are invested in a manner that is intended to produce the desired minimum rate of return which is equal to the Consumer Price Index (“CPI”) plus 400 basis points (4%) for spending, plus an additional 200 basis points (2%) for the operating budget on an annualized basis. The Foundation expects its endowment funds, over time, to provide an average annual rate of return of approximately CPI plus 600 basis points (6%). Actual returns in any year may vary from this amount. The Investment Committee recognizes that prudent investing requires taking reasonable risks in order to raise the likelihood of achieving the targeted investment returns. Research has demonstrated that portfolio risk is best minimized through diversification of assets. The portfolio of funds is structured to maintain prudent levels of diversification. In terms of relative risk, the volatility of the portfolio is expected to be in line with general market conditions.

Strategies Employed for Achieving Objectives -

To satisfy its long-term rate-of-return objectives, the Foundation relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). The Foundation targets a diversified asset allocation that places a greater emphasis on equity-based investments to achieve its long-term return objectives within prudent risk constraints.

Spending Policy and How the Investment Objectives Relate to Spending Policy -

The Foundation’s spending rate is calculated on a three year average of the market value of the endowments as of June 30. Spending is awarded for endowments greater than $25,000 after a one year waiting period. The approved spending rate was 4.00% for fiscal years ended June 30, 2016 and 2015.

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 10 - ENDOWMENTS (Continued)

Spending Policy and How the Investment Objectives Relate to Spending Policy (Continued) -

The Foundation strives to balance the donor’s desire to fund current program, faculty, and scholarship needs with the commitment to preserve over time the donor’s gifts to the endowment corpus. Furthermore, the Foundation takes seriously its responsibility to provide prudent fiduciary management, oversight of the endowments, and intergenerational equity. However, the Foundation is aware that despite utilizing a well-diversified investment portfolio strategy and the best good faith efforts of its governing board, there will be times when the fair market value of an endowment may fall below the endowment corpus value creating underwater endowments. In the event an endowment falls underwater, the Foundation will use a 25% step down spending allocation method to slow the spending from the endowment. For each 10% an endowment is underwater, the allocated endowment spending (exclusive of the operating allocation) will be reduced by 25%. Any endowment more than 30% underwater will receive no endowment spending allocation. The intent of this policy is to attempt to continue to provide spending to support the scholarships, programs, and faculty as designated by the donor and within the limits of Florida laws, while also allowing the endowment to recover more quickly from economic downturns. The Foundation’s operating budget is generally two percent (2%) of the three year average of the market value of the investment portfolio. Pursuant to the proposal adopted by the governing board, the goal is to reduce the operating budget from two percent (2%) to one and one-half percent (1.5%) of the total investment assets. As such, for each $1,000,000 increase in market value of the investment portfolio above $50,000,000, the percentage for the operating budget will decrease by one basis point (0.01%), reaching the objective of 1.5% with assets of $100,000,000. Using this formula, the budget rate for fiscal year 2016-2017 is 1.78%.

Changes in balances for donor and board restricted endowments by net asset class as of June 30, 2016 are as follows:

Donor-restricted permanent endowments $ - $ - $ 53,379,642 $ 53,379,642 Donor-restricted expendable balance

from permanent endowments - 4,731,745 - 4,731,745 Donor-restricted unconditional promises

to give, at fair value - - 1,715,916 1,715,916 Donor-restricted quasi endowments - 343,422 - 343,422 Board-designated quasi endowments 1,587,798 - - 1,587,798

Total endowment balance $ 1,587,798 $ 5,075,167 $ 55,095,558 $ 61,758,523

EndowmentTotal

Unrestricted RestrictedTemporarily Permanently

Restricted

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 10 - ENDOWMENTS (Continued)

Changes in balances for donor and board restricted endowments by net asset class as of June 30, 2015 are as follows:

Endowment Balance, July 1, 2014 $ 1,540,320 $ 13,128,848 $ 49,675,065 $ 64,344,233 Restricted contributions - - 1,403,098 1,403,098 Loss from cancelled restricted contributions - - (1,024,842) (1,024,842) Investment income 96,043 3,235,850 - 3,331,893 Net depreciation (62,418) (2,102,154) - (2,164,572) Other changes 255,154 - (106,099) 149,055 Amounts appropriated for expenditures (34,121) (3,192,206) - (3,226,327)

Endowment Balance, June 30, 2015 $ 1,794,978 $ 11,070,338 $ 49,947,222 $ 62,812,538

Restricted Restricted Total

Expendable Nonexpendable

UnrestrictedTemporarily Permanently

The earnings from investments, and expenditures from those earnings, related to the permanently restricted nonexpendable balances for the years ended June 30, 2016 and 2015 are classified as temporarily restricted. Endowment composition by net asset class as of June 30, 2016 is as follows:

Donor-restricted permanent endowments $ - $ - $ 53,379,642 $ 53,379,642 Donor-restricted expendable balance

from permanent endowments - 4,731,745 - 4,731,745 Donor-restricted unconditional promises

to give, at fair value - - 1,715,916 1,715,916 Donor-restricted quasi endowments - 343,422 - 343,422 Board-designated quasi endowments 1,587,798 - - 1,587,798

Total endowment balance $ 1,587,798 $ 5,075,167 $ 55,095,558 $ 61,758,523

EndowmentTotal

Unrestricted RestrictedTemporarily Permanently

Restricted

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 10 - ENDOWMENTS (Continued)

Endowment composition by type of fund as of June 30, 2015 is as follows:

Donor-restricted permanent endowments $ - $ - $ 48,326,431 $ 48,326,431 Donor-restricted expendable balance

from permanent endowments - 10,786,244 - 10,786,244 Donor-restricted unconditional promises

to give, at fair value - - 1,620,791 1,620,791 Donor-restricted quasi endowments - 284,094 - 284,094 Board-designated quasi endowments 1,794,978 - - 1,794,978

Total endowment balance $ 1,794,978 $ 11,070,338 $ 49,947,222 $ 62,812,538

TotalTemporarily Permanently EndowmentUnrestricted Restricted Restricted

As of June 30, 2016 and 2015, $1,931,220 and $2,079,072, respectively, of net assets have been designated as quasi-endowment funds to support the missions of the University. The quasi-endowments resulting from internal designations are classified as unrestricted net assets. The quasi-endowments resulting from donor designations are classified as temporarily restricted net assets.

NOTE 11 - RETIREMENT PLAN Certain Foundation employees working in regularly established positions of the University are covered by the Florida Retirement System (“FRS”), a State-administered cost-sharing, multiple-employer, public employee defined benefit retirement plan (“Plan”). The Plan provisions are established by Chapters 121 and 122, Florida Statutes; Chapter 112, Part IV, Florida Statutes; Chapter 238, Florida Statutes; and FRS Rules, Chapter 60S, Florida Administrative Code, wherein Plan eligibility, contributions, and benefits are defined and described in detail. The FRS is a single retirement system administered by the Department of Management Services, Division of Retirement, and consists of two cost-sharing, multiple-employer retirement plans and other non-integrated programs. These include the Plan, a Deferred Retirement Option Program (“DROP”), and a defined-contribution plan, referred to as the Public Employee Optional Retirement Program (“PEORP”). Participating employers include all State departments, counties, district school boards, universities and community colleges. Many municipalities and special districts have elected to be participating employers. Essentially all regular employees of participating employers are eligible. Employees in the Plan vest at six years of service. All vested members are eligible for normal retirement benefits at age 62 or at any age after 30 years of service, which may include up to four years of credit for military service.

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 11 - RETIREMENT PLAN (Continued)

The Plan provides retirement, disability, death benefits, and annual cost-of-living adjustments. The University, as an employer participating in the Plan, paid an amount between 7.26% to 21.43% and 7.37% to 21.14% for 2016 and 2015, respectively, of each individual’s salary to the retirement fund. Prior to July of 2011, the Plan was a non-contributory program for the employee. During 2016 and 2015, employees paid an amount of 3.00% into the Plan. Retirement expense for employees participating in this plan was $79,185 and $76,844 for the years ended June 30, 2016 and 2015, respectively. DROP, subject to provisions of section 121.091, Florida Statutes, permits employees eligible for normal retirement under the plan to defer receipt of monthly benefits payments while continuing employment with an FRS employer. An employer may participate in DROP for a period not to exceed 60 months after electing to participate. During the period of DROP participation, deferred monthly benefits are held in the FRS Trust Fund and accrue interest. No employees participated in DROP during the year ended June 30, 2016. As provided in Section 121.4501, Florida Statutes, eligible FRS members may elect to participate in the PEORP in lieu of the FRS defined-benefit plan. Employees already participating in the State University System Optional Retirement Program or the DROP are not eligible to participate in this program. Employer contributions are defined by law, but the ultimate benefit depends in part on the performance of investment funds. The PEORP is funded by employer contributions that are based on salary and membership class (Regular Class, Senior Management Service Class, etc.). Contributions are directed to individual member accounts, and the individual members allocated contributions and account balances among various approved investment choices. Employees in PEORP vest at one year of service. Retirement expenses for employees participating in this plan were $19,511 and $18,273 for the years ended June 30, 2016 and 2015, respectively. Pursuant to Section 121.35, Florida Statutes, the Florida Legislature created an Optional Retirement Program (“Program”) for eligible State University System faculty and administrators. The Program is a defined contribution plan, which provides full and immediate vesting of all contributions submitted to the participating companies on behalf of the participant. Employees in eligible positions may make an irrevocable election to participate in the Program rather than the Plan, and purchase retirement and death benefits through contracts provided by certain insurance carriers. The employing university contributes on behalf of the participant an amount equal to a percentage of the participant’s gross monthly compensation. The participant may contribute by salary deduction an amount not to exceed the percentage contributed by the University to the participant’s annuity account. Contributions made to the Program for fiscal years ended June 30, 2016 and 2015 totaled $65,345 and $56,811, respectively. Effective July 1, 2007, the University established a qualified defined contribution plan under Section 401(a) of the Internal Revenue Code of 1986, as amended (“Code”), that is a governmental plan as defined under Code Section 414(d), to provide retirement benefits to eligible employees. Retirement expenses paid by the Foundation in 2016 and 2015 for the University President participating in the plan totaled $38,616 and $37,290, respectively.

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 12 - STUDENT HOUSING SYSTEM

The Foundation has a sublease agreement with the Florida Board of Education of the State of Florida on behalf of the University for use of land and certain existing student housing facilities. The lease requires the Foundation to construct additional student housing facilities and to operate the facilities as a consolidated housing system on behalf of the University. The Student Housing System consists of eight projects, which are the following: the South Side facilities constructed in 1966 and 1972; the Villages Phase I (West) and II (East), completed in 1997 and 1999, respectively; the first (Martin Hall), the second (Pace Hall), and the third (Argo Hall) portions of Phase III completed in 2000, 2001, and 2004, respectively; and the first (Heritage Hall) and the second (President’s Hall) portions of Phase IV completed in 2010 and 2012, respectively. The terms of the sub-lease require the Foundation to pay the University rents of $10 per year plus variable rent equal to 100% of the Surplus Earnings from the Student Housing System. Surplus Earnings represent cash flows after payment of the operating costs, debt service and reserves. No variable rent was due for either 2016 or 2015. The sub-lease agreement was signed in 1998 and ends August 31, 2038. The Foundation and the University have a management operating agreement outlining the responsibilities of both parties for the operations of the Student Housing System. The current agreement was signed on June 14, 2012 and is effective through June 30, 2017.

NOTE 13 - CONCENTRATIONS

Uninsured Cash Balances: The Foundation’s cash balances held at financial institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to certain limits. At June 30, 2016, the Foundation’s uninsured cash balance at financial institutions totaled approximately $427,000. At June 30, 2016, the Foundation maintained approximately $8,987,000 of cash and cash equivalent balances in the State of Florida’s Division of Treasury’s SPIA investment pool (“Pool”). This amount is the Foundation’s pro-rata ownership in the Pool itself, not in the underlying securities. The Pool is invested in a combination of short-term liquid instruments and intermediate term fixed income securities. Federal depository insurance does not insure amounts in the Pool. At June 30, 2016, the Pool was rated at A+f by Standard and Poor’s and had an effective duration of 2.61 years. Fair value for this account is determined by multiplying the Foundation’s cost for its pro-rata share of the Pool by the Pool’s Fair Value Factor (“Factor”). At June 30, 2016, the unaudited Factor was 1.0143. The Factor is determined by an independent pricing service which uses quoted market prices as well as multifactor models for securities which have no quoted market prices.

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 13 - CONCENTRATIONS (Continued)

Uninsured Cash Balances (Continued):

Additional information may be found in Note 2 to the State of Florida Comprehensive Annual Financial Report (“CAFR”) and at the Treasury’s website, www.fltreasury.org. Due to the dollar for dollar liquidity of the account, the cash amounts in the Foundation’s financial statements that are held in SPIA have not been adjusted for the unaudited fair value factor. Additional financial instruments that potentially subject the Foundation to concentrations of credit risk consist of cash deposits at brokerage firms. These accounts are not insured by the FDIC. At June 30, 2016, the Foundation maintained cash and cash equivalent balances at these institutions totaling approximately $4,428,000. Management monitors the soundness of the financial institutions and does not believe the Foundation is exposed to any significant credit risk on cash and cash equivalents.

Contributions Receivable: For the year ended June 30, 2016, 43% of the Foundation’s contributions receivable was due from one donor.

NOTE 14 - CONDITIONAL ASSET RETIREMENT OBLIGATIONS The Foundation has conditional asset retirement obligations (“AROs”) primarily related to the encapsulated structural fireproofing in the older residence halls that is not subject to abatement unless the buildings are demolished and non-encapsulated asbestos that the Foundation would remediate only if it performed major renovations of those buildings. Under current accounting guidance, these AROs meet the definition of liabilities and should be recognized when incurred if their fair values can be reasonably estimated. Because there is no definitive timeframe in which these halls will be demolished and they are tied to the current bond funding that will not be alleviated until 2040, these conditional obligations are considered to have indeterminate settlement dates. Therefore, the Foundation could not develop a reasonable estimate of their fair values. However, the Foundation will continue to assess its ability to estimate fair values at each future reporting date. The related liability will be recognized once sufficient additional information becomes available.

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 15 - FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amounts of cash and cash equivalents, restricted cash, other receivables, accounts payable and accrued expenses approximate fair value because of the short maturity of these instruments. Long-term investments are carried at fair value, as discussed in Note 5. Contributions receivable and assets held under split interest agreements, and the related liabilities, are reported at fair value based on life expectancy of the beneficiary and the present value of expected cash flows using a discount rate. The fair value of bonds payable are estimated using discounted cash flow analyses based on the Foundation’s current incremental borrowing rates for similar types of bond arrangements. A comparison of the carrying value of the bonds payable, net, as of June 30, is as follows:

Carrying amount $ 47,956,174 $ 50,256,521 Fair value $ 48,838,346 $ 51,431,022

2016 2015

The Foundation determined the estimated fair value amounts by using available market information and commonly accepted valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Foundation or holders of the instruments could realize in a current market exchange. The use of different assumptions and/or estimation methodologies may have a material effect on the estimated fair value.

NOTE 16 - FAIR VALUE MEASUREMENTS The Foundation utilizes various methods to measure fair value of its assets and liabilities on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of hierarchy are:

Level 1: Unadjusted quoted market prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than quoted market prices and can include active markets and markets not considered to be active. Level 3: Unobservable inputs that are supported by little or no market activity.

-34-

UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level of any input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Changes in valuation techniques may result in transfers in or out of an investment’s assigned level as described above. The inputs used to measure the fair value of contributions receivable are categorized as Level 3. All information related to the fair value disclosure of these assets is described in Note 3.

-35-

UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)

The fair value of the Foundation’s assets and liabilities at June 30, 2016 is as follows:

Total (Level 1) (Level 2) (Level 3)Equity securities-Domestic & International:

Consumer $ 2,025,683 $ 2,025,683 $ - $ - Energy 3,365,459 3,365,459 - - Financials 1,962,639 1,962,639 - - Health care 540,059 540,059 - - Industrials 339,364 339,364 - - Technology 1,768,211 1,768,211 - - International 12,358,362 12,358,362 - - Other 24,026,802 24,026,802 - -

Total equity securities 46,386,579 46,386,579 - - Debt securities:

Corporate bonds and mutual funds 3,872,024 3,872,024 - - High yield fixed income 1,010,121 - 1,010,121 - U.S. government agencies 1,670,178 1,670,178 - - U.S. government mortgage pool 3,650,769 3,650,769 - - Corporate mortgage pool 483,352 483,352 - -

Total debt securities 10,686,444 9,676,323 1,010,121 - Alternative investments:

Fund of fund hedge funds - Directional, hedged equity 4,388,364 - - 4,388,364 Non-Directional absolute return 2,805,675 - - 2,805,675 Equity market neutral 7,552,099 - - 7,552,099

Total fund of fund hedge funds 14,746,138 - - 14,746,138 Private equity investments 2,148,431 - - 2,148,431 Real estate investment trust 1,912,513 - - 1,912,513

Total alternative investments 18,807,082 - - 18,807,082 Funds held in trust by others 3,121,850 - - 3,121,850

Total assets 79,001,955 56,062,902 1,010,121 21,928,932

Liabilities:Funds held in trust 1,795,555 - - 1,795,555 Due to WFHT 1,157,601 - 1,157,601 -

Total liabilities 2,953,156 - 1,157,601 1,795,555

Total $ 76,048,799 $ 56,062,902 $ (147,480) $ 20,133,377

Description

-36-

UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)

The fair value of the Foundation’s assets and liabilities at June 30, 2015 is as follows:

Total (Level 1) (Level 2) (Level 3)Equity securities-Domestic & International:

Consumer $ 1,898,917 $ 1,898,917 $ - $ - Energy 3,893,056 3,893,056 - - Financials 1,804,516 1,804,516 - - Health care 502,642 502,642 - - Industrials 620,953 620,953 - - Technology 1,686,171 1,686,171 - - International 12,489,394 12,489,394 - - Other 20,982,894 20,982,894 - -

Total equity securities 43,878,543 43,878,543 - - Debt securities:

Corporate bonds and mutual funds 3,888,951 3,888,951 - - High yield fixed income 956,454 - 956,454 - U.S. government agencies 1,482,253 1,482,253 - - U.S. government mortgage pool 3,162,872 3,162,872 - - Corporate mortgage pool 842,061 842,061 - -

Total debt securities 10,332,591 9,376,137 956,454 - Alternative investments:

Fund of fund hedge funds - Directional, hedged equity 4,910,153 - - 4,910,153 Non-Directional absolute return 3,047,955 - - 3,047,955 Equity market neutral 7,857,245 - - 7,857,245

Total fund of fund hedge funds 15,815,353 - - 15,815,353 Private equity investments 2,032,648 - - 2,032,648 Real estate investment trust 1,498,690 - - 1,498,690

Total alternative investments 19,346,691 - - 19,346,691 Funds held in trust by others 295,598 - - 295,598

Total assets 73,853,423 53,254,680 956,454 19,642,289

Liabilities:Funds held in trust 198,375 - - 198,375 Due to WFHT 1,238,099 - 1,238,099 -

Total liabilities 1,436,474 - 1,238,099 198,375

Total $ 72,416,949 $ 53,254,680 $ (281,645) $ 19,443,914

Description

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)

The following methods and assumptions were used to estimate the fair value for each class of asset and liability, measured at fair value:

Equity securities - Investments in equity securities are measured at fair value using quoted market prices. They are classified as Level 1 as they are traded in an active market for which closing stock prices are readily available. Debt securities - Investments in fixed income securities are classified as Level 1 as they trade with sufficient frequency and volume to enable the Foundation to obtain pricing information on an ongoing basis. However, a small segment of debt security holdings are in a High Yield Commingled Fund where there are inputs, other than quoted prices included in Level 1, that are observable, either directly or indirectly, and therefore included in Level 2. Alternative investments - Investments in fund of fund hedge funds and private equity partnerships for which there is no readily determinable fair value are classified as Level 3 as the valuation is based on significant unobservable inputs.

Directional (hedged equity) investment strategies utilize market movements, trends, or inconsistencies when picking stocks across a variety of markets. These types of strategies have a greater exposure to the fluctuations of the overall market than do market neutral strategies. Directional hedge fund strategies include U.S. and international long/short equity hedge funds, where long equity positions are hedged with short sales of equities or equity index options. Non-Directional or absolute return strategies aim to produce a positive absolute return regardless of the directions of financial markets. They typically achieve this by investing the portfolio’s assets in cash or other low volatility investments and then taking hedged long and short positions in portfolios of securities that when combined are expected to have modest exposures to market returns. Equity market neutral is a hedge fund strategy that seeks to exploit investment opportunities unique to some specific group of stocks while maintaining a neutral exposure to broad groups of stocks defined, for example, by sector, industry, market capitalization, country, or region. The strategy holds long/short equity positions, with long positions hedged with short positions in the same and related sectors, so that the equity market neutral investor should be little affected by sector-wide events.

-38-

UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)

Private equity and real estate investment trust funds for which there are not readily determinable fair values are classified as Level 3 as the valuation is based on significant unobservable inputs. Private equity real estate are partnerships formed for the purpose of acquiring, holding, managing and selling income producing real estate and real estate related assets including interest in joint venture development projects for current income, investment and capital appreciation over a three to five year holding period.

Funds held in trust by others - The Foundation’s beneficial interest in irrevocable split interest agreements held or controlled by a third party are classified as Level 3 as the fair values are based on a combination of Level 2 inputs (interest rates and yield curves) and significant unobservable inputs (entity specific estimates of cash flows). The fair values are measured at the present value of the future distributions the Foundation expects to receive over the term of the agreements. Due to WFHT - The amount payable to WFHT is classified as Level 2 as the value correlates directly to the fair value of WFHT’s interest in the Foundation’s investment pool.

While the Foundation believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

-39-

UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)

The following table presents a reconciliation of the statement of financial position amounts for financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended June 30, 2016:

Assets:Beginning balance $ 15,815,353 $ 2,032,648 $ 1,498,690 $ 295,598 $ 19,642,289

Transfers into Level 3 - - - - - Transfers out of Level 3 - - - - - Total gains or losses:

Included in change in net assets (1,069,215) 220,499 349,049 (105,457) (605,124)

Purchases, issuances, sales, and settlements:Purchases - 106,049 481,784 3,000,000 3,587,833 Sales - - - - - Settlements - (210,765) (417,010) (68,291) (696,066)

Total assets 14,746,138 2,148,431 1,912,513 3,121,850 21,928,932

Liabilities:Beginning balance - - - 198,375 198,375

Transfers into Level 3 - - - 52,974 52,974 Transfers out of Level 3 - - - (13,646) (13,646) Total gains or losses:

Included in change in net assets - - - (104,777) (104,777)

Purchases, issuances, sales, and settlements:Purchases - - - 1,731,600 1,731,600 Settlements - - - (68,971) (68,971)

Total liabilities - - - 1,795,555 1,795,555

Total $ 14,746,138 $ 2,148,431 $ 1,912,513 $ 1,326,295 $ 20,133,377

TotalHedge FundsPrivate

Trust by OthersEquityReal Estate

Fund of Fund Funds Held in

-40-

UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)

The following table presents a reconciliation of the statement of financial position amounts for financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended June 30, 2015:

Assets:Beginning balance $ 15,241,975 $ 1,753,691 $ 1,176,321 $ 311,850 $ 18,483,837

Transfers into Level 3 - - - - - Transfers out of Level 3 - - - - - Total gains or losses:

Included in change in net assets 573,378 215,777 101,426 4,197 894,778

Purchases, issuances, sales, and settlements:Purchases - 244,519 842,378 20,000 1,106,897 Sales - - - - - Settlements - (181,339) (621,435) (40,449) (843,223)

Total assets 15,815,353 2,032,648 1,498,690 295,598 19,642,289

Liabilities:Beginning balance - - - 198,715 198,715

Transfers into Level 3 - - - 32,730 32,730 Transfers out of Level 3 - - - (4,597) (4,597) Total gains or losses:

Included in change in net assets - - - 18,710 18,710

Purchases, issuances, sales, and settlements:Purchases - - - 7,780 7,780 Settlements - - - (54,963) (54,963)

Total liabilities - - - 198,375 198,375

Total $ 15,815,353 $ 2,032,648 $ 1,498,690 $ 97,223 $ 19,443,914

Hedge Funds Equity Estate Trust by Others TotalFund of Fund Private Real Funds Held in

-41-

UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)

The following table sets forth a summary of valuation techniques and quantitative information utilized in determining the fair value of the Level 3 investments as of June 30, 2016, excluding investments valued using the practical expedient or the net asset value (“NAV”).

Range(weighted

Fair Value Valuation Technique(s) Unobservable Input average)

$ 76,289 Independent Appraisal Capitalization Rate 6.76% $ 121,464 Market Transactions (a) N/A N/A

$ 85,758 Independent Appraisal Capitalization Rate 6.64% $ 228,342 Direct Capitalization Capitalization Rate 6.97% $ 1,400,660 Market Transactions (a) N/A N/A

$ 502,927 Market ApproachLTM EBITDA Multiple (9.5X) N/A

$ 437,462 Market Approach; Recent Transaction Price (b)

LTM EBITDA Multiple (15.2X); Discount for lack of marketability

15%Member or Partnership Interest

Real Estate Investment Trust - Harbert IV:

(a) Market Transactions include related capital expenditures of a particular investment.(b) Investment is valued based on pending transactions with an expended close date after valuation date.

Investment Type

Real Estate Partnership InterestReal Estate Partnership Interest

Preferred Partnership Interest

Private Equity Investments:

Real Estate Investment Trust - Harbert V:

Real Estate Partnership InterestReal Estate Partnership Interest

Real Estate Partnership Interest

-42-

UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)

The following table lists investments in hedge funds and investment limited partnerships by strategy as of June 30, 2016:

Fund of Fund Hedge Funds:Directional, hedged equity $ 4,388,364 $ - Quarterly 90 DaysNon-Directional absolute return 2,805,675 - Quarterly 90 Days

Equity market neutral 7,552,099 - Quarterly to Semi-annual 95 Days

Private equity investments 2,148,431 868,836 N/A* N/A*Real estate investment trust 1,912,513 354,812 N/A* N/A*Funds held in trust by others 3,121,850 - N/A** N/A**

$ 21,928,932 $ 1,223,648

* These funds are in private equity structures, with no ability to be redeemed.** These funds are in trust that have no identifiable redemption period.

Redemption

Notice PeriodRedemption

Fair Value CommitmentsUnfunded

Currently Eligible)Frequency (If

NOTE 17 - CONTINGENCY During the year ended June 30, 2016, management decided to take the Southside units, which are part of the University’s student housing system, off line. This action was compliant with the covenants in Section 5.14 of all the bond agreements, which allow housing facilities to be abandoned, sold, converted, razed or removed in the event that the facilities are found to be not capable of producing positive net revenues. Management has been considering this action as a portion of these units have been taken off line over the past few years. The Southside units, originally constructed in the 1960’s, are the oldest units and maintenance costs have increased each year. It was economically unfeasible to continue to operate these units in their current capacity. Management continues to explore alternative uses of the Southside units, including Greek housing, that are in line with the University’s master plan. Conversion costs and the highest and best use alternatives for these assets are uncertain at this time.

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UNIVERSITY OF WEST FLORIDA FOUNDATION, INC. A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015

NOTE 18 - SUBSEQUENT EVENT

On July 1, 2016, the assets of the Pensacola Museum of Art (“PMA”), an independent not-for-profit corporation, became part of the University. On that date, the Foundation was gifted a historic building, a fine arts collection, and a permanent endowment from the dissolving entity. Also on July 1, 2016, the Foundation transferred the building to the University and the fine arts collection to WFHT. WFHT maintains a management agreement with the University covering the preservation of historic properties for the University. As a result of this transaction, the Foundation will have approximately $4 million in contributions, of which approximately $3.3 million will be transferred to related parties, and $700,000 will remain endowments for PMA. The Foundation will continue to steward the endowment for purposes of the PMA, now a division of the WFHT. The new PMA division has a non-governing advisory board that reports to WFHT's board of directors.

SUPPLEMENTARY INFORMATION

Revenues: Rent $ 11,592,258 $ 11,556,232 Interest 150,627 139,254 Other 262,012 224,036

Total revenues 12,004,897 11,919,522

Operating Expenses: Salaries and wages 2,305,733 2,142,503 Administrative and general 775,969 972,505 Maintenance and repairs 1,280,695 1,260,648 Insurance 141,528 212,116 Utilities 1,185,940 1,233,256 Interest 2,182,724 2,671,048 Depreciation 2,708,340 2,660,812 Amortization 79,949 83,438

Total operating expenses 10,660,878 11,236,326

Excess of Revenues over Expenses $ 1,344,019 $ 683,196

UNIVERSITY OF WEST FLORIDA FOUNDATION, INC.

SCHEDULES OF STUDENT HOUSING SYSTEM REVENUES AND EXPENSESYEARS ENDED JUNE 30, 2016 AND 2015

2016 2015

A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

-44-

Cash and cash equivalents $ 1,540,800 $ 1,285,588Restricted cash equivalents 1,500,579 2,306,818Contributions receivable, net 2,802,212 2,170,155Other receivables, net 80,525 77,446Prepaid expenses 122,343 56,765Long-term investments 75,880,105 73,557,825Property and equipment, net 1,454,483 1,490,909Assets held under split interest agreements 3,121,850 295,598Other assets 353,073 255,066

Total Assets $ 86,855,970 $ 81,496,170

Liabilities: Accounts payable and accrued expenses $ 250,969 $ 215,399Liabilities held under split interest agreements 1,795,555 198,375Due to University 167,645 32,659 Due to West Florida Historic Trust 1,157,601 1,238,099

Total liabilities 3,371,770 1,684,532

Commitments and Contingencies -- --

Net Assets: Unrestricted 3,837,696 3,840,074Temporarily restricted 24,550,946 26,024,342Permanently restricted 55,095,558 49,947,222

Total net assets 83,484,200 79,811,638

Total Liabilities and Net Assets $ 86,855,970 $ 81,496,170

LIABILITIES AND NET ASSETS

2016 2015

UNIVERSITY OF WEST FLORIDA FOUNDATION, INC.

SCHEDULES OF FINANCIAL POSITION

JUNE 30, 2016 AND 2015

ASSETS

A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

(EXCLUDING THE STUDENT HOUSING SYSTEM)

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Amortization $ - $ - $ 79,949 $ - $ - $ 79,949 $ 83,438Bad debt expense (recovery) - 1,738 47,949 - - 49,687 (3,634) Bond expense - - 66,778 - - 66,778 79,939 Depreciation - 36,426 2,708,340 - - 2,744,766 2,697,239Equipment - 40,901 12,055 - 531 53,487 126,663Housing administrative and general - - 87,255 - - 87,255 121,187 Insurance - 65,435 141,528 - 23,915 230,878 303,466 Interest - - 2,182,724 - - 2,182,724 2,671,048 Investment and consultant fees - 3,549 - - 260,315 263,864 217,615Lobbying - 20,000 - - 45,000 65,000 70,000 Maintenance and repairs - - 1,280,695 - 434 1,281,129 1,262,388 Miscellaneous - 121,305 - 4,936 7,901 134,142 101,136 Office - 141,047 126,217 41,963 71,763 380,990 352,399 Professional development - 66,588 14,398 3,981 1,078 86,045 100,618 Professional services - 399,462 164,380 101,450 128,657 793,949 693,768 Public radio program - 303,961 - - - 303,961 341,660 Public relations - 96,634 - 28,210 22,280 147,124 199,960Recruitment - 24,469 916 842 77 26,304 37,234Rental - 33,529 - 6,430 160 40,119 34,442Salaries and wages - 1,268,151 2,305,733 151,941 1,418,968 5,144,793 4,745,848Scholarships 1,025,649 - - - - 1,025,649 1,124,533Service charges and other fees - 32,018 170,499 3,023 (142,013) 63,527 410,459Student and staff support - 5,032 - - - 5,032 1,615Travel and entertainment - 280,280 85,522 33,346 41,492 440,640 460,951University support - 1,045,888 - - 5,375 1,051,263 216,594Utilities - - 1,185,940 - - 1,185,940 1,233,256

$ 1,025,649 $ 3,986,413 $ 10,660,878 $ 376,122 $ 1,885,933 $ 17,934,995 $ 17,683,822

Student Housing 2016 2015General &Other ProgramTotalAdministrative

UNIVERSITY OF WEST FLORIDA FOUNDATION, INC.A COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

SCHEDULES OF FUNCTIONAL EXPENSESYEAR ENDED JUNE 30, 2016

(With Comparative Totals for 2015)

Scholarships Services System Fundraising Total

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University of West Florida FoundationIncome Statement

Housing Budget to Actual for the UWF Foundation Board

Actual Budget Variance Amt. Variance % Actual to Date Budget to Date Variance Amt. Variance % Budget 6/30/2016 6/30/2016 6/30/2016 6/30/2016 6/30/2016 6/30/2016 6/30/2016 6/30/2016 6/30/2016 Notes

Revenues

97-42113 INTEREST INCOME - HOUSING $935.06 $1,078.00 ($142.94) 15.29% $4,134.93 $4,800.00 ($665.07) 16.08% $4,800.00

97-42114 INTEREST INCOME - SPIA $67,155.07 $34,366.00 $32,789.07 (48.83%) $150,243.46 $100,000.00 $50,243.46 (33.44%) $100,000.00

97-43012 RENTAL INCOME - HOUSING $1,033,321.70 $1,099,755.00 ($66,433.30) 6.43% $11,592,257.62 $11,349,371.00 $242,886.62 (2.10%) $11,349,371.00

97-44000 CONCESSIONS REVENUE $16,204.19 $11,271.00 $4,933.19 (30.44%) $57,167.78 $55,000.00 $2,167.78 (3.79%) $55,000.00

97-45000 OTHER INCOME - HOUSING $41,562.37 $45,982.00 ($4,419.63) 10.63% $204,844.39 $153,000.00 $51,844.39 (25.31%) $153,000.00

Total Revenues $1,159,178.39 $1,192,452.00 ($33,273.61) 2.87% $12,008,648.18 $11,662,171.00 $346,477.18 (2.89%) $11,662,171.00

Expenses

97-51010 SALARIES - FACULTY & STAFF $307,173.04 $349,641.00 $42,467.96 (13.83%) $1,003,122.70 $1,117,055.00 $113,932.30 (11.36%) $1,117,055.00 1 97-51137 OPS - STAFF $860,990.51 $972,008.00 $111,017.49 (12.89%) $1,302,610.49 $1,452,714.00 $150,103.51 (11.52%) $1,452,714.00

97-52110 TRAVEL $888.52 $5,540.00 $4,651.48 (523.51%) $17,197.72 $32,940.00 $15,742.28 (91.54%) $32,940.00

97-53150 CONCESSION EXP - HOUSING $17,748.33 $17,482.00 ($266.33) 1.50% $68,323.75 $94,196.00 $25,872.25 (37.87%) $94,196.00

97-54100 PROFESSIONAL DEVELOPMENT $868.89 $1,435.00 $566.11 (65.15%) $12,697.99 $13,400.00 $702.01 (5.53%) $13,400.00

97-54110 MEMBERSHIPS & DUES $0.00 $0.00 $0.00 0.00% $1,699.50 $2,000.00 $300.50 (17.68%) $2,000.00

97-54120 PUBLICATIONS & SUBSCRIPTIONS $0.00 $0.00 $0.00 0.00% $0.00 $250.00 $250.00 0.00% $250.00

97-55100 RECRUITMENT - TRAVEL $0.00 $500.00 $500.00 0.00% $768.11 $1,500.00 $731.89 (95.28%) $1,500.00

97-55110 RECRUITMENT - MEALS $0.00 $2,250.00 $2,250.00 0.00% $147.59 $4,500.00 $4,352.41 (2948.99%) $4,500.00

97-70100 OFFICE EXPENSES - COPYING $651.56 $1,171.00 $519.44 (79.72%) $3,910.33 $6,000.00 $2,089.67 (53.44%) $6,000.00

97-70110 OFFICE EXPENSES - POSTAGE $647.45 $75.00 ($572.45) 88.42% $915.85 $700.00 ($215.85) 23.57% $700.00 2 97-70120 OFFICE EXPENSES - PRINT/DUPL $772.71 $480.00 ($292.71) 37.88% $6,060.31 $8,000.00 $1,939.69 (32.01%) $8,000.00

97-70130 OFFICE EXPENSES - MKTG COMM $858.86 $2,200.00 $1,341.14 (156.15%) $14,766.03 $20,000.00 $5,233.97 (35.45%) $20,000.00

97-70140 OFFICE SUPPLIES $1,584.98 $1,285.00 ($299.98) 18.93% $6,528.21 $7,000.00 $471.79 (7.23%) $7,000.00

97-70200 COMPUTER SUPPLIES $0.00 $0.00 $0.00 0.00% $129.15 $2,000.00 $1,870.85 (1448.59%) $2,000.00

97-70220 COMPUTER - SOFTWARE SUPPORT $17,999.97 $7,000.00 ($10,999.97) 61.11% $79,503.43 $81,800.00 $2,296.57 (2.89%) $81,800.00

97-70240 COMPUTER - TRAINING $0.00 $0.00 $0.00 0.00% $0.00 $5,000.00 $5,000.00 0.00% $5,000.00

97-70300 TELEPHONE $3,721.25 $4,800.00 $1,078.75 (28.99%) $14,405.27 $25,000.00 $10,594.73 (73.55%) $25,000.00

97-71100 EQUIPMENT - GENERAL $917.23 $1,100.00 $182.77 (19.93%) $3,839.10 $5,000.00 $1,160.90 (30.24%) $5,000.00

97-71200 EQUIPMENT - COMPUTER $0.00 $1,500.00 $1,500.00 0.00% $8,216.25 $19,500.00 $11,283.75 (137.33%) $19,500.00

97-72100 CLEANING SERVICES $194,567.90 $209,082.00 $14,514.10 (7.46%) $611,859.62 $624,307.00 $12,447.38 (2.03%) $624,307.00

97-72110 CLEANING SUPPLIES $3,908.13 $6,100.00 $2,191.87 (56.08%) $16,057.51 $23,000.00 $6,942.49 (43.24%) $23,000.00

97-72200 HSG REPAIR & MAINT. - MISCELLANEOUS $6,851.88 $10,400.00 $3,548.12 (51.78%) $29,560.51 $42,000.00 $12,439.49 (42.08%) $42,000.00

97-72210 HSG REPAIR & MAINT.- TOOLS $0.00 $1,000.00 $1,000.00 0.00% $2,479.96 $5,000.00 $2,520.04 (101.62%) $5,000.00

97-72215 HSG REPAIR & MAINT. - LOCKS & KEYS $178.50 $1,250.00 $1,071.50 (600.28%) $3,464.73 $10,000.00 $6,535.27 (188.62%) $10,000.00

97-72220 HSG REPAIR & MAINT. - LANDSCAPING $1,660.21 $1,500.00 ($160.21) 9.65% $11,104.25 $10,000.00 ($1,104.25) 9.94% $10,000.00

97-72225 HSG REPAIR & MAINT. - PLUMBING $744.98 $1,500.00 $755.02 (101.35%) $2,051.17 $5,000.00 $2,948.83 (143.76%) $5,000.00

97-72230 HSG REPAIR & MAINT. - FIRE ALARM $0.00 $2,000.00 $2,000.00 0.00% $8,600.72 $23,000.00 $14,399.28 (167.42%) $23,000.00

97-72235 HSG REPAIR & MAINT. - AIR HANDLERS $7,455.78 $8,000.00 $544.22 (7.30%) $16,300.26 $28,000.00 $11,699.74 (71.78%) $28,000.00

97-72240 HSG REPAIR & MAINT. - ELEVATORS $0.00 $0.00 $0.00 0.00% $0.00 $5,000.00 $5,000.00 0.00% $5,000.00

97-72245 HSG REPAIR & MAINT. - ELECTRICAL & HVAC $0.00 $4,250.00 $4,250.00 0.00% $9,824.77 $12,000.00 $2,175.23 (22.14%) $12,000.00

97-72250 HSG REPAIR & MAINT. - PEST CONTROL $7,105.91 $3,775.00 ($3,330.91) 46.88% $22,139.90 $20,000.00 ($2,139.90) 9.67% $20,000.00

97-72255 HSG REPAIR & MAINT. - UNIFORMS $0.00 $500.00 $500.00 0.00% $1,792.45 $5,000.00 $3,207.55 (178.95%) $5,000.00

97-72300 HOUSING - VEHICLE MISC. EXP $0.00 $50.00 $50.00 0.00% $468.53 $1,000.00 $531.47 (113.43%) $1,000.00

97-72310 HOUSING - VEHICLE GAS $1,724.99 $2,400.00 $675.01 (39.13%) $8,237.44 $12,000.00 $3,762.56 (45.68%) $12,000.00

97-72320 HOUSING - VEHICLE REPAIR & MAINT. $1,439.27 $3,000.00 $1,560.73 (108.44%) $17,306.60 $12,000.00 ($5,306.60) 30.66% $12,000.00 3 97-72400 OPER EXP - HOUSING SUPPLIES ($25,696.68) $12,000.00 $37,696.68 (146.70%) $48,766.65 $75,000.00 $26,233.35 (53.79%) $75,000.00

97-72900 RENEWAL & REPLACEMENT $149,491.64 $90,000.00 ($59,491.64) 39.80% $470,677.92 $400,000.00 ($70,677.92) 15.02% $400,000.00 4 97-73100 DEPREC/AMORT EXPENSE - OFFICE/Vehicle $1,922.94 $873.00 ($1,049.94) 54.60% $7,084.48 $3,940.00 ($3,144.48) 44.39% $3,940.00 5 97-73200 DEPRECIATION EXP - SOUTHSIDE $20,417.56 $16,993.00 ($3,424.56) 16.77% $74,277.34 $67,978.00 ($6,299.34) 8.48% $67,978.00

Quarter Ending Year to Date

Actual Budget Variance Amt. Variance % Actual to Date Budget to Date Variance Amt. Variance % Budget 6/30/2016 6/30/2016 6/30/2016 6/30/2016 6/30/2016 6/30/2016 6/30/2016 6/30/2016 6/30/2016 Notes

97-73205 DEPRECIATION EXP - VILLAGE WEST $71,323.13 $71,325.00 $1.87 (0.00%) $285,292.55 $285,292.00 ($0.55) 0.00% $285,292.00

97-73210 DEPRECIATION EXP - VILLAGE EAST $100,167.26 $97,492.00 ($2,675.26) 2.67% $398,885.03 $389,965.00 ($8,920.03) 2.24% $389,965.00

97-73215 DEPRECIATION EXP - ARGO HALL $46,606.85 $45,444.00 ($1,162.85) 2.50% $183,844.15 $181,784.00 ($2,060.15) 1.12% $181,784.00

97-73220 DEPRECIATION EXP - MARTIN $77,465.18 $67,292.00 ($10,173.18) 13.13% $298,814.14 $269,162.00 ($29,652.14) 9.92% $269,162.00

97-73225 DEPRECIATION EXP - PACE HALL $46,304.51 $46,302.00 ($2.51) 0.01% $185,217.89 $185,217.00 ($0.89) 0.00% $185,217.00

97-73230 DEPRECIATION EXP - HERITAGE $131,735.42 $131,490.00 ($245.42) 0.19% $526,941.79 $525,967.00 ($974.79) 0.19% $525,967.00

97-73235 DEPRECIATION EXP - PRESIDENTS $186,995.77 $186,766.00 ($229.77) 0.12% $747,983.13 $747,070.00 ($913.13) 0.12% $747,070.00

97-74100 AMORT EXP - HOUSING MGT S-W $1,999.97 $1,998.00 ($1.97) 0.10% $8,000.00 $8,000.00 $0.00 0.00% $8,000.00

97-74150 AMORTIZATION EXPENSE - HOUSING $18,091.12 $13,839.00 ($4,252.12) 23.50% $71,949.10 $55,364.00 ($16,585.10) 23.05% $55,364.00 6 97-74200 INTEREST EXPENSE - HOUSING $1,264,806.44 $1,280,341.00 $15,534.56 (1.23%) $2,182,724.03 $2,293,786.00 $111,061.97 (5.09%) $2,293,786.00

97-74300 HOUSING - MISC. OPERATING ADMIN FEES $687.40 $550.00 ($137.40) 19.99% $2,688.70 $3,500.00 $811.30 (30.17%) $3,500.00

97-74310 HOUSING - OTHER MISC. OPER EXP $5,148.40 $5,425.00 $276.60 (5.37%) $56,153.14 $80,000.00 $23,846.86 (42.47%) $80,000.00

97-74315 HOUSING - MEAL PLANS $0.00 $2,000.00 $2,000.00 0.00% $28,421.97 $65,000.00 $36,578.03 (128.70%) $65,000.00

97-75005 HOUSING UTILITIES - ELECTRICAL $169,944.45 $225,000.00 $55,055.55 (32.40%) $789,890.73 $935,000.00 $145,109.27 (18.37%) $935,000.00

97-75010 HOUSING UTILITIES - GAS $8,220.40 $15,000.00 $6,779.60 (82.47%) $35,431.68 $60,000.00 $24,568.32 (69.34%) $60,000.00

97-75015 HOUSING UTILITIES - SEWER $34,972.53 $42,933.00 $7,960.47 (22.76%) $153,153.79 $185,000.00 $31,846.21 (20.79%) $185,000.00

97-75020 HOUSING UTILITIES - WATER $460.48 $970.00 $509.52 (110.65%) $2,959.28 $4,600.00 $1,640.72 (55.44%) $4,600.00

97-75025 HOUSING UTILITIES - GARBAGE $17,373.39 $13,500.00 ($3,873.39) 22.30% $57,504.11 $56,000.00 ($1,504.11) 2.62% $56,000.00

97-75030 HOUSING UTILITIES - CABLE $26,720.94 $43,000.00 $16,279.06 (60.92%) $147,000.36 $175,000.00 $27,999.64 (19.05%) $175,000.00

97-75100 HOUSING - INSURANCE $108.60 $0.00 ($108.60) 100.00% $10,779.64 $32,600.00 $21,820.36 (202.42%) $32,600.00

97-75105 INSURANCE - DIRECTORS/OFFICERS $0.00 $0.00 $0.00 0.00% $0.00 $5,000.00 $5,000.00 0.00% $5,000.00

97-75110 INSURANCE - BOND $6,113.31 $0.00 ($6,113.31) 100.00% $71,549.31 $82,000.00 $10,450.69 (14.61%) $82,000.00

97-75115 INSURANCE - AUTOMOBILE $16,581.00 $15,000.00 ($1,581.00) 9.54% $17,576.18 $15,000.00 ($2,576.18) 14.66% $15,000.00 7 97-75120 INSURANCE - PROPERTY $0.00 $0.00 $0.00 0.00% $41,622.91 $95,600.00 $53,977.09 (129.68%) $95,600.00

97-75200 BOND EXPENSES $51,518.28 $61,714.00 $10,195.72 (19.79%) $66,778.28 $83,000.00 $16,221.72 (24.29%) $83,000.00

97-76020 LEGAL FEES $0.00 $0.00 $0.00 0.00% $0.00 $2,600.00 $2,600.00 0.00% $2,600.00

97-76060 PROFESSIONAL SERVICES $143,880.00 $7,500.00 ($136,380.00) 94.79% $164,380.00 $22,000.00 ($142,380.00) 86.62% $22,000.00 8 97-76110 BANK SERVICE CHARGES $3,540.26 $4,200.00 $659.74 (18.64%) $9,119.00 $11,000.00 $1,881.00 (20.63%) $11,000.00

97-76115 ADMINISTRATIVE FEE - SPIA $4,495.83 $4,000.00 ($495.83) 11.03% $11,572.44 $12,000.00 $427.56 (3.69%) $12,000.00

97-76117 ADMINISTRATIVE FEE - HSG $72,130.17 $75,000.00 $2,869.83 (3.98%) $150,091.20 $145,777.00 ($4,314.20) 2.87% $145,777.00

97-76300 BAD DEBT EXPENSE $47,949.21 $0.00 ($47,949.21) 100.00% $47,949.21 $0.00 ($47,949.21) 100.00% $0.00

Total Expenses $4,141,936.61 $4,201,221.00 $59,284.39 (1.43%) $10,661,170.33 $11,295,064.00 $633,893.67 (5.95%) $11,295,064.00

BEGINNING FUND BALANCE $15,316,212.82 $0.00 $15,316,212.82 (100.00%) $10,986,936.75 $0.00 $10,986,936.75 (100.00%) $0.00

TOTAL ADJUSTED FUND BALANCE $15,316,212.82 $0.00 $15,316,212.82 (100.00%) $10,985,976.75 $0.00 $10,985,976.75 (100.00%) $0.00

NET SURPLUS/(DEFICIT) ($2,982,758.22) $0.00 ($2,982,758.22) 100.00% $1,347,477.85 $0.00 $1,347,477.85 (100.00%) $0.00

ENDING FUND BALANCE $12,333,454.60 $0.00 $12,333,454.60 (100.00%) $12,333,454.60 $0.00 $12,333,454.60 (100.00%) $0.00

Notes

1 SALARIES - Open Desktop Administrator position and two residence life coordinators hired at lower salary that predecessors.

2 OFFICE EXPENSES - POSTAGE - Mailing campaign to bring in new students

3 HOUSING - VEHICLE REPAIR & MAINT. - Several vehicles required expensive repairs.

4 RENEWAL & REPLACEMENT - This year we are moving as many expenses to this line as feasible.

5 AMORT EXPENSE - Vehicles - Purchase of new van increased the amortization expense on this line

6 AMORTIZATION EXPENSE - Refinancing of Series 2005 and 2010 bonds resulted in higher amortization costs.

7 INSURANCE - AUTOMOBILE - Increase in insurance for new van.

8 PROFESSIONAL SERVICES - Fitch and Moody's rating agencies both charged more than estimated, architectural services for proposed Greek Village project (Services provided in prevous year, but the decision made not to continue

with project made in this fiscal year and cost is being expensed).

Quarter Ending Year to Date

University of West Florida FoundationA COMPONENT UNIT OF THE UNIVERSITY OF WEST FLORIDA

BUDGETED STATEMENT OF FUNCTIONAL EXPENSES

Actual TransfersOther Program Student HSG General & Expenses Out / (In) Budget

Scholarship Services System Fundraising Admin 6/30/2016 6/30/2016 6/30/2016 Variance % UnspentOperating Budget

Advancement Services $0 $0 $0 $0 $27,554 $27,554 $0 $27,300 ($254) (0.93%)

Alumni Relations $0 $0 $0 $0 $108,295 $108,295 $0 $159,879 $51,584 32.26%

Campaign $0 $0 $0 $8,938 $0 $8,938 $0 $30,000 $21,062 70.21%

Development $0 $0 $0 $319,894 $0 $319,894 $3,000 $359,142 $36,248 10.09%

Foundation $0 $0 $0 $0 $353,493 $353,493 $0 $443,460 $89,967 20.29%

Total Adv. Division Lines $0 $0 $0 $328,832 $489,342 $818,174 $3,000 $1,019,781 $198,607 19.48%

Executive $0 $0 $0 $0 $263,929.00 $263,929 $0 $230,206 ($33,723) (14.65%)

Total Executive Lines $0 $0 $0 $0 $263,929 $263,929 $0 $230,206 ($33,723) -14.65%

Total of Operating Budget $0 $0 $0 $328,832 $753,271 $1,082,103 $3,000 $1,249,987 $164,884 13.19%

Non-Endowed Budget

Non-End President & Reserve $0 $51,111 $0 $0 $0 $51,111 $405,000 $405,000 ($51,111) (12.62%)

Non-End Executive Lines $0 $0 $0 $7,000 $12,362 $19,362 $0 $24,000 $4,638 19.32%

Total Non-Endowed Budget $0 $51,111 $0 $7,000 $12,362 $70,474 $405,000 $429,000 ($46,474) (10.83%)

Other Areas

Administrative Fee $0 $56,708 $0 $0 $398 $57,106 $0 $85,000 $27,894 32.82%

Housing $0 $0 $10,660,885 $0 $0 $10,661,170 $0 $11,295,064 $633,894 5.61%

Unrestricted Gifts $2,654 $0 $0 $0 $819,353 $822,007 $87,727 $909,734 $0 0.00%

Other University Accounts $1,022,995 $3,879,605 $0 $40,778 $299,574 $5,242,953 ($495,727) $4,747,226 ($0) (0.00%)

Total Other Areas $1,025,649 $3,936,314 $10,660,885 $40,778 $1,119,325 $16,783,236 ($408,000) $17,037,024 $661,788 3.88%

Grand Total $1,025,649 $3,987,425 $10,660,885 $376,610 $1,884,958 $17,935,812 ($0) $18,716,011 $780,199 4.17%

Foundation Reso Refunding 2016

9.20.16

1

A RESOLUTION AUTHORIZING THE ISSUANCE OF DEBT

AND REQUESTING THE BOARD OF TRUSTEES OF THE

UNIVERSITY OF WEST FLORIDA TO APPROVE THE

ISSUANCE OF SUCH DEBT TO R E F U N D C E R T A I N

D E B T I N C U R R E D T O F I N A N C E THE

CONSTRUCTION OF STUDENT HOUSING FACILITIES ON

THE CAMPUS OF THE UNIVERSITY OF WEST FLORIDA;

AND PROVIDING AN EFFECTIVE DATE.

BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE UNIVERSITY OF WEST

FLORIDA FOUNDATION, INC.

Section 1. The Board of Directors (the “Board of Directors”) of The University of

West Florida Foundation, Inc. (the “Foundation”) a direct support organization of the University

of West Florida (the “University”) hereby authorizes the issuance of debt by the Foundation and

requests the Board of Trustees of the University to approve the issuance of debt in the amounts

set forth below for the purposes indicated below (the “Debt”):

1. An amount not exceeding $18,500,000 for the purpose of advance refunding the

outstanding Escambia County Housing Finance Authority Dormitory Revenue Bonds

(University of West Florida Foundation, Inc. Project), Series 2011 (the “2011 Bonds”)

in the event that debt service savings can be obtained without extension of the

remaining life of the Refunded Bonds;

2. An amount not exceeding $8,635,000 for the purpose of substituting the Foundation

as issuer in lieu of the Escambia County Housing Finance Authority (the “HFA”) in

connection with the outstanding Escambia County Housing Finance Authority

Dormitory Refunding Revenue Bonds (University of West Florida Foundation, Inc.

Project), Series 2010 (the “2010 Bonds”);

3. An amount not exceeding $14,000,000 for the purpose of advance refunding the

outstanding Escambia County Housing Finance Authority Dormitory Revenue Bonds

(University of West Florida Foundation, Inc. Project), Series 2009 (the “2009 Bonds”)

in the event that debt service savings can be obtained without extension of the

remaining life of the Refunded Bonds;

Foundation Reso Refunding 2016

9.20.16

2

4. An amount not exceeding $13,683,344 for the purpose of substituting the Foundation

as issuer in lieu of the HFA in connection with the outstanding Escambia County

Housing Finance Authority Dormitory Refunding Revenue Bonds (University of

West Florida Foundation, Inc. Project), Series 2015 (the “2015 Bonds”);

Section 2. No proceeds of the Debt will be used to finance operating expenses of

the University or the Foundation.

Section 3. The Debt is to be secured by a parity lien upon the net revenues of the

student housing system of the University. The Foundation is legally authorized to secure the

Debt with the revenues to be pledged pursuant to Section 1010.62, Florida Statutes.

Section 4. The exist ing maturi t ies of the Debt will not be extended in

connection with the refinancing herein contemplated, and all of the issues to be

refinanced matured not more than 30 (thirty) years after the date of issuance, including

any extensions or renewals thereof. The facilities financed with the proceeds of the Refunded

Bonds have a remaining estimated useful life that extends longer than the anticipated final

maturity of each issue of the Debt. The Debt will bear interest at a fixed interest rate.

Section 5. It is anticipated that the Foundation will arrange for the substitution of the

issuer in connection with the 2010 Bonds and the 2015 Bonds through a modification of the

terms of the 2010 Bonds and the 2015 Bonds with the existing holders of the respective issue.

The sale of the Debt to refund the 2011 Bonds and the 2009 Bonds, to be designated “Refunding

Revenue Bonds, Series 2016” will be through negotiated or competitive public sale or

competitive private placement.

Section 6. The Board of Directors will comply, and will require the Foundation to

comply, with all requirements of federal and state law relating to the Debt, including but not

limited to , laws relating to maintaining t h e exemption from taxation of interest payments

on the Debt and continuing secondary market disclosure of information regarding the Debt.

Section 7. The President, Vice President, C h i e f F i n an c i a l O f f i c e r and other

authorized representatives of the Foundation are hereby authorized to take all actions and

steps, to execute all instruments, documents, and contracts, and to take all other actions as they

Foundation Reso Refunding 2016

9.20.16

3

may deem necessary or desirable in connection with the execution, sale and delivery of the

Debt, all to the extent such actions, instruments and contracts are not inconsistent with this

resolution.

Section 8. In making the determination to approve the refunding of the Refunded

Bonds, the Board of Directors has reviewed the information described in the attached Appendix

A.

Section 9. This Resolution shall take effect immediately upon its adoption.

Adopted this ____ day of _______, 2016.

UNIVERSITY OF WEST FLORIDA

FOUNDATION, INC.

BOARD OF DIRECTORS

By: _____________________________________

President

CERTIFICATE OF THE SECRETARY

The undersigned Secretary of the University of West Florida Founda t ion , Inc .

does hereby certify that the attached resolution is a true and accurate copy as adopted by the

Board of Directors of the Foundation on _______, 2016 , as such resolution appears in the

official records of the Foundation.

IN WITNESS WHEREOF, I hereunto set m y hand and the official seal of the

Fo u n d a t i o n this ___ day of _____ 2016.

____________________________

Secretary

Foundation Reso Refunding 2016

9.20.16

4

Appendix A

The following documents have been reviewed by the Board of Directors prior to the

execution of this Resolution:

a. sources and uses of funds for the Debt;

b. an estimated debt service schedule;

c. a schedule showing expected savings to be accomplished by the Refunding Debt

transaction

University of West Florida Foundation Inc.

Outstanding Fiscal Year Debt Service as of 7/18/16

Series 2009 Series 2010 (Amended) Series 2011 Series 2015 Total Debt Service

Year Principal Interest Debt Service Year Principal Interest Debt Service Year Principal Interest Debt Service Year Principal Interest Debt Service Year Principal Interest Debt Service

6/30/17 656,000 594,512 1,250,512 6/30/17 618,500 237,463 855,963 6/30/17 340,000 846,994 1,186,994 6/30/17 731,544 424,184 1,155,728 6/30/17 2,346,044 2,103,152 4,449,1966/30/18 689,000 561,122 1,250,122 6/30/18 633,500 220,454 853,954 6/30/18 350,000 835,094 1,185,094 6/30/18 751,997 401,506 1,153,503 6/30/18 2,424,497 2,018,175 4,442,6726/30/19 724,000 526,052 1,250,052 6/30/19 652,000 203,033 855,033 6/30/19 365,000 821,531 1,186,531 6/30/19 776,196 378,194 1,154,390 6/30/19 2,517,196 1,928,809 4,446,0056/30/20 761,000 489,200 1,250,200 6/30/20 670,500 185,103 855,603 6/30/20 380,000 806,475 1,186,475 6/30/20 799,871 354,132 1,154,003 6/30/20 2,611,371 1,834,909 4,446,2806/30/21 800,000 450,465 1,250,465 6/30/21 688,000 166,664 854,664 6/30/21 395,000 789,375 1,184,375 6/30/21 827,073 329,336 1,156,409 6/30/21 2,710,073 1,735,840 4,445,9136/30/22 840,000 409,745 1,249,745 6/30/22 705,000 147,744 852,744 6/30/22 415,000 771,106 1,186,106 6/30/22 848,587 303,697 1,152,284 6/30/22 2,808,587 1,632,292 4,440,8796/30/23 883,000 366,989 1,249,989 6/30/23 727,000 128,356 855,356 6/30/23 440,000 749,319 1,189,319 6/30/23 879,456 277,390 1,156,846 6/30/23 2,929,456 1,522,054 4,451,5106/30/24 928,000 322,044 1,250,044 6/30/24 746,000 108,364 854,364 6/30/24 460,000 726,219 1,186,219 6/30/24 903,469 250,127 1,153,596 6/30/24 3,037,469 1,406,754 4,444,2236/30/25 975,000 274,809 1,249,809 6/30/25 765,500 87,849 853,349 6/30/25 485,000 702,069 1,187,069 6/30/25 931,652 222,120 1,153,772 6/30/25 3,157,152 1,286,846 4,443,9986/30/26 1,025,000 225,182 1,250,182 6/30/26 788,500 66,798 855,298 6/30/26 510,000 676,606 1,186,606 6/30/26 963,908 193,238 1,157,146 6/30/26 3,287,408 1,161,824 4,449,2326/30/27 1,077,000 173,009 1,250,009 6/30/27 810,000 45,114 855,114 6/30/27 535,000 649,831 1,184,831 6/30/27 990,289 163,357 1,153,646 6/30/27 3,412,289 1,031,311 4,443,6006/30/28 1,132,000 118,190 1,250,190 6/30/28 830,500 22,839 853,339 6/30/28 570,000 619,069 1,189,069 6/30/28 1,020,238 132,658 1,152,896 6/30/28 3,552,738 892,756 4,445,4946/30/29 1,190,000 60,571 1,250,571 6/30/29 600,000 586,294 1,186,294 6/30/29 1,053,615 101,031 1,154,646 6/30/29 2,843,615 747,896 3,591,511

6/30/30 635,000 551,794 1,186,794 6/30/30 1,085,278 68,369 1,153,647 6/30/30 1,720,278 620,163 2,340,4416/30/31 670,000 515,281 1,185,281 6/30/31 1,120,171 34,725 1,154,896 6/30/31 1,790,171 550,007 2,340,1786/30/32 710,000 476,756 1,186,756 6/30/32 710,000 476,756 1,186,7566/30/33 750,000 435,044 1,185,044 6/30/33 750,000 435,044 1,185,0446/30/34 795,000 390,981 1,185,981 6/30/34 795,000 390,981 1,185,9816/30/35 845,000 344,275 1,189,275 6/30/35 845,000 344,275 1,189,2756/30/36 890,000 294,631 1,184,631 6/30/36 890,000 294,631 1,184,6316/30/37 945,000 242,344 1,187,344 6/30/37 945,000 242,344 1,187,3446/30/38 1,000,000 186,825 1,186,825 6/30/38 1,000,000 186,825 1,186,8256/30/39 1,060,000 128,075 1,188,075 6/30/39 1,060,000 128,075 1,188,0756/30/40 1,120,000 65,800 1,185,800 6/30/40 1,120,000 65,800 1,185,800

Total 11,680,000$ 4,571,889$ 16,251,889$ 8,635,000$ 1,619,778$ 10,254,778$ 15,265,000$ 13,211,788$ 28,476,788$ 13,683,344$ 3,634,064$ 17,317,408$ 49,263,344$ 23,037,518$ 72,300,862$

University of West Florida Foundation Inc.

Outstanding Fiscal Year Debt Service as of 7/18/16 - With 2016 Proposed Refunding

Series 2010 (Amended) Series 2015 2016 Refunding of Series 2009 2016 Refunding of Series 2011 Total Debt Service

Year Principal Interest Debt Service Year Principal Interest Debt Service Year Principal Interest Debt Service Year Principal Interest Debt Service Year Principal Interest Debt Service

6/30/17 618,500 237,463 855,963 6/30/17 731,544 424,184 1,155,728 6/30/17 750,000 350,833 1,100,833 6/30/17 565,000 497,667 1,062,667 6/30/17 2,665,044 1,510,146 4,175,1906/30/18 633,500 220,454 853,954 6/30/18 751,997 401,506 1,153,503 6/30/18 615,000 488,750 1,103,750 6/30/18 345,000 718,250 1,063,250 6/30/18 2,345,497 1,828,960 4,174,4576/30/19 652,000 203,033 855,033 6/30/19 776,196 378,194 1,154,390 6/30/19 645,000 458,000 1,103,000 6/30/19 365,000 701,000 1,066,000 6/30/19 2,438,196 1,740,226 4,178,4226/30/20 670,500 185,103 855,603 6/30/20 799,871 354,132 1,154,003 6/30/20 675,000 425,750 1,100,750 6/30/20 380,000 682,750 1,062,750 6/30/20 2,525,371 1,647,734 4,173,1056/30/21 688,000 166,664 854,664 6/30/21 827,073 329,336 1,156,409 6/30/21 710,000 392,000 1,102,000 6/30/21 400,000 663,750 1,063,750 6/30/21 2,625,073 1,551,750 4,176,8236/30/22 705,000 147,744 852,744 6/30/22 848,587 303,697 1,152,284 6/30/22 745,000 356,500 1,101,500 6/30/22 420,000 643,750 1,063,750 6/30/22 2,718,587 1,451,690 4,170,2776/30/23 727,000 128,356 855,356 6/30/23 879,456 277,390 1,156,846 6/30/23 785,000 319,250 1,104,250 6/30/23 445,000 622,750 1,067,750 6/30/23 2,836,456 1,347,747 4,184,2036/30/24 746,000 108,364 854,364 6/30/24 903,469 250,127 1,153,596 6/30/24 825,000 280,000 1,105,000 6/30/24 465,000 600,500 1,065,500 6/30/24 2,939,469 1,238,991 4,178,4606/30/25 765,500 87,849 853,349 6/30/25 931,652 222,120 1,153,772 6/30/25 865,000 238,750 1,103,750 6/30/25 490,000 577,250 1,067,250 6/30/25 3,052,152 1,125,968 4,178,1206/30/26 788,500 66,798 855,298 6/30/26 963,908 193,238 1,157,146 6/30/26 905,000 195,500 1,100,500 6/30/26 515,000 552,750 1,067,750 6/30/26 3,172,408 1,008,286 4,180,6946/30/27 810,000 45,114 855,114 6/30/27 990,289 163,357 1,153,646 6/30/27 955,000 150,250 1,105,250 6/30/27 535,000 527,000 1,062,000 6/30/27 3,290,289 885,721 4,176,0106/30/28 830,500 22,839 853,339 6/30/28 1,020,238 132,658 1,152,896 6/30/28 1,000,000 102,500 1,102,500 6/30/28 565,000 500,250 1,065,250 6/30/28 3,415,738 758,247 4,173,985

6/30/29 1,053,615 101,031 1,154,646 6/30/29 1,050,000 52,500 1,102,500 6/30/29 595,000 472,000 1,067,000 6/30/29 2,698,615 625,531 3,324,1466/30/30 1,085,278 68,369 1,153,647 6/30/30 625,000 442,250 1,067,250 6/30/30 1,710,278 510,619 2,220,8976/30/31 1,120,171 34,725 1,154,896 6/30/31 655,000 411,000 1,066,000 6/30/31 1,775,171 445,725 2,220,896

6/30/32 685,000 378,250 1,063,250 6/30/32 685,000 378,250 1,063,2506/30/33 720,000 344,000 1,064,000 6/30/33 720,000 344,000 1,064,0006/30/34 755,000 308,000 1,063,000 6/30/34 755,000 308,000 1,063,0006/30/35 795,000 270,250 1,065,250 6/30/35 795,000 270,250 1,065,2506/30/36 835,000 230,500 1,065,500 6/30/36 835,000 230,500 1,065,5006/30/37 875,000 188,750 1,063,750 6/30/37 875,000 188,750 1,063,7506/30/38 920,000 145,000 1,065,000 6/30/38 920,000 145,000 1,065,0006/30/39 965,000 99,000 1,064,000 6/30/39 965,000 99,000 1,064,0006/30/40 1,015,000 50,750 1,065,750 6/30/40 1,015,000 50,750 1,065,750

8,635,000$ 1,619,778$ 10,254,778$ 13,683,344$ 3,634,064$ 17,317,408$ 10,525,000$ 3,810,583$ 14,335,583$ 14,930,000$ 10,627,417$ 25,557,417$ 47,773,344$ 19,691,842$ 67,465,186$

Jul 19, 2016 4:51 pm Prepared by Public Financial Management, Inc

TABLE OF CONTENTS

University of West Florida Foundation2016 Refunding of Series 2009

Report Page

Sources and Uses of Funds ............................. 1

Summary of Refunding Results ........................... 2

Summary of Bonds Refunded ............................ 3

Savings .................................... 4

Escrow Requirements ............................... 5

Bond Summary Statistics .............................. 6

Bond Pricing .................................. 7

Bond Debt Service ................................ 8

Escrow Statistics ................................. 9

Jul 19, 2016 4:51 pm Prepared by Public Financial Management, Inc Page 1

SOURCES AND USES OF FUNDS

University of West Florida Foundation2016 Refunding of Series 2009

Dated Date 10/01/2016Delivery Date 10/01/2016

Sources:

Bond Proceeds:Par Amount 10,525,000.00Premium 1,828,395.50

12,353,395.50

Other Sources of Funds:DSRF Release 1,000,000.00

13,353,395.50

Uses:

Refunding Escrow Deposits:Cash Deposit 0.44SLGS Purchases 13,221,546.00

13,221,546.44

Delivery Date Expenses:Cost of Issuance 131,562.50

Other Uses of Funds:Additional Proceeds 286.56

13,353,395.50

Jul 19, 2016 4:51 pm Prepared by Public Financial Management, Inc Page 2

SUMMARY OF REFUNDING RESULTS

University of West Florida Foundation2016 Refunding of Series 2009

Dated Date 10/01/2016Delivery Date 10/01/2016Arbitrage yield 2.145933%Escrow yield 0.753463%Value of Negative Arbitrage 422,660.29

Bond Par Amount 10,525,000.00True Interest Cost 2.323908%Net Interest Cost 2.600898%Average Coupon 5.000000%Average Life 7.241

Par amount of refunded bonds 11,680,000.00Average coupon of refunded bonds 5.090000%Average life of refunded bonds 7.357

PV of prior debt to 10/01/2016 @ 2.145933% 14,163,408.98Net PV Savings 672,785.98Percentage savings of refunded bonds 5.760154%Percentage savings of refunding bonds 6.392266%

Jul 19, 2016 4:51 pm Prepared by Public Financial Management, Inc Page 3

SUMMARY OF BONDS REFUNDED

University of West Florida Foundation2016 Refunding of Series 2009

Maturity Interest Par Call CallBond Date Rate Amount Date Price

Series 2009, 2009:BB&T Loan, LOAN 06/01/2017 5.090% 656,000.00 - -

06/01/2018 5.090% 689,000.00 - -06/01/2019 5.090% 724,000.00 - -06/01/2020 5.090% 761,000.00 06/01/2019 101.00006/01/2021 5.090% 800,000.00 06/01/2019 101.00006/01/2022 5.090% 840,000.00 06/01/2019 101.00006/01/2023 5.090% 883,000.00 06/01/2019 101.00006/01/2024 5.090% 928,000.00 06/01/2019 101.00006/01/2025 5.090% 975,000.00 06/01/2019 101.00006/01/2026 5.090% 1,025,000.00 06/01/2019 101.00006/01/2027 5.090% 1,077,000.00 06/01/2019 101.00006/01/2028 5.090% 1,132,000.00 06/01/2019 101.00006/01/2029 5.090% 1,190,000.00 06/01/2019 101.000

11,680,000.00

Jul 19, 2016 4:51 pm Prepared by Public Financial Management, Inc Page 4

SAVINGS

University of West Florida Foundation2016 Refunding of Series 2009

Present ValuePrior Refunding to 10/01/2016

Date Debt Service Debt Service Savings @ 2.1459333%

06/30/2017 1,250,512.00 1,100,833.33 149,678.67 149,780.4306/30/2018 1,250,121.60 1,103,750.00 146,371.60 141,630.6506/30/2019 1,250,051.50 1,103,000.00 147,051.50 139,259.9606/30/2020 1,250,199.90 1,100,750.00 149,449.90 138,513.9706/30/2021 1,250,465.00 1,102,000.00 148,465.00 134,672.9906/30/2022 1,249,745.00 1,101,500.00 148,245.00 131,609.1006/30/2023 1,249,989.00 1,104,250.00 145,739.00 126,630.4506/30/2024 1,250,044.30 1,105,000.00 145,044.30 123,340.3906/30/2025 1,249,809.10 1,103,750.00 146,059.10 121,552.3106/30/2026 1,250,181.60 1,100,500.00 149,681.60 121,904.5606/30/2027 1,250,009.10 1,105,250.00 144,759.10 115,380.3206/30/2028 1,250,189.80 1,102,500.00 147,689.80 115,198.7206/30/2029 1,250,571.00 1,102,500.00 148,071.00 113,025.56

16,251,888.90 14,335,583.33 1,916,305.57 1,672,499.42

Savings Summary

Dated Date 10/01/2016Delivery Date 10/01/2016PV of savings from cash flow 1,672,499.42Less: Prior funds on hand -1,000,000.00Plus: Refunding funds on hand 286.56

Net PV Savings 672,785.98

Jul 19, 2016 4:51 pm Prepared by Public Financial Management, Inc Page 5

ESCROW REQUIREMENTS

University of West Florida Foundation2016 Refunding of Series 2009

Dated Date 10/01/2016Delivery Date 10/01/2016

Period Principal RedemptionEnding Principal Interest Redeemed Premium Total

12/01/2016 - 297,256.00 - - 297,256.0006/01/2017 656,000.00 297,256.00 - - 953,256.0012/01/2017 - 280,560.80 - - 280,560.8006/01/2018 689,000.00 280,560.80 - - 969,560.8012/01/2018 - 263,025.75 - - 263,025.7506/01/2019 724,000.00 263,025.75 9,611,000.00 96,110.00 10,694,135.75

2,069,000.00 1,681,685.10 9,611,000.00 96,110.00 13,457,795.10

Jul 19, 2016 4:51 pm Prepared by Public Financial Management, Inc Page 6

BOND SUMMARY STATISTICS

University of West Florida Foundation2016 Refunding of Series 2009

Dated Date 10/01/2016Delivery Date 10/01/2016First Coupon 12/01/2016Last Maturity 06/01/2029

Arbitrage Yield 2.145933%True Interest Cost (TIC) 2.323908%Net Interest Cost (NIC) 2.600898%All-In TIC 2.496868%Average Coupon 5.000000%

Average Life (years) 7.241Weighted Average Maturity (years) 7.420Duration of Issue (years) 6.277

Par Amount 10,525,000.00Bond Proceeds 12,353,395.50Total Interest 3,810,583.33Net Interest 1,982,187.83Total Debt Service 14,335,583.33Maximum Annual Debt Service 1,105,250.00Average Annual Debt Service 1,131,756.58

Underwriter's Fees (per $1000) Average Takedown - Other Fee -

Total Underwriter's Discount -

Bid Price 117.371929

Par Average Average PV of 1 bpBond Component Value Price Coupon Life Duration change

Serials 10,525,000.00 117.372 5.000% 7.241 6.277 7,080.90

10,525,000.00 7.241 7,080.90

All-In ArbitrageTIC TIC Yield

Par Value 10,525,000.00 10,525,000.00 10,525,000.00 + Accrued Interest - - - + Premium (Discount) 1,828,395.50 1,828,395.50 1,828,395.50 - Underwriter's Discount - - - Cost of Issuance Expense -131,562.50 - Other Amounts - - -

Target Value 12,353,395.50 12,221,833.00 12,353,395.50

Target Date 10/01/2016 10/01/2016 10/01/2016Yield 2.323908% 2.496868% 2.145933%

Jul 19, 2016 4:51 pm Prepared by Public Financial Management, Inc Page 7

BOND PRICING

University of West Florida Foundation2016 Refunding of Series 2009

Maturity Yield to Call Call PremiumBond Component Date Amount Rate Yield Price Maturity Date Price (-Discount)

Serials:06/01/2017 750,000 5.000% 0.940% 102.690 - - - 20,175.0006/01/2018 615,000 5.000% 1.110% 106.404 - - - 39,384.6006/01/2019 645,000 5.000% 1.230% 109.858 - - - 63,584.1006/01/2020 675,000 5.000% 1.390% 112.859 - - - 86,798.2506/01/2021 710,000 5.000% 1.560% 115.422 - - - 109,496.2006/01/2022 745,000 5.000% 1.730% 117.576 - - - 130,941.2006/01/2023 785,000 5.000% 1.900% 119.322 - - - 151,677.7006/01/2024 825,000 5.000% 2.030% 120.985 - - - 173,126.2506/01/2025 865,000 5.000% 2.160% 122.334 - - - 193,189.1006/01/2026 905,000 5.000% 2.280% 123.474 - - - 212,439.7006/01/2027 955,000 5.000% 2.400% 122.308 C 2.592% 06/01/2026 100.000 213,041.4006/01/2028 1,000,000 5.000% 2.490% 121.442 C 2.829% 06/01/2026 100.000 214,420.0006/01/2029 1,050,000 5.000% 2.540% 120.964 C 2.998% 06/01/2026 100.000 220,122.00

10,525,000 1,828,395.50

Dated Date 10/01/2016Delivery Date 10/01/2016First Coupon 12/01/2016

Par Amount 10,525,000.00Premium 1,828,395.50

Production 12,353,395.50 117.371929%Underwriter's Discount - -

Purchase Price 12,353,395.50 117.371929%Accrued Interest -

Net Proceeds 12,353,395.50

Jul 19, 2016 4:51 pm Prepared by Public Financial Management, Inc Page 8

BOND DEBT SERVICE

University of West Florida Foundation2016 Refunding of Series 2009

PeriodEnding Principal Coupon Interest Debt Service

06/30/2017 750,000 5.000% 350,833.33 1,100,833.3306/30/2018 615,000 5.000% 488,750.00 1,103,750.0006/30/2019 645,000 5.000% 458,000.00 1,103,000.0006/30/2020 675,000 5.000% 425,750.00 1,100,750.0006/30/2021 710,000 5.000% 392,000.00 1,102,000.0006/30/2022 745,000 5.000% 356,500.00 1,101,500.0006/30/2023 785,000 5.000% 319,250.00 1,104,250.0006/30/2024 825,000 5.000% 280,000.00 1,105,000.0006/30/2025 865,000 5.000% 238,750.00 1,103,750.0006/30/2026 905,000 5.000% 195,500.00 1,100,500.0006/30/2027 955,000 5.000% 150,250.00 1,105,250.0006/30/2028 1,000,000 5.000% 102,500.00 1,102,500.0006/30/2029 1,050,000 5.000% 52,500.00 1,102,500.00

10,525,000 3,810,583.33 14,335,583.33

Jul 19, 2016 4:51 pm Prepared by Public Financial Management, Inc Page 9

ESCROW STATISTICS

University of West Florida Foundation2016 Refunding of Series 2009

Modified Yield to Yield to Perfect Value ofTotal Duration Receipt Disbursement Escrow Negative Cost of

Escrow Cost (years) Date Date Cost Arbitrage Dead Time

Global Proceeds Escrow:13,221,546.44 2.344 0.753463% 0.753463% 12,798,886.13 422,660.29 0.02

13,221,546.44 12,798,886.13 422,660.29 0.02

Delivery date 10/01/2016Arbitrage yield 2.145933%

Jul 19, 2016 4:55 pm Prepared by Public Financial Management, Inc

TABLE OF CONTENTS

University of West Florida Foundation2016 Refunding of Series 2011

Report Page

Sources and Uses of Funds ............................. 1

Summary of Refunding Results ........................... 2

Summary of Bonds Refunded ............................ 3

Savings .................................... 4

Escrow Requirements ............................... 5

Bond Summary Statistics .............................. 6

Bond Pricing .................................. 7

Bond Debt Service ................................ 9

Escrow Statistics ................................. 10

Jul 19, 2016 4:55 pm Prepared by Public Financial Management, Inc Page 1

SOURCES AND USES OF FUNDS

University of West Florida Foundation2016 Refunding of Series 2011

Dated Date 10/01/2016Delivery Date 10/01/2016

Sources:

Bond Proceeds:Par Amount 14,930,000.00Premium 2,702,176.55

17,632,176.55

Uses:

Refunding Escrow Deposits:Cash Deposit 0.67SLGS Purchases 17,444,678.00

17,444,678.67

Delivery Date Expenses:Cost of Issuance 186,625.00

Other Uses of Funds:Additional Proceeds 872.88

17,632,176.55

Jul 19, 2016 4:55 pm Prepared by Public Financial Management, Inc Page 2

SUMMARY OF REFUNDING RESULTS

University of West Florida Foundation2016 Refunding of Series 2011

Dated Date 10/01/2016Delivery Date 10/01/2016Arbitrage yield 2.565359%Escrow yield 0.758686%Value of Negative Arbitrage 741,752.45

Bond Par Amount 14,930,000.00True Interest Cost 3.320312%Net Interest Cost 3.728677%Average Coupon 5.000000%Average Life 14.236

Par amount of refunded bonds 15,265,000.00Average coupon of refunded bonds 5.769460%Average life of refunded bonds 14.681

PV of prior debt to 10/01/2016 @ 2.565359% 21,277,248.68Net PV Savings 2,190,215.65Percentage savings of refunded bonds 14.347957%Percentage savings of refunding bonds 14.669897%

Jul 19, 2016 4:55 pm Prepared by Public Financial Management, Inc Page 3

SUMMARY OF BONDS REFUNDED

University of West Florida Foundation2016 Refunding of Series 2011

Maturity Interest Par Call CallBond Date Rate Amount Date Price

Series 2011, 2011:Serials, SER 06/01/2017 3.500% 340,000.00 - -

06/01/2018 3.875% 350,000.00 - -06/01/2019 4.125% 365,000.00 - -06/01/2020 4.500% 380,000.00 06/01/2019 100.00006/01/2021 4.625% 395,000.00 06/01/2019 100.000

Term Bonds due 2026, TERM26 06/01/2022 5.250% 415,000.00 06/01/2019 100.00006/01/2023 5.250% 440,000.00 06/01/2019 100.00006/01/2024 5.250% 460,000.00 06/01/2019 100.00006/01/2025 5.250% 485,000.00 06/01/2019 100.00006/01/2026 5.250% 510,000.00 06/01/2019 100.000

Term Bonds due 2031, TERM31 06/01/2027 5.750% 535,000.00 06/01/2019 100.00006/01/2028 5.750% 570,000.00 06/01/2019 100.00006/01/2029 5.750% 600,000.00 06/01/2019 100.00006/01/2030 5.750% 635,000.00 06/01/2019 100.00006/01/2031 5.750% 670,000.00 06/01/2019 100.000

Term Bonds due 2040, TERM40 06/01/2032 5.875% 710,000.00 06/01/2019 100.00006/01/2033 5.875% 750,000.00 06/01/2019 100.00006/01/2034 5.875% 795,000.00 06/01/2019 100.00006/01/2035 5.875% 845,000.00 06/01/2019 100.00006/01/2036 5.875% 890,000.00 06/01/2019 100.00006/01/2037 5.875% 945,000.00 06/01/2019 100.00006/01/2038 5.875% 1,000,000.00 06/01/2019 100.00006/01/2039 5.875% 1,060,000.00 06/01/2019 100.00006/01/2040 5.875% 1,120,000.00 06/01/2019 100.000

15,265,000.00

Jul 19, 2016 4:55 pm Prepared by Public Financial Management, Inc Page 4

SAVINGS

University of West Florida Foundation2016 Refunding of Series 2011

Present ValuePrior Refunding to 10/01/2016

Date Debt Service Debt Service Savings @ 2.5653592%

06/30/2017 1,186,993.76 1,062,666.67 124,327.09 126,003.7706/30/2018 1,185,093.76 1,063,250.00 121,843.76 117,493.9506/30/2019 1,186,531.26 1,066,000.00 120,531.26 113,332.6706/30/2020 1,186,475.00 1,062,750.00 123,725.00 113,407.7006/30/2021 1,184,375.00 1,063,750.00 120,625.00 107,811.9106/30/2022 1,186,106.26 1,063,750.00 122,356.26 106,606.4806/30/2023 1,189,318.76 1,067,750.00 121,568.76 103,254.6906/30/2024 1,186,218.76 1,065,500.00 120,718.76 99,952.3406/30/2025 1,187,068.76 1,067,250.00 119,818.76 96,710.4806/30/2026 1,186,606.26 1,067,750.00 118,856.26 93,519.3206/30/2027 1,184,831.26 1,062,000.00 122,831.26 94,189.2706/30/2028 1,189,068.76 1,065,250.00 123,818.76 92,533.0406/30/2029 1,186,293.76 1,067,000.00 119,293.76 86,906.7506/30/2030 1,186,793.76 1,067,250.00 119,543.76 84,874.4106/30/2031 1,185,281.26 1,066,000.00 119,281.26 82,534.4206/30/2032 1,186,756.26 1,063,250.00 123,506.26 83,266.2706/30/2033 1,185,043.76 1,064,000.00 121,043.76 79,529.1306/30/2034 1,185,981.26 1,063,000.00 122,981.26 78,729.5606/30/2035 1,189,275.00 1,065,250.00 124,025.00 77,360.9306/30/2036 1,184,631.26 1,065,500.00 119,131.26 72,411.1406/30/2037 1,187,343.76 1,063,750.00 123,593.76 73,183.8206/30/2038 1,186,825.00 1,065,000.00 121,825.00 70,280.3106/30/2039 1,188,075.00 1,064,000.00 124,075.00 69,728.1606/30/2040 1,185,800.00 1,065,750.00 120,050.00 65,722.27

28,476,787.68 25,557,416.67 2,919,371.01 2,189,342.77

Savings Summary

Dated Date 10/01/2016Delivery Date 10/01/2016PV of savings from cash flow 2,189,342.77Plus: Refunding funds on hand 872.88

Net PV Savings 2,190,215.65

Jul 19, 2016 4:55 pm Prepared by Public Financial Management, Inc Page 5

ESCROW REQUIREMENTS

University of West Florida Foundation2016 Refunding of Series 2011

Dated Date 10/01/2016Delivery Date 10/01/2016

Period PrincipalEnding Principal Interest Redeemed Total

06/30/2017 340,000.00 846,993.76 - 1,186,993.7606/30/2018 350,000.00 835,093.76 - 1,185,093.7606/30/2019 365,000.00 821,531.26 14,210,000.00 15,396,531.26

1,055,000.00 2,503,618.78 14,210,000.00 17,768,618.78

Jul 19, 2016 4:55 pm Prepared by Public Financial Management, Inc Page 6

BOND SUMMARY STATISTICS

University of West Florida Foundation2016 Refunding of Series 2011

Dated Date 10/01/2016Delivery Date 10/01/2016First Coupon 12/01/2016Last Maturity 06/01/2040

Arbitrage Yield 2.565359%True Interest Cost (TIC) 3.320312%Net Interest Cost (NIC) 3.728677%All-In TIC 3.423722%Average Coupon 5.000000%

Average Life (years) 14.236Weighted Average Maturity (years) 14.345Duration of Issue (years) 10.487

Par Amount 14,930,000.00Bond Proceeds 17,632,176.55Total Interest 10,627,416.67Net Interest 7,925,240.12Total Debt Service 25,557,416.67Maximum Annual Debt Service 1,067,750.00Average Annual Debt Service 1,079,890.85

Underwriter's Fees (per $1000) Average Takedown - Other Fee -

Total Underwriter's Discount -

Bid Price 118.098972

Par Average Average PV of 1 bpBond Component Value Price Coupon Life Duration change

Serials 7,365,000.00 117.687 5.000% 8.324 7.029 5,226.80Term Bonds due 2033 1,405,000.00 119.826 5.000% 16.179 11.753 1,320.70Term Bonds due 2037 3,260,000.00 118.329 5.000% 19.228 13.150 3,031.80Term Bonds due 2040 2,900,000.00 118.050 5.000% 22.699 14.567 2,668.00

14,930,000.00 14.236 12,247.30

All-In ArbitrageTIC TIC Yield

Par Value 14,930,000.00 14,930,000.00 14,930,000.00 + Accrued Interest - - - + Premium (Discount) 2,702,176.55 2,702,176.55 2,702,176.55 - Underwriter's Discount - - - Cost of Issuance Expense -186,625.00 - Other Amounts - - -

Target Value 17,632,176.55 17,445,551.55 17,632,176.55

Target Date 10/01/2016 10/01/2016 10/01/2016Yield 3.320312% 3.423722% 2.565359%

Jul 19, 2016 4:55 pm Prepared by Public Financial Management, Inc Page 7

BOND PRICING

University of West Florida Foundation2016 Refunding of Series 2011

Maturity Yield to Call Call PremiumBond Component Date Amount Rate Yield Price Maturity Date Price (-Discount)

Serials:06/01/2017 565,000 5.000% 0.940% 102.690 - - - 15,198.5006/01/2018 345,000 5.000% 1.110% 106.404 - - - 22,093.8006/01/2019 365,000 5.000% 1.230% 109.858 - - - 35,981.7006/01/2020 380,000 5.000% 1.390% 112.859 - - - 48,864.2006/01/2021 400,000 5.000% 1.560% 115.422 - - - 61,688.0006/01/2022 420,000 5.000% 1.730% 117.576 - - - 73,819.2006/01/2023 445,000 5.000% 1.900% 119.322 - - - 85,982.9006/01/2024 465,000 5.000% 2.030% 120.985 - - - 97,580.2506/01/2025 490,000 5.000% 2.160% 122.334 - - - 109,436.6006/01/2026 515,000 5.000% 2.280% 123.474 - - - 120,891.1006/01/2027 535,000 5.000% 2.400% 122.308 C 2.592% 06/01/2026 100.000 119,347.8006/01/2028 565,000 5.000% 2.490% 121.442 C 2.829% 06/01/2026 100.000 121,147.3006/01/2029 595,000 5.000% 2.540% 120.964 C 2.998% 06/01/2026 100.000 124,735.8006/01/2030 625,000 5.000% 2.550% 120.869 C 3.113% 06/01/2026 100.000 130,431.2506/01/2031 655,000 5.000% 2.570% 120.679 C 3.220% 06/01/2026 100.000 135,447.45

7,365,000 1,302,645.85

Term Bonds due 2033:06/01/2032 685,000 5.000% 2.660% 119.826 C 3.428% 06/01/2026 100.000 135,808.1006/01/2033 720,000 5.000% 2.660% 119.826 C 3.428% 06/01/2026 100.000 142,747.20

1,405,000 278,555.30

Term Bonds due 2037:06/01/2034 755,000 5.000% 2.820% 118.329 C 3.721% 06/01/2026 100.000 138,383.9506/01/2035 795,000 5.000% 2.820% 118.329 C 3.721% 06/01/2026 100.000 145,715.5506/01/2036 835,000 5.000% 2.820% 118.329 C 3.721% 06/01/2026 100.000 153,047.1506/01/2037 875,000 5.000% 2.820% 118.329 C 3.721% 06/01/2026 100.000 160,378.75

3,260,000 597,525.40

Term Bonds due 2040:06/01/2038 920,000 5.000% 2.850% 118.050 C 3.833% 06/01/2026 100.000 166,060.0006/01/2039 965,000 5.000% 2.850% 118.050 C 3.833% 06/01/2026 100.000 174,182.5006/01/2040 1,015,000 5.000% 2.850% 118.050 C 3.833% 06/01/2026 100.000 183,207.50

2,900,000 523,450.00

14,930,000 2,702,176.55

Jul 19, 2016 4:55 pm Prepared by Public Financial Management, Inc Page 8

BOND PRICING

University of West Florida Foundation2016 Refunding of Series 2011

Dated Date 10/01/2016Delivery Date 10/01/2016First Coupon 12/01/2016

Par Amount 14,930,000.00Premium 2,702,176.55

Production 17,632,176.55 118.098972%Underwriter's Discount - -

Purchase Price 17,632,176.55 118.098972%Accrued Interest -

Net Proceeds 17,632,176.55

Jul 19, 2016 4:55 pm Prepared by Public Financial Management, Inc Page 9

BOND DEBT SERVICE

University of West Florida Foundation2016 Refunding of Series 2011

PeriodEnding Principal Coupon Interest Debt Service

06/30/2017 565,000 5.000% 497,666.67 1,062,666.6706/30/2018 345,000 5.000% 718,250.00 1,063,250.0006/30/2019 365,000 5.000% 701,000.00 1,066,000.0006/30/2020 380,000 5.000% 682,750.00 1,062,750.0006/30/2021 400,000 5.000% 663,750.00 1,063,750.0006/30/2022 420,000 5.000% 643,750.00 1,063,750.0006/30/2023 445,000 5.000% 622,750.00 1,067,750.0006/30/2024 465,000 5.000% 600,500.00 1,065,500.0006/30/2025 490,000 5.000% 577,250.00 1,067,250.0006/30/2026 515,000 5.000% 552,750.00 1,067,750.0006/30/2027 535,000 5.000% 527,000.00 1,062,000.0006/30/2028 565,000 5.000% 500,250.00 1,065,250.0006/30/2029 595,000 5.000% 472,000.00 1,067,000.0006/30/2030 625,000 5.000% 442,250.00 1,067,250.0006/30/2031 655,000 5.000% 411,000.00 1,066,000.0006/30/2032 685,000 5.000% 378,250.00 1,063,250.0006/30/2033 720,000 5.000% 344,000.00 1,064,000.0006/30/2034 755,000 5.000% 308,000.00 1,063,000.0006/30/2035 795,000 5.000% 270,250.00 1,065,250.0006/30/2036 835,000 5.000% 230,500.00 1,065,500.0006/30/2037 875,000 5.000% 188,750.00 1,063,750.0006/30/2038 920,000 5.000% 145,000.00 1,065,000.0006/30/2039 965,000 5.000% 99,000.00 1,064,000.0006/30/2040 1,015,000 5.000% 50,750.00 1,065,750.00

14,930,000 10,627,416.67 25,557,416.67

Jul 19, 2016 4:55 pm Prepared by Public Financial Management, Inc Page 10

ESCROW STATISTICS

University of West Florida Foundation2016 Refunding of Series 2011

Modified Yield to Yield to Perfect Value ofTotal Duration Receipt Disbursement Escrow Negative Cost of

Escrow Cost (years) Date Date Cost Arbitrage Dead Time

Global Proceeds Escrow:17,444,678.67 2.419 0.758686% 0.758686% 16,702,926.19 741,752.45 0.03

17,444,678.67 16,702,926.19 741,752.45 0.03

Delivery date 10/01/2016Arbitrage yield 2.565359%

Carried Forward Funds Carried Forward FundsUnspent Prior Years 165,704.33$ Unspent Prior Years 16,533.67$

Unspent 14/15 Budget Unspent 14/15 Budget

Total Carried Forward Budget 165,704.33 Total Carried Forward Budget 16,533.67

Expensed During 15/16 Expensed During 15/16State of Florida - License Plate Inventory 16,511.10

Academic Works - Scholarship Software 18,054.79

Raffalo Noel Levitz (Phonathon Calling Mgmnt.) 44,982.50

Alexander Haas (Consultant) - Partial Charges 27,472.20

Generate (Consultant) 6,440.34

Blue Wahoos Tickets 15,689.00

Total FY 15/16 Expenses to Date 129,149.93 Total FY 15/16 Expenses to Date -

Net FY 15/16 Activity 36,554.40 Net FY 15/16 Activity 16,533.67

Unspent 15/16 Budget 198,607.00 Unspent 15/16 Budget (33,723.00)

Net Carry Forward to FY 15/16 235,161.40$ Net Carry Forward to FY 15/16 (17,189.33)$

Unspent Division of Advancement Lines Unspent Executive Lines

The University of West Florida Foundation, Inc.Prior Years Unspent Budget Report

As of June 30, 2016

O:\FOUNDATION -Board Stuff\FDN - Audit Budget Committee\2017 Audit Budget Minutes and Agendas\August\Loose Materials Non Pdf\Prior Years Unspent Budget Report 06.30.16

Other Business

Prepared /Updated 9/22/2016 Page 1

2016-2017 Meeting Time Location Attendees

August 30th, Tuesday Board Orientation Workshop 12:00 p.m. - 4:00 p.m. Alumni Room, Building 12 New MembersAugust 31st, Wednesday Investment Committee 9:30 a.m. - 12:00 p.m. FPAN Building, 2nd Floor Committee membersAugust 31st, Wednesday Audit/Budget Committee 2:00 p.m. - 3:15 p.m. FPAN Building, 2nd Floor Committee membersAugust 31st, Wednesday Executive Committee 3:30 p.m. - 5:00 p.m. FPAN Building, 2nd Floor Committee members

September 29th, Thursday Board of Directors Meeting 3:30 p.m. - 5:00 p.m. UWF Pensacola Campus, Conference Center All Requested

October 4th, Tuesday Annual Donor Recognition Dinner 5:30 p.m. - 9:00 p.m. Museum of Commerce All Requested

November 10th, Thursday Investment Committee 9:30 a.m. - 12:00 p.m. FPAN Building, 2nd Floor Committee membersNovember 10th, Thursday Nominating Committee 1:00 p.m. - 2:00 p.m. FPAN Building, 2nd Floor Committee membersNovember 10th, Thursday Audit/Budget Committee 2:00 p.m. - 3:15 p.m. FPAN Building, 2nd Floor Committee membersNovember 10th, Thursday Executive Committee 3:30 p.m. - 5:00 p.m. FPAN Building, 2nd Floor Committee members

November 16th, Wednesday 50th Anniversary Gala 6:00 p.m. - 9:00 p.m. Hilton Pensacola Beach All Invited

December 2nd, Friday Grant Committee 12:00 p.m. - 2:00 p.m. UWF Pensacola Campus, 32/116 Committee membersDecember 8th, Thursday Board of Directors Meeting 3:30 p.m. - 5:00 p.m. UWF Pensacola Campus, Conference Center All RequestedDecember 8th, Thursday UWF Boards' Holiday Event 5:30 p.m. - 8:30 p.m. Scenic Hills Country Club All InvitedDecember 10th, Saturday Fall Commencement 9:30 a.m. - 2:00 p.m. Pensacola Bay Center All Invited

February 24th, Friday Investment Committee 9:30 a.m. - 12:00 p.m. FPAN Building, 2nd Floor Committee membersFebruary 24th, Friday Nominating Committee 1:00 p.m. - 2:00 p.m. FPAN Building, 2nd Floor Committee membersFebruary 24th, Friday Audit/Budget Committee 2:00 p.m. - 3:15 p.m. FPAN Building, 2nd Floor Committee membersFebruary 24th, Friday Executive Committee 3:30 p.m. - 5:00 p.m. FPAN Building, 2nd Floor Committee members

March 17th, Friday Grant Committee 12:00 p.m. - 2:00 p.m. UWF Pensacola Campus, 32/116 Committee membersMarch 22nd, Wednesday Board of Directors Meeting 3:30 p.m. - 5:00 p.m. Emerald Coast Campus, Fort Walton Beach All Requested

May 6th, Saturday Spring Commencement 9:30 a.m. - 2:00 p.m. Pensacola Bay Center All InvitedMay 18th, Thursday Investment Committee 9:30 a.m. - 12:00 p.m. FPAN Building, 2nd Floor Committee membersMay 18th, Thursday Nominating Committee 1:00 p.m. - 2:00 p.m. FPAN Building, 2nd Floor Committee membersMay 18th, Thursday Audit/Budget Committee 2:00 p.m. - 3:15 p.m. FPAN Building, 2nd Floor Committee membersMay 18th, Thursday Executive Committee 3:30 p.m. - 5:00 p.m. FPAN Building, 2nd Floor Committee members

June 28th, Wednesday Board of Directors Meeting 3:30 p.m. - 5:00 p.m. UWF Pensacola Campus-Conference Center All RequestedJune 29th, Thursday Joint Boards Appreciation Dinner 5:30 p.m. - 7:00 p.m. UWF Pensacola Campus-Conference Center All Invited

Color Code Key:Board Meetings in Red

Executive Committee Meetings in OrangeAudit / Budget Committee Meetings in Green

Investment Committee Meetings in PurpleNominating Committee Meetings in Silver

Grant Committee in AquaUWF / Volunteer Events in Blue