Oklahoma State University 0421

PRELIMINARY OFFICIAL STATEMENT DATED APRIL 6, 2021

NEW ISSUE—BOOK-ENTRY ONLY RATINGS: See “RATINGS” herein

In the opinion of Bond Counsel, under existing statutes, regulations, published rulings and judicial decisions, interest on the Series 2021A Bonds is excludable from the gross income of the recipients thereof for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”), and such interest will not be treated as an item of tax preference for purposes of the federal alternative minimum tax. In the opinion of Bond Counsel, under existing statutes, regulations, published rulings and judicial decisions, interest on the Series 2021B Bonds will be subject to federal income taxation. In the opinion of Bond Counsel, the Series 2021A Bonds and the Series 2021B Bonds, the transfer thereof and the interest earned thereon, including any profit derived from the sale thereof, are not subject to taxation of any kind by the State of Oklahoma or by any county, municipality or political subdivision therein. See “CERTAIN TAX MATTERS RESPECTING THE SERIES 2021A BONDS” and “CERTAIN TAX MATTERS RESPECTING THE SERIES 2021B BONDS” herein. THE BOARD OF REGENTS FOR THE OKLAHOMA AGRICULTURAL AND MECHANICAL COLLEGES ble its final Official Statement with respect

be any sale the of 2021 Bonds in any Series OKLAHOMA STATE UNIVERSITY $76,100,000* $104,370,000* GENERAL REVENUE AND REFUNDING BONDS GENERAL REVENUE REFUNDING BONDS TAX-EXEMPT SERIES 2021A FEDERALLY TAXABLE SERIES 2021B Dated: Date of Delivery Due: September 1, as shown on the inside cover The above-captioned bonds (individually, the “Series 2021A Bonds” and the “Series 2021B Bonds,” and collectively, the “Series 2021 Bonds”) are being issued by The Board of Regents for the Oklahoma Agricultural and Mechanical Colleges (the “Board of Regents” or the “Issuer”) for the benefit of Oklahoma State University (the “University”) to provide the funds to (i) pay the purchase price under certain lease agreements with The Oklahoma Development Finance Authority (“ODFA”) to acquire certain equipment and existing academic and related facilities on the Stillwater Campus of the University, (ii) make certain capital improvements to the University and (iii) pay costs of issuance of the Series 2021 Bonds. The Series 2021 Bonds are being issued pursuant to a Master Resolution Establishing the Oklahoma State University General notice. The Board of Regents will make availa

olicitation of an offer to buy, nor shall there shall there toolicitation of nor an offer buy, Revenue Financing System, as previously supplemented, and as further supplemented by a Seventeenth Supplemental Resolution and an Eighteenth Supplemental Resolution as described herein. BOKF, NA, Oklahoma City, Oklahoma, will serve as Registrar, Transfer Agent

ities laws of any such jurisdiction. and Paying Agent for the Series 2021 Bonds. The Series 2021 Bonds are issuable in fully registered form and when initially issued will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Series 2021 Bonds. Purchases of beneficial ownership interests in the Series 2021 Bonds will be made in book-entry form only, in $5,000 principal amounts or integral multiples thereof. Beneficial Owners of the Series 2021 Bonds will not receive physical delivery of certificates evidencing their ownership interest in the Series 2021 Bonds so long as DTC or a successor securities depository acts as the securities depository with respect to the Series 2021 Bonds. Interest on the Series 2021 Bonds is payable each March 1 and September 1, commencing September 1, 2021, as more fully described herein. So long as DTC or its nominee is the registered owner of the Series 2021 Bonds, payments of the principal of and interest on the Series 2021 Bonds will be made directly to DTC. Disbursement of such payments to DTC Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of DTC Participants. See “THE SERIES 2021 BONDS—Book-Entry-Only System” herein. Maturity Schedules on Inside Cover Pages The Series 2021 Bonds are subject to redemption prior to maturity. See “THE SERIES 2021 BONDS—Redemption Provisions” herein. THE SERIES 2021 BONDS AND THE INTEREST THEREON ARE LIMITED AND SPECIAL REVENUE OBLIGATIONS OF THE ISSUER, PAYABLE SOLELY FROM THE PLEDGED REVENUES. THE SERIES 2021 BONDS SHALL NOT CONSTITUTE AN INDEBTEDNESS OF THE STATE OF OKLAHOMA (THE “STATE”) AND SHALL NEVER CONSTITUTE inary Official Statement constitute an offer to sell or the s NOR GIVE RISE TO A PECUNIARY LIABILITY OF THE STATE OR A CHARGE AGAINST THE GENERAL CREDIT OF d herein are subject to change, completion or amendment subject to change, or are without completion amendment d herein THE STATE OR TAXING POWERS OF THE STATE. THE ISSUER AND THE UNIVERSITY HAVE NO POWER OF

unlawful prior to registration or qualification under the secur under or qualification to registration prior unlawful TAXATION. The Series 2021 Bonds are offered when, as and if issued and received by the Underwriters, subject to prior sale, to withdrawal or modification of the offer without notice, and to the approval of legality by the Attorney General of the State of Oklahoma and by The Public Finance Law Group PLLC, Bond Counsel, Oklahoma City, Oklahoma. Certain legal matters will be passed upon for the University by the General Counsel to the University and for the Underwriters by their counsel, Katten Muchin Rosenman LLP, New York, New York. It is expected that the Series 2021 Bonds will be available for delivery through the facilities of DTC, on or about May __, 2021.

RBC Capital Markets Stifel BOK Financial Securities BofA Securities

The date of this Official Statement is April __, 2021

* Preliminary, subject to change. to the Series Bonds. Under no 2021 circumstances shall this Prelim sale would solicitation or be in which such offer, jurisdiction This Preliminary Official Statement Statement containe and the information Official Preliminary This

THE BOARD OF REGENTS FOR THE OKLAHOMA AGRICULTURAL AND MECHANICAL COLLEGES OKLAHOMA STATE UNIVERSITY GENERAL REVENUE AND REFUNDING BONDS

Maturities, Amounts, Interest Rates and Yields

$76,100,000* TAX-EXEMPT SERIES 2021A

$60,965,000* Series 2021A Serial Bonds Maturity Principal Interest CUSIP September 1* Amount* Rate Yield Base: 679191 2021 $1,750,000 2022 1,500,000 2023 2,465,000 2024 2,535,000 2025 2,605,000 2026 2,685,000 2027 2,765,000 2028 2,850,000 2029 3,000,000 2030 3,105,000 2031 3,215,000 2032 3,325,000 2033 3,035,000 2034 3,145,000 2035 2,945,000 2036 3,045,000 2037 3,170,000 2038 3,285,000 2039 3,410,000 2040 3,530,000 2041 3,600,000

$11,855,000* ___% Series 2021A Term Bond due September 1, 2046* – Yield _____ (CUSIP 679191-___) $3,280,000* ___% Series 2021A Term Bond due September 1, 2051* – Yield _____ (CUSIP 679191-___)

CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein provided by CUSIP Global Services (“CGS”), managed on behalf of the American Bankers Association by S&P Capital IQ. This information is not intended to create a database and does not serve in any way as a substitute for services provided by CGS. CUSIP numbers have been assigned by an independent company not affiliated with the Issuer or the Underwriters and are included solely for the convenience of the registered and beneficial owners of the Series 2021A Bonds. None of the Issuer or the Underwriters is responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the Series 2021A Bonds or as included herein. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Series 2021A Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Series 2021A Bonds.

* Preliminary, subject to change.

THE BOARD OF REGENTS FOR THE OKLAHOMA AGRICULTURAL AND MECHANICAL COLLEGES OKLAHOMA STATE UNIVERSITY GENERAL REVENUE REFUNDING BONDS

Maturities, Amounts, Interest Rates and Yields

$104,370,000* FEDERALLY TAXABLE SERIES 2021B

$65,330,000* Series 2021B Serial Bonds Maturity Principal Interest CUSIP September 1* Amount* Rate Yield Base: 679191 2021 $2,450,000 2022 2,195,000 2023 3,780,000 2024 3,875,000 2025 3,965,000 2026 4,080,000 2027 4,195,000 2028 4,320,000 2029 4,405,000 2030 4,550,000 2031 4,710,000 2032 4,870,000 2033 4,510,000 2034 4,665,000 2035 4,305,000 2036 4,455,000

$24,160,000* ___% Series 2021B Term Bond due September 1, 2041* – Yield ____ (CUSIP 679191-___) $14,880,000* ___% Series 2021B Term Bond due September 1, 2045* – Yield ____ (CUSIP 679191-___)

CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein provided by CUSIP Global Services (“CGS”), managed on behalf of the American Bankers Association by S&P Capital IQ. This information is not intended to create a database and does not serve in any way as a substitute for services provided by CGS. CUSIP numbers have been assigned by an independent company not affiliated with the Issuer or the Underwriters and are included solely for the convenience of the registered and beneficial owners of the Series 2021B Bonds. None of the Issuer or the Underwriters is responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the Series 2021B Bonds or as included herein. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Series 2021B Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Series 2021B Bonds.

* Preliminary, subject to change. No dealer, broker, salesman or other person has been authorized to give any information or to make any representations, other than as contained in this Official Statement, and if given or made, any such other information or representations must not be relied upon. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 2021 Bonds, by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth in this Official Statement has been obtained from the Board of Regents, the University, from the sources referenced throughout this Official Statement and from other sources believed to be reliable. No representation or warranty is made, however, as to the accuracy or completeness of information received from parties other than the Board of Regents and the University. This Official Statement contains, in part, estimates and matters of opinion which are not intended as statements of fact, and no representation or warranty is made as to the correctness of such estimates and opinions, or that they will be realized. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of the Official Statement nor any sale made hereunder shall under any circumstances create any implication that there has been no change in the information or opinions set forth herein after the date of this Official Statement. References to website addresses presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader's convenience. Unless specified otherwise, such websites and the information or links contained therein are not incorporated into, and are not part of, this final official statement for purposes of, and as that term is defined in, SEC rule 15c2-12. The Underwriters have provided the following sentence for inclusion in this Official Statement: The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, their responsibilities to investors under federal securities laws as applied to the facts and circumstances of the transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. This Official Statement contains statements that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. When used in this Official Statement, the words “estimate,” “intend,” “expect” and similar expressions are intended to identify forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

THE COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. THE COVER PAGE IS NOT A SUMMARY OF THIS ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT, INCLUDING ALL APPENDICES ATTACHED HERETO TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE SERIES 2021 BONDS AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

OKLAHOMA STATE UNIVERSITY

Board of Regents for the Oklahoma Agricultural and Mechanical Colleges

Term Regent Position Residence Expires Occupation Rick Davis Chairman Guthrie 2024 Agriculture Dr. Trudy Milner Vice Chairman Tulsa 2025 Doctor of Osteopathic Medicine Douglas E. Burns† Member Norman 2021 Attorney Calvin J. Anthony Member Stillwater 2022 Pharmacist and Businessman Tucker Link†† Member Finley 2023 Agriculture and Businessman Jarold Callahan Member Edmond 2026 Agriculture Joe D. Hall Member Elk City 2027 Businessman Jimmy Harrel Member Leedey 2028 Agriculture and Businessman Blayne Arthur Member Stillwater ex officio President of State Board of Agriculture ______† Regent Burns’ term expired on April 4, 2021 and a replacement will be selected. †† Regent Link resigned from the Board or Regents and a replacement will be selected. Jason Ramsey, Oklahoma City, Oklahoma, serves as the Chief Executive Officer of the Board of Regents.

Principal Executive Officers of the University

Burns Hargis† President Dr. Gary Sandefur†† Provost and Senior Vice President for Academic Affairs Joseph B. Weaver, Jr. Senior Vice President, Administration and Finance Gary C. Clark Senior Vice President and General Counsel Dr. Doug Hallenbeck Vice President, Student Affairs Dr. Thomas Coon Vice President and Dean, Division of Agricultural Sciences and Natural Resources Mike Holder††† Vice President, Athletic Programs/Director, Intercollegiate Athletics Dr. Kenneth W. Sewell Vice President, Research Dr. Jason Kirksey Vice President, Institutional Diversity Kyle Wray Vice President, Enrollment and Brand Management Rita Hesser Controller ______† On October 23, 2020, President Hargis announced that he will retire on July 1, 2021, coinciding with the end of the current academic year. On April 3, 2021, the University announced Dr. Kayse Shrum as successor President. Dr. Kayse Shrum’s appointment is subject to approval by the Board of Regents on April 23, 2021. †† Dr. Sandefur retired effective March 31, 2021. Vice Provost Jeanette Mendez will serve as interim Provost pending selection of a successor to Dr. Sandefur. ††† Mr. Holder announced that he will resign effective July 1, 2021. Chad Weiberg, the current Deputy Athletic Director of the University, has been chosen as Mr. Holder’s successor.

Bond Counsel Municipal Advisor

The Public Finance Law Group PLLC Hilltop Securities Inc. 5657 N. Classen Boulevard, Suite 100 1201 Elm Street, Suite 3500 Oklahoma City, OK 73118 Dallas, TX 75270 (405) 235-3413 (214) 953-8875

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TABLE OF CONTENTS

Page Page

INTRODUCTION ...... 1 Federal Income Taxation ...... 23 AUTHORIZING LEGISLATION ...... 2 Backup Withholding ...... 24 THE ISSUER AND THE UNIVERSITY ...... 3 Oklahoma Taxation ...... 24 THE SERIES 2021 BONDS ...... 3 No Other Opinions ...... 25 Description of the Series 2021 Bonds ...... 3 CERTAIN TAX MATTERS RESPECTING THE SERIES Book-Entry-Only System ...... 4 2021B BONDS ...... 25 Exchange, Transfer and Replacement of Bonds ...... 6 The Series 2021B Bonds – Federally Taxable ...... 25 Redemption Provisions ...... 7 Interest Subject to Federal Income Taxation ...... 26 PLAN OF FINANCING ...... 9 Premium ...... 26 The Projects ...... 10 Market Discount ...... 26 DEBT SERVICE REQUIREMENTS FOR THE SERIES 2021 Sales or Other Dispositions ...... 27 BONDS ...... 12 Defeasance ...... 27 SECURITY FOR THE BONDS ...... 13 Backup Withholding ...... 27 Pledged Revenues; Exclusions; Prior Encumbered Health Care and Education Reconciliation Act of 2010 ..... 28 Obligations ...... 13 Foreign Investors ...... 28 Outstanding Parity Debt Under the Resolution...... 14 ERISA Considerations ...... 28 Subordinated Debt ...... 14 Oklahoma Taxation ...... 29 Additional Bonds ...... 14 No Other Opinions ...... 29 Funds Established by the Resolution ...... 14 LEGAL MATTERS ...... 29 Other Provisions of the Resolution ...... 16 NO LITIGATION ...... 30 Limited and Special Obligations ...... 16 FINANCIAL STATEMENTS ...... 30 RISKS OF BONDHOLDERS ...... 16 UNDERWRITING ...... 30 General ...... 16 MUNICIPAL ADVISOR ...... 31 State Appropriations for Operations ...... 17 RATINGS ...... 32 Public Health Epidemics or Outbreaks - COVID-19 ...... 17 CONTINUING DISCLOSURE ...... 32 Limited Enforcement Rights and Security for the Bonds ... 19 MISCELLANEOUS...... 32 Financial Information ...... 19 Environmental Liabilities ...... 20 Cyber Security ...... 20 APPENDIX A Certain Selected Information Regarding Challenges Associated with Certain Trends in Higher Oklahoma State University Education ...... 20 APPENDIX B Audited Financial Statements of Oklahoma Other Factors ...... 21 State University for the Fiscal Years Ended Legislative Proposals ...... 21 June 30, 2020 and 2019 Research ...... 21 APPENDIX C Definitions of Certain Terms and Summary of Secondary Market ...... 21 Certain Provisions of the Master Resolution Book-Entry ...... 22 CERTAIN TAX MATTERS RESPECTING THE SERIES APPENDIX D Form of Continuing Disclosure Agreement 2021A BONDS ...... 22 APPENDIX E Proposed Form of Bond Counsel Opinion The Series 2021A Bonds — Tax-Exempt ...... 22

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THE BOARD OF REGENTS FOR THE OKLAHOMA AGRICULTURAL AND MECHANICAL COLLEGES OKLAHOMA STATE UNIVERSITY

$76,100,000* $104,370,000* GENERAL REVENUE AND REFUNDING BONDS GENERAL REVENUE REFUNDING BONDS TAX-EXEMPT SERIES 2021A FEDERALLY TAXABLE SERIES 2021B

INTRODUCTION

This Official Statement, including the preceding pages and Appendices hereto, is provided to furnish information with respect to the offering, sale and delivery of the above-referenced series of bonds (individually, the “Series 2021A Bonds” and the “Series 2021B Bonds” and collectively, the “Series 2021 Bonds”) being issued by The Board of Regents for the Oklahoma Agricultural and Mechanical Colleges (the “Board of Regents” or the “Issuer”) for the benefit of Oklahoma State University (the “University”).

The Series 2021 Bonds are being issued by the Board of Regents pursuant to the Master Resolution Establishing the Oklahoma State University General Revenue Financing System authorized and adopted June 19, 2009 (the “Master Resolution”), as previously supplemented, and as further supplemented by a Seventeenth Supplemental Resolution and an Eighteenth Supplemental Resolution, each authorized March 5, 2021, adopted March 5, 2021, and dated as of May 1, 2021 (collectively, the “Supplemental Resolutions”). The Master Resolution as previously supplemented and as supplemented by the Supplemental Resolutions are herein collectively referred to as the “Resolution” and terms not otherwise defined herein shall have the meanings assigned thereto in the Resolution.

The Series 2021 Bonds are being issued by the Board of Regents pursuant to the Resolution and the authority of Title 70, Oklahoma Statutes 2011, Sections 3412.16 and 3980.1, et seq., as amended (collectively, the “Act”), to provide the funds to (i) pay the purchase price under certain lease agreements with The Oklahoma Development Finance Authority (“ODFA”) to acquire certain equipment and existing academic and related facilities on the Stillwater Campus of the University, (ii) make certain capital improvements to the University and (iii) pay costs of issuance of the Series 2021 Bonds. See “PLAN OF FINANCING—The Projects” herein.

The Series 2021 Bonds are the seventeenth and eighteenth series of bonds constituting Parity Debt issued under the Resolution and the Act. See “SECURITY FOR THE BONDS–Outstanding Parity Debt Under the Resolution” herein and “Outstanding Parity Debt” in Appendix A hereto for a description of the bonds of various series constituting Parity Debt issued under the Resolution and the Act (the “Outstanding Bonds”). The Outstanding Bonds, the Series 2021 Bonds and any additional bonds issued in the future under the Resolution on a parity therewith are collectively referred to as the “Bonds.”

All Bonds will be limited and special revenue obligations of the Issuer payable solely from the Pledged Revenues of the Financing System pursuant to the Resolution. The term “Pledged Revenues” generally means all revenues of the University derived from the Financing System now or hereafter lawfully available for payment of Bonds under the Resolution with certain exclusions, primarily consisting of revenues appropriated by the State of Oklahoma (the “State”) Legislature from tax receipts and certain funds whose purpose has been restricted by the donors, grantors or payors thereof to a purpose inconsistent with the payment of obligations, including the Bonds, issued under the Resolution. The term “Financing System” means the institutions and branches now or hereafter under the control or governance of the University and governed by the Board of Regents and made a Member of the Financing System by specific

* Preliminary, subject to change.

action of the Board of Regents. On the date hereof, the Oklahoma State University, Stillwater Campus, and Oklahoma State University-Tulsa (“OSU–Tulsa”) are the only Members of the Financing System. The pledge under the Resolution of the Pledged Revenues is subject to the pledge of certain portions of the Pledged Revenues by the Issuer to the payment of certain revenue bonds issued by the Issuer prior to the enactment of the Act (defined by the Resolution to be the “Prior Encumbered Obligations”). See “SECURITY FOR THE BONDS” and “RISKS OF BONDHOLDERS” herein.

The Act provides that neither the appropriations powers of the State Legislature pursuant to Article V of the State Constitution nor the powers described by Section 3 of Article XIII-A of the State Constitution with respect to monies lawfully appropriated to the Oklahoma State Regents for Higher Education nor the power of the State Legislature to impose taxes, generally, shall be pledged to the repayment of any obligations issued pursuant to the provisions of the Act. See “AUTHORIZING LEGISLATION” herein.

The payment of the principal of, premium, if any, and interest on the Series 2021 Bonds does not constitute an indebtedness or liability of the State or the individual members of the Board of Regents. The issuance of the Series 2021 Bonds does not directly or indirectly obligate the State to provide any funds for the payment of the Series 2021 Bonds. The Series 2021 Bonds do not currently and shall never constitute an indebtedness of the State within the meaning of the Constitution and the statutes of the State, and do not currently and shall never constitute or give rise to a pecuniary liability of the State or a charge against the general credit or taxing power of the State. The State shall not be liable for the payment of the principal of, premium, if any, and interest on the Series 2021 Bonds or for the performance of any agreement or covenant of any kind which may be undertaken by the University or the Board of Regents. No breach by the University or the Board of Regents of any covenant or agreement shall create any obligation upon the State, including any charge against its credit or taxing power. THE BOARD OF REGENTS AND THE UNIVERSITY HAVE NO TAXING POWER.

For certain information regarding the University, see Appendix A hereto. The information contained in Appendix A hereto primarily relates only to the Oklahoma State University, Stillwater Campus, and OSU-Tulsa. See Appendix B hereto for the audited financial statements of all agencies of the University for the fiscal years ended June 30, 2020 and 2019. Such audited financial statements include information relating to the Oklahoma State University, Stillwater Campus, and OSU–Tulsa, which agencies of the University are the initial and only Members of the Financing System, and all other agencies and component units of the University, which currently are not Members of the Financing System. See “FINANCIAL STATEMENTS” herein for additional information. See Appendix C hereto for definitions and summaries of certain provisions of the Resolution.

There follow brief descriptions of the Act, the Issuer, the University, the Financing System, the Series 2021 Bonds, the Resolution and related matters. Such descriptions do not purport to be comprehensive or definitive. References to such documents are qualified in their entirety by reference to the complete texts thereof, copies of such documents being available for inspection at the offices of the Director of Administration and Finance Business Operations, Oklahoma State University, 529 Scott Hall, Stillwater, Oklahoma 74078, Telephone: 405-744-5671.

AUTHORIZING LEGISLATION

The Act was adopted by the State Legislature as the Oklahoma Higher Education Promise of Excellence Act of 2005, effective March 31, 2005. The Act authorizes the Issuer, acting for the benefit of the University, to issue obligations pursuant to the provisions of the Act. The Act also authorizes the Board of Regents of the University of Oklahoma, and the Oklahoma State Regents for Higher Education (the “State Regents”), acting for the benefit of other institutions within The Oklahoma State System of Higher

Education (the “State System”) to issue obligations pursuant to the provisions of the Act. The Act states that it is the intent of the State Legislature to provide a method by which the total revenues available to each respective authorized issuer of obligations may be pledged to the repayment of such obligations, resulting in a higher credit rating and an interest cost savings to the State System.

Pursuant to the Act, the Issuer, acting for the benefit of the University, is authorized to pledge any lawfully available source of revenue other than revenues appropriated by the State Legislature from tax receipts, but inclusive of revenues derived from the Oklahoma Education Lottery Act, accruing to the credit of the University to the repayment of obligations issued pursuant to the Act. The Act further provides that the State Regents are required to affirmatively approve the issuance of obligations pursuant to the provisions of the Act and that all such obligations proposed to be issued shall be subject to final approval by the State Legislature by means of a “deemed approval” process in accordance with the provisions of the Act.

Prior to the enactment of the Act, the Issuer issued pursuant to earlier legislative authorization various issues of special obligation revenue bonds payable from certain discrete revenue sources as described in the table entitled “Prior Encumbered Obligations Outstanding as of April 1, 2021” appearing on page A-20 in Appendix A hereto.

THE ISSUER AND THE UNIVERSITY

As provided in Article 6, Section 31(a) of the State Constitution and Title 70, Oklahoma Statutes 2011, Section 3409, the Board of Regents is the governing board of the University and consists of nine members appointed by the Governor of Oklahoma, subject to confirmation by the State Senate, to serve staggered eight-year terms, except that one member is the President of the State Board of Agriculture, ex officio. The University, originally known as the Oklahoma Agricultural and Mechanical College, was established by the Oklahoma Territorial Legislature in 1890 and is a member of The Oklahoma State System of Higher Education. On the date hereof, the Oklahoma State University, Stillwater Campus, and OSU-Tulsa are the only Members of the Financing System and the information contained in Appendix A hereto primarily relates only to the Oklahoma State University, Stillwater Campus, and OSU-Tulsa. See Appendix B hereto for the audited financial statements of all agencies of the University for the fiscal years ended June 30, 2020 and 2019. Such audited financial statements include information relating to Oklahoma State University, Stillwater Campus, and OSU–Tulsa, which agencies of the University currently are the only Members of the Financing System, and all other agencies and component units of the University, which currently are not Members of the Financing System. See “FINANCIAL STATEMENTS” herein for additional information.

THE SERIES 2021 BONDS

Description of the Series 2021 Bonds

The principal amounts of the Series 2021 Bonds shall be as set forth on the cover page hereof and the Series 2021 Bonds shall mature on the dates and in the amounts, with interest thereon at the rates, set forth on the inside cover pages hereof.

The Series 2021 Bonds shall be executed and delivered in fully registered form in denominations of $5,000 or whole multiples thereof not exceeding the aggregate principal amount stated to mature on any given date. The Series 2021 Bonds shall be dated the date of their delivery and the owners of the Series 2021 Bonds shall be entitled to receive interest therefrom payable on March 1 and September 1 of each year. The first Interest Payment Date shall be September 1, 2021. The payment of principal of, premium, if any, and interest on the Series 2021 Bonds shall be made in lawful money of the United States of America. BOKF, NA, Oklahoma City, Oklahoma, will serve as Registrar, Transfer Agent and Paying Agent for the

Series 2021 Bonds. DTC (defined below) shall act as securities depository (the “Depository”) for the Series 2021 Bonds. So long as DTC is acting as Depository, the principal of, premium, if any, and interest on the Series 2021 Bonds shall be payable as directed by the Depository.

The principal of, and any premium due in connection with, the Series 2021 Bonds shall be payable at the principal office or offices of the Paying Agent, upon presentation and surrender of the Series 2021 Bonds. Payment of interest on any Series 2021 Bonds shall be made to the owner thereof by check or draft mailed by the Paying Agent to the owner at his/her address as it last appears on the registration books or records kept by the Registrar at the close of business on the regular record date (the fifteenth day of the calendar month next preceding each interest payment date) for such interest payment date, or, at the option of any owner of $1,000,000 or more in principal amount of Series 2021 Bonds, by wire transfer on such interest payment date to a bank within the continental United States as directed by such owner, but any such interest not so timely paid or duly provided for shall cease to be payable to the person who is the owner thereof at the close of business on a regular record date and shall be payable to the person who is the owner on a special record date for the payment of any such defaulted interest. Notice of the special record date shall be given by first-class mail to owners of the Series 2021 Bonds as shown on the Registrar’s registration books or records on the date selected by the Registrar, stating the date of the special record date and the date fixed for the payment of such defaulted interest. The Paying Agent may make payments of interest on any Series 2021 Bond by such alternative means as may be mutually agreed to by the Paying Agent and the owner. All such payments shall be made in lawful money of the United States of America.

Book-Entry-Only System

The information in this section concerning The Depository Trust Company (“DTC”) and DTC’s book-entry-only system has been obtained from DTC and the Issuer and the Underwriters take no responsibility for the accuracy thereof.

DTC will act as securities depository for the Series 2021 Bonds. The Series 2021 Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Series 2021 Bond certificate will be issued for each series and maturity of the Series 2021 Bonds, in the aggregate principal amount of such maturity, and will be deposited with DTC.

DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules

applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

Purchases of Series 2021 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2021 Bonds on DTC’s records. The ownership interest of each actual purchaser of Series 2021 Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2021 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Series 2021 Bonds, except in the event that use of the book-entry system for the Series 2021 Bonds is discontinued.

To facilitate subsequent transfers, all Series 2021 Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2021 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2021 Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Series 2021 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants (collectively, the “DTC Participants”) will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

Redemption notices shall be sent to DTC. If less than all the Bonds within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Series 2021 Bonds unless authorized by a Direct Participant in accordance with DTC’s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Series 2021 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Redemption proceeds, distributions and dividend payments on the Series 2021 Bonds will be made to Cede & Co. or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Issuer or the Paying Agent on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Paying Agent or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions and dividend payments on the Series 2021 Bonds to Cede & Co. (or such other nominee as may be requested by an authorized

representative of DTC) is the responsibility of the Issuer or the Paying Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as securities depository with respect to the Series 2021 Bonds at any time by giving reasonable notice to the Issuer. Under such circumstances, in the event that a successor securities depository is not obtained, Series 2021 Bond certificates are required to be printed and delivered.

The Issuer may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Series 2021 Bond certificates will be printed and delivered.

The Issuer, the Paying Agent and the Underwriters cannot and do not give any assurances that the DTC Participants will distribute to the Beneficial Owners of the Series 2021 Bonds: (i) payments of principal of or interest on the Series 2021 Bonds; (ii) certificates representing an ownership interest or other confirmation of Beneficial Ownership interests in the Series 2021 Bonds; or (iii) redemption or other notices sent to DTC or its nominee, as the registered owners of the Series 2021 Bonds; or that they will do so on a timely basis or that DTC or its participants will serve and act in the manner described in this Official Statement. The current “Rules” applicable to DTC are on file with the Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing with DTC Participants are on file with DTC.

None of the Issuer, the Paying Agent or the Underwriters will have any responsibility or obligation to such DTC Participants (Direct or Indirect) or the persons for whom they act as nominees with respect to: (i) the Series 2021 Bonds; (ii) the accuracy of any records maintained by DTC or any DTC Participant; (iii) the payment by any DTC Participant of any amount due to any Beneficial Owner in respect of the principal amount of or interest on the Series 2021 Bonds; (iv) the delivery by any DTC Participant of any notice to any Beneficial Owner which is required or permitted under the terms of the Resolution to be given to Registered Owners; (v) the selection of the Beneficial Owners to receive payment in the event of any partial redemption of the Series 2021 Bonds; or (vi) any consent given or other action taken by DTC as Registered Owner.

In reading this Official Statement, it should be understood that while the Series 2021 Bonds are in the book-entry system, references in other sections of this Official Statement to Registered Owner should be read to include the Beneficial Owners of the Series 2021 Bonds, but: (i) all rights of ownership must be exercised through DTC and the book-entry system; and (ii) notices that are to be given to Registered Owners by the Issuer or the Paying Agent will be given only to DTC.

Exchange, Transfer and Replacement of Bonds

Records for the registration and transfer of the Series 2021 Bonds shall be kept by the Registrar. Upon the surrender for transfer of any bond at the Registrar, duly endorsed for transfer or accompanied by an assignment in form satisfactory to the Registrar duly executed by the registered owner or his/her attorney duly authorized in writing, the Registrar shall authenticate and deliver in the name of the transferee or transferees a new bond or bonds of a like aggregate principal amount and of the same series, interest rate and maturity, bearing a number or numbers not previously assigned. Bonds may be exchanged at the Registrar for an equal aggregate principal amount of bonds of the same series, interest rate and maturity of other authorized denominations. In the case of such an exchange, the Registrar shall authenticate and deliver a bond or bonds bearing a number or numbers not previously assigned. The Registrar shall require the payment by the owner of any bond requesting exchange or transfer, of any tax or other governmental charge required to be paid with respect to such exchange or transfer and may charge a sum sufficient to pay

the cost of preparing and authenticating each new bond. No such charge shall be levied in the case of an exchange resulting from a redemption.

The Registrar shall not be required to transfer or exchange (i) any bond subject to redemption during a period beginning at the opening of business fifteen (15) days before the day of the mailing by the Registrar of a notice of prior redemption of bonds and ending at the close of business on the day of such mailing, or (ii) any bond after the mailing of notice calling such bond or any portion thereof for redemption.

The person in whose name any bond shall be registered on the registration records kept by the Registrar, shall be deemed and regarded as the absolute owner thereof for the purpose of making payments thereof and for all other purposes; and payment of either principal of, premium, if any, or interest on any bond shall be made only to or upon the written order of the registered owner thereof or his/her legal representative. All such payments shall be valid and effectual to discharge the liability upon such bond to the extent of the sum or sums so paid.

If any bond shall be lost, stolen, destroyed or mutilated, the Registrar shall, upon receipt of such evidence, information or indemnity relating thereto as it or the Issuer may reasonably require, and upon payment of all expenses in connection therewith, authenticate and deliver a replacement bond or bonds of a like aggregate principal amount and of the same series, interest rate and maturity, bearing a number or numbers not previously assigned. If such lost, stolen, destroyed or mutilated bond shall have matured or shall have been called for redemption, the Registrar may direct that such bond be paid by the Paying Agent in lieu of replacement.

Whenever any bond shall be surrendered to the Paying Agent upon payment thereof, or to the Registrar for transfer, exchange or replacement, such bond shall be promptly canceled by the Paying Agent or Registrar.

Redemption Provisions

Optional Redemption of the Series 2021A Bonds. The Series 2021A Bonds maturing on or after September 1, 2032*, are subject to redemption at the option of the Issuer, prior to maturity, in whole or in part, at any time, in such order of maturities as the Issuer may determine, on or after September 1, 2031*, at a redemption price of 100% of the principal amount thereof plus accrued interest thereon to the date of redemption.

Optional Redemption of the Series 2021B Bonds. The Series 2021B Bonds maturing on or after September 1, 2032*, are subject to redemption, prior to maturity, at the option of the Issuer in whole or in part, at any time, in such order of maturities as the Issuer may determine, on or after September 1, 2031*, at a redemption price of 100% of the principal amount thereof plus accrued interest thereon to the date of redemption.

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* Preliminary, subject to change.

Scheduled Mandatory Sinking Fund Redemption of Series 2021A Bonds. The Series 2021A Term Bonds maturing September 1, 2046*, and September 1, 2051*, are subject to mandatory redemption prior to their maturity, in part by lot, on September 1 of each of the years and in the principal amounts set forth below at a redemption price of 100% of the principal amounts of such Series 2021A Term Bonds, plus interest accrued to the date fixed for redemption.

Series 2021A Term Bond Series 2021A Term Bond Maturing September 1, 2046* Maturing September 1, 2051* Principal Principal Sept. 1* Amount* Sept. 1* Amount* 2042 $3,790,000 2047 $605,000 2043 3,935,000 2048 630,000 2044 2,720,000 2049 655,000 2045 830,000 2050 680,000 2046† 580,000 2051† 710,000 †Stated Maturity †Stated Maturity

Scheduled Mandatory Sinking Fund Redemption of Series 2021B Bonds. The Series 2021B Term Bonds maturing September 1, 2041*, and September 1, 2045*, are subject to mandatory redemption prior to their maturity, in part by lot, on September 1 of each of the years and in the principal amounts set forth below at a redemption price of 100% of the principal amounts of such Series 2021B Term Bonds, plus interest accrued to the date fixed for redemption.

Series 2021B Term Bond Series 2021B Term Bond Maturing September 1, 2041* Maturing September 1, 2045* Principal Principal Sept. 1* Amount* Sept. 1* Amount* 2037 $4,485,000 2042 $5,355,000 2038 4,645,000 2043 5,555,000 2039 4,815,000 2044 3,540,000 2040 4,985,000 2045† 430,000 2041† 5,230,000 †Stated Maturity †Stated Maturity

Partial Redemption of the Series 2021 Bonds. For so long as a book-entry-only system is in effect with respect to the Series 2021 Bonds and DTC or a successor securities depository is the sole registered owner of such Series 2021 Bonds, in the event of a redemption of less than all of the Series 2021 Bonds of a maturity, the particular ownership interests of such Series 2021 Bonds of such maturity to be redeemed will be determined by DTC and Direct Participants and Indirect Participants (all as defined in “Book-Entry-Only System” herein), or by any such successor securities depository or any other intermediary, in accordance with their respective operating rules and procedures. It is the Issuer’s intent that the Series 2021 Bonds will be made eligible for partial redemptions and will be treated by DTC, in accordance with its rules and procedures, as a “pro-rata pass-through distribution of principal,” and partial redemptions are expected to be processed by DTC on a pro-rata pass-through distribution of principal basis in accordance with such rules and procedures. In the event of a partial redemption of Series 2021 Bonds, the security position at DTC will not be reduced but the balance will be subject to adjustment by a factor to be provided to DTC by the Paying Agent. If, at the time of a partial redemption of Series 2021 Bonds, the Paying Agent fails to identify the Series 2021 Bonds being redeemed as being subject to a pro-rata pass-through distribution of principal and/or fails to furnish such factor to DTC, such redemption may be

* Preliminary, subject to change.

processed by random lottery pursuant to DTC’s rules and procedures. The Issuer provides no assurance that DTC and any Direct Participant and Indirect Participant, or any successor securities depository or other intermediary, will make such determination on a pro rata basis or effectuate a pro-rata pass-through distribution of principal in the case of a partial redemption of Series 2021 Bonds, or that the Paying Agent will identify the Series 2021 Bonds and provide an appropriate factor as described above in the case of a partial redemption of Series 2021 Bonds, and in each case any failure to do so shall not affect the sufficiency or the validity of the related redemption of Series 2021 Bonds.

Notice and Effect of Redemption. Notice of prior redemption of Series 2021 Bonds shall be given by the Registrar in the name and on the behalf of the Issuer by first-class mail, postage prepaid, at least thirty (30) days but not more than sixty (60) days prior to the redemption date, to the owner of any bond all or a part of which is called for prior redemption at his/her address as it last appears on the registration records kept by the Registrar. The notice shall identify the Series 2021 Bonds or portions thereof to be redeemed, specify the redemption date, describe any conditions with respect to such redemption and state that on the redemption date the principal amount thereof and premium thereon, if any, will, subject to the satisfaction of any conditions specified in the notice, become due and payable at the principal office of the Paying Agent, and that, after such redemption date, interest on such Series 2021 Bonds will cease to accrue. Failure to give such notice by mailing, or any defect therein, shall not affect the validity of the proceedings for the redemption of any other bond as to which no such failure or defect has occurred.

Notice of redemption having been duly given, and action having been duly taken to provide for the payment of the Series 2021 Bonds, or designated portions thereof, so called for prior redemption, the Series 2021 Bonds, or designated portions thereof, so called for redemption shall become due and payable on the redemption date stated in such notice at the applicable redemption price, plus interest accrued to the redemption date; and upon presentation and surrender thereof, together with a written instrument of transfer duly executed by the owner or by his/her duly authorized attorney, such bonds, or designated portions thereof, shall be paid.

If on the redemption date moneys for the redemption of all the Series 2021 Bonds, or designated portions thereof, to be redeemed, at the applicable redemption price, together with interest accrued to the redemption date, shall be held by the Paying Agent so as to be available therefor on such date, and if notice of redemption shall have been duly given as aforesaid, then from and after the redemption date such bonds, or designated portions thereof, shall cease to bear interest and shall no longer be considered Outstanding under the Resolution. All moneys held by the Paying Agent for the redemption of any bonds, or designated portions thereof, shall be held in trust for the account of the owners thereof.

PLAN OF FINANCING

Proceeds of the Series 2021 Bonds will be used to (i) pay the purchase price under certain lease agreements with ODFA to acquire certain equipment and existing academic and related facilities on the Stillwater Campus of the University, and (ii) make certain capital improvements to the University, as more fully described in “The Projects” below. Proceeds of the Series 2021 Bonds also will be used to pay costs of issuance of the Series 2021 Bonds.

The following table sets forth the estimated sources and uses of proceeds of the Series 2021 Bonds:

Series 2021A Bonds Series 2021B Bonds Total Principal of Series 2021 Bonds $ $ $ [Plus/Less]: Original Issue [Premium/Discount] Total Sources: $ $ $

Deposit to Series 2021A Project Account Payment of Purchase Price Under Lease Agreements Costs of Issuance and Misc.1 Total Uses: $ $ $ ______1 Includes all costs of issuance, underwriting discounts of $______with respect to the Series 2021A Bonds and $______with respect to the Series 2021B Bonds, fees for legal counsel and other expenses, the payment of which is contingent upon the issuance of the Series 2021 Bonds.

The Projects

Series 2021A Projects. $______of the proceeds of the Series 2021A Bonds are expected to finance a portion of the construction of a new facility for the Division of Agricultural Sciences and Natural Resources on the Oklahoma State University, Stillwater Campus, which will include administration and faculty offices, classrooms and teaching facilities (the “Series 2021A New Capital Project”). The estimated cost of the facility is approximately $80,000,000 to $100,000,000 and the remaining cost of the facility is anticipated to be funded with a combination of University funding, donations and future borrowing.

$______of the proceeds of the Series 2021A Bonds are expected to pay the purchase prices under the lease agreements set forth below with ODFA to acquire certain existing academic and related facilities on the Stillwater Campus of the University (the “Series 2021A Existing Capital Projects”).

Lease Description Existing Capital Project Purchase Price Master Real Property Lease, Series 2013A IT building construction $3,776,020.26 Master Real Property Lease, Series 2014E North dining construction 10,974,213.97 Master Real Property Lease, Series 2014E College of Human Science addition 16,000,669.46 Master Real Property Lease, Series 2014E Spears School of Business 18,290,952.55 Master Real Property Lease, Series 2014F Atherton renovation 8,635,703.59 Master Real Property Lease, Series 2015B South Parking Garage project 9,487,833.96 Master Real Property Lease, Series 2017A CEAT undergraduate lab 10,091,657.95

Pursuant to the terms of the lease agreements, upon payment of the purchase prices set forth above, ODFA’s interest in the above-described facilities will be transferred permanently to the University and the leases will be terminated.

Series 2021B Projects. $______of the proceeds of the Series 2021B Bonds are expected to pay the purchase prices under the lease agreements set forth below with ODFA to acquire certain equipment and existing academic and related facilities on the Stillwater Campus of the University (the “Series 2021B Existing Capital Projects”)

Lease Description Existing Capital Project Purchase Price Master Equipment Lease, Series 2013A Energy savings project $5,680,905.28 Master Real Property Lease, Series 2014G Atherton renovation 2,885,200.00 Master Real Property Lease, Series 2015C Central Plant construction 69,245,800.00 Master Real Property Lease, Series 2015E Central Plant adjustment 2,633,360.00 Master Real Property Lease, Series 2015E Clearwell construction project 4,686,640.00 Master Real Property Lease, Series 2016E Electric distribution center 4,649,860.00 Master Real Property Lease, Series 2016E University substation electrical distribution 5,822,240.00 Master Real Property Lease, Series 2017B Campus utility distribution expansion 4,804,000.00 Master Real Property Lease, Series 2017B DSNR Foundation seed building 1,360,480.00 Master Real Property Lease, Series 2017B New Central Plant distribution 3,366,500.00

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DEBT SERVICE REQUIREMENTS FOR THE SERIES 2021 BONDS

The following table sets forth the annual amounts required to pay scheduled principal and interest on the Outstanding Bonds, the Series 2021A Bonds and the Series 2021B Bonds during each fiscal year ending June 30. Debt Service Requirements (Columns may not sum due to rounding)

Period Ending Outstanding Series 2021A Bonds Series 2021A Bonds Series 2021B Bonds Series 2021B Bonds Total June 30 Bonds1 Principal Interest Principal Interest Debt Service 2021 $26,056,910 $ $ $ $ $ 2022 28,683,751 2023 36,665,871 2024 39,636,177 2025 39,606,050 2026 38,176,879 2027 38,158,989 2028 38,144,925 2029 38,128,934 2030 36,987,036 2031 35,619,014 2032 33,947,047 2033 33,953,839 2034 32,435,932 2035 29,899,356 2036 29,902,132 2037 29,900,645 2038 29,882,546 2039 29,893,538 2040 26,715,587 2041 12,106,542 2042 12,084,164 2043 12,096,932 2044 12,082,916 2045 8,030,324 2046 8,040,883 2047 4,611,730 2048 4,616,457 2049 3,183,288 2050 1,591,021 2051 1,588,899 $752,428,311 $ $ $ $ $ ______1 Includes annual debt service due on the Series 2010B Bonds, Series 2013A Bonds, Series 2016A Bonds, Series 2017A Bonds, Series 2018A Bonds, Series 2018B Bonds, Series 2019A Bonds, Series 2019B Bonds, Series 2020A Bonds, Series 2020B Bonds and Series 2020C Bonds. See “FINANCIAL MANAGEMENT—Outstanding Parity Debt” on page A-18 in Appendix A hereto.

SECURITY FOR THE BONDS

Pledged Revenues; Exclusions; Prior Encumbered Obligations

Pursuant to the Resolution, the Issuer pledges as security for all Bonds issued thereunder (including the Outstanding Bonds, the Series 2021 Bonds and any additional bonds issued in the future under the Resolution on a parity therewith) the Pledged Revenues of the Financing System, subject to the provisions of the resolutions authorizing Prior Encumbered Obligations.

The term “Pledged Revenues” as defined in the Resolution means, subject to the provisions of the Prior Encumbered Obligations, any or all revenues of the University and derived from or attributable to any Member of the Financing System now or hereafter lawfully available for the payment of obligations, including the Bonds, issued under the Resolution; however, the definition of Pledged Revenues excludes (i) revenues appropriated by the State Legislature from tax receipts and (ii) funds whose purpose has been restricted by the donors, grantors or payors thereof to a purpose inconsistent with the payment of obligations, including the Bonds, issued under the Resolution. The security for the Bonds under the Resolution does not include a perfected security interest in the Pledged Revenues; the Pledged Revenues will not be held by a secured party, no UCC security interest financing statements will be filed with respect to the Pledged Revenues and all revenues of the University, including the Pledged Revenues, will be held in the University’s account maintained with the Treasurer of the State. The Resolution does not create a mortgage or lien on or security interest in any real or tangible personal property of the University.

The term “Financing System” means the institutions and branches now or hereafter under the control or governance of the University and governed by the Board of Regents and made a Member of the Financing System by specific action of the Board of Regents. On the date hereof, the Oklahoma State University, Stillwater Campus, and OSU-Tulsa are the only Members of the Financing System.

The term “Prior Encumbered Obligations” as defined in the Resolution means the revenue obligations payable from certain discrete revenue sources issued by the Issuer prior to the enactment of the Act pursuant to separate bond resolutions which are payable from and secured by a pledge of the Prior Encumbered Revenues (which constitute a portion of the Pledged Revenues) which pledge is prior to the pledge of the Pledged Revenues under the Resolution securing the Bonds. The term “Prior Encumbered Revenues” as defined in the Resolution means the revenues pledged to the payment of Prior Encumbered Obligations.

The Prior Encumbered Obligations in the total aggregate principal amount of $520,000 as of April 1, 2021, are described in the table entitled “Prior Encumbered Obligations Outstanding as of April 1, 2021” appearing on page A-20 in Appendix A hereto. Pursuant to the Resolution, the Issuer covenants and agrees that it will not issue any additional obligations under the bond resolutions authorizing and securing the Prior Encumbered Obligations on a parity therewith.

See the tables appearing on page A-21 in Appendix A for a presentation of the amounts of gross revenues of the University derived from the Financing System for Fiscal Year 2020, that (a) constituted Pledged Revenues subject to the prior pledge of the Prior Encumbered Obligations, and (b) constituted Pledged Revenues not subject to the prior pledge of the Prior Encumbered Obligations.

The Issuer covenants and agrees at all times to fix, levy, charge, and collect the Pledged Revenues, in such amounts, without any limitation whatsoever, as will be at least sufficient at all times, together with other legally available funds, including other Pledged Revenues, to provide the money, to make or pay the principal of, interest on, and other payments or deposits with respect to the Bonds when and as required. The Pledged Revenues shall be adjusted, if and when permitted or required by the Resolution, to provide

Pledged Revenues sufficient to make when due all such payments and deposits. The Issuer may fix, levy, charge, and collect the Pledged Revenues in any manner it may determine within its discretion.

Outstanding Parity Debt Under the Resolution

The Board of Regents issued its General Revenue Bonds, Series 2009A, on August 4, 2009, as the first series of Bonds and, most recently, issued its General Revenue and Refunding Bonds, Series 2020A, Series 2020B and Federally Taxable Series 2020C, on May 13, 2020, as the fourteenth, fifteenth and sixteenth series of Bonds issued under the Resolution and the Act. For a listing of all of the General Revenue Bonds that are Outstanding under the Resolution in the aggregate principal amount of $493,555,000 as of April 1, 2021, see “FINANCIAL MANAGEMENT—Outstanding Parity Debt” on page A-18 in Appendix A hereto.

Subordinated Debt

There is no Subordinated Debt Outstanding under the Resolution.

Additional Bonds

The Resolution provides that the Issuer reserves and shall have the right and power to issue or incur additional bonds or other debt constituting Parity Debt (all debt of the Issuer secured by a pledge of the Pledged Revenues on a parity with the Outstanding Bonds and the Series 2021 Bonds) for any purpose authorized by law pursuant to the provisions of the Resolution and a Supplement thereto, provided that the Issuer determines that it will have sufficient funds to meet its financial obligations under the Resolution and is in compliance with all covenants contained in the Resolution and is not in default in the performance and observance of any of the terms, provisions, and conditions thereof.

See “FINANCIAL MANAGEMENT—Anticipated Additional Indebtedness” on page A-23 in Appendix A.

Funds Established by the Resolution

The Resolution creates the following separate funds: (i) the Oklahoma State University, University General Revenue Financing System Debt Service Fund (the “Debt Service Fund”); (ii) the Oklahoma State University, University General Revenue Financing System Reserve Fund (the “Reserve Fund”); and (iii) the Oklahoma State University, University General Revenue Financing System Rebate Fund (the “Rebate Fund”), the provisions relating thereto being described in Appendix C hereto.

The Seventeenth Supplemental Resolution establishes the following separate accounts within the funds established under the Resolution with respect to the Series 2021A Bonds: (i) within the Debt Service Fund, a Series 2021A Interest Account and a Series 2021A Principal Account, and (ii) within the Rebate Fund, a “Series 2021A Rebate Account”.

The Seventeenth Supplemental Resolution establishes the Series 2021A Project Account that will receive proceeds of the Series 2021A Bonds to be applied to pay the costs of the Series 2021A New Capital Project. The proceeds deposited therein will be held by the Issuer in accounts established with the Treasurer of the State of Oklahoma and the University will draw funds therefrom to pay, or to reimburse the Issuer or the University for the payment of, such costs. Upon completion of the Series 2021A New Capital Project, all moneys remaining in the Series 2021A Project Account not needed to pay the remaining costs of such project shall be transferred to the Series 2021A Principal Account or the Series 2021A Interest Account of the Debt Service Fund.

The Seventeenth Supplemental Resolution establishes the Series 2021A Refunding Account that will receive proceeds of the Series 2021A Bonds to be applied to pay the purchase prices for the Series 2021A Existing Capital Projects. The proceeds deposited therein will be held by the Issuer in accounts established with the Treasurer of the State of Oklahoma and the University will draw funds therefrom to pay the purchase price for the Series 2021A Existing Capital Projects.

The Seventeenth Supplemental Resolution establishes the Series 2021A Expense Account that will receive proceeds of the Series 2021A Bonds to be applied to pay the expenses associated with the issuance of the Series 2021A Bonds. The proceeds deposited therein will be held by the Issuer in accounts established with the Treasurer of the State and the University will draw funds therefrom to pay such costs and expenses. Moneys, if any, remaining in the Series 2021A Expense Account on September 1, 2021, shall be transferred to the Series 2021A Interest Account of the Debt Service Fund.

The Eighteenth Supplemental Resolution establishes the following separate accounts within the funds established under the Resolution with respect to the Series 2021B Bonds: within the Debt Service Fund, a Series 2021B Interest Account and a Series 2021B Principal Account.

The Eighteenth Supplemental Resolution establishes the Series 2021B Refunding Account that will receive proceeds of the Series 2021B Bonds to be applied to pay the purchase prices for the Series 2021B Existing Capital Projects. The proceeds deposited therein will be held by the Issuer in accounts established with the Treasurer of the State of Oklahoma and the University will draw funds therefrom to pay the purchase price for the Series 2021B Existing Capital Projects.

The Eighteenth Supplemental Resolution establishes the Series 2021B Expense Account that will receive proceeds of the Series 2021B Bonds to be applied to pay the expenses associated with the issuance of the Series 2021B Bonds. The proceeds deposited therein will be held by the Issuer in accounts established with the Treasurer of the State and the University will draw funds therefrom to pay such costs and expenses. Moneys, if any, remaining in the Series 2021B Expense Account on September 1, 2021, shall be transferred to the Series 2021B Interest Account of the Debt Service Fund.

The Debt Service Fund will be held by the Paying Agent and will be used to receive amounts provided by the Issuer from the Pledged Revenues in amounts sufficient to pay and such amounts will be applied by the Paying Agent to the payment of the debt service requirements with respect to the Bonds.

The Resolution provides that the Issuer may establish, but is not required to establish, a reserve requirement with respect to any series of Bonds issued under the Resolution. If such a reserve requirement is established, a separate debt service reserve account shall be established for such series in the Reserve Fund. To date, no reserve requirement has been established with respect to any Series of Bonds issued under the Resolution and no reserve requirement will be established with respect to the Series 2021 Bonds.

The Rebate Fund will be held by the Issuer and separate rebate accounts shall be established therein with respect to each series of federally tax-exempt Bonds issued under the Resolution and amounts held therein shall be used to make any rebate payments required to be made to the United States in connection therewith.

The Resolution does not establish a separate revenue fund to be held as a special trust account by a fiduciary as security for Bonds issued under the Resolution and the University will continue to use its operating account established with the Treasurer of the State for purposes of depositing, investing and applying its revenues, including those revenues which are Pledged Revenues under the Resolution.

Other Provisions of the Resolution

See Appendix C hereto for a discussion of certain provisions of the Resolution affecting the security for the Bonds issued under the Resolution.

Limited and Special Obligations

The payment of the principal of, premium, if any, and interest on all Bonds issued under and secured by the Resolution, including the Outstanding Bonds, the Series 2021 Bonds and any additional bonds issued in the future under the Resolution on a parity therewith, does not constitute an indebtedness or liability of the State or the individual members of the Board of Regents. The issuance of the Bonds does not directly or indirectly obligate the State to provide any funds for the payment of the Bonds. The Bonds do not currently and shall never constitute an indebtedness of the State within the meaning of the Constitution and the statutes of the State, and do not currently and shall never constitute or give rise to a pecuniary liability of the State or a charge against the general credit or taxing power of the State. The State shall not be liable for the payment of the principal of, premium, if any, and interest on the Bonds or for the performance of any agreement or covenant of any kind which may be undertaken by the University or the Board of Regents. No breach by the University or the Board of Regents of any covenant or agreement shall create any obligation upon the State, including any charge against its credit or taxing power. THE BOARD OF REGENTS AND THE UNIVERSITY HAVE NO TAXING POWER.

RISKS OF BONDHOLDERS

The purchase of the Series 2021 Bonds involves certain investment risks that are discussed throughout this Official Statement. Accordingly, each prospective purchaser of the Series 2021 Bonds should make an independent evaluation of all of the information presented in this Official Statement in order to make an informed investment decision. This discussion of certain risks is not intended to be exhaustive and should be read in conjunction with this entire Official Statement including the Appendices hereto.

General

The Bonds, including the Outstanding Bonds, the Series 2021 Bonds and any Additional Bonds, are payable from payments to be made by the Issuer from the Pledged Revenues under the Resolution. The ability of the Issuer to comply with its obligations under the Resolution with respect to the Bonds depends primarily upon the ability of the Issuer to operate the University so as to generate sufficient Pledged Revenues from operations and to receive sufficient appropriated funds from the State and donations from benefactors of the University for capital projects and operations; neither such appropriated funds or donations are included in Pledged Revenues and pledged to or legally available for the payment of the Bonds, but such appropriated funds and donations are essential to the operations and creditworthiness of the University.

There are certain risks which might prevent the Issuer from obtaining sufficient revenues to meet all of its obligations, including its obligations under the Resolution. Purchasers of the Series 2021 Bonds should bear in mind that the occurrence of any number of events, some of which are specified in more detail below, could adversely affect the ability of the Issuer to obtain such revenues. Future economic and other conditions, including (a) the demand for and the ability of the Issuer to provide higher education facilities and services through the operation of the University on a competitive basis, (b) the level of administrative, faculty, alumni, parent and student confidence in and support of the University, (c) economic developments in the area and competition from other public and private higher education institutions in the area and competition with web-based education providers, (d) changes in governmental programs supporting

research, educational programs or student loans, (e) the availability and cost of student loans, and (f) adverse performance of the investments of the University or those held for its benefit may adversely affect revenues and expenses and, consequently, the Issuer’s ability to make payments under the Resolution. The future financial condition of the Issuer and the University could also be adversely affected by, among other things, legislation, regulatory actions, increased competition, demand for educational facilities and services, demographic changes, changes in the local economy, the availability and cost of credit to fund capital expenditures and a number of other conditions which are unpredictable, including the risk factors listed below. Future revenues and expenses of the Issuer and the University are subject to conditions which may change in the future to an extent that cannot be determined at this time.

State Appropriations for Operations

As previously described herein, the Pledged Revenues securing the Bonds under the Resolution do not include revenues appropriated by the State Legislature from tax receipts; however, receipt by the University of such appropriated funds is essential to the operations and creditworthiness of the University. Pursuant to Article XIII A of the State Constitution, The Oklahoma State Regents for Higher Education (the “State Regents”) annually are required to recommend to the State Legislature the budget allocations to be made to each institution within The Oklahoma State System of Higher Education, including the University, and the appropriations made by the State Legislature for all such institutions are required to be made in one consolidated form without reference to any particular institution and the State Regents are authorized to allocate to each such institution an amount sufficient to meet its needs and functions for the entire fiscal year. As discussed under “FINANCIAL MANAGEMENT—State Appropriations” and “— State General Revenue Fund Recent Developments” in Appendix A hereto, appropriations for Higher Education by the State Legislature for Fiscal Years 2016, 2017 and 2018 have been reduced from amounts appropriated for each preceding fiscal year due in large part to reduced oil and gas, income and sales tax collections. The Education Break Out for Fiscal Year 2020 general appropriation bill provided for an increase in appropriations to the State Regents of 3.24% from the prior year. The Fiscal Year 2021 budget includes an anticipated 3.95% reduction in funding for higher education. See “FINANCIAL MANAGEMENT—State Appropriations” and “—State General Revenue Fund Recent Developments” in Appendix A hereto for further information.

Public Health Epidemics or Outbreaks - COVID-19

Public health epidemics or outbreaks could adversely impact the University’s operations. The World Health Organization has declared a pandemic following the outbreak of 2019 Novel Coronavirus Disease (“COVID-19”), a respiratory disease caused by a new strain of coronavirus, which is having significant adverse health and financial impacts throughout the world, including the State. On March 13, 2020, the President of the United States declared COVID-19 a national emergency. On April 2, 2020, Oklahoma Governor J. Kevin Stitt issued Executive Order 2020-12, declaring COVID-19 a health emergency in all counties in the State. Oklahoma Governor J. Kevin Stitt has subsequently issued a number of executive orders relating to COVID-19 preparedness and mitigation.

University leadership has spent significant time preparing to ensure the safety and well-being of its students, faculty and staff. University leadership and emergency management teams are working in tandem with national, State, and local partners to manage this rapidly changing situation. The goal is to continue to serve students of the University and the State, while taking steps to protect the health and safety of students, employees and communities.

University enrollment for the Fall semester of 2020 remained fairly steady relative to past years in spite of COVID-19, while Stillwater Campus housing occupancy was down approximately 8%. The nightly cleaning and disinfecting of all classrooms, the library and classroom technology needed due to social

distancing is budgeted to cost between $2 million and $5 million. Additionally, the financial impact of COVID-19 on athletics is not yet known, but the University was able to host five Fall football games with attendance in the stadium limited to 25% of normal capacity.

The University has developed a phased reopening plan called the “Cowboys Coming Back Plan” (the “Plan”). The Plan is subject to change based on updated information and guidance from the Centers for Disease Control and Prevention and from public health officials. The Plan includes safety measures such as social distancing, mandatory face coverings, screenings, additional on-line resources for students and faculty, quarantining and isolation, and enhanced facilities cleaning. The University began the Fall 2020 semester with a blend of online and in person instruction, with courses going fully online after the Thanksgiving break. Final exams were conducted fully online. The Spring 2021 semester was postponed one week and began on January 19, 2021 and Spring Break was eliminated. The complete Plan can be found on the University website referenced below.

The State did not make any cuts to the University’s funding in Fiscal Year 2020. For the University Financing System, the Fiscal Year 2020 budget allocation of $156.1 million was 2.74% higher than the $151.9 million allocated for 2019. In Fiscal Year 2021, however, the State appropriation was cut by $6.1 million, or 3.95%, to $149.9 million as it too grappled with the consequences of the COVID-19 pandemic.

The University Financing System received $16.8 million from the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). For the Spring semester of 2020, students were provided $7.9 million in refunds related to COVID-19. CARES Act funding was used by the University to reimburse that expense along with purchasing COVID-19 safety supplies. The University established a student relief fund to assist students with financial difficulties and provided $8.4 million in emergency financial aid grants to students, which was primarily covered by CARES Act funding. The Financing System received additional CARES Act funding from the State in the amount of $1.3 million and received additional funding through the Higher Education Emergency Relief Funds II created under the Coronavirus Response and Relief Supplemental Appropriations Act of $17.8 million of institutional support and an additional $8.4 million in student aid. Additional HEERF III funds are expected, but the amount has not yet been confirmed.

The full impact of COVID-19 and the scope of any adverse impact on the University's finances and operations cannot be fully determined at this time. Other adverse consequences of COVID-19 may include, but are not limited to, decline in enrollment, postponement or cancellation of athletic events, decline in demand for University housing, parking and dining, decline in demand for University programs that involve travel or that have international connections, and changes in the delivery of health care. COVID-19 has, and may continue, to negatively impact State appropriations to the University. The University can make no assurances as to any such future actions with respect to the legislative appropriations.

At this time, the University cannot predict (i) the duration or extent of the COVID-19 pandemic; (ii) the duration or expansion of travel restrictions and restrictions on assemblies or gatherings; (iii) what effect any COVID-19 or any other outbreak or pandemic-related restrictions or warnings may have on demand for higher education; (iv) whether and to what extent the COVID-19 pandemic may disrupt the State, national or global economy or whether any such disruptions may adversely impact the University's operations or revenues; (v) whether any of the foregoing may have a material adverse effect on the financial condition or operations of the University or the ratings on the Series 2021 Bonds (see “RATINGS” herein). However, the University currently anticipates that the COVID-19 pandemic and the related responsive measures will not impair the University's ability to pay debt service on the Series 2021 Bonds and to comply with the other terms thereof.

Additional information with respect to events surrounding the outbreak of COV1D-19 and responses from State and local agencies can be found on the following website established by the State's

Department of Health at: https://oklahoma.gov/health.html. Additionally, the University provides information relating to COVID-19 and related developments at the University on its website at: https://go.okstate.edu/coronavirus/index.html. References to website addresses presented herein are for informational purposes only. Such websites and the information or links contained therein are not incorporated into, and are not part of, this Official Statement. The University does not assume any responsibility for the accuracy of the information on such websites.

Limited Enforcement Rights and Security for the Bonds

The remedies available to the owners of the Bonds upon an event of default under the Resolution are limited. The Resolution provides, upon an event of default, that any owner of Bonds may require (by all legal and equitable means including the use and filing of mandamus proceedings in any court of competent jurisdiction against the Issuer, its officials and employees, or any appropriate official of the State) the Issuer to carry out, respect or enforce the covenants and obligations of the Resolution. The Resolution does not establish other remedies or specifically enumerate events of default with respect to the Bonds of each series. The Resolution does not provide for a trustee to enforce the covenants and obligations of the Issuer. Enforcement by the owners of the Bonds of the covenants and obligations of the Issuer under the Resolution may be difficult, time consuming and expensive and no assurance can be given that an action in mandamus or other legal action to enforce compliance by the Issuer under the Resolution will be successful. The various legal opinions delivered concurrently with the delivery of the Series 2021 Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by general principles of equity and by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally.

The security for the Bonds under the Resolution does not include a perfected security interest in the Pledged Revenues; the Pledged Revenues will not be held by a secured party, no UCC security interest financing statements will be filed with respect to the Pledged Revenues and all revenues of the University, including the Pledged Revenues, will be held in the University’s account maintained with the Treasurer of the State. The Resolution does not create a mortgage or lien on or security interest in any real or tangible personal property of the University.

A portion of the Pledged Revenues is subject to the prior pledge of the resolutions authorizing the Prior Encumbered Obligations (as described under “SECURITY FOR THE BONDS—Pledged Revenues; Exclusions; Prior Encumbered Obligations” herein and as described under “Outstanding Prior Encumbered Obligations” on page A-20 in Appendix A hereto). Otherwise, the Pledged Revenues under the Resolution are available for the payment of all Bonds issued under the Resolution. The Resolution authorizes the Issuer to issue Additional Bonds (or other Parity Debt) on a parity with the Series 2021 Bonds if the Issuer determines that it will have sufficient funds to meet its financial obligations under the Resolution and provided that the Issuer is in compliance with and not in default in the performance and observance of all covenants contained in the Resolution. The Resolution does not contain any historical or projected financial coverage tests for the issuance of Additional Bonds (or other Parity Debt) under the Resolution.

Financial Information

Certain financial information of the University is set forth in Appendices A and B. There can be no assurance that the financial results achieved by the University in the future will be similar to historical results. Such future results will vary from historical results and actual variations may be material. Therefore, the historical operating results of the University cannot be taken as a representation that the University will be able to generate sufficient Pledged Revenues in the future to make payments under the Resolution sufficient for the full and timely payment of the principal of, premium, if any, and interest on the Bonds.

Environmental Liabilities

Operations result in the production of waste products, including certain radioactive wastes and hazardous wastes as defined in federal and state laws. As a generator of these wastes, the University is responsible for compliance with applicable federal, state and local laws and regulations, including the proper handling, labeling, storage, transport and disposal of the wastes, and may incur liability without regard to fault or remedial actions and for personal injury and property damage related to a release or threatened release of these wastes. Such liability could be substantial and may adversely affect the University’s financial condition.

Cyber Security

Computer hacking, cyber-attacks or other malicious activities could disrupt the University’s services. Further, security breaches such as leakage, or loss of confidential or proprietary data and failure or disruption of information technology systems could materially and adversely affect the University’s reputation, which could lead to significant capital outlays and decreased financial performance that insurance may not cover.

The University is equipped with an IT Security department, an Information Security Program, a collection of Information Security policies and internal controls, and an IT Compliance unit dedicated to continuously monitoring, improving, and maintaining the security posture of the University’s enterprise IT operations. Precautions taken specifically regarding the prevention of cyber-attacks include network segmentation, redundancy and continuous audit; vulnerability scanning and management; multi-factor authentication; continuous auditing and backup of sensitive data and system locations; password complexity; and access controls to ensure least privilege, privileged account access monitoring, and prevention of privilege escalations.

The Oklahoma Agricultural and Mechanical Colleges purchase cyber liability insurance, with a $5,000,000 annual aggregate limit over a $100,000 retention. This includes full sub-limits of $5,000,000 for Security and Privacy Liability, Regulatory Action, Network Interruption, and Cyber Extortion.

Challenges Associated with Certain Trends in Higher Education

The University regularly monitors and assesses the impact on the University of numerous trends in higher education, including the needs of non-traditional students (e.g., older, working students attending college part time), the financial costs of higher education for traditional and non-traditional students, increased competition from non-traditional sources, and the increasing compliance, regulatory and personnel costs of higher education. The University devotes substantial resources to addressing trends in higher education, and anticipates that it will continue to devote substantial resources to monitor and address trends in higher education. For example, compliance costs related primarily to initiatives of the U.S. Department of Education are increasing and likely to continue to increase. Likewise, many not-for-profit and public institutions of higher education are developing and commercializing internet-based education programs and classes. The impacts of these initiatives are unknown at this time, but have the potential to affect the delivery of higher education in dramatic ways. The University is evaluating and responding to these trends in a number of ways, but cannot predict how these trends may develop, their impact on the University, the effectiveness of current University responses to these trends, or the ability of the University to respond in the future in a timely manner.

Other Factors

Other factors also may affect the operation of the University and affect its ability to maintain sufficient operating margins. These factors include: (i) changes in the cost and availability of energy; (ii) changes in the cost and availability of insurance, such as fire and general comprehensive liability, that institutions of a similar size and type generally carry; (iii) occurrence of uninsured acts of God; (iv) an increase in the rate of inflation, combined with difficulties in increasing tuition, fees and charges while maintaining the quantity and quality of educational facilities and services; and (v) the availability and cost of credit.

As a part of the State, the University has an All Risk policy that covers damages from natural disasters including but not limited to wind, rain, hail, freezing, flooding, lightning, earthquake, volcano. There is also Terrorism & Nuclear, Biological, Chemical, Radioactive (NBCR) coverage outside the All Risk policy. War is excluded under the policy.

Legislative Proposals

Over the past several years, Congress has debated the federal government’s support of educational and research efforts. Various members of Congress have proposed legislative changes that, among others, include: reductions in federal payments for research (which could reduce amounts paid to the University); reductions or eliminations of student loan programs (which could significantly affect students’ financial ability to attend the University); and reform of the Internal Revenue Code of 1986, as amended (the “Code”) in various manners which could affect the Bonds’ market value and marketability or reduce the incentive for donors to contribute funds to the University. Restrictive immigration or security legislation or rules could affect the University’s ability to recruit foreign students or faculty. The implementation of one or more of these proposals, without appropriate safeguards, could have a substantially adverse effect on the University and the Bondholders, as well as other institutions of higher learning.

Research

Federal, state and local government units have adopted regulations and restrictions that govern funded research, both by formal regulation and by contract. They may adopt additional regulations or restrictions in the future. From time to time, such government units audit university and other research programs. Although the University employs reasonable efforts to operate its programs consistently with the funded research requirements, an audit could discover areas in which a government unit disagrees with the University’s actions. In the case of a serious audit disagreement, the University could be required to repay amounts previously paid to it and could be barred from future research grants. Such an action could lead to the reduction or elimination of research funding by such government unit and by other sources of research funding. In addition, reductions in federal spending generally can have a significant impact on the University by reducing its anticipated federal grant receipts for federally-funded sponsored research programs. The University anticipates that any such reductions in federal grant receipts will be offset largely through expenditure reductions, including termination of positions funded by research grants on a per-grant, per-budget grant basis.

Secondary Market

There is no guarantee that a secondary trading market will develop for the Series 2021 Bonds. Consequently, prospective bond purchasers should be prepared to hold their Series 2021 Bonds to maturity or prior redemption. Subject to applicable securities laws and prevailing market conditions, the Underwriters intend, but are not obligated, to make a market in the Series 2021 Bonds.

Book-Entry

Persons who purchase bonds through broker-dealers become creditors of the broker-dealer with respect to such bonds. Records of the investors’ holdings are maintained only by the broker-dealer and the investor. In the event of the insolvency of the broker-dealer, the investor would be required to look to the broker-dealer’s estate, and to any insurance maintained by the broker-dealer, to make good the investor’s loss. None of the Issuer, the University, the Paying Agent or the Underwriters is responsible for failures to act by, or insolvencies of, the Securities Depository or any broker-dealer.

CERTAIN TAX MATTERS RESPECTING THE SERIES 2021A BONDS

The Series 2021A Bonds — Tax-Exempt

The following is a summary of certain material anticipated federal income tax consequences of the purchase, ownership and disposition of the Series 2021A Bonds (the “ Series 2021A Tax-Exempt Bonds”) and the Series 2021B Bonds (collectively the “Series 2021 Bonds”) under the Internal Revenue Code of 1986, as amended (the “Code”), the regulations promulgated thereunder (final and proposed) (the “Regulations”), and the judicial and administrative rulings and court decisions now in effect, all of which are subject to change or possible differing interpretations. This summary does not purport to address all aspects of federal income taxation that may affect particular investors in light of their individual circumstances, nor certain types of investors subject to special treatment under the federal income tax laws. This summary does not discuss the tax laws of any state other than Oklahoma or any local or foreign governments. Potential purchasers of the Series 2021A Tax-Exempt Bonds should consult their own tax advisors in determining the federal, state or local tax consequences to them of the purchase, holding and disposition of the Series 2021A Tax-Exempt Bonds. Prospective investors should note that no rulings have been or will be sought from the Internal Revenue Service (the “IRS”) with respect to any of the federal income tax consequences discussed below, and no assurance can be given that the IRS will not take contrary positions.

Tax legislation, administrative actions taken by tax authorities, or court decisions, whether at the federal or state level, may adversely affect the tax-exempt status of interest on the Series 2021A Tax- Exempt Bonds under federal or state law or otherwise prevent beneficial owners of the Series 2021A Tax- Exempt Bonds from realizing the full current benefit of the tax status of such interest. In addition, such legislation or actions (whether currently proposed, proposed in the future, or enacted) and such decisions could affect the market price or marketability of the Series 2021A Tax-Exempt Bonds. Regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value of the Series 2021A Tax-Exempt Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved or whether the Series 2021A Tax-Exempt Bonds or the market value thereof would be impacted thereby. Purchasers of the Series 2021A Tax-Exempt Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the Series 2021A Tax-Exempt Bonds and Bond Counsel has not expressed any opinion as of any date subsequent thereto or with respect to any pending legislation, regulatory initiatives or litigation.

Federal Income Taxation

In the opinion of Bond Counsel, to be delivered at the time of original issuance of the Series 2021A Tax-Exempt Bonds, under existing statutes, regulations, published rulings and judicial decisions, interest on the Series 2021A Tax-Exempt Bonds is (a) excludable from gross income of the recipients thereof for federal income tax purposes under Section 103 of the of the Code and (b) is not a specific preference item for purposes of the federal alternative minimum tax that may be imposed under the Code.

The opinions set forth above are subject to continuing compliance by the University with the terms of the Resolution and the tax certificate delivered in connection with the issuance of the Series 2021A Tax-Exempt Bonds and continuing requirements with certain provisions of the Code after the issuance of the Series 2021A Tax-Exempt Bonds. Failure by the University to comply with these covenants and all requirements of the Code may cause the interest on the Series 2021A Tax-Exempt Bonds to become includable in federal gross income retroactively to the date of issue of the Series 2021A Tax-Exempt Bonds, regardless of when such noncompliance occurs or is ascertained.

The accrual or receipt of such interest may otherwise affect the federal income tax liability of certain recipients such as banks, thrift institutions, property and casualty insurance companies, corporations (including S corporations and foreign corporations operating branches in the United States), Social Security or Railroad Retirement benefit recipients or taxpayers otherwise entitled to claim the earned income credit and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations, among others. The extent of these other tax consequences will depend upon the recipient’s particular tax status or other items of income or deduction. Bond Counsel expresses no opinion regarding any such consequences and investors should consult their own tax advisors regarding the tax consequences of purchasing or holding the Series 2021A Tax-Exempt Bonds.

The resulting discount on any Series 2021A Tax-Exempt Bonds which are sold at an initial offering price to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters or wholesalers) which is less than the principal amount of such Series 2021A Tax-Exempt Bonds constitute original issue discount, and such Series 2021A Tax-Exempt Bonds are herein referred to as the “OID Bonds.” The difference between such initial offering price and the principal payable at maturity constitutes original issue discount treated as interest which is excluded from gross income for federal income tax purposes. In the case of an owner of an OID Bond, the amount of original issue discount which is treated as having accrued with respect to such OID Bond is added to the cost basis of the owner in determining, for federal income tax purposes, gain or loss upon disposition of such OID Bond (including its sale, redemption or payment at maturity). Amounts received upon disposition of such OID Bond which are attributable to accrued original issue discount will be treated as tax-exempt interest, rather than as taxable gain, for federal income tax purposes. Original issue discount is treated as compounding semiannually, at a rate determined by reference to the yield to maturity of each individual OID Bond, on days which are determined by reference to the maturity of such OID Bond. The amount treated as original issue discount on such OID Bond for a particular semiannual accrual period is equal to (a) the product of (i) the yield to maturity for such OID Bond and (ii) the amount which would have been the tax basis of such OID Bond at the beginning of the particular accrual period if held by the original purchaser, (b) less the amount of any payments of qualified stated interest on such OID Bond during the accrual period. The tax basis is determined by adding to the initial public offering price on such OID Bond the sum of the amounts which would have been treated as original issue discount for such purposes during all prior periods. If such OID Bond is sold between semiannual compounding dates, original issue discount which would have accrued for that semiannual compounding period for federal income tax purposes is to be apportioned in equal amounts among the days in such compounding period. An owner of an OID Bond should consult his or her own tax advisor with respect to the determination for federal income purposes of original issue discount accrued with respect to such OID Bond as of any date, with respect to the accrual of original issue

discount for such OID Bond purchased in the secondary market and with respect to the state and local tax consequences of owning such OID Bond.

Certain maturities of the Series 2021A Tax-Exempt Bonds may be initially sold to the public at prices greater than the amounts payable thereon at maturity and are herein referred to as the “Premium Bonds.” Under the Code, the difference between the principal amount of a Premium Bond and the cost basis of such Premium Bond to an owner thereof is “bond premium.” A purchaser of a Premium Bond must amortize any premium over the term of such Premium Bond in accordance with the provisions of Section 171 of the Code. Owners of Premium Bonds (including purchasers of Premium Bonds in the secondary market) should consult their own tax advisors with respect to the precise determination for federal income tax purposes of the treatment of bond premium upon sale, redemption or other disposition of such Premium Bonds and with respect to the state and local consequences of owning and disposing of such Premium Bonds.

Upon the sale, exchange or retirement (including redemption) of a Series 2021A Tax-Exempt Bond, an owner of a Series 2021A Tax-Exempt Bond generally will recognize gain or loss in an amount equal to the difference between the amount of cash and the fair market value of any property received on the sale, exchange or retirement of the Bond (other than in respect of accrued and unpaid interest) and such owner’s adjusted tax basis in the Series 2021A Tax-Exempt Bond. To the extent the Series 2021A Tax-Exempt Bonds are held as a capital asset, such gain or loss will be capital gain or loss, except to the extent of accrued market discount not previously included in income, and will be long-term capital gain or loss if the Series 2021A Tax-Exempt Bond has been held for more than one year at the time of sale, exchange or retirement.

Backup Withholding

Information reporting requirements will apply to interest paid after March 31, 2007 on tax-exempt obligations, including the Series 2021A Tax-Exempt Bonds. In general, such requirements are satisfied if the interest recipient completes, and provides the payor with, a Form W-9 “Request for Taxpayer Identification Number and Certification”, or unless the recipient is one of a limited class of exempt recipients, including corporations. A recipient not otherwise exempt from information reporting who fails to satisfy the information reporting requirements will be subject to “backup withholding”, which means that the payor is required to deduct and withhold a tax from the interest payment, calculated in the manner set forth in the Code. For the foregoing purpose, a “payor” generally refers to the person or entity from whom a recipient receives its payments of interest or who collects such payments on behalf of the recipient.

If an owner purchasing a Series 2021A Tax-Exempt Bond through a brokerage account has executed a Form W-9 in connection with the establishment of such account, as generally can be expected, no backup withholding should occur. In any event, backup withholding does not affect the excludability of the interest on the Series 2021A Tax-Exempt Bonds from gross income for federal income tax purposes. Any amounts withheld pursuant to backup withholding would be allowed as a refund or a credit against the owner’s federal income tax once the required information is furnished to the Internal Revenue Service.

Oklahoma Taxation

In the opinion of The Public Finance Law Group PLLC, Bond Counsel, to be delivered at the time of original issuance of the Series 2021A Tax-Exempt Bonds, the transfer thereof and the interest earned thereon, including any profit derived from the sale thereof, are not subject to taxation of any kind by the State of Oklahoma or by any county, municipality or political subdivision therein under present law.

No Other Opinions

The opinion to be rendered by Bond Counsel on the date of delivery of the Series 2021A Tax-Exempt Bonds is expected to be in substantially the form of Appendix E hereto. Bond Counsel expresses no opinion regarding other federal, state or local tax consequences arising with respect to the Series 2021A Tax-Exempt Bonds.

State and Local Taxation. Except with respect to State of Oklahoma taxation, the discussion above does not address the tax consequences of purchase, ownership or disposition of the Series 2021A Tax-Exempt Bonds under any state or local tax law. Investors should consult their own tax advisors regarding state and local tax consequences.

Other Tax Consequences. The foregoing is not intended to be a complete description of all Federal or Oklahoma income tax consequences associated with an investment in the Series 2021A Tax-Exempt Bonds, and except as set forth in Bond Counsel’s opinion (described above), Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Series 2021A Tax-Exempt Bonds should consult their own tax advisors regarding the particular tax consequences to them of an investment in such bonds.

CERTAIN TAX MATTERS RESPECTING THE SERIES 2021B BONDS

The Series 2021B Bonds – Federally Taxable

The following is a summary of certain anticipated federal income tax consequences of the purchase, ownership and disposition of the Series 2021B Bonds under the Code and the Regulations and the judicial and administrative rulings and court decisions now in effect, all of which are subject to change or possible differing interpretations. This summary does not purport to address all aspects of federal income taxation that may affect particular investors in light of their individual circumstances, nor certain types of investors subject to special treatment under the federal income tax laws. This summary does not address owners that may be subject to special tax rules, such as banks, insurance companies, dealers in securities or currencies, purchasers that hold Series 2021B Bonds (or foreign currency) as a hedge against currency risks or as part of a straddle with other investments or as part of a “synthetic security” or other integrated investment (including a “conversion transaction”) comprised of a Series 2021B Bond and one or more other investments, or purchasers that have a “functional currency” other than the U.S. dollar. Except to the extent discussed below under “Foreign Investors,” this summary is not applicable to non-United States persons not subject to federal income tax on their worldwide income. This summary does not discuss the tax laws of any state other than Oklahoma or any local or foreign governments. Potential purchasers of the Series 2021B Bonds should consult their own tax advisors in determining the federal, state or local tax consequences to them of the purchase, holding and disposition of the Series 2021B Bonds.

From time to time, there are legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to above or adversely affect the market value of the Series 2021B Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether if enacted, it would apply to bonds issued prior to enactment. In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value of the Series 2021B Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved or whether the Series 2021B Bonds or the market value thereof would be impacted thereby. Purchasers of the Series 2021B Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant

judicial and regulatory authorities as of the date of issuance and delivery of the Series 2021B Bonds and Bond Counsel has not expressed any opinion as of any date subsequent thereto or with respect to any pending legislation, regulatory initiatives or litigation.

Interest Subject to Federal Income Taxation

Interest on the Series 2021B Bonds (including original issue discount, as discussed below) is not excludable from gross income for federal income tax purposes under Code Section 103. Interest on the Series 2021B Bonds will be fully subject to federal income taxation. Thus, owners of the Series 2021B Bonds generally must include interest (including original issue discount) on the Series 2021B Bonds in gross income for federal income tax purposes.

In general, interest paid on the Series 2021B Bonds, original issue discount, if any, and market discount, if any, will be treated as ordinary income to the owners of the Series 2021B Bonds, and principal payments (excluding the portion of such payments, if any, characterized as original issue discount) will be treated as a return of capital.

Premium

An investor that acquires a Series 2021B Bond for a cost greater than its remaining stated redemption price at maturity and holds the Series 2021B Bond as a capital asset will be considered to have purchased the Series 2021B Bond at a premium and, subject to prior election permitted by Section 171 of the Code, may generally amortize such premium under the constant yield method. Except as may be provided by regulation, amortized premium will be allocated among, and treated as an offset to, interest payments. The basis reduction requirements of Section 1016(a)(5) of the Code apply to amortizable bond premium that reduces interest payments under Section 171 of the Code. Bond premium is generally amortized over the bond’s term using constant yield principles, based on the purchaser’s yield to maturity. Investors of any Series 2021B Bond purchased with a bond premium should consult their own tax advisors as to the effect of such bond premium with respect to their own tax situation and as to the treatment of bond premium for state tax purposes.

Market Discount

An investor that acquires a Series 2021B Bond for a price less than the adjusted issue price of such Series 2021B Bond (or an investor who purchases the Bond in the initial offering at a price less than the issue price) may be subject to the market discount rules of Sections 1276 through 1278 of the Code. Under these sections and the principles applied by the Regulations, “market discount” means (i) in the case of a Series 2021B Bond originally issued at a discount, the amount by which the issue price of such Series 2021B Bond, increased by all accrued original issue discount (as if held since the issue date), exceeds the initial tax basis of the owner therein, less any prior payments that did not constitute payments of qualified stated interest, and (ii) in the case of a Series 2021B Bond not originally issued at a discount, the amount by which the stated redemption price of such Series 2021B Bond at maturity exceeds the initial tax basis of the owner therein. Under Section 1276 of the Code, the owner of such a Series 2021B Bond will generally be required (i) to allocate each principal payment to accrued market discount not previously included in income, and upon sale or other disposition of the bond, to recognize the gain on such sale or disposition as ordinary income to the of such cumulative amount of accrued market discount as of the date of sale or other disposition of such bond or (ii) to elect to include such market discount in income currently as it accrues on all market discount instruments acquired by such owner on or after the first day of the taxable year to which such election applies.

The Code authorizes the Treasury Department to issue regulations providing for the method for accruing market discount on debt instruments the principal of which is payable in more than one installment.

Until such time as regulations are issued by the Treasury Department, certain rules described in the legislative history will apply. Under those rules, market discount will be included in income either (a) on a constant interest basis or (b) in proportion to the accrual of stated interest or, in the case of a Series 2021B Bond with original issue discount, in proportion to the accrual of original issue discount.

A Bondholder of a Series 2021B Bond who acquired a Series 2021B Bond at a market discount also may be required to defer, until the maturity date of such Series 2021B Bond or its earlier disposition in a taxable transaction, the deduction of a portion of the amount of interest that the Bondholder paid or accrued during the taxable year on indebtedness incurred or maintained to purchase or carry a Series 2021B Bond in excess of the aggregate amount of interest (including original issue discount) includable in such Bondholder’s gross income for the taxable year with respect to such Series 2021B Bond. The amount of such net interest expense deferred in a taxable year may not exceed the amount of market discount accrued on the Series 2021B Bond for the days during the taxable year on which the Bondholder held the Bond and, in general, would be deductible when such market discount is includable in income. The amount of any remaining deferred deduction is to be taken into account in the taxable year in which the Series 2021B Bond matures or is disposed of in a taxable transaction. In the case of a disposition in which gain or loss is not recognized in whole or in part, any remaining deferred deduction will be allowed to the extent gain is recognized on the disposition. This deferral rule does not apply if the Bondholder elects to include such market discount in income currently as it accrues on all market discount obligations acquired by such Bondholder in that taxable year or thereafter.

Attention is called to the fact that Treasury regulations implementing the market discount rules have not yet been issued. Therefore, investors should consult their own tax advisors regarding the application of these rules as well as the advisability of making any of the elections with respect thereto.

Sales or Other Dispositions

If an owner of a Series 2021B Bond sells the bond, such person will recognize gain or loss equal to the difference between the amount realized on such sale and such owner’s basis in such bond. Ordinarily, such gain or loss will be treated as a capital gain or loss. However, if a Series 2021B Bond was, at its initial issuance, sold at a discount, a portion of such gain will be recharacterized as interest and therefore ordinary income. If the terms of a Series 2021B Bond were materially modified, in certain circumstances, a new obligation would be deemed created and exchanged for the prior obligation in a taxable transaction. Among the modifications that may be treated as material are those that relate to redemption provisions and, in the case of a nonrecourse obligation, those which involve the substitution of collateral. Each potential owner of a Series 2021B Bond should consult its own tax advisor concerning the circumstances in which such bond would be deemed reissued and the likely effects, if any of such reissuance.

Defeasance

The legal defeasance of the Series 2021B Bonds may result in a deemed sale or exchange of such bonds under certain circumstances. Owners of such Series 2021B Bonds should consult their tax advisors as to the federal income tax consequences of such a defeasance.

Backup Withholding

An owner of a Series 2021B Bond may be subject to backup withholding at the applicable rate determined by statute with respect to interest paid with respect to the Series 2021B Bonds, if such owner, upon issuance of the Series 2021B Bonds, fails to provide to any person required to collect such information pursuant to Section 6049 of the Code with such owner’s taxpayer identification number, furnishes an incorrect taxpayer identification number, fails to report interest, dividends or other “reportable payments”

(as defined in the Code) properly, or, under certain circumstances, fails to provide such persons with a certified statement, under penalty of perjury, that such owner is not subject to backup withholding.

Health Care and Education Reconciliation Act of 2010

Pursuant to Section 1411 of the Code, as enacted by the Health Care and Education Reconciliation Act of 2010, an additional tax is imposed on individuals beginning January 1, 2013. The additional tax is 3.8% of the lesser of (i) net investment income (defined as gross income from interest, dividends, net gain from disposition of property not used in a trade or business, and certain other listed items of gross income), or (ii) the excess of “modified adjusted gross income” of the individual over $200,000 for unmarried individuals ($250,000 for married couples filing a joint return and a surviving spouse). Holders of the Series 2021B Bonds should consult with their tax advisor concerning this additional tax as it may apply to interest earned on the Series 2021B Bonds as well as gain on the sale of a Series 2021B Bond.

Foreign Investors

An owner of a Series 2021B Bond that is not a “United States person” (as defined below) and is not subject to federal income tax as a result of any direct or indirect connection to the United States of America in addition to its ownership of a Series 2021B Bond will generally not be subject to United States income or withholding tax in respect of a payment on a Series 2021B Bond, provided that the owner complies to the extent necessary with certain identification requirements (including delivery of a statement, signed by the owner under penalties of perjury, certifying that such owner is not a United States person and providing the name and address of such owner). For this purpose the term “United States person” means a citizen or resident of the United States, a corporation, partnership or other entity created or organized in or under the laws of the United States of America or any political subdivision thereof, or an estate or trust whose income from sources within the United States is includable in gross income for United States of America income tax purposes regardless of its connection with the conduct of a trade or business within the United States of America.

Except as explained in the preceding paragraph and subject to the provisions of any applicable tax treaty, a 30% United States withholding tax will apply to interest paid and original issue discount accruing on Series 2021B Bonds owned by foreign investors. In those instances in which payments of interest on the Series 2021B Bonds continue to be subject to withholding, special rules apply with respect to the withholding of tax on payments of interest on, or the sale or exchange of Series 2021B Bonds having original issue discount and held by foreign investors. Potential investors that are foreign persons should consult their own tax advisors regarding the specific tax consequences to them of owning a Series 2021B Bond.

ERISA Considerations

The Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the Code generally prohibit certain transactions between a qualified employee benefit plan under ERISA (an “ERISA Plan”) and persons who, with respect to that plan, are fiduciaries or other “parties in interest” within the meaning of ERISA or “disqualified persons” within the meaning of the Code. In the absence of an applicable statutory, class or administrative exemption, transactions between an ERISA Plan and a party in interest with respect to an ERISA Plan, including the acquisition by one from the other of a Series 2021B Bond, could be viewed as violating those prohibitions. For example, Code Section 4975 prohibits transactions between certain tax-favored vehicles such as Individual Retirement Accounts and disqualified persons and Code Section 503 includes similar restrictions with respect to governmental and church plans. In this regard, the Issuer or any underwriter of the Series 2021B Bonds, might be considered or might become a “party in interest” within the meaning of ERISA or a “disqualified person” within the meaning of the Code, with respect to an ERISA Plan or a plan or arrangement subject to Code Sections 4975 or 503.

Prohibited transactions within the meaning of ERISA and the Code may arise if Series 2021B Bonds are acquired by such plans or arrangements. In all events, fiduciaries of ERISA Plans and plans or arrangements subject to the above Code Sections, in consultation with their advisors, should carefully consider the impact of ERISA and the Code on an investment in the Series 2021B Bonds.

Oklahoma Taxation

In the opinion of The Public Finance Law Group PLLC, Bond Counsel, to be delivered at the time of original issuance of the Series 2021B Bonds, the transfer thereof and the interest earned thereon, including any profit derived from the sale thereof, are not subject to taxation of any kind by the State of Oklahoma or by any county, municipality or political subdivision therein under present law.

No Other Opinions

The opinion to be rendered by Bond Counsel on the date of delivery of the Series 2021B Bonds is expected to be in substantially the form of Appendix E hereto. Bond Counsel expresses no opinion regarding other federal, state or local tax consequences arising with respect to the Series 2021B Bonds.

State and Local Taxation. Except with respect to State of Oklahoma taxation, the discussion above does not address the tax consequences of purchase, ownership or disposition of the Series 2021B Bonds under any state or local tax law. Investors should consult their own tax advisors regarding state and local tax consequences.

Other Tax Consequences. The foregoing is not intended to be a complete description of all Federal or Oklahoma income tax consequences associated with an investment in the Series 2021B Bonds, and except as set forth in Bond Counsel’s opinion (described above), Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Series 2021B Bonds should consult their own tax advisors regarding the particular tax consequences to them of an investment in such bonds.

LEGAL MATTERS

Legal matters incident to the authorization, issuance and sale of the Series 2021 Bonds are subject to the approval of the Attorney General of the State of Oklahoma. The issuance of the Series 2021 Bonds is subject to the approval of The Public Finance Law Group PLLC, Oklahoma City, Oklahoma, Bond Counsel, which will render an opinion in substantially the form attached hereto as Appendix E. Certain legal matters will be passed upon for the University by the General Counsel for The Board of Regents of the Oklahoma Agricultural and Mechanical Colleges, and for the Underwriters by Katten Muchin Rosenman LLP, New York, New York. The legal fees of all legal counsel are contingent upon the sale and delivery of the Series 2021 Bonds. The various legal opinions to be delivered concurrently with the delivery of the Series 2021 Bonds express the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. In rendering a legal opinion, the attorney does not become an insurer or guarantor of the expression of professional judgment, of the transaction opined upon, or of the future performance of the parties to the transaction, nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction.

Bond Counsel has participated in the preparation, and has reviewed those portions, of this Official Statement pertaining to the Series 2021 Bonds, the tax status of interest on the Series 2021 Bonds, the provisions of the Resolution and the matters of law contained under “THE SERIES 2021 BONDS” (other than the information under the subcaption “Book-Entry-Only System”), “PLAN OF FINANCING” (except with respect to the numerical accuracy of the tables included thereunder), “SECURITY FOR THE BONDS” (except with respect to reference to financial data), “CONTINUING DISCLOSURE” (except with respect to compliance with prior continuing disclosure undertakings), “CERTAIN TAX MATTERS

RESPECTING THE SERIES 2021A BONDS” (with respect to the opinions contained therein), “CERTAIN TAX MATTERS RESPECTING THE SERIES 2021B BONDS” (with respect to the opinions contained therein), and “LEGAL MATTERS” and in “APPENDIX C—DEFINITIONS OF CERTAIN TERMS AND SUMMARY OF CERTAIN PROVISIONS OF THE MASTER RESOLUTION,” “APPENDIX D—FORM OF CONTINUING DISCLOSURE AGREEMENT” and “APPENDIX E— PROPOSED FORM OF OPINION OF BOND COUNSEL.” Bond Counsel has not been retained to pass upon, and will not express any opinion upon, any other information contained in this Official Statement.

NO LITIGATION

There is not now pending or, to the knowledge of the Board of Regents or the University, threatened, any litigation restraining or enjoining the issuance or delivery of the Series 2021 Bonds or questioning or affecting the validity of the Series 2021 Bonds, the proceedings and authority under which they are to be issued or the delivery of this Official Statement. There is no litigation pending or, to the knowledge of the Board of Regents or the University, threatened which in any manner challenges or threatens the creation, organization or existence of the Board of Regents or the University, nor is the title of the present members or officers of the Board of Regents or the University to their respective offices being contested.

FINANCIAL STATEMENTS

See Appendix B hereto for the audited financial statements of all agencies of the University for the fiscal years ended June 30, 2020 and 2019. Such audited financial statements include information relating to Oklahoma State University, Stillwater Campus, and OSU–Tulsa, which agencies of Oklahoma State University are the initial and only Members of the Financing System, and all other agencies and component units of Oklahoma State University, which currently are not Members of the Financing System.

The audited financial statements of all agencies of the University for the fiscal years ended June 30, 2020 and 2019 attached hereto as Appendix B are pending formal acceptance by the Board of Regents expected to happen on or about April 23, 2021.

BKD, LLP, the University’s independent auditor, has not been engaged to perform and has not performed, since the date of its report included in Appendix B, any procedures on the financial statements addressed in that report. BKD, LLP also has not performed any procedures relating to this Official Statement.

UNDERWRITING

The Series 2021 Bonds are to be purchased by the Underwriters identified on the cover page hereof for whom RBC Capital Markets, LLC is acting as representative (the “Underwriters”), pursuant to a Bond Purchase Agreement with the Board of Regents (the “Bond Purchase Agreement”) at a price for the Series 2021A Bonds of $______(representing the par amount of the Series 2021A Bonds, less an underwriting discount of $______and [plus/less] original issue [premium/discount] of $______) and at a price for the Series 2021B Bonds of $______(representing the par amount of the Series 2021B Bonds, less an underwriting discount of $______). The Bond Purchase Agreement provides that the Underwriters will not be obligated to purchase any Series 2021 Bonds if all Series 2021 Bonds are not available for purchase and requires the Board of Regents to indemnify, to the extent permitted under State law, the Underwriters against losses, claims, damages and liabilities rising out of any incorrect or incomplete statements or information contained in this Official Statement pertaining to the Board of Regents and certain other matters. The initial public offering prices or yields set forth on the inside cover pages hereof may be changed under certain conditions. The Underwriters may offer and sell the Series 2021 Bonds to certain

dealers (including dealers depositing Series 2021 Bonds into investment trusts) and others at prices lower or yields higher than the public offering prices or yields stated on the inside cover pages hereof. The initial public offering prices or yields may be changed from time to time by the Underwriters.

One of the Underwriters of the Series 2021 Bonds is BOK Financial Securities, Inc. (“BOKF Securities”). BOKF Securities and BOKF, NA (“BOKF, NA,” which serves as Registrar, Transfer Agent and Paying Agent for the Series 2021 Bonds) are both wholly-owned subsidiaries of BOK Financial Corporation (“BOKF”), a bank holding company organized under the laws of the State of Oklahoma. Thus, BOKF Securities and BOKF, NA are affiliated, but BOKF Securities is not a bank. Affiliates of BOKF Securities may provide banking services or engage in other transactions with the Issuer or the University. BOKF and BOKF, NA are not responsible for the obligations of BOKF Securities.

BofA Securities, Inc., one of the Underwriters of the Series 2021 Bonds, has entered into a distribution agreement with its affiliate Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”). As part of this arrangement, BofA Securities, Inc. may distribute securities (including Series 2021 Bonds) to MLPF&S, which may in turn distribute such securities to investors through the financial advisor network of MLPF&S. As part of this arrangement, BofA Securities, Inc. may compensate MLPF&S as a dealer for its selling efforts with respect to the Series 2021 Bonds.

The Underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. The Underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various investment banking services for the Issuer or the University for which they received or will receive customary fees and expenses.

In the ordinary course of their various business activities, the Underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the Issuer or the University.

MUNICIPAL ADVISOR

Hilltop Securities Inc., Dallas, Texas, is employed as municipal advisor to the Issuer in connection with the issuance of the Series 2021 Bonds. The municipal advisor’s fee for services rendered with respect to the sale of the Series 2021 Bonds is contingent upon the issuance and delivery of the Series 2021 Bonds. Hilltop Securities Inc., in its capacity as municipal advisor, does not assume any responsibility for the information, covenants and representations contained in any of the legal documents with respect to the federal income tax status of the Series 2021 Bonds, or the possible impact of any present, pending or future actions taken by any legislative or judicial bodies.

The municipal advisor to the Issuer has provided the following sentence for inclusion in this Official Statement. The municipal advisor has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to the Issuer and, as applicable, to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the municipal advisor does not guarantee the accuracy or completeness of such information.

RATINGS

The Series 2021 Bonds have been assigned ratings of “AA-” (Stable Outlook) and “AA-” (Stable Outlook) by Fitch Ratings (“Fitch”), and S&P Global Ratings (“S&P”), respectively. Such ratings reflect only the views of such organizations at the time such ratings are given, and the Issuer and the Underwriters make no representation as to the appropriateness of such ratings. An explanation of the significance of such ratings may be obtained only from such rating agencies. The Issuer furnished such rating agencies with certain information and materials relating to the Series 2021 Bonds that have not been included in this Official Statement. Generally, rating agencies base their ratings on the information and materials so furnished and on investigations, studies and assumptions by the rating agencies. There is no assurance that a particular rating will be maintained for any given period of time or that it will not be lowered or withdrawn entirely if, in the judgment of the agency originally establishing such rating, circumstances so warrant. None of the Underwriters, the Issuer or the University has undertaken any responsibility to bring to the attention of the owners of the Series 2021 Bonds any proposed revision or withdrawal of a rating of the Series 2021 Bonds or to oppose any such proposed revision or withdrawal. A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time. Any revision or withdrawal of a rating could have an adverse effect on the market price and marketability of the Series 2021 Bonds.

CONTINUING DISCLOSURE

The Issuer will enter into a Continuing Disclosure Agreement (the “Continuing Disclosure Agreement”), to provide certain periodic information and notices of certain events in accordance with and to provide notice to the Municipal Securities Rulemaking Board (the “MSRB”), using EMMA, pursuant to the requirements of Section (b)(5)(i) of Securities and Exchange Commission Rule 15c2-12 (17 C.F.R. Part 240, § 240.15c2-12) (the “Rule”) for the benefit of the holders and beneficial owners of the Series 2021 Bonds. The obligation of the Underwriters to accept and pay for the Series 2021 Bonds is conditioned upon delivery to the Underwriters or their agents of a certified copy of the Continuing Disclosure Agreement. The proposed form of the Continuing Disclosure Agreement is attached hereto as Appendix D.

In connection with certain of its previous continuing disclosure undertakings, the Issuer, within the past five years, failed to include a utility system table in its filings of operating information regarding certain prior issues of utility system revenue bonds. The Issuer did make such remedial filings and notices of late filings on April 21, 2017. In addition, the Issuer made notice filings on April 21, 2017, of its continuing disclosure agreements relating to certain 2004 and 2006 bonds for the purpose of clarifying the deadline for filing certain financial and operating information (the offering documents relating to such 2004 and 2006 bonds contained a scrivener’s error relating to such filing deadline in the form of the continuing disclosure agreement appended thereto). On March 8, 2021, the Issuer filed a notice of material event in connection with some identified errors in an official statement relating to its Oklahoma State University- Okmulgee Student Fee Revenue Bonds, Series 2004. The Issuer has instituted additional procedures designed to ensure that all such filings be made completely and timely as required by all continuing disclosure undertakings in the future.

MISCELLANEOUS

Information concerning the Issuer, the University, the Pledged Revenues and the Series 2021 Bonds contained in this Official Statement has been furnished by the University.

The foregoing summaries or descriptions of provisions in the Resolution and all references to other materials not purporting to be quoted in full, are only brief outlines of certain provisions thereof and do not constitute complete statements of such provisions and do not summarize all the pertinent provisions of such

32 provisions. For further information, reference should be made to the complete documents, copies of which will be furnished by the University upon request.

References to website addresses presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader’s convenience. Unless specified otherwise, such websites and the information or links contained therein are not incorporated into, and are not part of, this Official Statement.

All projections and other statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement with the purchasers or holders of any of the Series 2021 Bonds.

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33 This Official Statement is submitted only in connection with the offer and sale of the Series 2021 Bonds and may not be reproduced or used in whole or in part for any other purpose. This Official Statement has been approved by the Board of Regents.

THE BOARD OF REGENTS FOR THE OKLAHOMA AGRICULTURAL AND MECHANICAL COLLEGES

By: Chairman

APPENDIX A

CERTAIN SELECTED INFORMATION REGARDING OKLAHOMA STATE UNIVERSITY

GENERAL DESCRIPTION

General

Oklahoma State University was founded in 1890 as Oklahoma Agricultural and Mechanical College with the first classes held on December 14, 1891. The first commencement was in 1896 with six male graduates. The name was changed to Oklahoma State University of Agriculture and Applied Science on July 1, 1957, and to Oklahoma State University in 1981. The seven major divisions of the University include the Colleges of agriculture; arts and sciences; business administration; education and human sciences; engineering, architecture and technology; veterinary medicine; and the graduate college. The University has a full-time faculty of approximately 1,400 and full-time staff (excluding students and faculty) of approximately 3,500.

The Stillwater Campus of the University is located in north central Oklahoma in Stillwater, a city with a 2010 Census population of 45,688 and estimated 2020 population of 49,939. It is almost equally distant from Tulsa and Oklahoma City. The University is coeducational and for the fall semester of 2020 had a headcount enrollment of 24,405 on the Stillwater and Tulsa campuses. The Stillwater Campus of the University encompasses 1,608.50 acres and around 143 major buildings. The Oklahoma State University Library is a six story building at the heart of the University, containing approximately 2.6 million physical volumes in its main collection. Within the Library’s Archives, there are 1,425 physical collections requiring 6.5 miles of shelving or 34,320 shelf feet. The McCasland Maps and Spatial Data collection contains 125,000 maps and 100,000 aerial photos and the Oklahoma Oral History Research Program has a collection of 1,804 oral history interview recordings and transcripts. In addition, the Library provides a robust information technology infrastructure that supports access to 3 million electronic books and journals.

OSU–Tulsa was established on January 1, 1999, and offers junior-, senior- and graduate-level education to students in the Tulsa area. OSU–Tulsa provides opportunities for students to complete bachelor’s, master’s and doctoral degrees in a variety of programs and has an enrollment of approximately 2,300 students. The downtown Tulsa campus is home to the Helmerich Research Center and the School of Materials Science and Engineering.

Governance

Oklahoma State University is governed by the Board of Regents for the Oklahoma Agricultural and Mechanical Colleges (the “Board of Regents”). The Board of Regents was created on July 11, 1944, by Section 31a, Article 6, of the Oklahoma Constitution.

The Board of Regents has the supervision, management and control of five institutions, including Connors State College, Langston University, Northeastern Oklahoma Agricultural and Mechanical College, Oklahoma Panhandle State University, and Oklahoma State University and its constituent agencies which include the Agricultural Experiment Station, the Agricultural Extension Division, Oklahoma State University Institute of Technology, the Oklahoma State University College of Veterinary Medicine, Oklahoma State University-Oklahoma City, the Oklahoma State University Center for Health Sciences, and Oklahoma State University-Tulsa.

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The Board of Regents consists of nine members, one of whom is the President of the State Board of Agriculture. The remaining eight members are appointed by the Governor, by and with the advice and consent of the Senate. Except for the President of the State Board of Agriculture, Board of Regents members are appointed for eight-year terms to numbered positions on the Board of Regents representing Congressional Districts One through Five and three at-large appointments.

The Board of Regents’ powers to govern are constitutional and include, but are not limited to, those enumerated in Title 70, Oklahoma Statutes, Section 3412, and other laws and judicial decisions of the State of Oklahoma.

Its functions are legislative in the establishing of all general policies affecting the institutions it governs, their relation to one another, and the prescribing of such rules and regulations as may bring these policies into effect. Its judicial functions are limited to acting as a court of final settlement for matters that cannot be satisfactorily adjusted by the presidents of the colleges. Its executive power is delegated in most instances to the presidents of the institutions and their authorized administrators.

The current members of the Board of Regents are:

Regent Term Position Residence Expires Occupation

Rick Davis Chairman Guthrie 2024 Agriculture Dr. Trudy Milner Vice Chairman Tulsa 2025 Doctor of Osteopathic Medicine Douglas E. Burns† Member Norman 2021 Attorney Calvin J. Anthony Member Stillwater 2022 Pharmacist and Businessman Tucker Link†† Member Finley 2023 Agriculture and Businessman Jarold Callahan Member Edmond 2026 Agriculture Joe D. Hall Member Elk City 2027 Businessman Jimmy Harrel Member Leedey 2028 Agriculture and Businessman Blayne Arthur Member Stillwater ex officio President of State Board of Agriculture ______† Regent Burns’ term expired on April 4, 2021 and a replacement will be selected. †† Regent Link resigned from the Board or Regents and a replacement will be selected.

Jason Ramsey, Oklahoma City, Oklahoma, serves as the Chief Executive Officer of the Board of Regents. The Board of Regents address is 900 N. Portland Avenue, Oklahoma City, Oklahoma 73107 and the telephone number is 405/945-3263.

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Key Administrative Officials

The names and positions of the principal executive officers of the University are provided below:

______† On October 23, 2020, President Hargis announced that he will retire on July 1, 2021, coinciding with the end of the current academic year. On April 3, 2021, the University announced Dr. Kayse Shrum as successor President. Dr. Kayse Shrum’s appointment is subject to approval by the Board of Regents on April 23, 2021. †† Dr. Sandefur retired effective March 31, 2021. Vice Provost Jeanette Mendez will serve as interim Provost pending selection of a successor to Dr. Sandefur. ††† Mr. Holder announced that he will resign effective July 1, 2021. Chad Weiberg, the current Deputy Athletic Director of the University, has been chosen as Mr. Holder’s successor.

Burns Hargis was named the 18th President of Oklahoma State University and the OSU System in December 2007 and took office March 10, 2008. President Hargis oversees one of the nation’s most comprehensive land-grant university systems with more than 35,000 students, 7,000 employees, and campuses located in Stillwater, Tulsa, Oklahoma City and Okmulgee. He has guided OSU to record enrollment and record fundraising, surpassing the $1 billion Branding Success campaign goal nearly two years ahead of schedule. In total, OSU has raised $2.2 billion in private support and added 82,000 new donors during Hargis’ time as president. OSU’s fundraising has focused on student scholarships, faculty and other vital resources and programs. He also is overseeing a construction program that is transforming the OSU campus to be more competitive in academics and athletics. President Hargis has held several leadership positions related to intercollegiate athletics, including service on NCAA, Football Bowl Championship and Big 12 Conference boards.

President Hargis, who holds degrees in accounting from Oklahoma State University and in law from the University of Oklahoma, is the second OSU graduate to lead the university as president. Oliver S. Willham, who served as president from 1952 to 1966, graduated from then Oklahoma A&M in 1923. Before being named OSU President, Hargis had a long and distinguished legal and business career, with active civic and philanthropic leadership across many fronts. He is also familiar to many Oklahomans through the political perspective and wit he provided on the award-winning television program “Flashpoint.” Prior to coming to OSU, he was Vice Chairman of Bank of Oklahoma, N.A. Before joining Bank of Oklahoma in 1997, President Hargis practiced law in Oklahoma City for 28 years, most recently with the firm of McAfee & Taft. He is a former president of the Oklahoma County Bar Association, former president of the Oklahoma Bar Foundation, and is a Fellow of the American Bar Foundation. He served as vice- chairman of the Oklahoma State Election Board and the Oklahoma Constitutional Revision Commission, and served as Chairman of the Oklahoma Commission for Human Services. He is a former member of the Commission of the North Central Association of Colleges and Schools. He was a candidate for the Republican nomination for Governor of Oklahoma in 1990. A firm believer in the power of imagination and

A-3 collaboration, President Hargis was the first chair of the Oklahoma Creativity Project. He has served and chaired many boards, including the Board of Regents for the Oklahoma Agricultural and Mechanical Colleges of Oklahoma State University. He received the State’s highest honor when he was inducted into the Oklahoma Hall of Fame in 2009.

On October 23, 2020, President Hargis announced that he will retire on July 1, 2021, coinciding with the end of the current academic year. On April 3, 2021, the University announced Dr. Kayse Shrum as the 19th President of Oklahoma State University and the OSU System. Dr. Kayse Shrum’s appointment is subject to approval by the Board of Regents on April 23, 2021.

Academic Programs

The following colleges are located on the OSU-Stillwater and OSU-Tulsa campuses

Degree Date Programs Fall 2020 College Established Offered Enrollment

Ferguson College of Agriculture 1891 38 2,932 College of Arts and Sciences 1908 90 5,882 College of Education and Human Sciences (1) 2019 37 3,940 College of Engineering, Architecture, & Technology 1902 37 3,867 William S. Spears School of Business 1914 23 5,257 School of Global Studies & Partnerships 2018 1 39 University College Advising 1975 0 1,856 Graduate College (2) 1960 8 224 College of Veterinary Medicine 1948 1 408 235 24,405

(1) The College of Education, Health & Aviation, established in 1913, and the College of Human Sciences, established in 1915, were combined into the College of Education and Human Sciences in 2019. (2) Interdisciplinary graduate programs that do not have a specific area of specialization are reported in the Graduate College along with Special Graduate students.

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Faculty and Staff

The number of faculty and staff employed by OSU-Stillwater and OSU-Tulsa as of fall semester 2020 (based on October 2020 data) are set forth below:

Full Time Faculty 1,425 Part Time Faculty 161 Full Time Graduate Assistants 14 Part Time Graduate Assistants 1,774 Full Time Staff 3,534 Part Time Staff 441 Full Time Student Employees 4 Part Time Student Employees 2,758

Total OSU Stillwater and Tulsa Campus 10,111 Employees

Of the University’s full-time faculty at its Stillwater and Tulsa campuses, over 91% have earned a doctoral degree or higher and among the full-time faculty approximately 54% are tenured and 25% are tenure track.

OSU-STILLWATER & OSU-TULSA CAMPUS STUDENT PROFILE

Enrollment

All statistics relating to an academic year (summer, fall, and spring semesters) are those available for the fall semester of such academic year and all references to the University’s fiscal year refer to the periods commencing on July 1 and ending June 30 of the succeeding year.

Fall Veterinary Semester Undergraduate Graduate Medicine Total

2016 21,093 4,175 326 25,594 2017 20,978 3,917 359 25,254 2018 20,574 3,701 374 24,649 2019 20,024 3,622 395 24,041 2020 20,307 3,690 408 24,405

In the academic year beginning fall semester 2020, students from Oklahoma accounted for approximately 67.4% of the total Stillwater and Tulsa campus enrollment and students from out-of-state and foreign countries accounted for approximately 27.3% and 5.3%, respectively, of such enrollment. The largest number of out-of-state students are from Texas, representing 47% of out-of-state students and 59% of out-of-state undergraduates. Other states from which the University attracts a large number of students include Kansas, California, Arkansas, Missouri, Colorado and Illinois.

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Student Full-Time Equivalent (FTE) Enrollment for OSU-Stillwater & OSU-Tulsa

Fall Veterinary Semester Undergraduate Graduate Medicine Total

2016 19,031 2,341 326 21,698 2017 19,005 2,172 359 21,536 2018 18,633 2,062 374 21,069 2019 18,149 2,001 395 20,545 2020 18,444 2,018 408 20,870

Admissions

The following table provides five-year summaries of freshman applications, acceptances and matriculations at OSU-Stillwater. All freshman applications are directed to OSU-Stillwater.

Fall Stillwater Stillwater Stillwater Semester Applied Admitted % Matriculated %

2016 13,055 9,729 74.5% 4,161 42.8% 2017 13,635 10,128 74.3% 4,220 41.7% 2018 14,405 10,629 73.8% 4,166 39.2% 2019 15,273 10,692 70.0% 4,200 39.3% 2020 17,164 11,515 67.1% 4,144 36.0%

The following table provides five-year summaries of undergraduate transfer applications, acceptances and matriculations. This includes data for OSU-Stillwater and OSU-Tulsa.

Stillwater Stillwater Stillwater & Fall & Tulsa & Tulsa Tulsa Stillwater Tulsa Semester Applied Admitted % Matriculated % Matriculated Matriculated

2016 3,802 2,339 61.5% 1,615 69.0% 1,406 209 2017 3,566 2,273 63.7% 1,539 67.7% 1,364 175 2018 3,503 2,101 60.0% 1,418 67.5% 1,272 146 2019 3,473 2,006 57.8% 1,321 65.9% 1,213 108 2020 3,843 2,104 54.7% 1,340 63.7% 1,267 73

The following table provides five-year summaries of College of Veterinary Medicine applications, acceptances and matriculations.

Fall Stillwater Stillwater Stillwater Semester Applied Admitted % Matriculated %

2016 748 88 11.8% 88 100% 2017 814 106 13.0% 106 100% 2018 824 106 12.9% 106 100% 2019 939 106 11.3% 106 100% 2020 917 106 11.6% 106 100%

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The following table provides five-year summaries of graduate school applications, acceptances and matriculations. This includes data for OSU-Stillwater and OSU-Tulsa.

Stillwater Stillwater Stillwater & Fall & Tulsa & Tulsa Tulsa Stillwater Tulsa Semester Applied Admitted % Matriculated % Matriculated Matriculated

2016 4,901 2,114 43.1% 1,110 52.5% 1,000 110 2017 3,914 2,024 51.7% 1,050 51.9% 965 85 2018 3,285 1,534 46.7% 958 62.5% 894 64 2019 3,195 1,653 51.7% 978 59.2% 910 68 2020 4,223 2,103 49.8% 1,024 48.7% 931 93

Academic Preparedness

The following table provides the average composite ACT scores for first-time matriculating freshman students at OSU-Stillwater. All freshman applications are directed to OSU-Stillwater.

Fall Average Semester Score

2016 24.8 2017 24.8 2018 25.0 2019 24.7 2020 24.7

Degrees Conferred

The following table provides the number of degrees conferred during the past five years. This includes data for OSU-Stillwater and OSU-Tulsa.

Academic Veterinary Year Bachelor’s Master’s Medicine Doctoral Total

2015-16 4,343 1,164 91 259 5,857 2016-17 4,525 1,043 74 225 5,867 2017-18 4,744 1,055 79 245 6,123 2018-19 4,899 920 85 237 6,141 2019-20 4,836 930 88 227 6,081

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Graduation and Retention Rates, Fall 2009 – 2019

The following information represents retention rates after one year and graduation rates within six years for full-time degree seeking freshmen.

Freshmen Class Retention After Graduation Rate Fall Semester 1 Year After 6-Years 2009 78.3 61.6 2010 79.9 62.8 2011 79.0 62.8 2012 78.6 61.5 2013 81.3 64.7 2014 81.1 63.8 2015 80.8 n/a 2016 81.2 n/a 2017 81.8 n/a 2018 83.2 n/a 2019 84.9 n/a

FINANCIAL MANAGEMENT

Responsibility for Financial Management

Financial debt management for the University is the responsibility of the Senior Vice-President for Administration and Finance. Debt is generally issued on a project-by-project basis pursuant to the University’s master plan for facilities and capital equipment. Issuance of debt requires approval by several governing bodies. University officials continually update financial information on revenues and expenditures related to bonds outstanding and periodically present reports to the Board of Regents for their review and information. In addition, project status reports for those facilities under construction with bond proceeds are submitted periodically to the Board of Regents.

Financial Statements

The audited financial statements for the University for fiscal years ended June 30, 2020 and 2019, attached hereto as Appendix B, are pending formal acceptance by the Board of Regents expected to happen on or about April 23, 2021. Such audited financial statements include information relating to Oklahoma State University, OSU–Stillwater, and OSU–Tulsa, which agencies are the initial and only members of the Financing System, and all other agencies and component units of Oklahoma State University, which currently are not members of the Financing System.

Financial Results

The following table reflects the condensed Statements of Net Assets of OSU-Stillwater and OSU-Tulsa as of June 30, 2016, 2017, 2018, 2019, and 2020.

Net assets are divided into three major categories. The first category, invested in capital assets, net of debt, provides the institution’s equity in property, plant and equipment owned by the institution. The next category, restricted net assets, is divided into two categories, expendable and nonexpendable. Expendable restricted net assets are available for expenditure by the institution, but must be spent for purposes as determined by donors and/or external entities that have placed time or purpose restrictions on the use of the assets. The corpus of nonexpendable restricted resources is only available for investment

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purposes. The final category is unrestricted net assets. Unrestricted assets are available to the institution for any lawful purpose of the institution. The chart on the following page is a summary of the Statements of Net Assets for OSU-Stillwater and OSU-Tulsa over the last five years.

2016 2017 2018 2019 2020 ASSETS Current $ 186,339,000 $ 216,170,000 $ 226,689,000 $ 226,977,000 $ 250,810,000 Noncurrent 221,308,000 167,710,000 128,656,000 108,340,000 94,791,000 Capital assets, net 1,418,977,000 1,559,210,000 1,600,708,000 1,665,635,000 1,775,885,000

Total 1,826,624,000 1,943,090,000 1,956,053,000 2,000,952,000 2,121,486,000

DEFERRED OUTFLOWS OF RESOURCES 30,318,000 135,264,000 84,594,000 83,577,000 93,600,000

LIABILITIES Current 56,472,000 75,689,000 81,552,000 79,573,000 82,365,000 Noncurrent 308,561,000 449,226,000 365,022,000 357,256,000 354,622,000 Capital leases 360,064,000 415,970,000 396,149,000 327,020,000 289,094,000 Revenue bonds 403,590,000 400,757,000 419,271,000 490,326,000 550,150,000

Total 1,128,687,000 1,341,642,000 1,261,994,000 1,254,175,000 1,276,231,000

DEFERRED INFLOWS OF RESOURCES 46,019,000 14,002,000 44,857,000 46,728,000 44,438,000

NET ASSETS Capital assets 793,534,000 870,610,000 846,510,000 883,493,000 965,604,000 Restricted-Expendable 36,004,000 745,000 33,433,000 42,688,000 65,862,000 Restricted-Nonexpendable 475,000 493,000 517,000 585,000 539,000 Unrestricted (147,777,000) (149,138,000) (146,664,000) (143,140,000) (137,588,000)

Total 682,236,000 722,710,000 733,796,000 783,626,000 894,417,000

Increase in Net Assets $ (55,280,000) $ 40,474,000 $ 11,086,000 $ 49,829,000 $ 110,791,000

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The following table reflects the combined Statements of Revenues, Expenses and Changes in Net Assets of OSU-Stillwater and OSU-Tulsa for the fiscal years ended June 30, 2016, 2017, 2018, 2019, and 2020.

2016 2017 2018 2019 2020 OPERATING REVENUES Tuition and fees $ 233,201,000 $ 232,254,000 $ 238,165,000 $ 259,414,000 $ 264,997,000 Grants & contracts 103,369,000 122,853,000 103,436,000 106,223,000 125,245,000 Auxiliaries 189,047,000 193,817,000 189,554,000 198,969,000 176,049,000 Other 25,476,000 27,971,000 30,600,000 31,954,000 32,031,000 Total 551,093,000 576,895,000 561,755,000 596,560,000 598,322,000

OPERATING EXPENSES Compensation and benefits 483,933,000 453,157,000 459,363,000 481,673,000 507,906,000 Depreciation 68,842,000 64,623,000 67,499,000 71,730,000 77,759,000 Other 314,161,000 284,498,000 280,587,000 258,226,000 274,488,000 Total 866,936,000 802,278,000 807,449,000 811,629,000 860,153,000 Operating Loss (315,843,000) (225,383,000) (245,694,000) (215,069,000) (261,831,000)

NONOPERATING REVENUES AND EXPENSES State appropriations 190,054,000 178,385,000 172,070,000 171,876,000 173,582,000 Grants & contracts 39,040,000 38,137,000 41,820,000 41,966,000 61,618,000 Other revenues 30,511,000 28,569,000 37,728,000 43,155,000 44,738,000 Interest on indebtedness (27,335,000) (33,589,000) (32,335,000) (34,491,000) (29,437,000) Total 232,270,000 211,502,000 219,283,000 222,506,000 250,501,000

Income Before Other Revenues and Expenses (83,573,000) (13,881,000) (26,411,000) 7,437,000 (11,330,000)

OTHER REVENUES AND EXPENSES 28,293,000 54,355,000 37,497,000 42,392,000 122,121,000

Increase in Net Assets (55,280,000) 40,474,000 11,086,000 49,829,000 110,791,000

Cumulative effect of adopting GASB 68 - - - - -

Increase/Decrease in Net Assets, adjusted $ (55,280,000) $ 40,474,000 $ 11,086,000 $ 49,829,000 $ 110,791,000

State Appropriations (OSU-Stillwater and OSU-Tulsa)

The following is a brief discussion of the appropriation process and is offered for general information purposes. A prospective investor is cautioned that the general revenue bonds issued under the Financing System are not secured by or payable from appropriated revenues.

Pursuant to Article XIII-A of the Oklahoma Constitution, the Oklahoma State Regents for Higher Education (the “State Regents”) are annually required to recommend to the State Legislature the budget allocations to be made to each institution within The Oklahoma State System of Higher Education (the “State System”) and the appropriations made by the State Legislature for all such institutions, including the University, are required to be made in one consolidated form without reference to any particular institution and the State Regents are authorized to allocate to each such institution an amount sufficient to meet its needs

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and functions for the entire fiscal year. The fiscal year for Oklahoma State government entities is a period of 12 consecutive months beginning on July 1 of each year and ending on June 30 of the following year.

The State System’s share of the State’s appropriation budget is shown below.

State Appropriations (1)

Higher Ed. OSU Fiscal State Budget Budget % of Appropriations % of Higher Year (in millions) (in millions) Total (in millions) Education 2016(2) 6,846 963 14.1% 172 17.9% 2017(2) 6,778 878 13.0% 164 18.7% 2018(2) 6,848 848 12.4% 155 18.3% 2019 7,567 853 11.3% 155 18.0% 2020 7,999 879 11.0% 160 18.2%

(1) The State appropriations provided here do not include the on-behalf payments from OTRS (see the FINANCIAL MANAGEMENT— Retirement Plans section below), whereas the State appropriations provided in the table under “Financial Results” above reflect the combined Statements of Revenues, Expenses and Changes in Net Assets of OSU-Stillwater and OSU-Tulsa, and thus do include the on-behalf payments. (2) The numbers for Fiscal Years 2016, 2017 and 2018 reflect budget cuts made during those years

From Fiscal Year 2016 through 2019, appropriations for Higher Education remained flat or decreased while tuition and fees charged by such institutions, including the University, have increased. In Fiscal Year 2020, institutions received nominal increases that were mandated to be used for faculty salary adjustments. From Fiscal Year 2016 to 2020, the percentage of Higher Education System appropriations that the University received has increased from 17.9% to 18.2% and the percentage of revenue derived by the University from tuition and fees has increased from 29.4% to 34.4%.

State General Revenue Fund Recent Developments

According to the Oklahoma Office of Management and Enterprise Services (OMES) annual report, total collections for the 2020 fiscal year were $6.27 billion and came in at $716.1 million, or 10.2%, below the 2020 fiscal year estimate and $586.8 million, or 8.6%, below prior year collections.

“The final months of this fiscal year saw revenues fall at an unprecedented rate due to historically low oil and gas prices and the economic impact of COVID-19,” said OMES Director Steven Harpe. “However, thanks to the foresight of Governor Stitt and the state Legislature to put away additional savings, we were able to use reserve funds to stabilize our state budget. Additionally, the state’s combined reserves ended up higher than originally anticipated, since the revenue shortfall was slightly less severe than projected in April and less reserve amounts were necessary to complete budgeted appropriations.”

After expending the 5% budget cushion, the final FY 20 revenue shortage was $366.6 million, or 5.2%, of the total budget, an improvement over the projected revenue failure of $416.9 million declared during April’s BOE meeting. The revenue loss was filled by savings from the Rainy Day and Revenue Stabilization Funds.

Record misses in the fourth quarter for individual and corporate income taxes were the result of the federal and state income tax filing extensions and a deferral option for 2019 state income tax payments and first quarter 2020 estimated tax payments. However, these deferred payments are expected to bolster the first quarter collections in FY 21.

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COVID-19

For a discussion of the effect of COVID-19 on the operations and finances of the University and the University’s response to COVID-19 see “RISKS OF BONDHOLDERS – Public Health Epidemics or Outbreaks - COVID-19” on page 17 of the Official Statement.

Tuition and Fees (OSU-Stillwater and OSU-Tulsa)

As provided in the Constitution and Statutes of Oklahoma, the Oklahoma State Regents for Higher Education have the responsibility for prescribing and coordinating enrollment fees in the Oklahoma State System of Higher Education within the limits authorized by the Oklahoma State Legislature. Pursuant to legislation, the University’s combined average of undergraduate residential tuition and mandatory fees shall remain less than the combined average of undergraduate resident tuition and fees of the state-supported institutions of higher education that are members of the original Big 12 Conference. The University’s combined average of undergraduate nonresident tuition and mandatory fees shall remain less than 105% of the combined average of undergraduate nonresident tuition and fees of the state-supported institutions of higher education that are members of the original Big 12 Conference. The per credit hour rates shown in the following table became effective with the fall semesters shown.

Fee totals below include all fees, whether charged per credit hour or per semester. Per semester fees are converted to per hour equivalents based on a standard course load of 15 credit hours per semester for undergraduates and 12 credit hours for graduate students.

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Tuition and Fees: 2016-2020

Non Resident Non Resident Semester and Resident Mandatory Tuition Resident Tuition Course Level Tuition Fees & Fees Tuition & Fees

Fall 2016 Undergraduate $164.75 $112.60 $277.35 $635.50 $748.10 Undergraduate Lock Tuition 189.41 112.60 302.01 n.a. n.a. (Residents Only) Graduate $209.70 $112.60 $322.30 $825.05 $937.65 Fall 2017 Undergraduate $173.00 $118.25 $291.25 $674.25 $792.50 Undergraduate Lock Tuition 198.92 118.25 317.17 n.a. n.a. (Residents Only) Graduate $223.30 $118.25 $341.55 $849.20 $967.45 Fall 2018 Undergraduate $178.55 $122.05 $300.60 $695.90 $817.95 Undergraduate Lock Tuition 205.30 122.05 327.35 n.a. n.a. (Residents Only) Graduate $230.45 $122.05 $352.50 $876.40 $998.45 Fall 2019 Undergraduate $178.55 $122.05 $300.60 $695.90 $817.95 Undergraduate Lock Tuition 205.30 122.05 327.35 n.a. n.a. (Residents Only) Graduate $230.45 $122.05 $352.50 $876.40 $998.45 Fall 2020 Undergraduate $178.55 $122.05 $300.60 $695.90 $817.95 Undergraduate Lock Tuition 205.30 122.05 327.35 n.a. n.a. (Residents Only) Graduate $230.45 $122.05 $352.50 $876.40 $998.45

Under the Undergraduate Lock Tuition program, new freshmen (residents only) have the option of either (i) paying tuition at the standard rates charged for each year of attendance or (ii) paying a fixed rate of tuition for each year of attendance based on the projected average of tuition costs for the next four years. Very few students have opted for the fixed-rate tuition.

Sponsored Program Expenditures

An important component of the University’s success is its ability to maintain its research and outreach sponsored program expenditure base. During the five fiscal years ended June 30, 2020, sponsored program expenditures averaged $77.6 million, ranging from a low of $70.6 million in fiscal year 2017 to a high of $88.5 million in fiscal year 2020.

Research activities are under the direction of the Vice President for Research and are a major element in the mission of the University. A high priority is placed upon both basic and applied research because of the significance that research plays in both graduate and undergraduate education. Original scientific research is an essential requirement in most of the University’s graduate programs and undergraduate participation in research programs is an expanding component of the students’ educational experience. The University believes the integration of teaching and research provides a major benefit to its

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faculty and students, the Stillwater community, and the State of Oklahoma. The University also believes that research (1) contributes significantly to the advancement and preservation of knowledge and (2) facilitates the learning process and better prepares students as useful citizens and faculty members as informed professionals.

Federal, state and local government units have adopted regulations and restrictions that govern funded research, both by formal regulation and by contract. They may adopt additional regulations or restrictions in the future. From time to time, such government units audit university and other research programs. Although the University employs reasonable efforts to operate its programs consistently with the funded research requirements, an audit could discover areas in which a government unit disagrees with the University’s actions. In the case of a serious audit disagreement, the University could be required to repay amounts previously paid to it, and could be barred from future research grants. Such an action could lead to the reduction or elimination of research funding by such government unit and by other sources of research funding. In addition, reductions in federal spending generally can have a significant impact on the University by reducing its anticipated federal grant receipts for federally-funded sponsored research programs. The University anticipates that any such reductions in federal grant receipts will be offset largely through expenditure reductions, including termination of positions funded by research grants on a per-grant, per-budget grant basis.

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Sponsored Program Expenditures (OSU-Stillwater and OSU-Tulsa)

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 U.S. Department of: Agriculture $ 9,570,000 $ 9,357,000 $ 9,352,012 $ 9,069,943 $ 9,471,168 Commerce 842,000 561,000 572,581 473,094 908,418 Defense 2,780,000 2,839,000 2,461,163 1,950,710 2,642,868 Education 2,393,000 3,304,000 3,324,628 4,122,993 11,813,301 Energy 2,554,000 1,868,000 1,662,460 2,116,948 4,303,799 HHS 4,846,000 2,066,000 2,368,354 3,482,557 3,725,382 Homeland Security 448,000 539,000 168,089 390,925 437,186 Justice 436,000 292,000 139,580 273,404 294,464 Transportation 5,162,000 4,866,000 4,109,467 4,467,269 4,834,182 NASA 546,000 665,000 5,403,096 8,997,083 10,209,205 NIH 2,403,000 6,777,000 8,463,865 7,702,760 8,275,924 NSF 10,829,000 13,305,000 14,467,242 13,776,725 9,499,074 Other 4,051,000 4,001,000 3,131,528 4,483,464 3,704,861 Subtotal Federal $46,860,000 $ 50,440,000 $ 55,624,065 $61,307,875 $70,119,832

City and County $ 588,000 $ 251,000 $ 224,307 $ 230,117 $ 83,891 Commercial 3,186,000 1,587,000 1,099,524 1,339,738 1,179,401 Foundations 1,708,000 1,788,000 1,486,819 1,345,208 1,672,808 Universities 3,666,000 2,728,000 2,161,441 1,992,664 2,170,528 State of Oklahoma 9,853,000 8,019,000 10,069,672 8,334,728 6,724,635 Multiple Sources 5,013,000 5,804,000 6,304,147 6,398,252 6,568,866 Subtotal Other $24,014,000 $ 20,177,000 $ 21,345,910 $19,640,707 $18,400,129

Grand Total $70,874,000 $ 70,617,000 $ 76,969,975 $80,948,582 $88,519,961

Federal 66.1% 71.4% 72.3% 75.7% 79.2% State 13.9% 11.4% 13.1% 10.3% 7.6% Other 20.0% 17.2% 14.6% 14.0% 13.2% Grand Total 100.0% 100.0% 100.0% 100.0% 100.0%

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Endowments and Donor Base

Endowment fund balances are shown in the following table. As more fully shown below, these funds are held by the Oklahoma State University Foundation (“OSU Foundation”), the Oklahoma State Regents for Higher Education, and the Oklahoma Land Commission.

Oklahoma State University Endowment Funds

OSU State Land As of June 30 Foundation Regents Commission Total

2016 $ 545,545,752 $ 160,645,000 $ 140,813,000 $ 847,003,752 2017 $ 586,680,506 $ 170,020,000 $ 146,714,000 $ 903,414,506 2018 $ 642,866,557 $ 176,549,000 $ 143,346,000 $ 962,761,557 2019 $ 642,487,918 $ 209,947,000 $ 153,719,000 $ 1,006,153,918 2020 $ 648,577,394 $ 195,508,000 $ 141,185,000 $ 985,270,394

Donor Base

Fiscal Year Alumni Individuals Foundations Corporations(1) Other Total 2016 5,928 1,693 65 569 346 8,601 2017 5,489 1,568 71 549 390 8,067 2018 5,592 1,522 65 481 405 8,065 2019 4,987 1,341 62 460 342 7,192 2020 4,202 1,153 84 429 324 6,192

(1) According to the Oklahoma State University Foundation, if a company matches employee gifts to OSU, and also makes additional gifts to OSU, that company is counted twice.

OSU Foundation Brighter Orange, Brighter Future Campaign

In the fall of 2019, the OSU Foundation launched the Brighter Orange, Brighter Future campaign, which aims to ensure students have additional financial resources to attend the University and increased access to support and life‑changing educational experiences. The goal is to raise $300 million for scholarships, $50 million to support student success initiatives, and $25 million for improving academic experiences and opportunities. The current total raised in receipts and pledges is $225 million. The campaign is expected to be complete in 2022.

OSU Foundation New Frontiers Campaign

In the Spring 2020, the OSU Foundation launched the New Frontiers campaign, which aims to fund the new home for the Division of Agricultural Sciences and Natural Resources. The goal is to raise $50 million. The current total raised in receipts and pledges is $32.9 million.

Investments

The University invests available resources pursuant to the Board of Regents Institutional Policy for Investing Funds, the Oklahoma State Regents for Higher Education System-wide Policy for Investment of Institutional Funds, and the Investment Policy of the Oklahoma State Treasurer. The short-term investment of agency special and agency relationship funds is directed primarily toward maximizing earnings on the University’s working capital while maintaining adequate liquidity to meet cash flow needs of the

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University. Short-term allowable monies are invested through the OK Invest Program administered through the Office of the State Treasurer. As of June 30, 2020, approximately $61 million was invested by the University through the OK Invest Program. As an agency of the State of Oklahoma, these investments were executed in cooperation with the Oklahoma State Treasurer’s Office, which serves as the University’s official depository.

The Institutional Guidelines for Investment of Funds of the Oklahoma State University is directed toward the investment of long-term oriented funds held by the University in a Fixed Income portfolio. The long-term objective of the portfolio is to maximize the returns without exposure to undue risk. Allowable monies are invested in securities permitted by Oklahoma State Statute (Title 62 §89.2). Whereas fluctuating rates of return are characteristic of the securities markets, the main concern is the long-term appreciation of the assets and the consistency of total return. As of June 30, 2020, approximately $80 million was invested by the University in the Fixed Income portfolio. These investments are managed and held by a third party investment management fiduciary.

Assets held on the University’s behalf by the Oklahoma State University Foundation, Oklahoma State Regents for Higher Education, and Oklahoma Land Commission are subject to the respective investment polices of each entity.

Plant Assets and Capital Plan (OSU-Stillwater and OSU-Tulsa)

The University’s investment in capital assets, net of related depreciation, consisted of the following as of June 30, 2016, 2017, 2018, 2019, and 2020:

2016 2017 2018 2019 2020 Non-depreciable Land $ 66,441,189 $ 67,197,829 $ 65,902,066 $ 66,134,430 $ 71,610,457 Capitalized Collections 285,000 485,315 485,315 485,315 591,215 Livestock for Education 4,061,959 3,943,710 4,088,847 4,171,737 4,476,036 Construction in Progress 124,778,980 199,697,428 130,604,206 118,417,956 56,756,953 195,567,128 271,324,282 201,080,434 189,209,438 133,434,661

Depreciable Buildings $1,037,248,408 $1,102,023,270 $1,213,122,988 $1,259,302,413 $1,396,663,166 Equipment 52,586,530 51,891,704 51,998,811 56,670,528 59,801,513 Land Improvements 28,306,223 28,819,621 28,689,591 29,754,512 38,367,215 Leasehold Improvements 148,422 107,225 418,393 70,980 52,858 Infrastructure 70,106,984 67,995,840 68,709,180 93,303,272 109,892,282 Books and Periodicals 35,013,069 37,047,149 36,689,151 37,324,122 37,673,575 1,223,409,636 1,287,884,809 1,399,628,114 1,476,425,827 1,642,450,609

Net Capital Assets $1,418,976,764 $1,559,209,091 $1,600,708,548 $1,665,635,265 $1,775,885,270

The University budgets and plans for major capital projects on a project-by-project basis. No project is commenced unless sufficient funds (i.e., private, state, federal, bond proceeds, or other unrestricted sources) have been identified and committed to cash flow related expenditures.

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Debt Management Policy and Practice

Pursuant to the University’s Debt Policy, all debt shall be secured in accordance with Oklahoma law and the administrative rules of the State of Oklahoma Council of Bond Oversight. Debt is defined to include all current and long-term obligations, guarantees, and instruments that have the effect of committing the University to future payments. Generally, debt obligations encompassed by this policy will take the form of bonds, notes, loans, or capital leases.

The Debt Policy serves as a framework for the University to make debt related decisions by setting forth the University’s objectives and enumerating the primary considerations for allocating debt to, and structuring for, capital needs. Generally, the Debt Policy addresses the purposes for which debt can be issued, requires that adequate internal revenue sources be identified that will allow for the repayment of such debt and provides mechanisms to ensure that such debt is issued in compliance with State law and the Board of Regents’ policy.

General Revenue Financing System

On June 19, 2009, the Board of Regents adopted a Master Resolution establishing the Oklahoma State University General Revenue Financing System (the “Master Resolution”). This Financing System provides for the issuance of general revenue bonds pursuant to the Master Resolution (subject to approval of supplemental resolutions for each series) and the authority of Title 70, Oklahoma Statutes 2011, Sections 3412.16 and 3980.1, et seq. (collectively, the “Act”). Debt issued under the Financing System is secured by a pledge of all general revenues of the University and derived from or attributable to any Member of the Financing System now or hereafter lawfully available for the payment of obligations, except appropriated tax dollars and certain restricted funds. Currently, OSU-Stillwater and OSU-Tulsa are the only Members of the Financing System.

Outstanding Parity Debt

Parity Debt. The Board of Regents has issued the following series of General Revenue Bonds under the Master Resolution, all of which constitute Parity Debt Outstanding as of April 1, 2021:

General Revenue Bonds Outstanding as of April 1, 2021

Outstanding Principal Description Final Maturity Original Issue Outstanding General Revenue Bonds, Federally Taxable Series 2010B August 1, 2023 $13,265,000 $3,405,000 General Revenue Refunding Bonds, Series 2013A July 1, 2032 17,785,000 11,575,000 General Revenue Bonds, Federally Taxable Series 2016A August 1, 2045 60,300,000 54,755,000 General Revenue Refunding Bonds, Series 2017A July 1, 2039 52,850,000 51,115,000 General Revenue Bonds, Series 2018A August 1, 2047 16,065,000 14,950,000 General Revenue Bonds, Federally Taxable Series 2018B August 1, 2047 14,610,000 13,130,000 General Revenue Bonds, Series 2019A August 1, 2048 62,990,000 60,650,000 General Revenue Bonds, Federally Taxable Series 2019B August 1, 2048 12,555,000 12,220,000 General Revenue Refunding Bonds, Series 2020A September 1, 2036 118,520,000 118,520,000 General Revenue Bonds, Series 2020B September 1, 2050 26,490,000 26,490,000 General Revenue Bonds, Federally Taxable Series 2020C September 1, 2050 126,745,000 126,745,000 Total $ 522,175,000 $ 493,555,000

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Debt service on the Outstanding Series 2010B, Series 2013A, Series 2016A, Series 2017A, Series 2018A, Series 2018B, Series 2019A, Series 2019B, Series 2020A, Series 2020B, and Series 2020C General Revenue Bonds is shown in the following table:

Debt Service Requirements on General Revenue Bonds

Fiscal Year Principal Interest Total

2021 $ 8,455,000 $ 17,601,910 $ 26,056,910 2022 9,190,000 19,493,751 28,683,751 2023 17,590,000 19,075,869 36,665,869 2024 21,105,000 18,460,791 39,565,791 2025 21,735,000 17,871,051 39,606,051 2026 21,165,000 17,011,879 38,176,879 2027 22,150,000 16,008,989 38,158,989 2028 23,190,000 14,954,925 38,144,925 2029 24,270,000 13,858,934 38,128,934 2030 24,240,000 12,747,035 36,987,035 2031 23,975,000 11,644,013 35,619,013 2032 23,380,000 10,567,047 33,947,047 2033 24,480,000 9,473,840 33,953,840 2034 23,955,000 8,480,931 32,435,931 2035 22,255,000 7,644,356 29,899,356 2036 23,070,000 6,832,131 29,902,131 2037 23,940,000 5,960,645 29,900,645 2038 24,825,000 5,057,545 29,882,545 2039 25,780,000 4,113,538 29,893,538 2040 23,550,000 3,165,587 26,715,587 2041 9,570,000 2,536,542 12,106,542 2042 9,935,000 2,149,164 12,084,164 2043 10,355,000 1,741,932 12,096,932 2044 10,765,000 1,317,916 12,082,916 2045 7,075,000 955,324 8,030,324 2046 7,380,000 660,883 8,040,883 2047 4,175,000 436,729 4,611,729 2048 4,335,000 281,457 4,616,457 2049 3,035,000 148,288 3,183,288 2050 1,520,000 71,021 1,591,021 2051 1,565,000 23,899 1,588,899 Total $ 502,010,000 $ 250,347,922 $ 752,357,922

Subordinated Debt

There is no Subordinated Debt Outstanding under the Master Resolution.

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Outstanding Prior Encumbered Obligations

Prior to the creation of the general revenue Financing System, the Board of Regents issued various revenue bond obligations payable from certain discrete revenue sources. These revenue obligations are now referred to as “Prior Encumbered Obligations” and the liens under which those obligations were issued are now closed. The various fees, revenues and funds pledged as security for the payment of the Prior Encumbered Obligations listed in this table are collectively referred to as the “Prior Encumbered Revenues” pledged to secure the Prior Encumbered Obligations. The following revenue bonds, constituting Prior Encumbered Obligations, remain outstanding:

Prior Encumbered Obligations Outstanding as of April 1, 2021

Final Original Principal Description Maturity Issue Outstanding

Student Union, Series 2002(1) July 1, 2023 $ 2,400,000 $ 520,000 Total $ 2,400,000 $ 520,000

(1) Revenues from ownership and operation of the student union building; receipts from the student activity fee charged to all students; receipts from the student facility fee charged to all students. .

Debt service on the currently outstanding Prior Encumbered Obligations is shown in the following table:

Debt Service Requirements on Prior Encumbered Obligations (OSU Stillwater and OSU-Tulsa)

Fiscal Year Principal Interest Total

2021 $155,000 $28,786 $183,786 2022 165,000 21,225 186,225 2023 175,000 13,041 188,041 2024 180,000 4,388 184,388

Total $675,000 $67,440 $742,440

The following table shows revenues pledged to Prior Encumbered Obligations, as of June 30, 2020. Following payment of debt service on the respective Prior Encumbered Obligations, these revenues are available, together with other Pledged Revenue, to secure General Revenue Bonds issued pursuant to the Financing System Master Resolution and Supplemental Resolutions. As the following Prior Encumbered Obligations are paid off, these revenues will be available as additional security for Financing System bonds.

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Revenues That Constituted Encumbered Revenues Supporting Prior Encumbered Obligations as of June 30, 2020

FY 2020 Available for Debt Service Debt Service Gross O&M Net on Prior on Parity Revenue Source Revenue Expense Revenue Obligations Bonds (2)

Student Union Revenue Bonds, Series 2002 (1) $ 23,304,530 $ 21,111,682 $ 2,192,848 $ 185,898 $ 2,006,950

Total $ 23,304,530 $ 21,111,682 $ 2,192,848 $ 185,898 $ 2,006,950

(1) Student Union revenues include student fees ($2,950,222), investment income ($228,324), space rental ($2,142,203) and other revenues that are classified separately for the purposes of the Statement of Revenues, Expenses and Changes in Net Assets. (2) The Parity Bonds include the General Revenue Bonds described in the table under “Outstanding Parity Debt” above, and any Additional Bonds issued in the future on a parity therewith under the Master Resolution.

Revenue Sources

The following table presents other revenues that constituted Pledged Revenues (on a gross and not net basis) that would not have constituted Encumbered Revenues subject to the prior pledge in favor of the Prior Encumbered Obligations as of June 30, 2020.

Other Available Gross Revenues (That Did Not Constitute Encumbered Revenues Supporting Prior Encumbered Obligations) as of June 30, 2020

Fiscal Year 2020 Revenue Source Gross Revenue

Tuition and Fees $ 264,997,000 Auxiliary Enterprises – Other 157,933,000 Sales and Services of Educational Activities 10,699,000 Investment Income 5,541,000 Other Revenues 21,332,000

Total $ 460,502,000

The following table presents total available revenues (encumbered and unencumbered revenues) as of June 30, 2020.

Revenue Source Fiscal Year 2020 Encumbered Revenues Available for Debt Service $ 2,006,950 Other Available Gross Revenues 460,502,000 Total $462,508,950

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Other Indebtedness

The University has entered into various capital lease obligations payable from both general and discrete revenue sources. As of June 30, 2020 the capital lease obligations shown below were outstanding:

Capital Leases Outstanding (as of June 30, 2020)

Final Lease Original Principal Description Payment Date Issue Outstanding

Master Equipment Lease, 2011C June, 2031 $ 11,651,000 $ 1,129,000 Master Equipment Lease, 2013A June, 2033 7,510,000 5,520,667 Master Equipment Lease, 2014D December, 2021 2,730,000 578,750 Master Equipment Lease, 2016B June, 2026 6,208,000 3,829,417 Master Equipment Lease, 2017A December, 2026 2,150,000 1,474,583 Master Equipment Lease, 2017B December, 2031 925,000 747,917 Master Equipment Lease, 2017C June, 2027 933,000 684,667 Master Equipment Lease, 2018A December, 2028 1,604,000 1,311,417 Master Real Property Lease, 2011D June, 2026 11,090,000 5,148,333 Master Real Property Lease, 2013A June, 2033 5,055,000 3,686,667 Master Real Property Lease, 2014A June, 2028 1,880,000 1,172,417 Master Real Property Lease, 2014E June, 2044 45,882,000 40,594,417 Master Real Property Lease, 2014F June, 2044 8,680,000 7,704,167 Master Real Property Lease, 2014G June, 2044 3,205,000 2,824,167 Master Real Property Lease, 2015A June, 2034 20,749,000 16,616,417 Master Real Property Lease, 2015B June, 2045 42,145,000 36,841,667 Master Real Property Lease, 2015C June, 2045 75,315,000 67,784,167 Master Real Property Lease, 2015E June, 2045 7,870,000 7,165,000 Master Real Property Lease, 2016D June, 2046 30,089,000 25,720,583 Master Real Property Lease, 2016E June, 2046 11,245,000 10,249,750 Master Real Property Lease, 2016G December, 2021 2,684,000 792,917 Master Real Property Lease, 2017A June, 2047 17,933,000 15,094,250 Master Real Property Lease, 2017B June, 2047 13,075,000 11,495,000 Master Real Property Lease, 2017C December, 2027 10,125,000 6,828,083 Master Real Property Lease, 2019A June, 2039 8,738,000 8,448,500 Subtotal – Capital Leases 349,471,000 283,442,920

Tulsa Energy Project Lease, 2012 February, 2032 1,519,845 1,179,305

Other Capital Leases January, 2021 103,191 5,748

OCIA Capital Lease Obligations(1) 86,669,522 58,511,904 TOTAL – All Capital Leases $ 437,763,558 $ 343,139,877

(1) The Oklahoma Capitol Improvement Authority (“OCIA”) has issued multiple bond issues with all or part of the proceeds benefiting Oklahoma institutions of higher education. For these issues, the State Legislature has indicated, by statute, its intent to appropriate sufficient funds to make the lease payments to secure these bonds. In fiscal year 2017, the Oklahoma State University System paid a portion of the OCIA debt service with an appropriation reduction from the Oklahoma State Regents for Higher Education of $413,480. Similarly, in fiscal year 2018 the State Regents identified $1,591,690 in reduced appropriation that went towards the OCIA debt service. Prior to fiscal year 2017, the State legislature annually allocated sufficient funds to cover the debt service. The amounts shown in this table are the portions of five outstanding issues allocated to projects for Oklahoma State University.

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Debt Service Requirements on Capital Lease Obligations(1)

Period Ending June 30 Principal Interest Total 2021 $ 13,588,837 $ 11,513,057 $ 25,101,894 2022 13,404,316 11,104,763 24,509,079 2023 12,937,099 10,656,211 23,593,310 2024 12,984,039 10,191,108 23,175,147 2025 13,450,313 9,695,636 23,145,949 2026-2030 58,891,635 41,082,447 99,974,082 2031-2035 53,772,480 29,464,631 83,237,111 2036-2040 49,119,250 18,723,735 67,842,985 2041-2045 53,221,250 7,496,992 60,718,242 2046-2047 3,258,750 160,468 3,419,218 $ 284,627,969 $ 150,089,048 $ 434,717,017

(1) Excludes debt service on OCIA obligations that is paid from State appropriations.

Subsequent to June 30, 2020, the University incurred additional other indebtedness consisting of capital lease obligations relating to the obligations described below:

The ODFA Master Real Property Lease, Series 2020D, was issued on October 15, 2020, with a par amount of $41,755,000. OSU's portion of that financing was $5,095,000 of the par, which refunded the outstanding amount due under the Master Real Property Lease 2011D.

The ODFA Master Equipment Lease Program, Series 2020C, issued on December 1, 2020 with a par amount of $2,995,000 to purchase an fMRI machine for OSU’s Center for Health Sciences.

A portion of the proceeds of the Series 2021 Bonds, are expected be used to pay the purchase price under certain lease agreements with ODFA to acquire certain equipment and existing academic and related facilities on the OSU-Stillwater campus. See “PLAN OF FINANCING – The Projects” on page 10 of this Official Statement for a description of the lease agreements with ODFA expected to be paid off with proceeds of the Series 2021 Bonds.

Anticipated Additional Indebtedness

Oklahoma State University has identified several potential projects proposed for financing during fiscal years 2021 and 2022. Whether financing will occur for all of these projects is unknown at this time.

Amount of Debt to Finance

Music Department Pianos $ 2,750,000 OSU-CHS Medical Building 20,000,000 TOTAL: $22,750,000

Retirement Plans All dollar amounts in this “Retirement Plans” section are presented in thousands of dollars.

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Retirement System of Oklahoma (OTRS) in 1943 and establishment of OSU’s Defined Contribution Plan in 1971, with TIAA-CREF as the provider, it was determined that no employees would become eligible for supplemental income after June 30, 1996. However, OSU does continue to have a limited number of retirees (or surviving spouses) receiving monthly income from this Plan.

The University has provided eligible employees the opportunity to participate in a defined contribution plan, the TIAA plan (formerly TIAA-CREF), and two defined benefit plans, the Teachers’ Retirement System of Oklahoma (OTRS) and the Supplemental Retirement Plan. Effective June 30, 1996, the University terminated the Supplemental Retirement Plan such that no future retirees will be eligible to receive benefits under the plan.

The TIAA and the OTRS plans are integrated with the University’s ongoing retirement program. Effective July 1, 1993, these eligibility requirements were modified; however, any employee eligible under the previous requirements was included in the modified plan pursuant to a grandfather provision. Eligible employees include all faculty, exempt and nonexempt continuous regular staff who are scheduled to work at least 1,560 hours annually. Employees hired after June 30, 2004, are not eligible for the integrated plan. The University’s retirement program requires the University to contribute 11.5 percent of salary for employees hired on or after July 1, 1993, and for employees hired before July 1, 1993, the University pays the first $1.5 of the OTRS cost in the fiscal year plus 10 percent of salary over $7.8 up to $48 and 11.5 percent on salary over $48. These retirement contributions are first distributed to the OTRS on mandatory members and optional members who were grandfathered July 1, 1993, as determined by the calculation of OTRS contributions as defined below (see Contributions). Any remaining retirement contributions are distributed to the TIAA plan.

Effective July 1, 2004, eligible new hires must make a one-time irrevocable election. Eligible employees must choose either the Alternate Retirement Plan (ARP) or OTRS. For those electing OTRS, the University will contribute the required member and employer contributions. For those electing the ARP, the University contributes 11.5 percent of salary. All ARP contributions are forwarded to TIAA. Should the eligible new hire not make an election within 30 days of hire, he/she will be default enrolled in OTRS. Regardless of the election of the new hire, the University makes contributions retroactive to the date of hire. The ARP does have a 100 percent cliff vesting provision of two years. Effective July 1, 2018, eligible new hires who choose OTRS must make the required member contribution.

Teachers’ Retirement System of Oklahoma (OTRS)

Plan Description

The University contributes to the OTRS, a cost-sharing multiple-employer defined benefit pension plan sponsored by the State of Oklahoma. The OTRS provides retirement, disability, and death benefits to plan members and beneficiaries. The benefit provisions are established and may be amended by the legislature of the State. Title 70 of the Oklahoma Statutes, Sections 17-101 through 17-116.9, as amended, assigns the authority for management and operation of the OTRS to the Board of Trustees of the OTRS. The OTRS issues a publicly available financial report that includes financial statements and supplementary information for the OTRS. That report may be obtained by writing to Oklahoma Teachers Retirement System, P.O. Box 53524, Oklahoma City, Oklahoma, 73152-3524 or by calling (877) 738-6365 (toll free).

Benefits Provided

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the death of eligible members. Title 70 O.S. Sec. 17-105 defines all retirement benefits. The authority to establish and amend benefit provisions rests with the State Legislature.

Benefit provisions include:

 Members that joined OTRS prior to November 1, 2017, become 100 percent vested in retirement benefits earned to date after five years of credited Oklahoma service. Members who joined OTRS after October 31, 2017, become 100 percent vested in retirement benefits earned to date after seven years of credited Oklahoma service. Members who joined OTRS on June 30, 1992, or prior are eligible to retire at maximum benefits when age and years of creditable service total 80. Members joining OTRS after June 30, 1992, are eligible for maximum benefits when their age and years of creditable service total 90. Members whose age and service do not equal the eligible limit may receive reduced benefits as early as age 55, and at age 62 receive unreduced benefits based on their years of service. For those joining OTRS after October 31, 2011, the reduced benefit provision applies as early as age 60 and at 65 receive unreduced benefits based on years of service. The maximum retirement benefit is equal to 2 percent of final compensation for each year of credited service.

 Final compensation for members who joined OTRS prior to July 1, 1992, is defined as the average salary for the three highest years of compensation. Final compensation for members joining OTRS after June 30, 1992, is defined as the average of the highest five consecutive years of annual compensation in which contributions have been made. The final average compensation is limited for service credit accumulated prior to July 1, 1995, to $40 or $25, depending on the member’s election. Monthly benefits are 1/12 of this amount. Service credits accumulated after June 30, 1995, are calculated based on each member’s final average compensation, except for certain employees of the state’s two comprehensive universities: University of Oklahoma and Oklahoma State University.

 Upon the death of a member who has not yet retired, the designated beneficiary shall receive the member’s total contributions plus 100 percent of interest earned through the end of the fiscal year, with interest rates varying based on time of service. A surviving spouse of a qualified member may elect to receive, in lieu of the aforementioned benefits, the retirement benefit the member was entitled to at the time of death as provided under the Joint Survivor Benefit Option.

 Upon the death of a retired member, OTRS will pay $5 to the designated beneficiary, in addition to the benefits provided for the retirement option selected by the member.

 A member is eligible for disability benefits after ten years of credited Oklahoma service. The disability benefit is equal to 2 percent of final average compensation for the applicable years of credited service.

 Upon separation from OTRS, members’ contributions are refundable with interest based on certain restrictions in the plan, or by the IRC.

 Members may elect to make additional contributions to a tax-sheltered annuity program up to the exclusion allowance provided under the IRC under Code Section 403(b).

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Contributions

Employees of the University, as OTRS members, are required to contribute to the plan at a rate established by the legislature of the State. For the years ended June 30, 2020 and 2019, the contribution rate for the system members of 7 percent is applied to their total compensation. The University made the majority of the system member’s required contributions on behalf of its employees in 2020, 2019, and 2018.

For the years ended June 30, 2020, 2019, and 2018, the local employer contribution rate due from the University was 8.55 percent.

The University’s contributions for OTRS members for the years ended June 30, 2020, 2019, and 2018, were $17,045, $18,397, and $18,699, respectively, these amounts being the majority of the required contributions for OTRS members for each year.

In addition for the years ended June 30, 2020 and 2019, the State of Oklahoma contributed on-behalf of the University $17,530 and $21,698, respectively. The University recognized these contributions in the University’s Statement of Revenues, Expenses, and Changes in Net Position as both revenues and compensation and employee benefit expense. These on-behalf payments do not meet the definition of a special funding situation.

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OTRS

The University’s proportion of the net pension liability was based on its proportionate share based on the University’s actual contributions to the plan relative to the actual contributions of the plan from all participating employers. An additional adjustment is made to this allocation based on three entity’s, short-term obligation to pay a 2.5 percent funding surcharge associated with the Alternate Retirement Plan. Based upon this information, the University’s proportion was 5.54 percent, 5.92 percent, and 5.58 percent for the years ended June 30, 2020, 2019, and 2018, respectively.

There were no changes of benefit terms that affected measurement of the total pension liability during the measurement period.

For the years ended June 30, 2020 and 2019, the University recognized pension expense in accordance with GASB Statement No. 68, Accounting and Reporting for Pensions – an amendment of GASB Statement No. 27 of $50,828 and $40,846, respectively, for the employer share of the pension liability. This expense also includes the $17,530 and $21,698, for 2020 and 2019, respectively, on behalf of payments by the State of Oklahoma. At June 30, 2020 and 2019, the University reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

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2020 Deferred Deferred Outflows of Inflows of Resources Resources

Differences between expected and actual experience $ 18,835 $ 15,723 Changes of assumptions 19,263 12,382 Net difference between projected and actual earning on pension plan investments 2,488 Changes in proportion and differences between the University’s contributions and the University proportionate share of contributions 27,256 19,384 University’s contributions subsequent to the measurement date 18,807 -

Total $ 86,649 $ 47,489

2019 Deferred Deferred Outflows of Inflows of Resources Resources

Differences between expected and actual experience $ - $ 24,743 Changes of assumptions 33,556 18,333 Net difference between projected and actual earning on pension plan investments - 6,222 Changes in proportion and differences between the University’s contributions and the University proportionate share of contributions 40,284 - University’s contributions subsequent to the measurement date 20,254 -

Total $ 94,094 $ 49,298

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As of June 30, 2020 and 2019, the University reported $18,807 and $20,254, as deferred outflows of resources related to pensions resulting from University contributions subsequent to the measurement date, that will be recognized as a reduction of the net pension liability in the years ending June 30, 2020 and 2019, respectively. Other amounts reported as deferred outflows of resources and deferred inflows of resources at June 30, 2020, related to the OTRS pension plan will be recognized in pension expense as follows:

Year Ending June 30,

2021 $ 20,328 2022 (4,493) 2023 (1,100) 2024 5,660 2025 (42)

$ 20,353

Actuarial Assumptions

The total pension liability in the June 30, 2019 and 2018, actuarial valuations were determined using the following actuarial assumptions:

2020 2019

Valuation date June 30, 2019 June 30, 2018 Actuarial cost method Entry age actuarial cost method Amortization method Level percentage of payroll, open Remaining amortization period 5 years Asset valuation method 5 year market value Discount rate 7.50% 7.50% Investment rate of return 7.50% 7.50% Inflation rate 2.50% 2.50% Salary increase rate 3.25% 3.25% Payroll growth rate 2.75% 2.75% Retirement age Experience-based tables of rates based on age, service, and gender Mortality tables Various based upon age and gender

The long-term expected rate of return on pension plan investments was determined using a building block method in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense, and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

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The target asset allocation and best estimates of arithmetic expected real rates of return for each major asset class as of June 30, 2019 and 2018, are summarized in the following tables:

2019 Long-Term Expected Target Asset Real Rate of Asset Class Allocation Return

Domestic Equity 38.5% 7.5% International Equity 19.0% 8.5% Fixed Income 23.5% 2.5% Real Estate** 9.0% 4.5% Alternative Assets 10.0% 6.1%

100.0%

** The Real Estate total expected return is a combination of U.S. Direct Real Estate (unlevered) and U.S. Value added Real Estate (unlevered) 2018 Long-Term Expected Target Asset Real Rate of Asset Class Allocation Return

Domestic Equity 38.5% 7.5% International Equity 19.0% 8.5% Fixed Income 23.5% 2.5% Real Estate** 9.0% 4.5% Alternative Assets 10.0% 6.1%

100.0%

** The Real Estate total expected return is a combination of U.S. Direct Real Estate (unlevered) and U.S. Value added Real Estate (unlevered) Discount Rate

The discount rate used to measure the total pension liability was 7.5 percent for the years ended June 30, 2020 and 2019. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current contribution rate and that contributions from employers will be made at contractually required rates, determined by State statutes. Projected cash flows also assume the State of Oklahoma will continue contributing 5 percent of sales, use and individual income taxes, as established by statute. Based on these assumptions, OTRS’ fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on the pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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Sensitivity of the Net Pension Liability to Changes in the Discount Rate

The following tables present the net pension liability of the University, prior to the separate ARP allocation, calculated using the discount rate of 7.5 percent, as well as what the University’s net pension liability would be if OTRS calculated the total pension liability using a discount rate that is 1 percentage point lower (6.5 percent) or 1 percentage point higher (8.5 percent) than the current rate:

2020 1% Current 1% Decrease Discount Rate Increase (6.50%) (7.50%) (8.50%) University’s proportionate share of the net pension liability $ 517,002 $ 366,900 $ 241,332

2019 Current 1% Discount 1% Decrease Rate Increase Increase (6.50%) (7.50%) (8.50%) University’s proportionate share of the net pension liability $ 509,581 $ 360,499 $ 231,781

Pension Plan Fiduciary Net Position

Detailed information about the pension plan’s fiduciary net position is available in the separately issued OTRS’ financial report.

Payable to the Pension Plan

The University reported a payable of $1,809 and $2,107 for the outstanding amount of contributions to the pension plan required for the years ended June 30, 2020 and 2019, respectively.

Defined Contribution Plan

On May 8, 1971, the University approved a contract providing for a funded plan for staff retirement, the TIAA plan. The TIAA plan, which is a defined contribution plan qualified under Internal Revenue Code Section 401(a), provides an annuity in the name of the employee based upon contributions made by the University. All contributions to the TIAA are fully vested immediately.

Employees may voluntarily contribute, on a pretax basis, to the 403(b) Supplemental Tax Deferred Annuity Program and/or the 457(b) Deferred Compensation Plan, but such contributions are not considered part of the University’s retirement program.

As of June 30, 2020, 2019, and 2018, the TIAA held no related party investments of the University.

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Oklahoma Law Enforcement Retirement System (OLERS)

Plan Description

The Oklahoma Law Enforcement Retirement System (OLERS) is administrator of the Oklahoma Law Enforcement Retirement Plan, a cost-sharing defined benefit pension plan established by Oklahoma statutes. OLERS is a component unit of the State of Oklahoma (the “State”) and is part of the State’s reporting entity. Currently, agencies and/or departments who are members of OLERS are the Oklahoma Highway Patrol and Capitol Patrol of the Department of Public Safety (DPS), the Oklahoma State Bureau of Investigation, the Oklahoma State Bureau of Narcotics and Dangerous Drugs Control, the Alcoholic Beverage Law Enforcement Commission, certain members of the DPS Communications Division, DPS Waterways Lake Patrol Division, park rangers, park managers, and park supervisors of the Oklahoma Tourism and Recreation Department, inspectors of the Oklahoma State Board of Pharmacy and Oklahoma University and Oklahoma State University campus police officers.

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OLERS

The University’s proportion of the net pension liability was based on its proportionate share based on the University’s actual contributions to the plan relative to the actual contributions of the plan from all participating employers. Based upon this information, the University’s proportion was 3.45 percent, 3.50 percent, and 2.95 percent for the years ended June 30, 2020, 2019, and 2018, respectively.

There were no changes of benefit terms that affected measurement of the total pension liability during the measurement period.

For the years ended June 30, 2020 and 2019, the University recognized pension expense of $1,887 and $1,239, respectively. At June 30, 2020 and 2019, the University reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

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2020 Deferred Deferred Outflows of Inflows of Resources Resources

Differences between expected and actual experience $ 651 $ 169 Changes of assumptions 17 - Net difference between projected and actual earning on 737 - pension plan investments Changes in proportion and differences between the University’s contributions and the University proportionate share of contributions 369 389 University’s contributions subsequent to the measurement date 311 -

Total $ 2,085 $ 558

2019 Deferred Deferred Outflows of Inflows of Resources Resources

Differences between expected and actual experience $ 620 $ 267 Changes of assumptions 25 - Net difference between projected and actual earning on 257 - pension plan investments Changes in proportion and differences between the University’s contributions and the University proportionate share of contributions 480 89 University’s contributions subsequent to the measurement date 294 -

Total $ 1,676 $ 356

Supplemental Retirement Plan Plan Description The University sponsors the Supplemental Retirement Plan (the “Plan”), a single-employer public employee retirement system, which was approved in 1971 and terminated as of June 30, 1996. Individuals employed by the University on or after July 1, 1980, when the TIAA-CREF annuity contribution became fully funded, were ineligible for participation in the Plan. Benefits vested upon retirement. The Plan guaranteed eligible employees with 25 years of service, provided they continuously participated in TIAA/CREF and the OTRS, a level of annual retirement benefit if Social Security, the OTRS, and the TIAA-CREF, when applicable, do not equal one-half of the average of the highest three years’ earnings. Authority to establish and amend benefit provisions rests with the Board of Regents. The Plan does not issue a stand-alone financial report.

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Funding Policy Contribution requirements of the University are established and may be amended by the Board of Regents. All contributions are made by the University. Benefits are funded under a “pay as you go” funding method; however, expenses are recorded as benefits accumulate.

Other Postemployment Benefits Life Insurance Plan Description The University pays life insurance premiums for individuals who meet the specified criteria to be considered a retiree as of the last day of continuous regular employment. Eligible retirees must (a) be at least 62 years of age and have at least 10 continuous regular years of service, (b) have worked for the University for at least 25 years in a continuous regular appointment, regardless of age, or (c) meet the OTRS guidelines. In addition, the individual must also have been enrolled in the University’s life insurance program prior to retirement. Each retiree is eligible to receive $6 of life insurance coverage at an annual cost to the University of $.00029 per $1 of coverage. As of June 30, 2020 and 2019, there were approximately 5,900 active employees and 1,900 retirees. Authority to establish and amend benefit provisions rests with the Board of Regents.

Funding Policy Contribution requirements of the University are established and may be amended by the Board of Regents. All contributions are made by the University. Benefits are funded under a “pay as you go” funding method and there are no plan assets; however, expenses are recorded as benefits accumulate.

Health Care Implicit Rate Subsidy Plan Description The University allows retirees to remain in the University’s health care plan, although the retiree is required to pay 100 percent of the premium. By allowing retirees to be included in the same pool as active employees, this gives retirees a benefit of a lower premium cost than if the retiree obtained health insurance on his or her own, which is referred to as the implicit rate subsidy. As of June 30, 2020, there were approximately 5,900 active employees and 200 retirees in the health care plan.

Liabilities, Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Other Postemployment Benefits At June 30, 2020 and 2019, the University reported a combined liability of $15,548 and $14,027, respectively, for the life insurance and health care implicit rate subsidy. For the years ended June 30, 2020 and 2019, the University recognized OPEB expense of $1,931 and $1,406, respectively. The University reported deferred outflows of resources related to other postemployment benefits from the following sources for the years ended June 30, 2020 and 2019, as noted below.

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2020 2019 Deferred Deferred Outflows of Inflows of Resources Resources

Differences between expected and actual experience $ 3,292 $ 3,751 Changes of assumptions 3,661 2,598

Total $ 6,953 $ 6,349

The balance as of June 30, 2020, of the deferred outflows of resources will be recognized in the OPEB expense in the future fiscal years as noted below.

Years ending June 30: 2021 $ 949 2022 949 2023 949 2024 949 2025 948 Thereafter 2,209

$ 6,953

Actuarial Assumptions

The other postemployment liability in the June 30, 2020 and 2019, actuarial valuation was determined using the following actuarial assumptions:

2020 2019

Valuation date June 30, 2020 June 30, 2019 Actuarial cost method Entry Age Normal Discount rate 2.66% 3.51% Inflation rate 3.25% 3.25% Salary increase rate 3.25% 3.25% Retirement age Experience-based tables of rates based on age, service, and gender Mortality tables RPH-2018 Total Dataset Mortality Table fully generational using Scale MP-2018

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Changes in the Other Postemployment Liability

2020 2019

Total OPEB liability, beginning of year $ 14,027 $ 7,230 Changes for the year Service cost 490 337 Interest 492 275 Changes in assumptions 1,541 2,923 Differences between expected and actual experience 11 4,220 Benefits payments (1,013) (958)

Net change in total OPEB liability 1,521 6,797

Total OPEF Liability, end of year $ 15,548 $ 14,027

Sensitivity of the Other Postemployment Liability to Changes in the Discount Rate

The following table presents the net other postemployment liability as of June 30, 2020 and 2019, calculated using a discount rate of 2.66 percent and 3.51 percent, respectively, and what it would be using a 1 percent higher and 1 percent lower discount rate.

2020 1% Current 1% Decrease Discount Rate Increase (1.66%) (2.66%) (3.66%)

University’s net other postemployment liability $ 17,746 $ 15,548 $ 13,761

2019 1% Current 1% Decrease Discount Rate Increase (2.51%) (3.51%) (4.51%)

University’s net other postemployment liability $ 15,819 $ 14,027 $ 12,554

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Sensitivity of the Other Postemployment Liability to Changes in the Health Care Trend Rates

2020 1% Current 1% Decrease Discount Rate Increase (6.50%) (7.50%) (8.50%)

University’s net other $ 14,944 $ 15,548 $ 16,273 postemployment benefit

2019 1% Current 1% Decrease Discount Rate Increase (7.00%) (8.00%) (9.00%)

University’s net other $ 13,537 $ 14,027 $ 14,609 postemployment benefit

OTRS/Health Care Plan

Plan Description

As of June 30, 2020 and 2019, the University recorded an asset for other postemployment benefits of $3,428 and $3,827 for its proportionate share of the OTRS’s OPEB, deferred outflows of $112 and $172 and deferred inflows of $1,764 and $2,675, respectively. These balances were measured as of June 30, 2019 and 2018, and were determined by an actuarial valuation.

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Actuarial Assumptions

The other postemployment benefit at June 30, 2020 and 2019, was determined using the following actuarial assumptions:

June 30, 2020 June 30, 2019

Actuarial cost method Entry Age Normal Discount rate 7.50% Inflation rate 2.50% Salary increase rate 3.25% Investment rate of return 7.50% Retirement age Experience-based tables of rates based on age, service, and gender Mortality tables Various based upon age and gender

Sensitivity of the Other Postemployment Benefit to Changes in the Discount Rate

2019 1% Current 1% Decrease Discount Rate Increase (6.50%) (7.50%) (8.50%)

University’s proportionate share of the $ 1,149 $ 3,428 $ 5,375 net other postemployment benefit

2018 1% Current 1% Decrease Discount Rate Increase (6.50%) (7.50%) (8.50%)

University’s proportionate share of the $ 1,344 $ 3,827 $ 5,949 net other postemployment benefit

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APPENDIX B

AUDITED FINANCIAL STATEMENTS OF OKLAHOMA STATE UNIVERSITY FOR THE FISCAL YEARS ENDED JUNE 30, 2020 AND 2019

The audited financial statements of all agencies of Oklahoma State University for the fiscal years ended June 30, 2020 and 2019 include information relating to the Oklahoma State University, Stillwater Campus, and OSU–Tulsa, which agencies of the Oklahoma State University are the initial and only Members of the Financing System, and all other agencies and component units of the Oklahoma State University, which currently are not Members of the Financing System.

The audited financial statements for fiscal years ended June 30, 2020 and 2019 are pending formal acceptance by the Board of Regents expected to happen on or about April 23, 2021.

B-1

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Oklahoma State University

Independent Auditor’s Report and Financial Statements

June 30, 2020 and 2019

Oklahoma State University June 30, 2020 and 2019

Contents

Independent Auditor’s Report ...... 1

Management’s Discussion and Analysis ...... 3

Financial Statements Oklahoma State University Statements of Net Position ...... 12 Statements of Revenues, Expenses, and Changes in Net Position ...... 13 Statements of Cash Flows ...... 15 Oklahoma State University Foundation (A component unit of Oklahoma State University) Consolidated Statements of Financial Position ...... 18 Consolidated Statements of Activities ...... 19 Consolidated Statements of Cash Flows ...... 21 National Center for Addiction Studies and Treatment Foundation(A component unit of Oklahoma State University) Balance Sheet ...... 23 Statement of Revenues, Expenses, and Changes in Net Position ...... 24 Statement of Cash Flows ...... 25

Notes to Financial Statements ...... 26

Required Supplementary Information Schedule of the University’s Proportionate Share of the Net Pension Liability ...... 112 Schedule of University Contributions ...... 113

Supplementary Information Revenue Bond Systems Outstanding - Schedule of Revenues, Expenditures, and Changes in Fund Balance ...... 114 Combining Schedule of Net Position by Campus ...... 115 Combining Schedule of Revenues, Expenses, and Changes in Net Position by Campus ...... 117

Independent Auditor’s Report

Board of Regents for the Oklahoma Agricultural and Mechanical Colleges Oklahoma State University Oklahoma City, Oklahoma

Report on the Financial Statements

We have audited the accompanying financial statements of the business-type activities and the aggregate discretely presented component units of Oklahoma State University (the “University”) as of and for the years ended June 30, 2020 and 2019, and the related notes to the financial statements, which collectively comprise Oklahoma State University’s basic financial statements, as listed in the table of contents.

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 did not audit the financial statements of Oklahoma State University Foundation (OSU Foundation), a discretely presented component unit which represents 87 percent and 100 percent of the assets, 87 percent and 100 percent of the net position/net assets and 52 percent and 100 percent of the revenues, respectively, of the aggregate discretely presented component units for the years then ended. Those statements were audited by other auditors whose report thereon has been furnished to us, and our opinion insofar as it relates to the amounts included for the OSU Foundation, is based solely on the report of the other auditors. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions

In our opinion, based on our audits and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities and the aggregate discretely presented component units of Oklahoma State University as of June 30, 2020 and 2019, and the respective changes in financial position and cash flows thereof for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Board of Regents for the Oklahoma Agricultural and Mechanical Colleges Oklahoma State University Page 2

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and pension information listed in the table of contents be presented to supplement the basic financial statements. Such information, although not part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audits of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audits were conducted for the purpose of forming opinions on the basic financial statements that collectively comprise the University’s basic financial statements. The Revenue Bond Systems Outstanding – Schedule of Revenues, Expenditures, and Changes in Fund Balance and Combining Schedules by Campus as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements.

This supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures, in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole.

Springfield, Missouri October 30, 2020

Oklahoma State University Management’s Discussion and Analysis Years Ended June 30, 2020 and 2019

Overview of Financial Statements and Financial Analysis

Oklahoma State University proudly presents its financial statements for fiscal years 2020 and 2019, with comparative data presented for fiscal year 2018. The emphasis of discussions concerning these statements will be for the current year. There are three financial statements presented: the Statements of Net Position; the Statements of Revenues, Expenses, and Changes in Net Position; and the Statements of Cash Flows. All dollar amounts in this discussion are presented in thousands of dollars. This discussion and analysis of the University’s financial statements provides an overview of its financial activities for the year.

Statements of Net Position

The Statements of Net Position present the assets (current and noncurrent), deferred outflows of resources, liabilities (current and noncurrent), deferred inflows of resources, and net position (assets plus deferred outflows minus liabilities minus deferred inflows) as of the end of the fiscal year. The purpose of the Statements of Net Position is to present to the readers of the financial statements a fiscal snapshot of Oklahoma State University. The difference between current and noncurrent assets is discussed in the footnotes to the financial statements. From the data presented, readers of the Statements of Net Position are able to determine the assets available to continue the operations of the institution. They are also able to determine cost of unamortized debt, and determine how much the institution owes vendors, investors, and lending institutions. Net position is divided into three major categories. The first category, net investment in capital assets, provides the institution’s equity in property, plant, and equipment owned by the institution. The next category, restricted is divided into two categories, nonexpendable and expendable. The nonexpendable restricted resources are only available for investment purposes. Expendable restricted resources are available for expenditure by the institution, but must be spent for purposes as determined by donors and/or external entities that have placed time or purpose restrictions on the use of the assets. The final category is unrestricted. Unrestricted resources are available to the institution for any lawful purpose of the institution. The following chart is a summary of the Statements of Net Position over the last three fiscal years:

2020 2019 2018 (In Thousands) Assets Current assets$ 364,267 $ 378,429 $ 327,898 Capital assets, net of accumulated depreciation 1,977,836 1,857,098 1,791,664 Other assets 143,807 127,362 151,452

Total assets 2,485,910 2,362,889 2,271,014

Deferred Outflows of Resources 112,527 104,084 105,639

Total Assets and Deferred Outflows of Resources 2,598,437 2,466,973 2,376,653

Liabilities Current liabilities 135,357 138,826 134,923 Noncurrent liabilities 1,312,029 1,290,098 1,301,997

Total liabilities 1,447,386 1,428,924 1,436,920

Deferred Inflows of Resources 53,948 56,786 54,433

Net Position Net investment in capital assets 1,100,012 1,005,640 966,224 Restricted - expendable 115,984 65,817 53,120 Restricted - unexpendable 589 665 558 Unrestricted (119,482) (90,859) (134,602)

Total Net Position $ 1,097,103 $ 981,263 $ 885,300

In fiscal year 2020, total assets of the institution increased by $123,021 or 5.21 percent over fiscal year 2019. A review of the Statements of Net Position will reveal that there are many offsetting variances, but the increase was primarily due to increases in capital assets, net of depreciation of $120,738, accounts receivable, net of $5,667, and investments of $5,058. These were offset by a decrease in receivables from state agencies of $5,861. In fiscal year 2019, total assets of the institution increased by $91,875 or 4.05 percent over fiscal year 2018. A review of the Statements of Net Position will reveal that there are many offsetting variances, but the increase was primarily due to increases in capital assets, net of depreciation of $65,434, cash and cash equivalents of $40,345, and investments of $7,607. These were offset by decreases in receivables from state agencies of $10,610 and accounts receivable, net of $9,041. In fiscal year 2020, capital assets, net of accumulated depreciation increased $120,738 or 6.50 percent. This was due primarily to capital grants and gifts for the O’Brate Baseball Stadium and the Neal Patterson Soccer Stadium. In fiscal year 2019, capital assets, net of accumulated depreciation increased $65,434 or 3.65 percent. This was due primarily to additions for the College of Engineering, Architecture and Technology ENDEAVOR undergraduate laboratory, the Animal Resources multi-species research facility, and the College of Human Sciences renovation on the Stillwater campus, along with other renovation projects across all campuses.

In fiscal year 2020, deferred outflows of resources increased by $8,443 over fiscal year 2019. This was due primarily to an increase to deferred costs on debt refunding of $14,878, but offset by a decrease in the deferred costs on pension programs of $7,036. In fiscal year 2019, deferred outflows of resources decreased by $1,555 over fiscal year 2018. This was due primarily to a decrease to deferred costs on pension programs of $7,687, but offset by an increase in the deferred costs on other postemployment benefits of $6,158. In fiscal year 2020, total liabilities for the year increased by $18,462 or 1.29 percent over fiscal year 2019. The increase was primarily due to increases in the pension liability of $7,378 and unearned revenue of $4,321. These were offset by a decrease in accounts payable of $7,454. There was also an increase in revenue bonds and lease obligations of $18,594. This is primarily due to an increase in revenue bonds payable of $32,440 and revenue bonds premium payable of $29,071, offset by a decrease in the ODFA master lease program of $38,934 due to refunding in fiscal year 2020. In fiscal year 2019, total liabilities for the year decreased by $7,996 or 0.56 percent over fiscal year 2018. The decrease was primarily due to decreases in the pension liability of $14,509 and the federal loan program contribution payable of $5,183. These were offset by increases in other postemployment benefits of $6,797 and accrued compensated absences of $3,136. There was also a decrease in revenue bonds and lease obligations of $1,161. This is primarily due to a decrease in the ODFA master lease program of $69,544, offset by an increase in revenue bonds payable of $62,955 and revenue bonds premium payable of $8,404 due to refunding in fiscal year 2019. In fiscal year 2020, deferred inflows of resources decreased by $2,838 over fiscal year 2019. This was due to decreases in deferred inflows for pension liabilities, other postemployment benefits, and debt refunding. In fiscal year 2019, deferred inflows of resources increased by $2,353 over fiscal year 2018. This was due to an increase in deferred inflows for pension liabilities and other postemployment benefits. In fiscal year 2020, the combination of the increase in total assets, plus the increase in deferred outflows of resources, less the increase in total liabilities plus the decrease in deferred inflows of resources nets to an increase in total net position of $115,840 or 11.81 percent. In fiscal year 2019, the combination of the increase in total assets, less the decrease in deferred outflows of resources, plus the decrease in total liabilities less the increase in deferred inflows of resources nets to an increase in total net position of $95,963 or 10.84 percent.

Bonds and Capital Lease Obligations

In fiscal year 2020, bonds were issued in the principal amount of $271,755 and a premium of $35,168. These bond proceeds were used to refund certain outstanding bonds, make capital improvements, and pay the purchase price under certain capital lease obligations. In fiscal year 2018, bonds were issued in the principal amount of $75,545 with a premium of $9,051. These bond proceeds were used to make certain capital improvements, and pay the purchase price under certain capital lease agreements.

Statements of Revenues, Expenses, and Changes in Net Position

While the fiscal years 2019 – 2020 comparisons are important indicators of activity during the year under audit, it is important to look at some of the operating and nonoperating categories over time. One of the important measures of an institution’s fiscal stability is how operating revenues compare to operating expenses. Public institutions will normally not have an excess of operating revenues over operating expenses because state appropriations and federal and some state student grants are considered nonoperating revenues under generally accepted accounting principles in the United States of America. 5

The following table summarizes the revenues, expenses, and changes in net position for Oklahoma State University over the last three years: 2020 2019 2018 (In Thousands)

Operating revenues$ 842,324 $ 904,057 $ 802,851

Operating expenses 1,171,199 1,134,314 1,112,127

Operating loss (328,875) (230,257) (309,276)

Nonoperating net revenues 309,099 279,734 274,431

Income (loss) before other revenues, expenses, gains, and losses (19,776) 49,477 (34,845)

Other revenues, expenses, gains, and losses 135,616 46,486 43,805

Net increase in net position $ 115,840 $ 95,963 $ 8,960

Operating revenues of $842,324 in fiscal year 2020 reflect a decrease of $61,733 or 6.83 percent when compared to fiscal year 2019. The decrease came primarily from decreases in auxiliary enterprises of $75,268 offset by increases in grants and contracts and federal appropriations of $2,937. Operating revenues of $904,057 in fiscal year 2019 reflect an increase of $101,206 or 12.61 percent when compared to fiscal year 2018. The increase came primarily from increases in auxiliary enterprises of $59,852, tuition and fees, net of scholarship allowances of $26,236, and grants and contracts and federal appropriations of $13,102. The following table summarizes the operating revenues of Oklahoma State University for the last three years: 2020 2019 2018 (In Thousands)

Tuition and fees, net of scholarship allowances $ 303,232 $ 297,206 $ 270,970 Grants and contracts and federal appropriations 160,943 158,006 144,904 Sales and services of educational departments 65,943 53,389 59,418 Auxiliary enterprises charges 292,184 367,452 307,600 Interest earned on loans to students 236 255 580 Other operating revenues 19,786 27,749 19,379

Total Operating Revenues $ 842,324 $ 904,057 $ 802,851

Operating expenses of $1,171,199 in fiscal year 2020 reflect an increase of $36,885 or 3.25 percent when compared to fiscal year 2019. The increase was primarily due to the increase in compensation and employee benefits of $25,190 and scholarships and fellowships of $12,659. Operating expenses of $1,134,314 in fiscal year 2019 reflect an increase of $22,187 or 2.00 percent when compared to fiscal year 2018. The increase was primarily due to the increase in compensation and employee benefits of $29,005, contractual services of $6,260, and depreciation expense of $4,690. These were offset by a decrease in other operating expenses of $20,785.

2020 2019 2018 (In Thousands)

Compensation and employee benefits$ 641,568 $ 616,378 $ 587,373 Contractual services 222,729 226,383 220,123 Supplies and materials 46,566 51,662 48,752 Utilities 33,283 33,261 34,283 Communication 4,700 5,270 5,353 Other operating expenses 71,798 69,583 90,368 Scholarships and fellowships 63,772 51,113 49,901 Depreciation expense 86,783 80,664 75,974

Total Operating Expenses $ 1,171,199 $ 1,134,314 $ 1,112,127

To alleviate the gap between operating revenues and operating expenses, tuition and fees, grants and contracts, and auxiliary enterprise revenues must increase in amounts greater than increases in operating expenses. Of particular interest is the relationship of state appropriations when compared to tuition and fees over the past three years. State appropriations and tuition and fees are essential components of the revenue projections of the University. While state appropriations have increased 4.24 percent in that time period, tuition and fees revenues have increased 11.91 percent. It should be noted that scholarship discount and allowance increased by $1,944 (1.65 percent) during that same time period.

Grants & Contracts ($ in Thousands)

250,000

200,000

150,000

100,000

50,000

‐ 2020 2019 2018

Other important contributors to revenues are both operating and nonoperating grants and contracts. Over the past three fiscal years total grants and contracts have increased by $35,363 or 17.44 percent.

Auxiliary Enterprises ($ in Thousands)

400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 ‐ 2020 2019 2018

Revenue Expenses

Auxiliary Enterprises (Residential Life, Student Union, Bookstore, Health, Physical Education and Recreation, Athletics, University Health Services, Fire Protection Publications, etc.) have contributed positively to the Operating Revenues over time. Since fiscal year 2018, auxiliaries have experienced a revenue decrease of $15,416 or 5.01 percent and expenses have increased $5,107 or 1.76 percent. For fiscal year 2020, auxiliaries have shown a net operating loss of $3,608. Nonoperating net revenues of $309,099 in fiscal year 2020 increased $29,365 or 10.50 percent when compared to fiscal year 2019. Nonoperating net revenues of $279,734 in fiscal year 2019 increased $5,303 or 1.93 percent when compared to fiscal year 2018. The following table summarizes the nonoperating revenues and expenses for Oklahoma State University for the last three years:

2020 2019 2018 (In Thousands)

State appropriations$ 199,280 $ 192,082 $ 191,175 On-behalf payments for OTRS 17,530 21,698 20,906 Federal and state grants and contracts 77,159 57,470 57,835 Gifts 40,115 39,145 38,433 Investment income 7,078 6,612 1,425 Interest expense (32,063) (37,273) (35,343)

Net Nonoperating Revenues $ 309,099 $ 279,734 $ 274,431

Other revenues, expenses, gains, and losses of $135,616 in fiscal year 2020 increased $89,130 or 191.74 percent when compared to fiscal year 2019. Other revenues, expenses, gains, and losses of $46,486 in fiscal year 2019 increased $2,681 or 6.12 percent when compared to fiscal year 2018.

The following table summarizes the other revenues, expenses, gains, and losses of Oklahoma State University for the last three years: 2020 2019 2018 (In Thousands)

Capital from grants, gifts, and affiliates$ 103,167 $ 26,923 $ 25,581 State appropriations restricted for capital 3,271 844 1,441 On-behalf payments for OCIA capital leases 2,695 4,726 9,157 State school land funds 7,786 7,913 8,960 Additions to permanent endowments 4 1 1 Loss on disposal of capital assets (3,831) (2,806) (8,843) Other additions, net 22,524 8,885 7,508

Total Other Revenues, Expenses, Gains, and Losses $ 135,616 $ 46,486 $ 43,805

Statements of Cash Flows

The final statement presented by Oklahoma State University is the Statement of Cash Flows. The Statements of Cash Flows present detailed information about the cash activity of the institution during the year. The statement is divided into five sections. The first section deals with operating cash flows and shows the net cash used by the operating activities of the institution. The second section reflects cash flows from noncapital financing activities. This section reflects the cash received and spent for nonoperating, noninvesting, and noncapital financing purposes. The third section reflects the cash flows from investing activities and shows the purchases, proceeds, and interest received from investing activities. The fourth section deals with cash flows from capital and related financing activities. This section deals with the cash used for the acquisition and construction of capital and related items. The fifth section reconciles the net cash used to the operating income or loss reflected on the Statement of Revenues, Expenses, and Changes in Net Position.

2020 2019 2018 (In Thousands)

Cash provided by (used in) Operating activities$ (215,342) $ (117,603) $ (215,480) Noncapital financing activities 313,706 287,995 286,072 Investing activities 2,190 (985) 14,300 Capital and related financing activities (101,410) (129,062) (83,229)

Net change in cash and cash equivalents (856) 40,345 1,663 Cash and cash equivalents, beginning of year 264,361 224,016 222,353

Cash and cash equivalents, end of year $ 263,505 $ 264,361 $ 224,016

In fiscal year 2020, the cash and cash equivalents, end of year, decreased by $856 or 0.32 percent. The difference in net change in cash and cash equivalents from fiscal year 2019 to fiscal year 2020 was a decrease of $41,201. This net decrease was generated by a decrease in operating activities of $97,739. This was offset by increases in capital and related financing activities of $27,652, noncapital financing activities of $25,711, and investing activities of $3,175. In fiscal year 2019, the cash and cash equivalents, end of year, increased by $40,345 or 18.01 percent. The difference in net change in cash and cash equivalents from fiscal year 2018 to fiscal year 2019 was an increase of $38,682. This net increase was generated by an increase in operating activities of $97,877 and noncapital financing activities of $1,923. This was offset by decreases in capital and related financing activities of $45,833 and investing activities of $15,285.

Determining Whether Certain Organizations Are Component Units

The Governmental Accounting Standards Board (GASB) published GASB Statement No. 39, Determining Whether Certain Organizations Are Component Units, which became effective in fiscal year 2004 and requires universities to include in their financial statements component unit financial information. Oklahoma State University has determined that the Oklahoma State University Foundation and the National Center for Addiction and Studies Treatment Foundation meet the necessary criteria for inclusion. The inclusion of these statements should not be interpreted that Oklahoma State University has access to the resources contained therein. The financial statements include the accounts of the Oklahoma State University Research Foundation, Inc. (OSURF), collectively referred to as the “University.” OSURF was formed in 1967 as a nonprofit corporation to engage in research, extension, and academic contractual arrangements for the benefit and advancement of the General University. OSURF receives and administers funds from federal and state organizations and from private sources for the purpose of carrying out the educational and research programs of the General University. OSURF is governed by a Board of Directors comprised primarily of management of the General University. In addition, General University employees and facilities are used for virtually all activities of OSURF. Accordingly, OSURF has been reported as a blended component unit in the financial statements.

Economic Outlook

The State of Oklahoma’s overall budget decrease for fiscal year 2021 was 2.6 percent. The Legislature decreased most agencies budget and the total Education budget was decreased by 2.9 percent. Oklahoma State Regents for Higher Education (OSRHE) decrease was 3.95 percent which was passed down to the institutions that report to the OSRHE. Institutions shared a 3.95 percent cut as well. In addition, institutions that participate with concurrent enrollment were reimbursed at only 95.1 percent of total eligible waivers given in fiscal year 2020. The allocation for National Guard Waiver reimbursements was also reduced by 3.95 percent. Funding for OK Promise in the amount of $70 million will also be received in fiscal year 2021. The University continues to look for strategies to increase enrollment, increase private dollars, and explore cost savings and avoidance ideas. The University continues to provide initiatives for students to Finish in Four. The first initiative was moving to block tuition in Fall 2014. The University continues to see the positive results from this initiative with the most current four-year graduation rate at 47 percent, the highest ever for the University. Prior to block tuition, the four-year graduation rate hovered around 34.5 percent. The most recent retention rate is 84.9 percent, which is the highest rate in Oklahoma State University history. The Fall 2019 freshman class was 4,144. The University has not increased tuition and mandatory fees since Fall 2018 for undergraduate/graduate resident and nonresident students. Oklahoma State University still remains among one of the most affordable Big 12 Schools.

Oklahoma State University Statements of Net Position June 30, 2020 and 2019

Assets 2020 2019 (In Thousands)

Current Assets Cash and cash equivalents $ 134,033 $ 159,096 Accounts receivable, net 114,194 108,424 Investments 105,002 99,867 Interest receivable 284 454 Current portion of student loans receivable, net 1,110 1,257 Inventories 9,644 9,331

Total current assets 364,267 378,429

Noncurrent Assets Cash and cash equivalents 129,472 105,265 Accounts receivable, net 32 135 Investments 889 966 Receivables from state agencies - 5,861 Loans to students, net 9,986 11,308 Other postemployment benefits 3,428 3,827 Capital assets, net of accumulated depreciation 1,977,836 1,857,098

Total noncurrent assets 2,121,643 1,984,460

Total assets 2,485,910 2,362,889

Deferred Outflows of Resources Debt refunding 16,469 1,591 Pension related 88,734 95,770 Other postemployment benefits related 7,065 6,522 Other 259 201

Total deferred outflows of resources 112,527 104,084

See Notes to Financial Statements

2020 2019 (In Thousands) Liabilities Current Liabilities Accounts payable $ 50,075 $ 52,987 Unearned revenue 39,805 35,337 Assets held in trust for other institutions 483 484 Student and other deposits 2,943 2,497 Accrued compensated absences 13,057 13,836 Accrued workers' compensation claims 1,630 2,457 Current portion of revenue bonds and lease obligations 27,364 31,228 Total current liabilities 135,357 138,826 Noncurrent Liabilities Accrued compensated absences 18,676 19,051 Landfill closure and postclosure costs 2,937 2,937 Accrued workers' compensation claims 3,118 3,198 Unearned revenue - 147 Student deposits 526 510 Revenue bonds payable 494,880 462,440 Revenue bonds premium payable 44,880 15,809 Accounts payable for noncurrent assets 4,610 9,152 Accrued interest payable 5,409 7,546 Federal loan program contribution payable 10,104 12,303 Pension liability 373,018 365,640 Other postemployment benefits 15,548 14,027 Asset retirement obligation 532 494 OCIA capital lease obligation 57,392 57,450 ODFA master lease program 279,281 318,215 Obligations under other capital leases 1,118 1,179 Total noncurrent liabilities 1,312,029 1,290,098 Total liabilities 1,447,386 1,428,924 Deferred Inflows of Resources Debt refunding 4,137 4,456 Pension related 48,047 49,654 Other postemployment benefits related 1,764 2,676 Total deferred inflows of resources 53,948 56,786 Net Position Net investment in capital assets 1,100,012 1,005,640 Restricted for Nonexpendable 589 665 Expendable Scholarships, research, instruction, and other 6,557 3,786 Loans 4,573 5,221 Capital projects 84,972 54,628 Debt service 19,882 2,182 Unrestricted (119,482) (90,859)

Total net position $ 1,097,103 $ 981,263

12 Oklahoma State University Statements of Revenues, Expenses, and Changes in Net Position Years Ended June 30, 2020 and 2019

2020 2019 (In Thousands)

Operating Revenues Tuition and fees, net of scholarship allowances of $119,633 in 2020 and $122,746 in 2019$ 303,232 $ 297,206 Federal appropriations 11,446 10,974 Federal grants and contracts 98,981 102,840 State and local grants and contracts 17,141 12,647 Nongovernmental grants and contracts 33,375 31,545 Sales and services of educational departments 65,943 53,389 Auxiliary enterprises charges Residential life, net of scholarship allowances of $2,291 in 2020 and $1,475 in 2019 33,262 40,000 Student union services, including bookstore sales; revenues totaling $18,442 in 2020 and $20,315 in 2019 are used as security for 2002 and 2004 Student Union Revenue Bonds and 2004 Okmulgee Student Fee Revenue Bonds 38,658 44,286 Recreation and wellness services 3,905 4,244 Athletics, net of scholarship allowance of $3,048 in 2020 and $3,033 in 2019 59,813 62,705 University health services 99,466 153,290 Fire protection publications 9,648 10,464 Other auxiliary revenue 47,432 52,463 Interest earned on loans to students 236 255 Other operating revenues 19,786 27,749

Total operating revenues 842,324 904,057

Operating Expenses Compensation and employee benefits 641,568 616,378 Contractual services 222,729 226,383 Supplies and materials 46,566 51,662 Utilities 33,283 33,261 Communications 4,700 5,270 Other operating expenses 71,798 69,583 Scholarships and fellowships 63,772 51,113 Depreciation expense 86,783 80,664

Total operating expenses 1,171,199 1,134,314

Operating loss (328,875) (230,257)

See Notes to Financial Statements 13 Oklahoma State University Statements of Revenues, Expenses, and Changes in Net Position Years Ended June 30, 2020 and 2019

2020 2019 (In Thousands)

Nonoperating Revenues (Expenses) State appropriations$ 199,280 $ 192,082 On-behalf payments for OTRS 17,530 21,698 Federal and state grants and contracts 77,159 57,470 Gifts, including $18,527 in 2020 and $21,104 in 2019 used as security on the 2003 and 2004 Athletic Facilities Revenue Bonds 40,115 39,145 Investment income, net 7,078 6,612 Interest expense (32,063) (37,273) Net nonoperating revenues 309,099 279,734

Income (loss) before other revenues, expenses, gains, or losses (19,776) 49,477

Capital from grants, gifts, and affiliates 103,167 26,923 State appropriations restricted for capital purposes 3,271 844 On-behalf payments for OCIA capital leases 2,695 4,726 State school land funds 7,786 7,913 Additions to permanent endowments 4 1 Loss on disposal of fixed assets (3,831) (2,806) Other additions, net 22,524 8,885

Increase in net position 115,840 95,963

Net Position Net position - beginning of year 981,263 885,300

Net position - end of year $ 1,097,103 $ 981,263

See Notes to Financial Statements 14 Oklahoma State University Statements of Cash Flows Years Ended June 30, 2020 and 2019

2020 2019 (In Thousands) Operating Activities Tuition and fees $ 300,564 $ 298,106 Grants and contracts 149,570 153,138 Sales and services of educational activities 65,943 53,389 Auxiliary enterprise charges Residential life 35,828 36,884 Student union services 38,054 44,910 Recreation and wellness services 3,955 4,274 Athletics 49,762 64,037 Interest earned on loans to students 236 255 Other operating revenues 197,718 253,281 Payments to employees for salaries and benefits (610,779) (597,103) Payments to suppliers (447,706) (432,878) Loans issued to students (241) (325) Collection of loans to students 1,754 4,429

Net cash used in operating activities (215,342) (117,603)

Noncapital Financing Activities State appropriations 199,280 192,082 Federal and state grants and contracts 77,159 57,470 Gifts received for other than capital purposes 37,268 38,429 Direct lending receipts 165,367 169,823 Direct lending payments (165,367) (169,823) Agency fund receipts 2,248 3,675 Agency fund payments (2,249) (3,661)

Net cash provided by noncapital financing activities 313,706 287,995

Investing Activities Purchases of investments (608) (4,020) Proceeds from sales of investments 1,108 1,568 Interest received on investments 1,690 1,467

Net cash provided by (used in) investing activities 2,190 (985)

See Notes to Financial Statements 15 Oklahoma State University Statements of Cash Flows Years Ended June 30, 2020 and 2019

2020 2019 (In Thousands)

Capital and Related Financing Activities Cash paid for capital assets$ (117,974) $ (136,670) Capital appropriations received 3,271 844 Capital from grants, gifts, and affiliates received 5,247 12,203 State school land funds 7,786 7,913 Proceeds of capital debt 32,351 42,015 Proceeds from bond/lease refunding 265,328 66,057 Repayments of capital debt and leases (20,204) (29,289) Payments on bond/lease refunding (268,094) (67,307) Interest paid on capital debt and leases (31,626) (34,006) Asset retirement obligation (19) - Other sources 22,524 9,178

Net cash used in capital and related financing activities (101,410) (129,062)

Increase (Decrease) in Cash and Cash Equivalents (856) 40,345

Cash and Cash Equivalents, Beginning of Year 264,361 224,016

Cash and Cash Equivalents, End of Year $ 263,505 $ 264,361

Reconciliation of Cash and Cash Equivalents to the Statements of Net Position Cash and cash equivalents, current$ 134,033 $ 159,096 Cash and cash equivalents, noncurrent 129,472 105,265

Total cash and cash equivalents $ 263,505 $ 264,361

See Notes to Financial Statements 16 Oklahoma State University Statements of Cash Flows Years Ended June 30, 2020 and 2019

2020 2019 (In Thousands)

Reconciliation of Operating Loss to Net Cash Used in Operating Activities Operating loss$ (328,875) $ (230,257) Adjustments to reconcile operating loss to net cash used in operating activities Depreciation expense 86,783 80,664 On-behalf payments for OTRS 17,530 21,698 Changes in assets and liabilities Accounts receivable (2,816) 9,758 Inventories (313) 305 Accounts payable and accrued expenses (3,819) 4,450 Pension liability 7,378 (14,509) Other postemployment benefits 1,920 5,460 Federal loan program contributions payable (2,199) (5,183) Deferred inflows of resources (2,520) 2,671 Deferred outflows of resources 6,491 1,529 Unearned revenue 4,321 (358) Student and other deposits 462 151 Accrued compensated absences (1,154) 3,136 Loans to students 1,469 2,882

Net Cash Used in Operating Activities $ (215,342) $ (117,603)

Noncash Investing, Noncapital Financing, and Capital and Related Financing Transactions Fixed assets acquired by gifts from affiliates$ 97,920 $ 14,720 Change in accounts payable for capital assets$ (4,542) $ (2,486) Change in accounts receivable related to private gifts$ 2,851 $ 717 Change in receivable from state agency affecting proceeds of capital debt$ 5,861 $ 10,610 Loss on refunding of debt$ 15,105 $ - Interest on capital debt paid by state agency on behalf of University, net$ 2,665 $ 2,699 Principal on capital debt paid by state agency on behalf of University$ 30 $ 2,027

See Notes to Financial Statements 17

Oklahoma State University Foundation

Oklahoma State University Foundation Consolidated Statements of Financial Position June 30, 2020 and 2019

Assets 2020 2019

Assets Cash and cash equivalents $ 11,202,484 $ 6,032,477 Short-term investments 65,777,891 40,990,551 Interest and other receivables 2,195,693 3,479,038 Contributions receivable, net 112,281,786 99,282,275 Notes receivable 5,904,051 7,724,569 Other property investments 5,327,292 2,331,848 Investments 945,325,525 960,568,983 Property and equipment, net 17,646,038 18,171,308 Beneficial interests in trusts 12,698,686 14,126,504 Other assets 3,338,472 3,220,147

Total assets$ 1,181,697,918 $ 1,155,927,700

Liabilities and Net Assets

Liabilities Oklahoma State University support payable $ 2,551,509 $ 4,772,584 Accounts payable and accrued liabilities 2,213,382 2,887,481 Funds held on behalf of Oklahoma State University 7,051,380 6,821,072 Funds held on behalf of Cowboy Athletics 1,177,938 - Funds held on behalf of Oklahoma State University Alumni Association - 16,078,786 Funds held on behalf of Foundation for the McKnight Center for the Performing Arts - 10,032,101 Unearned revenue 15,000 15,000 Line of credit 23,705,000 37,370,000 Obligations under split-interest agreements 11,741,106 12,042,096 Notes payable 14,431,143 16,590,508

Total liabilities 62,886,458 106,609,628

Net Assets Without donor restrictions 388,654,006 361,880,615 With donor restrictions 730,157,454 687,437,457

Total net assets 1,118,811,460 1,049,318,072

Total liabilities and net assets$ 1,181,697,918 $ 1,155,927,700

See Notes to Financial Statements 18 Oklahoma State University Foundation Consolidated Statements of Activities Years Ended June 30, 2020 and 2019

2020 2019 Without Donor With Donor Restrictions Restrictions Total Total Revenues, Gains, and Support Contributions Cash$ 39,313,392 $ 16,672,578 $ 55,985,970 $ 53,471,922 Securities 1,315,029 3,214,114 4,529,143 5,793,421 Land, goods, services, and other 2,688,200 - 2,688,200 11,831,310 Promises to give - 38,393,440 38,393,440 24,458,221 Total contributions 43,316,621 58,280,132 101,596,753 95,554,874

Provisions for uncollectible pledges - (796,915) (796,915) (2,376,165) Net investment returns 37,830,025 41,091,559 78,921,584 42,886,347 Contract support services 3,049,279 - 3,049,279 2,969,770 Net gains (losses) on disposals of property and equipment and other property investments 4,987,087 38,305 5,025,392 38,587 Management fee income (loss) 10,078,692 (9,893,819) 184,873 275,809 Change in value of split-interest agreements (283,000) 2,397,254 2,114,254 780,438 Other income (loss) 2,280,049 (33,776) 2,246,273 3,716,494 Reclassifications - donor directed 249,722 (249,722) - - Net assets released from restrictions 48,113,021 (48,113,021) - - Total revenues, gains, and support 149,621,496 42,719,997 192,341,493 143,846,154

Expenses Program services Intercollegiate athletics 12,806,985 - 12,806,985 25,886,788 Cowboy Athletics 31,405,728 - 31,405,728 54,656,323 Library 579,361 - 579,361 557,180 Research 1,267,599 - 1,267,599 1,079,188 General University support 18,459,493 - 18,459,493 26,034,341 Awards and scholarships 18,033,075 - 18,033,075 16,375,959 Endowed faculty and lectureship programs 7,090,457 - 7,090,457 5,925,210 Facilities and equipment 8,613,610 - 8,613,610 15,932,001 Total program services 98,256,308 - 98,256,308 146,446,990

Management and general 8,469,720 - 8,469,720 8,129,634 Fundraising 15,287,077 - 15,287,077 14,972,408 Charitable legacy distributions 835,000 - 835,000 22,552 Total expenses 122,848,105 - 122,848,105 169,571,584

Change in Net Assets 26,773,391 42,719,997 69,493,388 (25,725,430)

Net Assets, Beginning of Year 361,880,615 687,437,457 1,049,318,072 1,075,043,502

Net Assets, End of Year $ 388,654,006 $ 730,157,454 $ 1,118,811,460 $ 1,049,318,072

See Notes to Financial Statements 19 Oklahoma State University Foundation Consolidated Statements of Activities Years Ended June 30, 2020 and 2019

2019 Without Donor With Donor Restrictions Restrictions Total Revenues, Gains, and Support Contributions Cash $ 40,693,550 $ 12,778,372 $ 53,471,922 Securities 2,122,017 3,671,404 5,793,421 Land, goods, services, and other 5,189,185 6,642,125 11,831,310 Promises to give (334,542) 24,792,763 24,458,221 Total contributions 47,670,210 47,884,664 95,554,874

Provisions for uncollectible pledges (29,138) (2,347,027) (2,376,165) Net investment returns 18,508,535 24,377,812 42,886,347 Contract support services 2,969,770 - 2,969,770 Net gains (losses) on disposals of property and equipment and other property investments (22,126) 60,713 38,587 Management fee income (loss) 9,850,895 (9,575,086) 275,809 Change in value of split-interest agreements 317,607 462,831 780,438 Other income (loss) 3,738,025 (21,531) 3,716,494 Reclassifications - donor directed 921,800 (921,800) - Net assets released from restrictions 50,940,436 (50,940,436) - Total revenues, gains, and support 134,866,014 8,980,140 143,846,154

Expenses Program services Intercollegiate athletics 25,886,788 - 25,886,788 Cowboy Athletics 54,656,323 - 54,656,323 Library 557,180 - 557,180 Research 1,079,188 - 1,079,188 General University support 26,034,341 - 26,034,341 Awards and scholarships 16,375,959 - 16,375,959 Endowed faculty and lectureship programs 5,925,210 - 5,925,210 Facilities and equipment 15,932,001 - 15,932,001 Total program services 146,446,990 - 146,446,990

Management and general 8,129,634 - 8,129,634 Fundraising 14,972,408 - 14,972,408 Charitable legacy distributions 22,552 - 22,552 Total expenses 169,571,584 - 169,571,584

Change in Net Assets (34,705,570) 8,980,140 (25,725,430)

Net Assets, Beginning of Year 396,586,185 678,457,317 1,075,043,502

Net Assets, End of Year $ 361,880,615 $ 687,437,457 $ 1,049,318,072

See Notes to Financial Statements 20 Oklahoma State University Foundation Consolidated Statements of Cash Flows Years Ended June 30, 2020 and 2019

2020 2019

Cash Flow From Operating Activities Change in net assets $ 69,493,388 $ (25,725,430) Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities Net investment gains (72,365,434) (34,594,426) Change in value of split-interest agreements (2,114,254) (780,438) Gains (losses) on disposals of property and equipment and other property investments 12,914 (38,587) Contributions restricted for long-term investment, cash (12,126,146) (13,549,641) Contributions restricted for long-term investment, securities (900,959) (1,567,411) Noncash distributions - 12,191,364 Noncash contributions (7,426,771) (17,468,582) Proceeds from sales of donated financial assets 2,002,609 2,137,236 Depreciation expense 855,387 896,564 Change in discount on contributions receivable 33,031,398 2,096,144 Provision for uncollectible pledges 796,915 2,376,165 Changes in operating assets and liabilities Contributions receivable, net (45,335,473) (12,585,210) Interest and other receivables 1,283,345 (849,547) Notes receivable 1,820,518 1,889,509 Other assets (118,325) 118,805 Oklahoma State University support payable (2,221,075) 3,595,539 Accounts payable and accrued liabilities (674,099) 574,667 Funds held on behalf of Oklahoma State University 230,308 124,282 Funds held on behalf of Cowboy Athletics 1,177,938 - Funds held on behalf of Oklahoma State University Alumni Association (16,078,786) (1,245,518) Funds held on behalf of Foundation for the McKnight Center for the Performing Arts (10,032,101) 5,229,583 Obligations under split-interest agreements 1,735,422 1,234,336 Unearned revenue - (263,500)

Net cash used in operating activities (56,953,281) (76,204,096)

Cash Flows From Investing Activities Purchases of investments (510,604,416) (497,916,228) Proceeds from sales and maturities of investments 575,867,995 528,122,420 Proceeds from sale of other property investments 33,178 - Purchases of property and equipment (376,209) (388,584)

Net cash provided by investing activities 64,920,548 29,817,608

See Notes to Financial Statements 21 Oklahoma State University Foundation Consolidated Statements of Cash Flows Years Ended June 30, 2020 and 2019

2020 2019

Cash Flows From Financing Activities Contributions restricted for long-term investment $ 13,027,105 $ 15,117,052 Proceeds from line of credit 21,335,000 36,130,922 Repayments of line of credit (35,000,000) - Repayments of notes payable (2,159,365) (3,409,492)

Net cash provided by (used in) financing activities (2,797,260) 47,838,482

Net Increase in Cash and Cash Equivalents 5,170,007 1,451,994

Cash and Cash Equivalents at Beginning of Year 6,032,477 4,580,483

Cash and Cash Equivalents at End of Year $ 11,202,484 $ 6,032,477

Supplemental Disclosure of Cash Flow Information Interest paid $ 1,537,312 $ 1,317,826 Noncash transfers of property and equipment to Oklahoma State University $ - $ 1,938,048 Noncash transfers of other property investments to Oklahoma State University $ - $ 10,208,316 Donated securities $ 4,529,143 $ 6,574,896 Donation of beneficial interest $ - $ 937,624 Donated other property investments $ 2,590,384 $ 11,831,310 Donated services provided for the benefit of Oklahoma State University $ 97,816 $ 156,149

See Notes to Financial Statements 22

National Center for Addiction Studies and Treatment Foundation

(This Page Intentionally Left Blank)

National Center for Addiction Studies and Treatment Foundation Balance Sheet December 31, 2019

Assets

Current Assets Cash and current equivalents $ 103,643,570 Contribution receivable, net - current 13,765,866

Total current assets 117,409,436

Contribution Receivable, Net - Noncurrent 56,818,934

Total assets $ 174,228,370

Net Position

Unrestricted $ 71,728,370 Restricted - expendable 102,500,000

Total net position $ 174,228,370

See Notes to Financial Statements 23

National Center for Addiction Studies and Treatment Foundation Statement of Revenues, Expenses, and Changes in Net Position Period from March 26, 2019 Through December 31, 2019

Operating Revenues Contributions $ 70,584,800 Other income and support 102,500,000

Total operating revenues 173,084,800

Operating Income 173,084,800

Nonoperating Revenues (Expenses) Investing income 1,310,485 Investment fees (166,915)

Total nonoperating revenues (expenses) 1,143,570

Increase in Net Position 174,228,370

Net Position, Beginning of Year -

Net Position, End of Year $ 174,228,370

See Notes to Financial Statements 24

National Center for Addiction Studies and Treatment Foundation Statement of Cash Flows Period from March 26, 2019 Through December 31, 2019

Operating Activities Settlement payment received $ 102,500,000

Net cash provided by operating activities 102,500,000

Investing Activities Investment income 1,143,570

Net cash provided by investing activities 1,143,570

Increase in Cash and Cash Equivalents 103,643,570

Cash and Cash Equivalents, Beginning of Year -

Cash and Cash Equivalents, End of Year $ 103,643,570

Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating income $ 173,084,800 Change in operating assets Contribution receivable, net (70,584,800)

Net cash provided by operating activities $ 102,500,000

See Notes to Financial Statements 25 (This Page Intentionally Left Blank)

Notes to Financial Statements

Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 1: Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

Oklahoma State University (the “University”) is a modern comprehensive land grant university that serves the state, national, and international communities by providing its students with academic instruction, by conducting research and other activities that advance fundamental knowledge and by disseminating knowledge to the people of Oklahoma and throughout the world.

Reporting Entity

The financial reporting entity, as defined by Governmental Accounting Standards Board (GASB) Statements No. 14, 61, and 80, consists of the primary government, organizations for which the primary government is financially accountable and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion could cause the financial statements to be misleading or incomplete. Accordingly, the financial statements include the accounts of all agencies of Oklahoma State University (the “General University”), as the primary government, and the accounts of the Oklahoma State University Research Foundation, Inc. (OSURF, formerly known as the Center for Innovation and Economic Development, Inc.), collectively referred to as the “University.” Further, the financial statements of all component units of the University meeting the criteria established by GASB Statements No. 39 and No. 80 have been discretely presented. The General University includes Oklahoma State University - Stillwater; Oklahoma State University Institute of Technology - Okmulgee; Oklahoma State University - Oklahoma City; the Center for Veterinary Health Sciences; the Agricultural Experiment Station; the Agricultural Extension Division; the Center for Health Sciences - Tulsa and Oklahoma State University - Tulsa. The General University is governed by the Board of Regents for the Oklahoma Agricultural and Mechanical Colleges (Board of Regents). The State of Oklahoma allocates and allots funds to each agency separately and requires that the funds be maintained accordingly. Because of this requirement, separate accounts are maintained for each agency. OSURF was formed in 1967 as a nonprofit corporation to engage in research, extension, and academic contractual arrangements for the benefit and advancement of the General University. OSURF receives and administers funds from federal and state organizations and from private sources for the purpose of carrying out the educational and research programs of the General University. OSURF is governed by a Board of Directors comprised primarily of management of the General University. In addition, General University employees and facilities are used for virtually all activities of OSURF. Accordingly, OSURF has been reported as a blended component unit in the financial statements.

26 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

In preparing the financial statements, all significant transactions and balances between agencies and between the General University and OSURF are eliminated. The University is a member of the Oklahoma State System of Higher Education, a component unit of the State of Oklahoma, and is included in the comprehensive annual financial report of the State of Oklahoma as part of the Higher Education component unit. Financial Statement Presentation: As a member of the Oklahoma State System of Higher Education, the University presents its financial statements in accordance with the requirements of GASB Statement No. 34, Basic Financial Statements and Management Discussion and Analysis for State and Local Governments and GASB Statement No. 35, Basic Financial Statements and Management’s Discussion and Analysis for Public Colleges and Universities. The financial statement presentation required by GASB Statements No. 34 and 35 provides a comprehensive, entity-wide perspective of the University’s assets, deferred outflows of resources, liabilities, deferred inflows of resources, net position, revenues, expenses, changes in net position, and cash flows. Component Units: Oklahoma State University Foundation (OSU Foundation), is a private nonprofit organization that reports under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features. No modifications have been made to OSU Foundation’s financial information, which has been discretely presented. The National Center for Addiction Studies and Treatment Foundation (NCAST) is a nonprofit organization that reports under GASB standards and operates under a December 31 fiscal year-end. NCAST has also been discretely presented. Basis of Accounting: For financial reporting purposes, the University is considered a special- purpose government engaged only in business-type activities. Accordingly, the University’s financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intra-agency transactions have been eliminated.

Cash Equivalents

The University considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Funds invested through the State Treasurer’s Cash Management Program are considered cash equivalents.

Investments

The University accounts for its investments at fair value in accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools. Changes in unrealized gain (loss) on the carrying value of investments are reported as a component of investment income in the statements of revenues, expenses, and changes in net position.

27 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Accounts Receivable

Accounts receivable consist of tuition and fee charges to students and auxiliary enterprise services provided to students, faculty and staff, the majority of each residing in the State. Accounts receivable also include amounts due from the federal government, state and local governments or private sources, in connection with reimbursement of allowable expenditures made pursuant to the University’s grants and contracts. Accounts receivable are recorded net of estimated uncollectible amounts. The University determines its allowance by considering a number of factors, including the length of time accounts receivable are past due, the University’s previous loss history, and the condition of the general economy and the industry as a whole. The University writes off specific accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts.

Inventories

Inventories are carried at the lower of cost or market on either the first-in, first-out (FIFO) basis or the average cost basis.

Noncurrent Cash and Investments

Cash and investments that are externally restricted to make debt service payments, maintain sinking or reserve funds or to purchase or construct capital or other noncurrent assets, are classified as noncurrent assets in the statements of net position.

Capital Assets

Capital assets are recorded at cost at the date of acquisition, or acquisition value at the date of donation in the case of gifts. Livestock for educational purposes is recorded at estimated fair value. For equipment, the University’s capitalization policy includes all items with a unit cost of $5 or more, and an estimated useful life of greater than one year. Renovations to buildings, infrastructure, and land improvements that significantly increase the value or extend the useful life of the structure are capitalized. Routine repairs and maintenance are charged to operating expense in the year in which the expense was incurred. Internally generated software has a capitalization threshold of $1,000. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 40 to 50 years for buildings, 20 to 25 years for infrastructure and land improvements, 10 years for library books, 5 to 7 years for equipment, 3 years for purchased software, and 5 years for internally generated software. Costs incurred during construction of long-lived assets are recorded as construction in progress and are not depreciated until placed in service. The University capitalized interest as a component of capital assets constructed for its own use, until July 1, 2018, when GASB Statement No. 89 was early adopted and the capitalization of interest ceased.

28 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Deferred Outflows of Resources

The University reports increases in net position generated by its defined benefit pension plan or other postemployment benefits that relate to future periods and costs of restructuring debt as deferred outflows of resources in a separate section of its statements of net position.

Unearned Revenues

Unearned revenues include amounts received for tuition and fees and certain auxiliary activities prior to the end of the fiscal year but related to the subsequent accounting period. Unearned revenues also include amounts received from grant and contract sponsors that have not yet been earned.

Compensated Absences

The liability and expense incurred for employee vacation pay are recorded as accrued compensated absences in the statements of net position, and as a component of compensation and employee benefit expense in the statements of revenues, expenses, and changes in net position. Compensated absence liabilities are computed using the regular pay and termination pay rates in effect at statement of net position date plus an additional amount for compensation-related payments such as Social Security and Medicare taxes computed using rates in effect at that date. The estimated compensated absences liability expected to be paid more than one year after the statements of net position date is included in other long-term liabilities.

Noncurrent Liabilities

Noncurrent liabilities include (1) principal amounts of revenue bonds payable and capital lease obligations; (2) estimated amounts for accrued compensated absences and other liabilities that will not be paid within the next fiscal year; and (3) other liabilities that, although payable within one year, are to be paid from funds that are classified as noncurrent assets.

Pensions and Benefit Plans

The University participates in a cost-sharing multiple-employer defined benefit pension plan. The fiduciary net position of the Teacher Retirement System of Oklahoma (OTRS) has been determined on the flow of economic resources measurement focus and full accrual basis of accounting. This includes for purposes of measuring the net pension liability, deferred outflows of resources, and deferred inflows of resources related to pensions, pension expense and information about assets, liabilities and additions to/deductions from OTRS’s fiduciary net position. Benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

29 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

The University has a single-employer defined benefit other postemployment benefit (OPEB) plan, providing health insurance and life insurance to retirees (the “OPEB Plans”). For purposes of measuring the total OPEB liability, deferred outflows of resources, and deferred inflows of resources related to OPEB and OPEB expense have been determined on the same basis as they are reported by the OPEB Plans. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms.

Deferred Inflows of Resources

The University reports decreases in net position generated by its defined benefit pension plan or other postemployment benefits that relate to future periods and savings of restructuring debt as deferred inflows of resources in a separate section of its statements of net position.

Net Position

The University’s net position is classified as follows: Net investment in capital assets: This represents the University’s total investment in capital assets, net of accumulated depreciation, and outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of net investment in capital assets.

Restricted net position - expendable: Restricted expendable net position includes resources in which the University is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties.

Restricted net position - nonexpendable: Restricted nonexpendable net position consists of endowment and similar type funds in which donors or other outside sources have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income, which may either be expended or added to principal.

Unrestricted net position: Unrestricted net position represents resources derived from student tuition and fees, state appropriations, and sales and services of educational departments and auxiliary enterprises. These resources are used for transactions relating to the educational and general operations of the University, and may be used at the discretion of the governing board to meet current expenses for any purpose. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty, and staff.

When an expense is incurred that can be paid using either restricted or unrestricted resources, the University’s policy is to use prudent decision processes to determine which resources will be applied based on availability of funding, donor intent, and returns available from idle funds.

30 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Income Taxes

The General University, as a political subdivision of the State, is excluded from federal income taxes under Section 115(a) of the Internal Revenue Code, as amended. OSURF is an organization described in Section 501(c)(3) of the Internal Revenue Code, exempt from federal income tax under Section 501(a) of the Internal Revenue Code for activities which relate to its exempt purpose.

Classification of Revenues

The University has classified its revenues as either operating or nonoperating revenues according to the following criteria: Operating revenues: Operating revenues include activities that have the characteristics of exchange transactions, such as (1) student tuition and fees, net of scholarship discounts and allowances, (2) sales and services of auxiliary enterprises, net of scholarship discounts and allowances, (3) certain federal, state, and local grants and contracts and federal appropriations, and (4) interest on institutional student loans.

Nonoperating revenues: Nonoperating revenues include activities that have the characteristics of nonexchange transactions, such as gifts and contributions, student aid revenues, and other revenue sources that are defined as nonoperating revenues by GASB Statement No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting, and GASB Statement No. 34, such as state appropriations and investment income.

Scholarship Discounts and Allowances

Student tuition and fee revenues, and certain other revenues from students, are reported net of scholarship discounts and allowances in the statements of revenues, expenses, and changes in net position. Scholarship discounts and allowances are the difference between the stated charge for goods and services provided by the University, and the amount that is paid by students and/or third parties making payments on the students’ behalf. Certain governmental grants, such as Pell grants, and other federal, state, or nongovernmental programs are recorded as either operating or nonoperating revenues in the University’s financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the University has recorded a scholarship discount and allowance.

Use of Estimates

31 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

New Pronouncements

In January 2017, GASB issued Statement No. 84, Fiduciary Activities. This Statement establishes criteria for identifying fiduciary activities of all state and local governments. The focus of the criteria generally is on whether a government is controlling the assets of the fiduciary activity and the beneficiaries with whom a fiduciary relationship exists. This Statement is now effective for periods beginning after December 15, 2019. Earlier application is encouraged. In June 2017, GASB issued Statement No. 87, Leases. This Statement requires recognition of certain lease assets and liabilities that previously were classified as operating leases and recognized as inflows of resources or outflows of resources. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. This Statement is now effective for periods beginning after June 15, 2021. Earlier application is encouraged. In August 2018, GASB issued Statement No. 90, Majority Equity Interests. This Statement improves consistency and comparability of reporting a government’s majority equity interest in a legally separate organization. It also requires that a component unit for which a government has a 100 percent equity interest account for its assets, deferred outflows or resources, liabilities, and deferred inflows of resources at acquisition value. This Statement is now effective for periods beginning after December 15, 2019. Earlier application is encouraged. In May 2019, GASB issued Statement No. 91, Conduit Debt Obligations. This Statement provides a single method of reporting conduit debt obligations by issuers and eliminates diversity in practice associated with commitments extended by issuers, arrangements associated with conduit debt obligations, and related note disclosures. The Statement is now effective for periods beginning after December 15, 2021. Earlier application is encouraged. In January 2020, GASB issued Statement No. 92, Omnibus 2020. This Statement enhances comparability in accounting and financial reporting and improves the consistency of authoritative literature by addressing practice issues that have been identified during implementation and application of certain GASB Statements. This Statement in now effective for periods beginning after June 15, 2021. Earlier application is encouraged. In March 2020, GASB issued Statement No. 93, Replacement of Interbank Offered Rates. This statement addresses accounting and financial reporting implications that result from the replacement of an interbank offered rate as a result of global reference rate reform. The removal of LIBOR as an appropriate benchmark interest rate is effective for reporting periods ending after December 31, 2021. All other requirements of the statement are now effective for reporting periods beginning after June 15, 2021. Earlier application is encouraged. In March 2020, GASB issued Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements. This Statement addresses issues related to public-private and public-public partnership arrangements and provides guidance for accounting and financial reporting for availability payment arrangements. This Statement is effective for periods beginning after June 15, 2022. Earlier application is encouraged.

32 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

In May 2020, GASB issued Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance. This statement provides temporary relief to governments and other stakeholders in light of the COVID-19 pandemic by postponing the effective dates of certain provisions that first became effective or are scheduled to become effective for periods beginning after June 15, 2018, and later. In May 2020, GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements. This Statement defines a subscription-based information technology arrangement (SBITA), establishes that a SBITA results in a right-to-use subscription asset and a corresponding subscription liability, provides capitalization criteria for outlays other than subscription payments, and requires note disclosure regarding a SBITA. This Statement is effective for periods beginning after June 15, 2022. Earlier application is encouraged. In June 2020, GASB issued Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. This Statement increases consistency and comparability related to the reporting of fiduciary component units, mitigates the costs associated with the reporting of certain defined contribution pension plans, defined contribution other postemployment benefit plans, and other employee benefit plans, and enhances the relevance, consistency, and comparability of the accounting and financial reporting for Internal Revenue Code Section 457 deferred compensation plans. The requirements of this Statement that are related to the accounting and financial reporting for Section 457 plans are effective for periods beginning after June 15, 2021. All other requirements of this Statement are effective immediately. Earlier application is encouraged. Management has not yet determined the effect, if any, of adoption of the new GASB statements for the financial statements.

Note 2: Cash and Cash Equivalents, Other Deposits and Investments

Cash and Cash Equivalents

At June 30, 2020 and 2019, the carrying amounts of the University’s deposits with the State Treasurer and other financial institutions were $263,505 and $264,361, respectively. These amounts consisted of deposits with the State Treasurer ($258,454 and $259,857), U.S. financial institutions ($931 and $1,150), trustees related to the University’s various bond indenture agreements ($3,946 and $3,187), and petty cash and change funds ($174 and $167), respectively.

33 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

By Oklahoma Statute, the State Treasurer is required to ensure that all state funds are either insured by the Federal Deposit Insurance Corporation (FDIC), collateralized by securities held by the cognizant Federal Reserve Bank, or invested in U.S. government obligations. Any deposits with the State Treasurer are pooled with funds of other state agencies, and then in accordance with statutory limitations, placed in banks or invested as the State Treasurer may determine, in the State’s name. The University’s cash balances deposited with the State Treasurer were $267,124 and $262,856, respectively, at June 30, 2020 and 2019. The difference between the carrying amount and the cash balances deposited with the State Treasurer are due to deposits in transit and outstanding checks at June 30. The University requires that balances on deposit with financial institutions be insured by the FDIC or collateralized by securities held by the cognizant Federal Reserve Bank, in the University’s name. The carrying amount and related bank balances of the University’s deposits was $1 and $181, respectively, at June 30, 2020 and 2019.

Deposits

At June 30, 2020 and 2019, the University held no nonnegotiable certificates of deposit. Some deposits with the State Treasurer are placed in the State Treasurer’s internal investment pool OK INVEST. OK INVEST pools the resources of all state funds and agencies and invests them in (a) U.S. treasury securities which are explicitly backed by the full faith and credit of the U.S. government; (b) U.S. agency securities which carry an implicit guarantee of the full faith and credit of the U.S. government; (c) money market mutual funds which participate in investments, either directly or indirectly, in securities issued by the U.S. Treasury and/or agency and repurchase agreements relating to such securities; and (d) investments related to tri-party repurchase agreements which are collateralized at 102 percent and, whereby, the collateral is held by a third party in the name of the State Treasurer. Of funds on deposit with the State Treasurer, amounts invested in OK INVEST total $61,196 at June 30, 2020, and $68,737 at June 30, 2019.

34 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

For financial reporting purposes, deposits with the State Treasurer that are invested in OK INVEST are classified as cash equivalents. At June 30, the distribution of deposits in OK INVEST is as follows:

2020 2019 Market Market OK INVEST Portfolio Cost Value Cost Value

U.S. agency securities $ 14,186 $ 14,370 $ 21,297 $ 21,429 Certificates of deposit 903 903 1,520 1,520 Money market mutual funds 3,193 3,193 6,841 6,841 Mortgage backed agency securities 22,738 23,750 27,619 28,194 Municipal bonds 78 81 122 128 Foreign bonds 636 635 285 280 U.S. Treasury Obligations 19,462 19,949 11,053 11,198

$ 61,196 $ 62,881 $ 68,737 $ 69,590

Agencies and funds that are considered to be part of the State’s reporting entity in the State’s Comprehensive Annual Financial Report are allowed to participate in OK INVEST. Oklahoma statutes and the State Treasurer establish the primary objectives and guidelines governing the investment of funds in OK INVEST. Safety, liquidity, and return on investment are the objectives which establish the framework for the day to day OK INVEST management with an emphasis on safety of the capital and the probable income to be derived and meeting the State and its funds and agencies’ daily cash flow requirements. Guidelines in the Investment Policy address credit quality requirements, diversification percentages, and specify the types and maturities of allowable investments, and the specifics regarding these policies can be found on the State Treasurer’s website at http://www.treasurer.state.ok.us/. The State Treasurer, at his discretion, may further limit or restrict such investments on a day to day basis. OK INVEST includes a substantial investment in securities with an overnight maturity as well as in U.S. government securities with a maturity of up to three years. OK INVEST maintains an overall weighted average maturity of less than 270 days. Participants in OK INVEST maintain an interest in its underlying investments and, accordingly, may be exposed to certain risks. As stated in the State Treasurer information statement, the main risks are interest rate risk, credit/default risk, liquidity risk, and U.S. government securities risk. Interest rate risk is the risk that during periods of rising interest rates, the yield and market value of the securities will tend to be lower than prevailing market rates; in periods of falling interest rates, the yield will tend to be higher. Credit/default risk is the risk that an issuer or guarantor of a security, or a bank or other financial institution that has entered into a repurchase agreement, may default on its payment obligations. Liquidity risk is the risk that OK INVEST will be unable to pay redemption proceeds within the stated time period because of unusual market conditions, an unusually high volume of redemption requests, or other reasons.

35 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

U.S. government securities risk is the risk that the U.S. government will not provide financial support to U.S. government agencies, instrumentalities, or sponsored enterprises if it is not obligated to do so by law. Various investment restrictions and limitations are enumerated in the State Treasurer’s Investment Policy to mitigate those risks; however, any interest in OK INVEST is not insured or guaranteed by the State, the FDIC, or any other government agency.

Investments

The University invests available resources pursuant to the A&M Board of Regents Institutional Policy for Investing Funds, the Oklahoma State Regents for Higher Education System-wide Policy for Investment of Institutional Funds, and the Investment Policy of the Oklahoma State Treasurer. The short-term investment of agency special and agency relationship funds is directed primarily toward maximizing earnings on the University’s working capital while maintaining adequate liquidity to meet cash flow needs of the University. Short term allowable monies are invested through the OK INVEST Program administered through the Office of the State Treasurer. As an agency of the State of Oklahoma investments in this program are executed in cooperation with the Oklahoma State Treasurer’s Office, which serves as the University’s official depository. The Institutional Guidelines for Investment of Funds of the University is directed toward the investment of long-term oriented funds held by the University in a Fixed Income portfolio. The long-term objective of the portfolio is to maximize the returns without exposure to undue risk. Allowable monies are invested in securities permitted by Oklahoma State Statute (Title 62 § 89.2). Whereas fluctuating rates of return are characteristic of the securities markets, the main concern is the long-term appreciation of the assets and the consistency of total return. These investments are managed and held by a third-party investment management fiduciary. Credit Risk - investment credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. In accordance with state statutes, the State Treasurer may only purchase and invest in (a) obligations of the United States government, its agencies and instrumentalities; (b) prime banker’s acceptances; (c) investment grade obligations of state and local governments; (d) money market funds; (e) collateralized or insured certificates of deposits; (f) negotiable certificates of deposits; (g) prime commercial paper; and (h) repurchase agreements. State law limits investments in obligations of state and local governments to the highest rating from at least one nationally recognized rating agency acceptable to the State Treasurer. Additionally, it is the University’s policy to limit its investments in municipal and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations. As of June 30, 2020 and 2019, the University did not directly hold investments in municipal or corporate bonds. Interest Rate Risk - the risk that changes in interest rates will adversely affect the fair value of an investment. Investments that are held for longer periods of time are subject to increased risk of adverse interest changes. Neither the University nor state statutes limit investment maturities as a means of managing exposure to fair value losses arising from increasing interest rates; however, the State Treasurer Investment Policy limits the average maturity on its portfolio to four years, with certain individual securities having more restrictive limits as defined in the policy.

36 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Concentration of Credit Risk - the risk of loss attributed to the magnitude of the University’s investment in a single issuer. Neither the University’s investment policy nor state statutes place limits on amounts that can be invested in any one issuer; however, the State Treasurer Investment Policy states that, with the exception of U.S. Treasury securities, no more than 50 percent of the State’s total funds may be invested in a single security type or with a single financial institution, with diversification percentages being more restrictive on individual securities. At June 30, 2020 and 2019, no investments in any one organization (other than those issued or sponsored by the U.S. government and those in pooled investments) represented 5 percent of total investments. Custodial Credit Risk – for an investment, custodial credit risk is the risk that, in the event of failure of the counterparty, the University will not be able to recover the value of its investments or collateral securities in the possession of an outside party. Investments held by counterparty are held in the University’s name. At June 30, the fair value of the University’s investments consisted of the following: 2020 2019

U.S. government securities $ 12,440 $ 14,965 U.S. Treasury notes 71,762 62,700 Money market funds 18,298 19,746 Equity securities 2,807 2,757 State Regents Endowment Trust funds 584 665

Total investments $ 105,891 $ 100,833

The University’s investments are categorized by maturity dates to reflect the fair values that are sensitive to changes in interest rates.

37 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

The University’s investment schedule by maturity date as of June 30, 2020, is as follows:

U.S. U.S. Maturity Year Government Treasury Ending June 30 Securities Notes Total

2021 $ 1,850 $ 11,928 $ 13,778 2022 2,153 2,660 4,813 2023 545 692 1,237 2024 383 23,256 23,639 2025 280 15,452 15,732 2026 - 2030 746 17,774 18,520 2031 - 2035 884 - 884 2036 - 2040 3,341 - 3,341 2041 - 2045 1,795 - 1,795 2046 - 2050 463 - 463

$ 12,440 $ 71,762 84,202

Investments not subject to maturity dates Money market funds 18,298 Equity funds 2,807 State Regents Endowment Trust funds 584

Total investments $ 105,891

Assets Held in Trust

At June 30, 2020 and 2019, the University held investments in trust for three higher education institutions that are also under the governance of the Board of Regents. Such investments consist of U.S. government securities and money market accounts. These investments are maintained in separate internal investment accounts for each participant for reporting purposes. These investments bear interest at rates from .125 percent to 9.0 percent, with maturities from April 2020 through August 2044. Investments in money market accounts totaled $2 and $2 at June 30, 2020 and 2019, respectively.

38 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Condensed statements of net position and changes in net position of the investments held in trust at fair value are as follows for the years ended June 30: 2020 2019

Net assets held in trust at beginning of period $ 484 $ 470 Withdrawal of funds (20) (20) Net interest, realized gains, and fees 32 20 Net increase (decrease) in fair value (13) 14

Net assets held in trust at end of period $ 483 $ 484

Note 3: Accounts Receivable

Accounts receivable consisted of the following at June 30: 2020 2019

Student tuition and fees $ 32,527 $ 28,903 Auxiliary enterprises and other operating activities 38,053 48,223 Contributions and gifts 10,654 7,803 Federal appropriations 1,675 2,235 Federal, state and private grants, and contracts 43,402 33,647 126,311 120,811 Less allowance for doubtful accounts 12,085 12,252

Net accounts receivable $ 114,226 $ 108,559

39 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 4: Inventories

Inventories consisted of the following at June 30: 2020 2019

Bookstore $ 3,406 $ 3,503 Livestock - College of Agriculture 1,603 2,207 Fire protection publications 2,389 1,931 Food services 329 321 Physical plant 473 510 Other 1,444 859

$ 9,644 $ 9,331

Note 5: Student Loans Receivable

Student loans made through the Federal Perkins Loan Program (the “Program”) comprise substantially all of the loans receivable at June 30, 2020 and 2019. Under this Program, the federal government provides funds for approximately 75 percent of the total contribution for student loans with the University providing the balance. Under certain conditions, such loans can be forgiven at annual rates of 10 percent to 30 percent of the original balance up to maximums of 50 percent to 100 percent of the original loan. The federal government reimburses the University to the extent of 10 percent of the amounts forgiven for loans originated prior to July 1, 1993, under the Program. No reimbursements are provided for loans originated after this date. The Perkins Loan Programs for the OSU Institute of Technology and the Center for Health Sciences were liquidated in fiscal year 2019 reducing the total liability. Amounts refundable to the federal government upon cessation of the Program of approximately $10,104 and $12,303 at June 30, 2020 and 2019, respectively, are reflected in the accompanying statements of net position as noncurrent liabilities. As the University determines that loans are uncollectible and not eligible for reimbursement by the federal government, the loans are written off and assigned to the U.S. Department of Education. The allowance for uncollectible loans only applies to University funded loans and the University portion of federal student loans, as the University is not obligated to fund the federal portion of uncollected student loans. The University has provided an allowance for uncollectible loans, which, in management’s opinion, is sufficient to absorb loans that will ultimately be written off. At June 30, 2020 and 2019, the allowance for uncollectible loans was approximately $108 and $109, respectively.

40 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 6: Capital Assets

Following are the changes in capital assets for the years ended June 30:

2020 June 30, June 30, 2019 Additions Transfers Retirement 2020 Capital assets not being depreciated Land$ 71,342 $ 6,225 $ - $ (197) $ 77,370 Capitalized collections 591 - - - 591 Livestock for educational purposes 4,172 942 - (638) 4,476 Construction in progress 120,411 76,910 (127,453) - 69,868

$ 196,516 $ 84,077 $ (127,453) $ (835) $ 152,305

Other capital assets Nonmajor infrastructure networks$ 171,241 $ 1,046 $ 22,473 $ - $ 194,760 Land improvements 77,152 8,694 4,852 - 90,698 Buildings 2,097,574 87,345 100,128 (3,113) 2,281,934 Leasehold improvements 568 - - - 568 Furniture, fixtures, and equipment 254,048 18,681 - (8,897) 263,832 Library materials 75,087 8,535 - (5,828) 77,794 Intangible assets 9,600 2,974 - (1,191) 11,383

Total other capital assets 2,685,270 127,275 127,453 (19,029) 2,920,969

Less accumulated depreciation Nonmajor infrastructure networks (71,115) (7,497) - - (78,612) Land improvements (45,242) (4,551) - - (49,793) Buildings (676,680) (49,797) - 1,714 (724,763) Leasehold improvements (146) (53) - - (199) Furniture, fixtures, and equipment (189,391) (15,270) - 7,299 (197,362) Library materials (34,129) (7,950) - 5,828 (36,251) Intangible assets (7,985) (1,665) - 1,192 (8,458)

Total accumulated depreciation (1,024,688) (86,783) - 16,033 (1,095,438)

Other capital assets, net $ 1,660,582 $ 40,492 $ 127,453 $ (2,996) $ 1,825,531

Capital assets summary Capital assets not being depreciated$ 196,516 $ 84,077 $ (127,453) $ (835) $ 152,305 Other capital assets, at cost 2,685,270 127,275 127,453 (19,029) 2,920,969 Total cost of capital assets 2,881,786 211,352 - (19,864) 3,073,274 Less accumulated depreciation (1,024,688) (86,783) - 16,033 (1,095,438)

Capital assets, net $ 1,857,098 $ 124,569 $ - $ (3,831) $ 1,977,836

41 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

2019 June 30, June 30, 2018 Additions Transfers Retirement 2019 Capital assets not being depreciated Land$ 70,992 $ 350 $ - $ - $ 71,342 Capitalized collections 485 106 - - 591 Livestock for educational purposes 4,089 83 - - 4,172 Construction in progress 133,270 107,170 (120,029) - 120,411

$ 208,836 $ 107,709 $ (120,029) $ - $ 196,516

Other capital assets Nonmajor infrastructure networks$ 141,108 $ - $ 30,133 $ - $ 171,241 Land improvements 71,918 - 5,234 - 77,152 Buildings 2,002,972 10,103 84,499 - 2,097,574 Leasehold improvements 568 - - - 568 Furniture, fixtures, and equipment 245,308 20,614 163 (12,037) 254,048 Library materials 71,970 8,871 - (5,754) 75,087 Intangible assets 9,411 1,571 - (1,382) 9,600

Total other capital assets 2,543,255 41,159 120,029 (19,173) 2,685,270

Less accumulated depreciation Nonmajor infrastructure networks (64,802) (6,313) - - (71,115) Land improvements (41,288) (3,954) - - (45,242) Buildings (630,342) (46,338) - - (676,680) Leasehold improvements (70) (76) - - (146) Furniture, fixtures, and equipment (184,243) (14,892) - 9,744 (189,391) Library materials (31,910) (7,772) - 5,553 (34,129) Intangible assets (7,772) (1,319) - 1,106 (7,985)

Total accumulated depreciation (960,427) (80,664) - 16,403 (1,024,688)

Other capital assets, net $ 1,582,828 $ (39,505) $ 120,029 $ (2,770) $ 1,660,582

Capital assets summary Capital assets not being depreciated$ 208,836 $ 107,709 $ (120,029) $ - $ 196,516 Other capital assets, at cost 2,543,255 41,159 120,029 (19,173) 2,685,270 Total cost of capital assets 2,752,091 148,868 - (19,173) 2,881,786 Less accumulated depreciation (960,427) (80,664) - 16,403 (1,024,688)

Capital assets, net $ 1,791,664 $ 68,204 $ - $ (2,770) $ 1,857,098

42 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 7: Unearned Revenue

Unearned revenue consists of the following at June 30: 2020 2019

Prepaid tuition and fees$ 12,709 $ 11,753 Prepaid athletic ticket sales 4,558 7,368 Other auxiliary enterprises 8,328 2,734 Grants and contracts 14,210 13,629

$ 39,805 $ 35,484

Note 8: Long-Term Liabilities

Long-term liability activity was as follows for the years ended June 30: 2020 Balance Balance Amounts June 30, June 30, Due Within 2019 Additions Reductions 2020 One Year Bonds and Capital Lease Obligations Revenue bonds payable $ 475,030 $ 271,755 $ (243,115) $ 503,670 $ 8,790 Revenue bonds premium payable 16,456 35,168 (4,159) 47,465 2,585 Capital lease obligations, including unexpended funds of $58,105 394,835 - (41,055) 353,780 15,989

Total bonds and capital leases 886,321 306,923 (288,329) 904,915 27,364

Other Liabilities Accrued compensated absences 32,887 11,903 (13,057) 31,733 13,057 Landfill closure and postclosure costs 2,937 - - 2,937 - Accounts payable for noncurrent assets 9,152 4,610 (9,152) 4,610 - Federal loan program contribution payable 12,303 - (2,199) 10,104 - Pension liability 365,640 7,378 - 373,018 - Other postemployment benefits 14,027 1,521 - 15,548 - Asset retirement obligation 494 38 - 532 - Student deposits 680 397 (375) 702 176 Unearned revenue 35,484 39,805 (35,484) 39,805 39,805 Accrued interest payable 7,546 5,409 (7,546) 5,409 - Accrued workers' compensation claims 5,655 723 (1,630) 4,748 1,630 Total other liabilities 486,805 71,784 (69,443) 489,146 54,668

$ 1,373,126 $ 378,707 $ (357,772) $ 1,394,061 $ 82,032

43 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

2019 Balance Balance Amounts June 30, June 30, Due Within 2018 Additions Reductions 2019 One Year

Bonds and Capital Lease Obligations Revenue bonds payable $ 412,845 $ 75,545 $ (13,360) $ 475,030 $ 12,590 Revenue bonds premium payable 7,751 9,051 (346) 16,456 647 Capital lease obligations, including unexpended funds of $33,713 466,886 12,866 (84,917) 394,835 17,991 Total bonds and capital leases 887,482 97,462 (98,623) 886,321 31,228

Other Liabilities Accrued compensated absences 29,751 16,972 (13,836) 32,887 13,836 Landfill closure and postclosure costs 2,937 - - 2,937 - Accounts payable for noncurrent assets 11,638 9,152 (11,638) 9,152 - Federal loan program contribution payable 17,486 - (5,183) 12,303 - Pension liability 380,149 - (14,509) 365,640 - Other postemployment benefits 7,230 6,797 - 14,027 - Asset retirement obligation - 494 - 494 - Student deposits 422 375 (117) 680 170 Unearned revenue 35,842 35,484 (35,842) 35,484 35,337 Accrued interest payable 6,887 7,546 (6,887) 7,546 - Accrued workers' compensation claims 5,155 2,957 (2,457) 5,655 2,457 Total other liabilities 497,497 79,777 (90,469) 486,805 51,800

$ 1,384,979 $ 177,239 $ (189,092) $ 1,373,126 $ 83,028

Additional information regarding revenue bonds payable is included at Note 9. Additional information regarding capital lease obligations is included at Note 10. Landfill Closure and Postclosure Costs: State laws and regulations require the University to place a final cover on its landfill site and to perform certain maintenance and monitoring functions, including evaluation of well water samples, at the site after closure. The landfill, containing radioactive and chemical waste, is no longer being used, but the University has not placed a final cover on it. Estimated closure and postclosure costs as of June 30, 2020 and 2019, are $2,937. Actual cost may differ due to inflation, changes in technology, or changes in regulations.

44 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 9: Revenue Bonds

Revenue bonds payable consisted of the following at June 30: 2020 2019

4.25% - 4.875% Student Union System Revenue Bonds of 2002 and 2004 issued in the original amount of $4,135 and mature in varying annual amounts to July 1, 2023 $ 675 $ 825

4.05% - 4.75% Oklahoma State University - Okmulgee Student Fee Revenue Bonds, Series 2004, issued in the original amount of $3,000 and mature in varying annual amounts to September 1, 2024 985 1,160

3.0% - 5.0% General Revenue Bonds, Series 2009A, issued in the original amount of $61,745 and partially refunded in June 2017, the remainder matured July 2019 - 965

3.0% - 4.917% General Revenue Bonds, Series 2010A, issued in the original amount of $39,120 and mature in varying annual amounts to August 1, 2039 (Refunded in May 2020) - 32,220

3.25% - 5.01% General Revenue Bonds, Federally Taxable Series 2010B, issued in the original amount of $13,265 and mature in varying annual amounts to August 1, 2023 4,435 5,415

2.5% - 5.0% General Revenue Bonds, Series 2010C, issued in the original amount of $145,320 and mature in varying annual amounts to August 1, 2039 (Refunded in May 2020) - 119,150

2.0% - 2.75% General Revenue Refunding Bonds, Series 2013A, issued in the original amount of $17,785 and mature in varying annual amounts to July 1, 2032 12,410 13,230

2.0% - 4.5% General Revenue Refunding Bonds, Series 2013B, issued in the original amount of $19,365 and mature in varying annual amounts to August 1, 2033 (Refunded in May 2020) - 12,680

Total forward 18,505 185,645

45 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

2020 2019

Total forward $ 18,505 $ 185,645

4.0% - 5.0% General Revenue Bonds, Series 2013C, issued in the original amount of $80,230 and mature in varying annual amounts to August 1, 2043 (Refunded in May 2020) - 73,840

1.15% - 4.076% General Revenue Bonds, Federally Taxable Series 2016A, issued in the original amount of $60,300 and mature in varying annual amounts to August 1, 2045 56,170 57,565

3.00% - 5.00% General Revenue Refunding Bonds, Series 2017A, issued in the original amount of $52,850 and mature in varying annual amounts to July 1, 2039 52,850 52,850

3.00% - 4.00% General Revenue Bonds, Series 2018A, issued in the original amount of $16,065 and mature in varying annual amounts to August 1, 2047 15,270 15,580

2.15% - 4.35% General Revenue Bonds Federally Taxable, Series 2018B, issued in the original amount of $14,610 and mature in varying annual amounts to August 1, 2047 13,575 14,005

3.00% - 5.00% General Revenue and Refunding Bonds, Series 2019A, issued in the original amount of $62,990 and mature in varying annual amounts to August 1, 2048 62,990 62,990

2.55% - 4.13% General Revenue and Refunding Bonds, Federally Taxable Series 2019B, issued in the original amount of $12,555 and mature in varying annual amounts to August 1, 2048 12,555 12,555

4.00% - 5.00% General Revenue Refunding Bonds, Series 2020A, issued in the original amount of $118,520 and mature in varying annual amounts to September 1, 2036 118,520 -

3.00% - 5.00% General Revenue Bonds, Series 2020B issued in the original amount of $26,490 and mature in varying annual amounts to September 1, 2050 26,490 -

1.89% - 3.81% General Revenue Refunding Bonds, Federally Taxable Series 2020C, issued in the original amount of $126,745 and mature in varying annual amounts to September 1, 2050 126,745 -

Total revenue bonds $ 503,670 $ 475,030

46 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Principal and interest on these revenue bonds are collateralized by a pledge of revenues produced by the facilities constructed with the bond proceeds, student activity fees and facility fees, and/or a pledge of certain contributions made for the benefit of the University. In the case of the General Revenue Bonds, the principal and interest is secured by a pledge of the general revenues of the financing system created in fiscal year 2009. General revenues consist of all lawfully available funds excluding: (i) revenues appropriated by the Oklahoma Legislature from tax receipts; (ii) funds whose purpose has been restricted by the donors or grantors thereof to a purpose inconsistent with the payment of obligations; and (iii) funds pledged pursuant to separate bond resolutions to revenue bond issues issued and outstanding prior to the creation of the financing system. The financing system is currently comprised of the Oklahoma State University-Stillwater and Oklahoma State University-Tulsa campuses. Certain of these bonds payable are callable at the option of the Board of Regents. The General Revenue Bonds have varying maturity dates as noted, with the last payment date in September 2050. The University is required to maintain certain renewal and replacement and debt service reserves aggregating $292 in 2020 and 2019. The University’s reserve balances exceeded these amounts at June 30, 2020 and 2019. The University has secured insurance contracts with insurance companies to cover the reserve requirements in the debt agreements of the Oklahoma State University – Okmulgee Student Fee Revenue Bonds, Series 2004. There is no reserve requirement for the General Revenue Bond issues. The General Revenue and Refunding Bonds, Series 2019A in the par amount of $62,990, and the General Revenue and Refunding Bonds, Series 2019B in the par amount of $12,555 closed on May 9, 2019. Gross bond proceeds, including discount and premium, totaled $71,890 and $12,525, respectively. These bond issues resulted in a premium of $9,051 which is being amortized over the life of the bonds. A portion of the Series 2019 bond proceeds were used to advance refund Oklahoma Development Finance Authority leases. The University’s advance refunding resulted in a net present value savings of $10,367 and a cash flow savings of $13,760. The General Revenue and Refunding Bonds, Series 2020A in the par amount of $118,520, the General Revenue Bonds, Series 2020B in the par amount of $26,490, and the General Revenue and Refunding Bonds, Federally Taxable Series 2020C in the par amount of $126,745 closed on May 13, 2020. Gross bond proceeds, including discount and premium, totaled $149,836, $30,045, and $126,486, respectively. These bond issues resulted in a premium of $35,168 which is being amortized over the life of the bonds.

47 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Proceeds from Series 2020A were used for the current refunding of General Revenue Bonds Series 2010A and 2010C. A portion of the Series 2020C bond proceeds were used for the advance refunding of General Revenue Bonds 2013C and for the current refunding of Oklahoma Development Finance Authority leases. The University’s refunding resulted in a net present value saving of $36,974 and a cash flow savings of $29,423. The advance refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $15,105. This difference, reported in the accompanying financial statements as a deferred outflow of resources, is being charged to interest expense starting in fiscal year 2021 using the straight-line method, which is not materially different than the effective-interest method.

Maturity Information

The scheduled maturities of the revenue bonds are as follows at June 30, 2020: Total Year Ending June 30 Principal Interest Payment

2021 $ 8,790 $ 17,672 $ 26,462 2022 9,545 19,548 29,093 2023 17,960 19,113 37,073 2024 21,490 18,551 40,041 2025 21,950 17,876 39,826 2026 - 2030 115,015 74,582 189,597 2031 - 2035 118,045 47,810 165,855 2036 - 2040 121,165 25,129 146,294 2041 - 2045 47,700 8,701 56,401 2046 - 2050 20,445 1,598 22,043 2051 - 2055 1,565 24 1,589

$ 503,670 $ 250,604 $ 754,274

48 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 10: Lease Obligations

Equipment Leases

The University has acquired certain equipment under various lease-purchase contracts and other capital lease agreements. The cost of University assets held under capital leases totaled $1,592 and $1,592 as of June 30, 2020 and 2019, respectively. Accumulated amortization of leased equipment totaled $796 and $699 at June 30, 2020 and 2019, respectively.

Oklahoma Capital Improvement Authority Leases

The Oklahoma Capital Improvement Authority (OCIA) is authorized to issue bonds, notes, or other obligations to finance construction of buildings or other facilities for the State of Oklahoma, its departments and agencies. OCIA may also issue refunding bonds to refinance its existing obligations. The OCIA issues bonds and the State Regents for Higher Education allocate amounts to the University, who then enters into lease agreements with OCIA for projects being funded. The lease agreements provide for the University to make specified monthly payments, however during the years ended June 30, 2020 and 2019, OCIA made lease principal and interest payments totaling $2,695 and $4,726, respectively, on behalf of the University. These on-behalf payments have been recorded as restricted state appropriations, shown as on-behalf payments for OCIA capital leases, in the University’s statements of revenues, expenses, and changes in net position. The leases range from 5 - 25 years and secure the OCIA bond debt and any future debt that might be issued to refund earlier bond issues. There were no undrawn allotments as of June 30, 2020 and 2019. As OCIA restructures the bond obligations, the leases are also restructured which can result in a gain or loss on restructuring, which is recorded as deferred inflows of resources or deferred outflows of resources and amortized over the shorter of the remaining life of the old lease or the life of the new lease. As of June 30, 2020 and 2019, $4,137 and $4,456, respectively, were included in deferred inflows of resources. The balance outstanding for these leases, including premiums, was $59,094 and $59,182 as of June 30, 2020 and 2019, respectively.

49 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Oklahoma Development Finance Authority Master Lease Program

Master Lease payable consisted of the following at June 30: 2020 2019 0.75% - 4.25% ODFA Oklahoma State System of Higher Education Master Lease Revenue Bonds, Series 2010A, allocated to the University in the original amount of $10,099 and mature in varying annual amounts to May 15, 2030 (Refunded in May 2020)$ - $ 6,370

0.45% - 5.00% ODFA Oklahoma State System of Higher Education Master Lease Revenue Bonds, Series 2011C, allocated to the University in the original amount of $11,651 and mature in varying annual amounts to May 15, 2031 1,136 8,118

2.00% - 4.375% ODFA Oklahoma State System of Higher Education Master Lease Revenue Bonds, Series 2013A, allocated to the University in the original amount of $7,510 and mature in varying annual amounts to May 15, 2033 5,521 5,851

0.66% - 2.75% ODFA Oklahoma State System of Higher Education Master Lease Revenue Bonds, Series 2014D, allocated to the University in the original amount of $2,730 and mature in varying annual amounts to November 15, 2021 579 980

1.05% - 2.85% ODFA Oklahoma State System of Higher Education Master Lease Revenue Bonds, Series 2016B, allocated to the University in the original amount of $6,208 and mature in varying annual amounts to May 15, 2026 3,829 4,428

2.00% - 2.75% ODFA Oklahoma State System of Higher Education Master Lease Revenue Bonds, Series 2017A, allocated to the University in the original amount of $2,150 and mature in varying annual amounts to November 15, 2026 1,475 1,687

Total forward 12,540 27,434

50 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

2020 2019

Total forward$ 12,540 $ 27,434

1.50% - 4.00% ODFA Oklahoma State System of Higher Education Master Lease Revenue Bonds, Series 2017B, allocated to the University in the original amount of $925 and mature in varying annual amounts to November 15, 2031 748 803

2.00% - 4.00% ODFA Oklahoma State System of Higher Education Master Lease Revenue Bonds, Series 2017C, allocated to the University in the original amount of $933 and mature in varying annual amounts to May 15, 2027 685 769

4.00% ODFA Oklahoma State System of Higher Education Master Lease Revenue Bonds, Series 2018A, allocated to the University in the original amount of $1,604 and mature in varying annual amounts to December 1, 2028 1,311 1,499

0.45% - 3.00% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2010A, allocated to the University in the original amount of $3,194 and matured on May 15, 2020 - 334

0.74% - 6.05% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2010B, allocated to the University in the original amount of $9,150 and mature in varying annual amounts to May 15, 2030 (Refunded in May 2020) - 5,087

0.45% - 5.00% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2011A, allocated to the University in the original amount of $9,966 and mature in varying annual amounts to May 15, 2031 (Refunded in May 2020) - 6,978

Total forward 15,284 42,904

51 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

2020 2019

Total forward$ 15,284 $ 42,904

0.79% - 5.57% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2011C, allocated to the University in the original amount of $2,023 and mature in varying annual amounts to May 15, 2031 (Refunded in May 2020) - 1,390

0.40% - 3.85% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2011D, allocated to the University in the original amount of $11,090 and mature in varying annual amounts to May 15, 2026 5,149 5,925

2.00% - 4.375% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2013A, allocated to the University in the original amount of $5,055 and mature in varying annual amounts to May 15, 2033 3,687 3,912

2.00% - 5.00% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2014A, allocated to the University in the original amount of $1,880 and mature in varying annual amounts to May 15, 2028 1,172 1,296

2.00% - 5.00% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2014E, allocated to the University in the original amount of $45,882 and mature in varying annual amounts to May 15, 2044 40,594 41,582

Total forward 65,886 97,009

52 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

2020 2019

Total forward$ 65,886 $ 97,009 2.00% - 5.00% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2014F, allocated to the University in the original amount of $8,680 and mature in varying annual amounts to May 15, 2044 7,704 7,890

0.80% - 4.50% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2014G, allocated to the University in the original amount of $3,205 and mature in varying annual amounts to May 15, 2044 2,824 2,894

2.00% - 5.00% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2015A, allocated to the University in the original amount of $20,749 and mature in varying annual amounts to May 15, 2034 16,616 17,500

2.00% - 5.00% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2015B, allocated to the University in the original amount of $42,145 and mature in varying annual amounts to May 15, 2045 36,842 37,990

0.54% - 4.87% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2015C, allocated to the University in the original amount of $75,315 and mature in varying annual amounts to June 1, 2045 67,784 69,378

0.39% - 4.92% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2015E, allocated to the University in the original amount of $7,870 and mature in varying annual amounts to May 15, 2045 7,165 7,340

0.50% - 4.00% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2016D, allocated to the University in the original amount of $30,089 and mature in varying annual amounts to May 15, 2031 25,721 26,880

Total forward 230,542 266,881

53 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

2020 2019

Total forward$ 230,542 $ 266,881 0.07% - 3.875% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2016E, allocated to the University in the original amount of $11,245 and mature in varying annual amounts to May 15, 2046 10,250 10,514

2.00% - 4.00% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2016G, allocated to the University in the original amount of $2,684 and mature in varying annual amounts to November 15, 2021 793 1,335

1.00% - 4.00% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2017A, allocated to the University in the original amount of $17,933 and mature in varying annual amounts to May 15, 2047 15,094 16,049

1.00% - 4.00% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2017B, allocated to the University in the original amount of $13,075 and mature in varying annual amounts to May 15, 2047 11,495 12,026

2.00% - 4.00% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2017C, allocated to the University in the original amount of $10,125 and mature in varying annual amounts to December 1, 2027 6,828 8,142

3.60% - 4.75% ODFA Oklahoma State System of Higher Education Master Real Property Lease Revenue Bonds, Series 2019A, allocated to the University in the original amount of $8,738 and mature in varying annual amounts to June 1, 2039 8,448 8,716

283,450 323,663

Premiums 10,057 10,755

Total $ 293,507 $ 334,418

54 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

In connection with the ODFA Master Lease Program, the University has recorded a receivable from ODFA, totaling $0 and $5,861 for the allotments not drawn down as of June 30, 2020 and 2019, respectively. A corresponding lease obligations payable to ODFA for the total amounts of the undrawn allotments has also been recorded in unexpended plant funds. All bond issuance costs were expensed. Future minimum lease payments for all capital lease obligations as of June 30, 2020, are as follows: Year Ending Equipment ODFA OCIA June 30 Leases Leases Leases Interest Total

2021$ 60 $ 14,227 $ 1,702 $ 14,052 $ 30,041 2022 68 14,034 1,783 13,564 29,449 2023 73 13,513 4,155 13,041 30,782 2024 79 13,549 4,344 12,400 30,372 2025 86 14,009 4,473 11,708 30,276 2026 - 2030 538 60,964 25,614 47,978 135,094 2031 - 2035 275 55,290 17,023 31,048 103,636 2036 - 2040 - 50,420 - 18,724 69,144 2041 - 2045 - 54,171 - 7,497 61,668 2046 - 2050 - 3,330 - 160 3,490

Totals $ 1,179 $ 293,507 $ 59,094 $ 170,172 $ 523,952

Note 11: Funds Held In Trust By Others

Beneficial Interest in State School Land Funds

The University has a beneficial interest in the “Section Thirteen Fund State Educational Institutions” and the “New College Fund” held in the care of the Commissioners of the Land Office as Trustees. The University has the right to receive annually 30 percent of the distributions of income produced by “Section Thirteen Fund State Educational Institutions” assets and 100 percent of the distribution of income produced by the University’s “New College Fund.” The University received $7,786 and $7,913 during the years ended June 30, 2020 and 2019, respectively, which is restricted to the acquisition of buildings, equipment, or other capital items. Present state law prohibits the distribution of any corpus of these funds to the beneficiaries. The total trust fund for the University, held in trust by the Commissioners of the Land Office, is approximately $141,185 and $153,719 as of June 30, 2020 and 2019, respectively.

55 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Oklahoma State Regents Endowment Trust Fund

The State has matched contributions received under the Endowed Chair Program. The State match amount, plus retained accumulated earnings, totaled approximately $192,457 and $206,725 at June 30, 2020 and 2019, respectively, and is invested by the Oklahoma State Regents on behalf of the University. The University is entitled to receive an annual distribution on these funds; however, since legal title of the State match amount is retained by the Oklahoma State Regents, such funds have not been reflected in the accompanying financial statements. With regard to private matching funds, approximately $2,641 and $2,789 from donor matching funds and $410 and $433 in institutional matching funds as of June 30, 2020 and 2019, respectively, are on deposit with the Oklahoma State Regents for Higher Education, with the remaining matching funds of approximately $247,707 and $243,422 as of June 30, 2020 and 2019, respectively, held by the Oklahoma State University Foundation.

Note 12: Retirement Plans

Beginning in 1935, eligible employees were guaranteed a 50 percent income replacement upon retirement at age 65 or 25 years of service. Upon retirement, an eligible retiree could receive supplemental lifetime income via the OSU Supplement Plan. However, with the establishment of the Teacher’s Retirement System of Oklahoma (OTRS) in 1943 and establishment of OSU’s Defined Contribution Plan in 1971, with TIAA-CREF as the provider, it was determined that no employees would become eligible for supplemental income after June 30, 1996. However, OSU does continue to have a limited number of retirees (or surviving spouses) receiving monthly income from this Plan. The University has provided eligible employees the opportunity to participate in a defined contribution plan, the TIAA plan (formerly TIAA-CREF), and two defined benefit plans, the Teachers’ Retirement System of Oklahoma (OTRS) and the Supplemental Retirement Plan. Effective June 30, 1996, the University terminated the Supplemental Retirement Plan such that no future retirees will be eligible to receive benefits under the plan. The TIAA and the OTRS plans are integrated with the University’s ongoing retirement program. Effective July 1, 1993, these eligibility requirements were modified; however, any employee eligible under the previous requirements was included in the modified plan pursuant to a grandfather provision. Eligible employees include all faculty, exempt and nonexempt continuous regular staff who are scheduled to work at least 1,560 hours annually. Employees hired after June 30, 2004, are not eligible for the integrated plan. The University’s retirement program requires the University to contribute 11.5 percent of salary for employees hired on or after July 1, 1993, and for employees hired before July 1, 1993, the University pays the first $1.5 of the OTRS cost in the fiscal year plus 10 percent of salary over $7.8 up to $48 and 11.5 percent on salary over $48. These retirement contributions are first distributed to the OTRS on mandatory members and optional members who were grandfathered July 1, 1993, as determined by the calculation of OTRS contributions as defined below (see Contributions). Any remaining retirement contributions are distributed to the TIAA plan.

56 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Plan Description

Benefits Provided

OTRS provides defined retirement benefits based on members’ final compensation, age, and term of service. In addition, the retirement program provides for benefits upon disability and to survivors upon the death of eligible members. Title 70 O.S. Sec. 17-105 defines all retirement benefits. The authority to establish and amend benefit provisions rests with the State Legislature. Benefit provisions include:

57 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

 Upon the death of a retired member, OTRS will pay $5 to the designated beneficiary, in addition to the benefits provided for the retirement option selected by the member.

 Upon separation from OTRS, members’ contributions are refundable with interest based on certain restrictions in the plan, or by the IRC.

 Members may elect to make additional contributions to a tax-sheltered annuity program up to the exclusion allowance provided under the IRC under Code Section 403(b).

Contributions

58 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

In addition, the University is required to contribute 2.5 percent for some employees who elect not to participate in OTRS due to the one-time irrevocable election provision which became effective July 1, 2004. The University’s total contributions for employer contributions and fees for the years ended June 30, 2020, 2019, and 2018, were $19,906, $23,287, and $24,581, respectively. The University’s contributions for OTRS members for the years ended June 30, 2020, 2019, and 2018, were $17,045, $18,397, and $18,699, respectively, these amounts being the majority of the required contributions for OTRS members for each year. In addition for the years ended June 30, 2020 and 2019, the State of Oklahoma contributed on- behalf of the University $17,530 and $21,698, respectively. The University recognized these contributions in the University’s Statement of Revenues, Expenses, and Changes in Net Position as both revenues and compensation and employee benefit expense. These on-behalf payments do not meet the definition of a special funding situation.

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OTRS

At June 30, 2020 and 2019, the University reported a liability of $366,900 and $360,499, respectively, for its proportionate share of the OTRS’s net pension liability. The net pension liability was measured as of June 30, 2019 and 2018, respectively, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of those dates. The University’s proportion of the net pension liability was based on its proportionate share based on the University’s actual contributions to the plan relative to the actual contributions of the plan from all participating employers. An additional adjustment is made to this allocation based on three entity’s, short-term obligation to pay a 2.5 percent funding surcharge associated with the Alternate Retirement Plan. Based upon this information, the University’s proportion was 5.54 percent, 5.92 percent, and 5.58 percent for the years ended June 30, 2020, 2019, and 2018, respectively. There were no changes of benefit terms that affected measurement of the total pension liability during the measurement period.

59 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Differences between expected and actual experience $ 18,835 $ 15,723 Changes of assumptions 19,263 12,382 Net difference between projected and actual earning on pension plan investments 2,488 - Changes in proportion and differences between the University’s contributions and the University proportionate share of contributions 27,256 19,384 University’s contributions subsequent to the measurement date 18,807 -

Total $ 86,649 $ 47,489

2019 Deferred Deferred Outflows of Inflows of Resources Resources

Total$ 94,094 $ 49,298

60 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Year Ending June 30,

2021 $ 20,328 2022 (4,493) 2023 (1,100) 2024 5,660 2025 (42)

$ 20,353

Actuarial Assumptions

The total pension liability in the June 30, 2019 and 2018, actuarial valuations were determined using the following actuarial assumptions: 2020 2019

61 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

2019 Long-Term Target Expected Asset Real Rate Asset Class Allocation of Return

Domestic Equity 38.5% 7.5% International Equity 19.0% 8.5% Fixed Income 23.5% 2.5% Real Estate** 9.0% 4.5% Alternative Assets 10.0% 6.1%

100.0%

**The Real Estate total expected return is a combination of U.S. Direct Real Estate (unlevered) and U.S. Value added Real Estate (unlevered)

62 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

2018 Long-Term Target Expected Asset Real Rate Asset Class Allocation of Return

Domestic Equity 38.5% 7.5% International Equity 19.0% 8.5% Fixed Income 23.5% 2.5% Real Estate** 9.0% 4.5% Alternative Assets 10.0% 6.1%

100.0%

**The Real Estate total expected return is a combination of U.S. Direct Real Estate (unlevered) and U.S. Value added Real Estate (unlevered)

Discount Rate

63 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Sensitivity of the Net Pension Liability to Changes in the Discount Rate

2020 1% Current 1% Decrease Discount Rate Increase (6.50%) (7.50%) (8.50%) University's proportionate share of the net pension liability $ 517,002 $ 366,900 $ 241,332

2019 1% Current 1% Decrease Discount Rate Increase (6.50%) (7.50%) (8.50%) University's proportionate share of the net pension liability $ 509,581 $ 360,499 $ 231,781

Pension Plan Fiduciary Net Position

Detailed information about the pension plan’s fiduciary net position is available in the separately issued OTRS’ financial report.

Payable to the Pension Plan

The University reported a payable of $1,809 and $2,107 for the outstanding amount of contributions to the pension plan required for the years ended June 30, 2020 and 2019, respectively.

Defined Contribution Plan

64 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

The University’s total payroll for the years ended June 30, 2020, 2019, and 2018, was approximately $479,193, $475,644, and $458,549, respectively. The University’s contributions to the TIAA were calculated using the base salary amount of approximately $287,041, $268,170, and $258,023 in 2020, 2019, and 2018, respectively. The University funded participant ARP and integrated plan contributions to the TIAA of approximately $24,638, $22,161 and $20,631 in 2020, 2019 and 2018, respectively, which represents approximately 7 percent of covered payroll in each period. Employees may voluntarily contribute, on a pretax basis, to the 403(b) Supplemental Tax Deferred Annuity Program and/or the 457(b) Deferred Compensation Plan, but such contributions are not considered part of the University’s retirement program. As of June 30, 2020, 2019, and 2018, the TIAA held no related party investments of the University.

Oklahoma Law Enforcement Retirement System (OLERS)

Plan Description

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OLERS

At June 30, 2020 and 2019, the University reported a liability of $5,005 and $3,753, respectively, for its proportionate share of the OLERS’s net pension liability. The net pension liability was measured as of June 30, 2019 and 2018, respectively, and the total pension liability used to calculate the net pension liability which was determined by an actuarial valuation as of those dates. The University’s proportion of the net pension liability was based on its proportionate share based on the University’s actual contributions to the plan relative to the actual contributions of the plan from all participating employers. Based upon this information, the University’s proportion was 3.45 percent, 3.50 percent, and 2.95 percent for the years ended June 30, 2020, 2019, and 2018, respectively. There were no changes of benefit terms that affected measurement of the total pension liability during the measurement period.

65 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

2020 Deferred Deferred Outflows of Inflows of Resources Resources

Differences between expected and actual experience $ 651 $ 169 Changes of assumptions 17 - Net difference between projected and actual earning on pension plan investments 737 - Changes in proportion and differences between the University’s contributions and the University proportionate share of contributions 369 389 University’s contributions subsequent to the measurement date 311 -

Total $ 2,085 $ 558

2019 Deferred Deferred Outflows of Inflows of Resources Resources

Differences between expected and actual experience $ 620 $ 267 Changes of assumptions 25 - Net difference between projected and actual earning on pension plan investments 257 - Changes in proportion and differences between the University’s contributions and the University proportionate share of contributions 480 89 University’s contributions subsequent to the measurement date 294 -

Total$ 1,676 $ 356

66 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Supplemental Retirement Plan

Plan Description

The University sponsors the Supplemental Retirement Plan (the “Plan”), a single-employer public employee retirement system, which was approved in 1971 and terminated as of June 30, 1996. Individuals employed by the University on or after July 1, 1980, when the TIAA-CREF annuity contribution became fully funded, were ineligible for participation in the Plan. Benefits vested upon retirement. The Plan guaranteed eligible employees with 25 years of service, provided they continuously participated in TIAA/CREF and the OTRS, a level of annual retirement benefit if Social Security, the OTRS, and the TIAA-CREF, when applicable, do not equal one-half of the average of the highest three years’ earnings. Authority to establish and amend benefit provisions rests with the Board of Regents. The Plan does not issue a stand-alone financial report. Funding Policy

Contribution requirements of the University are established and may be amended by the Board of Regents. All contributions are made by the University. Benefits are funded under a “pay as you go” funding method; however, expenses are recorded as benefits accumulate.

Other Postemployment Benefits

Life Insurance

Plan Description

The University pays life insurance premiums for individuals who meet the specified criteria to be considered a retiree as of the last day of continuous regular employment. Eligible retirees must (a) be at least 62 years of age and have at least 10 continuous regular years of service, (b) have worked for the University for at least 25 years in a continuous regular appointment, regardless of age, or (c) meet the OTRS guidelines. In addition, the individual must also have been enrolled in the University’s life insurance program prior to retirement. Each retiree is eligible to receive $6 of life insurance coverage at an annual cost to the University of $.00029 per $1 of coverage. As of June 30, 2020 and 2019, there were approximately 5,900 active employees and 1,900 retirees. Authority to establish and amend benefit provisions rests with the Board of Regents.

Funding Policy

Contribution requirements of the University are established and may be amended by the Board of Regents. All contributions are made by the University. Benefits are funded under a “pay as you go” funding method and there are no plan assets; however, expenses are recorded as benefits accumulate.

67 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Health Care Implicit Rate Subsidy

Plan Description

The University allows retirees to remain in the University’s health care plan, although the retiree is required to pay 100 percent of the premium. By allowing retirees to be included in the same pool as active employees, this gives retirees a benefit of a lower premium cost than if the retiree obtained health insurance on his or her own, which is referred to as the implicit rate subsidy. As of June 30, 2020, there were approximately 5,900 active employees and 200 retirees in the health care plan. Liabilities, Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Other Postemployment Benefits

At June 30, 2020 and 2019, the University reported a combined liability of $15,548 and $14,027, respectively, for the life insurance and health care implicit rate subsidy. For the years ended June 30, 2020 and 2019, the University recognized OPEB expense of $1,931 and $1,406, respectively. The University reported deferred outflows of resources related to other postemployment benefits from the following sources for the years ended June 30, 2020 and 2019, as noted below. 2020 2019 Deferred Deferred Outflows of Outflows of Resources Resources

Differences between expected and actual experience$ 3,292 $ 3,751 Changes of assumptions 3,661 2,598

Total$ 6,953 $ 6,349

The balance as of June 30, 2020, of the deferred outflows of resources will be recognized in the OPEB expense in the future fiscal years as noted below. Years ending June 30: 2021$ 949 2022 949 2023 949 2024 949 2025 948 Thereafter 2,209

$ 6,953

68 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Actuarial Assumptions

The other postemployment liability in the June 30, 2020 and 2019, actuarial valuation was determined using the following actuarial assumptions: 2020 2019

Changes in the Other Postemployment Liability

2020 2019

Total OPEB liability, beginning of year$ 14,027 $ 7,230 Changes for the year Service cost 490 337 Interest 492 275 Changes in assumptions 1,541 2,923 Differences between expected and actual experience 11 4,220 Benefits payments (1,013) (958)

Net change in total OPEB liability 1,521 6,797

Total OPEB liability, end of year $ 15,548 $ 14,027

69 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Sensitivity of the Other Postemployment Liability to Changes in the Discount Rate

2020 1% Current 1% Decrease Discount Rate Increase (1.66%) (2.66%) (3.66%)

University's net other postemployment liability$ 17,746 $ 15,548 $ 13,761

2019 1% Current 1% Decrease Discount Rate Increase (2.51%) (3.51%) (4.51%)

University's net other postemployment liability$ 15,819 $ 14,027 $ 12,554

Sensitivity of the Other Postemployment Liability to Changes in the Health Care Trend Rates

The following table presents the net other postemployment liability as of June 30, 2020 and 2019, calculated using a health care trend rate starting at a rate 1 percenter higher and lower than the initial rate of 7.50 percent and 8.00 percent as of June 30, 2020 and 2019, respectively. 2020 1% Current 1% Decrease Discount Rate Increase (6.50%) (7.50%) (8.50) University's net other postemployment benefit $ 14,944 $ 15,548 $ 16,273

2019 1% Current 1% Decrease Discount Rate Increase (7.00%) (8.00%) (9.00) University's net other postemployment benefit $ 13,537 $ 14,027 $ 14,609

70 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

OTRS/Health Care Plan

Plan Description

At retirement, if an employee is enrolled in the OTRS plan and is participating in the University’s health care plan, the retiree may elect to continue health insurance coverage in the University’s health care plan. OTRS will pay the first one hundred dollars to one hundred and five dollars of monthly premiums for each participating retiree (not dependents). The actual amount paid by OTRS is determined by total service and average salary at retirement. As of June 30, 2020 and 2019, the University recorded an asset for other postemployment benefits of $3,428 and $3,827 for its proportionate share of the OTRS’s OPEB, deferred outflows of $112 and $172 and deferred inflows of $1,764 and $2,675, respectively. These balances were measured as of June 30, 2019 and 2018, and were determined by an actuarial valuation.

Actuarial Assumptions

The other postemployment benefit at June 30, 2020 and 2019, was determined using the following actuarial assumptions: June 30, 2020 June 30, 2019

71 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Sensitivity of the Other Postemployment Benefit to Changes in the Discount Rate

The following table presents the other postemployment benefit as of June 30, 2020, calculated using the current discount rate of 7.50 percent and what it would be using a 1 percent higher (8.50 percent) and 1 percent lower (6.50 percent) discount rate. 2019 1% Current 1% Decrease Discount Rate Increase (6.50%) (7.50%) (8.50%) University's proportionate share of the net other postemployment benefit$ 1,149 $ 3,428 $ 5,375

2018 1% Current 1% Decrease Discount Rate Increase (6.50%) (7.50%) (8.50%) University's proportionate share of the net other postemployment benefit$ 1,344 $ 3,827 $ 5,949

Note 13: Risk Management

Due to the diverse risk exposure of the University and its constituent agencies, the insurance portfolio contains a comprehensive variety of coverage. Oklahoma Statutes require participation of all State agencies in basic tort, educator’s legal liability, property and casualty programs and fidelity bonding provided by the Risk Management Division of the Office of Management and Enterprise Services (the “SRMD”). In addition to these basic policies, the University’s Department of Risk and Property Management establishes enterprise risk management guidelines for risk assessment, risk avoidance, risk acceptance, and risk transfer. Oklahoma State University and individual employees are provided sovereign immunity when performing official business within the scope of their employment under the Oklahoma Governmental Tort Claims Act. For risks not protected by sovereign immunity, it is the internal policy of the University’s Risk and Property Management department to accept initial risk in the form of retention or deductibles only to the extent that funds are available from the University’s general operations or a funded reserve to maintain this risk.

72 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Beyond acceptable retention levels, risk transfer is practiced by purchasing conventional insurance coverage through an insurance broker or through the SRMD. These coverages are outlined as follows:

 The buildings and contents are insured for replacement value. Each loss incident is subject to a $100 deductible.

 Out-of-state and out-of-country comprehensive general liability, educator’s legal liability including employment practices, auto liability, aircraft liability, watercraft liability, leased vehicles, equipment, and fidelity bonds are acquired by the University from the SRMD. To complement coverage provided by State Statute and to meet specific coverage requirements for special grants and/or contracts, additional coverage is purchased based on specific departmental and institutional needs and risks, but the related risks are not considered material to the University as a whole. Claim settlements have not exceeded insurance coverage in each of the past three fiscal years.

Self-Funded Programs

The University’s life insurance program was self-funded through December 31, 2003. Effective January 1, 2004, life waivers for disabled employees and their dependents were all that remained in the self-funded plan. Reserves were established at the onset of disability to pay the claims. In 2009, the University reached an agreement to apportion the remaining reserve between the University and the former TPA, American Fidelity Assurance. American Fidelity Assurance assumed all liability for all runoff claims. Effective January 1, 2004, the University’s life coverage is handled through an insured plan. Through June 30, 1999, the University’s health care programs were also self-funded. Effective July 1, 1999, the University terminated its self-insurance program, and participated in the State self-insurance program through December 31, 2007. Effective January 1, 2008, the University began participation in an insured program with BlueCross BlueShield of Oklahoma as the provider. The University believes that there is no exposure to pay run-off claims for the previous self-insured program at June 30, 2020. Beginning January 1, 2015, the University’s health care program again became self-funded. BlueCross BlueShield is the third-party administrator. The University has employed Lockton Company as a consultant to assist with premium setting, development of plan features, reserve funding and use of third-party stop loss coverage insurance. At June 30, 2020 and 2019, respectively, the University had recorded a liability of approximately $3,526 and $3,661, respectively, for claims incurred but not yet paid and is included in accounts payable in the statements of net position.

73 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

The University’s workers’ compensation program is self-funded and is administered by a third party. The University maintains a cash deposit with the administrator and reimburses the administrator for claims paid and administrative expenses on a monthly basis. Benefits provided are prescribed by State law and include lump-sum payments for rated disabilities, in addition to medical expenses and a portion of salary loss, resulting from a job-related injury or illness. The University records a liability for workers’ compensation in its financial statements based on annual actuarial valuations. As of June 30, 2020 and 2019, the accrued workers’ compensation liability totaled $4,748 and $5,655, respectively, computed utilizing a discount rate of 2 percent for each year. The University’s unemployment compensation insurance program is also self-funded. Unemployment benefits that separated employees receive are determined by Oklahoma Statutes and are administered by the Oklahoma Employment Security Commission (OESC). As a reimbursing employer, the University is billed quarterly by the OESC for benefits paid to former employees. The Board of Regents requires that the University maintain a minimum of $700 in reserve to cover claims. This minimum cash balance is considered each year during the rate-setting process.

Note 14: Related Party Transactions

A summary of related party transactions during the years ended June 30, 2020 and 2019, including a description of the relationship and operations are as follows:

Oklahoma State University Foundation

Nature of Relationship: OSU Foundation is a not-for-profit corporation formed to promote and foster the educational, benevolent, and scientific purposes of the University, and to create a fund to be used for any program, project, or enterprise undertaken in the interest of the University, and to promote and foster educational and cultural interests in the State and the United States. OSU Foundation is governed by an independent Board of Trustees who maintain no position at the University. Although the University does not control the timing or amount of receipts from OSU Foundation, the majority of resources, or income thereon, that OSU Foundation holds and invests are restricted to the activities of the University by the donors. Because these restricted resources held by OSU Foundation can only be used by, or for the benefit of, the University, OSU Foundation is considered a component unit of the University as defined by GASB Statement No. 39, Determining Whether Certain Organizations are Component Unit, and is separately presented. Description of Operations: OSU Foundation acts largely as a fundraising organization: soliciting, receiving, managing, and disbursing contributions on behalf of the University based on terms of a service agreement. Most of the contributions received are designated by the donors to be used for specific purposes or by specific departments. In these instances, OSU Foundation serves essentially as a conduit. Contributions that are not designated are used where the need is considered greatest, as determined by OSU Foundation. 74 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Related party transactions and funds held by OSU Foundation on behalf of the University are as follows as of and for the years ended June 30: 2020 2019

Dollar value of transactions for the year ended June 30 Funds disbursed to or on behalf of the University $ 98,256 $ 146,329 Funds collected from the University 2,846 2,765 Nonmonetary goods distributed to the University 1,752 5,896 Total net assets held on behalf of or for the benefit of the University at June 30 1,118,811 1,049,318 Related party receivables and payables at June 30 Due to the University 2,552 4,773 Due from the University 6,775 8,323

National Center for Addiction Studies and Treatment Foundation

Nature of Relationship: NCAST is a nonprofit corporation formed to improve the lives of individuals in Oklahoma and across the nation that are affected by pain and substance abuse disorders through exceptional programs in research, education, prevention, treatment, and advocacy. NCAST is governed by a Board of Directors primarily appointed by the University. The University does not have an ownership interest but has the ability to remove appointed members of the governing body. NCAST is considered a component unit of the University as defined by GASB Statement No. 39, Determining Whether Certain Organizations are Component Unit, and is discretely presented. Description of Operations: NCAST was created as a result of a consent settlement agreement between the State of Oklahoma and Purdue Pharma, Inc. (Purdue) in March 2019. The settlement agreement provided for a $102,500,000 payment to be made to NCAST by Purdue. In addition, the owners of Purdue agreed within the settlement agreement to donate $75,000,000 to NCAST.

Cowboy Athletics, Inc. (CAI)

Nature of Relationship: CAI is a not-for-profit Oklahoma corporation organized to support the University and other educational programs associated with the University. CAI is governed by a seven-member Board of Directors, three of whom serve by virtue of their association with the University. The remaining four members are elected by the members. Although the University does not control the timing or amount of receipts from CAI, the majority of resources or income thereon that CAI holds and invests is restricted to the activities of the University. CAI is considered immaterial to the operations of the University and therefore, is not considered as a component unit.

75 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

CAI also operates a golf course (Karsten Creek) and related facilities in Stillwater, Oklahoma. The golf course is primarily utilized as a teaching and practice facility by the University for the men’s and women’s golf teams. Use of the course is also open to golf course members and others based on established membership and usage fee schedules. Description of Operations: CAI revenues consist primarily of contributions from the private sector, including individuals and corporations, green fees, pro shop sales, food and beverage sales, and membership fees. Charitable gifts made for use by the University’s Department of Intercollegiate Athletics are received, processed, and administered by OSU Foundation. Such contributions may be transferred to CAI at which time CAI recognizes contribution revenue. Other contributions are recorded when received or when a donor has announced an intention to give, and CAI believes that collection is probable. Green fees are recognized when earned. Pro shop sales, and food and beverage sales, are recorded when a sale is made – essentially on the cash basis. Membership fees are assessed on a calendar year basis, are nonrefundable, and are recognized in the year for which they apply. Funds are expended for any purpose consistent with promoting the primary objectives of CAI. Related party transactions and funds held by CAI on behalf of the University as of and for the years ended June 30: 2020 2019 Dollar value of transactions for the year ended June 30 Funds disbursed to or on behalf of the University $ 773 $ 500 Funds collected from the University 5,418 3,250 Nonmonetary goods distributed to the University 97,817 14,130 Related party receivables and payables at June 30 Due to the University 25 16 Due from the University 53 114

In fiscal year 2020 CAI transferred the O’Brate Baseball Stadium in the amount of $69,467, the Neal Patterson Soccer Stadium in the amount of $21,896, the cross country maintenance building in the amount of $99 to the University. CAI also transferred improvements to Gallagher-Iba Area in the amount of $133, the equestrian facility in the amount of $1,157, the Michael and Anne Greenwood Tennis Center in the amount of $1,022, and the cross country facilities in the amount of $3,208. There were gifts of equipment in the amount of $835. The acquisitions are reflected as capital from grants, gifts, and affiliates of $97,817 in the statement of revenues, expenses, and changes in net position of the University for the year ended June 30, 2020. In fiscal year 2019, CAI transferred the Equestrian Facility in the amount of $718 and improvements to the Cowgirl Softball Stadium and Boone Pickens Stadium in the amounts of $85 and $8,737, respectively. There were gifts of equipment for the Boone Pickens Stadium in the amount of $4,587. The acquisitions are reflected as capital from grants, gifts, and affiliates of $14,127 in the statement of revenues, expenses, and changes in net position of the University for the year ended June 30, 2019. The remaining $3 pertains to equipment gifts that were below the capitalization threshold.

76 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

OSU – University Multispectral Laboratories, L.L.C.

Nature of Relationship: OSU – University Multispectral Laboratories, L.L.C. (OSU-UML) is a nonprofit limited liability company founded for the purposes of research, development, testing, evaluation, validation, and verification of sensors and other technologies in support of the global war on terrorism, homeland security, and other related national security requirements for the benefit of the University. OSU-UML is governed by a board of directors comprised primarily of management of the University. The University is the sole member of OSU-UML. OSU-UML is considered immaterial to the operations of the University and therefore, is not separately presented as a component unit. Description of Operations: Prior to fiscal year 2019, OSU-UML received and administered funds from federal and state organizations and from private sources for the purpose of carrying out certain research programs of the University. Funds were expended for purposes consistent with promoting the research activities of OSU-UML. The operations of OSU-UML have significantly decreased with limited activity in fiscal years 2020 and 2019. The process has begun for liquidating all accounts receivable and accounts payable and finalizing all federal contracts in preparation for the dissolution of this entity. In fiscal year 2020 and 2019, OSURF made advances to OSU-UML in the amount of $2,200 and $2,475, respectively, for which an allowance for the total of the advances was also recorded.

Oklahoma State University Alumni Association Nature of Relationship: Oklahoma State University Alumni Association (the “Association”) is a not-for-profit corporation formed to provide a corporate body through which alumni may unify their efforts to promote and encourage the growth and development of the University. The Association is considered immaterial to the operations of the University and therefore, is not separately presented as a component unit. Description of Operations: The Association’s revenues consist primarily of dues, investment earnings, support from the University, and revenue from Association sponsored activities. Funds are expended for any purpose consistent with promoting the primary objectives of the Association. Related party transactions and funds held by the Association on behalf of the University are as follows as of and for the years ended: 2020 2019 Dollar value of transactions for the year ended June 30 Funds disbursed to or on behalf of the University $ 423 $ 549 Funds collected from the University 464 464

77 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Foundation for the McKnight Center for the Performing Arts Nature of Relationship: The Foundation for the McKnight Center for the Performing Arts (the “McKnight Center”) is a not-for-profit corporation formed to provide support and assistance to the University in connection with the performing arts including, but not limited to, providing funding for the performing arts, long-term management, and operations of the McKnight Center. It is considered immaterial to the operations of the University and therefore, is not separately presented as a component unit. Description of Operations: The McKnight Center revenues consist primarily of program revenue, ticket sales, investment earnings, and support from the Oklahoma State University Foundation. Funds are expended for any purpose consistent with promoting the primary objectives of the McKnight Center.

Note 15: Disclosures About Fair Value of Assets and Liabilities

The University categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs supported by little or no market activity and are significant to the fair value of the assets or liabilities.

78 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Recurring Measurements

The following tables present the fair value measurements of assets and liabilities recognized in the accompanying financial statements measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2020 and 2019: 2020 Description Level 1 Level 2 Level 3 Total

Investments U.S. government securities $ - $ 12,440 $ - $ 12,440 U.S. Treasury notes - 71,762 - 71,762 Money market funds 18,298 - - 18,298 State Regents Endowment Trust - 584 - 584

Total investments $ 18,298 $ 84,786 $ - $ 103,084

Assets held in trust U.S. government securities $ - $ 481 $ - $ 481 Money market funds 2 - - 2

Total assets held in trust $ 2 $ 481 $ - $ 483

2019 Description Level 1 Level 2 Level 3 Total

Investments U.S. government securities $ - $ 14,965 $ - $ 14,965 U.S. Treasury notes - 62,700 - 62,700 Money market funds 19,746 - - 19,746 State Regents Endowment Trust - 665 - 665

Total investments $ 19,746 $ 78,330 $ - $ 98,076

Assets held in trust U.S. government securities $ - $ 482 $ - $ 482 Money market funds 2 - - 2

Total assets held in trust $ 2 $ 482 $ - $ 484

79 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

U.S. government securities, U.S. Treasury notes, corporate bonds and notes, and State Regents Endowment Trust funds are valued on the basis of evaluated prices provided by independent pricing services when such processes are believed to reflect the fair market value of such securities and are classified within Level 2 of the fair value hierarchy. Money market funds are principally valued at the regular trading session closing price on the exchange or market in which such funds are principally traded, on the last business day of each period presented and are classified within Level 1 of the fair value hierarchy.

Equity interest in a closely held entity is accounted for as an equity method investment and is not included in the table above.

Note 16: Commitments, Contingent Liabilities, and Uncertainties

The University had outstanding commitments under construction contracts of approximately $20,915 and $17,460 at June 30, 2020 and 2019, respectively. The University is party to various lawsuits arising out of the normal conduct of its operations. In the opinion of University management, the ultimate resolution of these matters will not have a material adverse effect upon the University’s financial position. The University participates in certain federal grant programs. These programs are subject to financial and compliance audits by the grantor or its representative. Such audits could lead to requests for reimbursement to the grantor agency for expenditures disallowed under terms of the grant. Management believes disallowances, if any, will not be material.

Note 17: Natural Classifications with Functional Classifications

The University’s operating expenses by functional classification were as follows for the years ended June 30, 2020 and 2019:

Year Ended June 30, 2020 Natural Classification Compensation and Supplies Other Scholarships Functional Employee Contractual and Operating and Depreciation Classification Benefits Services Materials Utilities Communications Expenses Fellowships Expense Total

Instruction $ 236,850 $ 39,545 $ 6,538 $ 30 $ 1,044 $ 7,355 $ - $ - $ 291,362 Research 106,129 11,022 10,213 540 400 6,087 - - 134,391 Public service 54,545 14,950 2,585 99 368 5,588 - - 78,135 Academic support 56,438 11,604 4,610 7 574 15,199 - - 88,432 Student services 30,866 2,679 364 1 284 881 - - 35,075 Institutional support 23,745 2,968 (1,415) - 301 1,887 - - 27,486 Operation of plant 18,596 25,317 1,138 23,012 281 41 - - 68,385 Scholarships 1,510 - 1 - - 75 63,772 - 65,358 Auxiliary enterprises 112,889 114,644 22,532 9,594 1,448 34,685 - - 295,792 Depreciation ------86,783 86,783

Total expenses $ 641,568 $ 222,729 $ 46,566 $ 33,283 $ 4,700 $ 71,798 $ 63,772 $ 86,783 $ 1,171,199

80 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Year Ended June 30, 2019 Natural Classification Compensation and Supplies Other Scholarships Functional Employee Contractual and Operating and Depreciation Classification Benefits Services Materials Utilities Communications Expenses Fellowships Expense Total

Instruction $ 227,161 $ 42,309 $ 6,135 $ 34 $ 1,032 $ 4,876 $ - $ - $ 281,547 Research 101,373 13,236 11,512 508 384 4,218 - - 131,231 Public service 50,983 13,723 2,020 91 535 4,745 - - 72,097 Academic support 56,074 13,358 3,205 8 564 11,069 - - 84,278 Student services 28,776 2,864 745 - 616 1,194 - - 34,195 Institutional support 24,887 3,673 2,755 - 373 5,398 - - 37,086 Operation of plant 15,937 23,206 1,392 22,313 276 (1,922) - - 61,202 Scholarships 1,329 - 12 - - 29 51,113 - 52,483 Auxiliary enterprises 109,858 114,014 23,886 10,307 1,490 39,976 - - 299,531 Depreciation ------80,664 80,664

Total expenses $ 616,378 $ 226,383 $ 51,662 $ 33,261 $ 5,270 $ 69,583 $ 51,113 $ 80,664 $ 1,134,314

Note 18: Current Economic Conditions

As a result of the spread of the SARS-COV-2 virus and the incidence of COVID-19, economic uncertainties have arisen which may negatively affect the financial position, results of operations and cash flows of the University. The duration of these uncertainties and the ultimate financial effects cannot be reasonably estimated at this time.

Note 19: Subsequent Events

The University has evaluated events and transactions that occurred subsequent to June 30, 2020, through October 30, 2020, the date these financial statements were available to be issued, for potential recognition or disclosure in these financial statements.

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Notes to Financial Statements – Oklahoma State University Foundation

Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 20: Discretely Presented Component Unit – Oklahoma State University Foundation (Not in Thousands)

Organization

Oklahoma State University Foundation (the “Foundation”) is a not-for-profit corporation formed in 1961 to promote the educational, benevolent, and scientific purposes of Oklahoma State University (the “University” or “OSU”). The Foundation, through the contributions it receives, provides funds for University projects and programs which cannot be funded by appropriations or grants from state and federal governments, or for which existing appropriations are inadequate.

Reporting Entity

The consolidated financial statements include the assets, liabilities, net assets, changes in net assets, and cash flows of the Foundation and affiliates. The Foundation has approximately 5,700 active component funds, one affiliated organization, and two single-member limited liability companies. The affiliated organization is the Foundation for Engineering at Oklahoma State University, Inc. (FEOSU), which was incorporated on October 10, 2008, and is included with the Foundation in the accompanying consolidated financial statements because the Foundation has an economic interest in the organization and controls the affiliated organization’s Board of Trustees. Further, distributions made by the affiliated organization exclusively benefit the charitable purposes of the Foundation. The Foundation is also the sole member of the Oklahoma State University Student Foundation, LLC and the OSU Foundation Real Estate, LLC and as such the accompanying consolidated financial statements include all assets, liabilities, revenues, and expenses of the LLCs. All material interorganization transactions of the affiliated organization and the LLCs have been eliminated in consolidation. The Foundation, its affiliate, and the LLCs are collectively referred to as the Foundation throughout these consolidated financial statements.

Operations

The Foundation acts primarily as a fundraising organization, soliciting, receiving, managing, and disbursing contributions on behalf of the University. Distribution of amounts held in the funds of the Foundation is subject to the approval of the Foundation and the availability of monies. Accordingly, the accompanying consolidated financial statements generally reflect expenditures which have been submitted to and approved by the Foundation as of the financial reporting date.

82 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 20: Discretely Presented Component Unit – Oklahoma State University Foundation (Not in Thousands) (Continued)

Basis of Presentation

The Foundation follows the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). The ASC is the single source of authoritative guidance for accounting principles generally accepted in the United States of America (U.S. GAAP) for nongovernmental entities. The Foundation’s consolidated financial statements have been prepared on the accrual basis of accounting and to ensure the observance of limitations and restrictions placed on the use of available resources, the Foundation maintains its accounts in accordance with the principles and practices of fund accounting. All interfund activities have been eliminated in the accompanying consolidated financial statements.

Reclassifications

Certain reclassifications have been made to the 2019 consolidated statements of financial position and footnotes to conform to the classifications used in 2020. These reclassifications had no effect on net assets.

Concentrations of Credit

The Foundation has certain concentrations of credit risk with financial institutions in the form of uninsured cash and time deposits. For purposes of evaluating credit risk, the stability of financial institutions conducting business with the Foundation is periodically reviewed and management believes that credit risks related to such balances are minimal. The Foundation received contributions from two and five donors totaling approximately $31,132,000 and $11,827,000 in the years ended June 30, 2020 and 2019, respectively. These contributions represent approximately 31 percent and 12 percent of total contribution revenue in 2020 and 2019, respectively. Net contributions receivable totaling approximately $69,253,000 and $59,179,000 are due from ten and nine donors at June 30, 2020 and 2019, respectively. These receivables represent approximately 62 percent and 60 percent of total net contributions receivable at June 30, 2020 and 2019, respectively. The Foundation has a closely held stock that represents approximately 10 percent of the total investment balance at June 30, 2020 and 2019.

83 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 20: Discretely Presented Component Unit – Oklahoma State University Foundation (Not in Thousands) (Continued)

Liquidity and Availability

Financial assets available for general expenditures, that is, without donor or other restrictions limiting their use, within one year of the statement of financial position date, comprise the following: 2020 2019

Cash and cash equivalents $ 11,202,484 $ 6,032,477 Short-term investments and unrestricted liquid investments 169,518,984 142,027,175 Interest and other receivables 2,195,693 3,479,038 Notes receivables 875,000 875,000 Unendowed investments 38,528,781 69,576,517 Endowment spending-rate distributions 26,217,124 25,122,280

$ 248,538,066 $ 247,112,487

The Foundation’s endowment funds consist of donor-restricted endowments and funds designated as endowments. Income from donor-restricted endowments is restricted for specific purposes, with the exception of the amounts available for general use. Donor-restricted endowment funds are not available for general expenditure. Consistent with the objectives of the Foundation’s investment policy, cash and investments are managed such that funds are available as expenditures, liabilities, and other obligations come due. As part of the Foundation’s liquidity management plan, the Foundation invests cash in excess of expected short-term needs in short-term investments. The Foundation receives management fees on funds held in the investment pool and a gift allocation on gifts received. For the fiscal year ending June 30, 2020, management fees and gift allocations were approximately $10,079,000 and $2,549,000, respectively. For the fiscal year ending June 30, 2019, management fees and gift allocations were approximately $9,851,000 and $2,244,000, respectively. The management fees and gift allocation provide funds necessary to fulfill the Foundation’s general expenditure obligation.

84 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 20: Discretely Presented Component Unit – Oklahoma State University Foundation (Not in Thousands) (Continued)

Investments

Investments consisted of the following at June 30: 2020 2019 Marketable securities Fixed income Cash and short-term funds $ 65,777,891 $ 40,990,551 Global fixed income mutual funds 70,344,840 99,715,038 U.S. fixed income mutual funds 821,246 859,394 Equity Long-only - domestic 5,563,983 45,387,877 Long-only - emerging markets 824,221 851,193 Long-only - global 1,732,609 1,816,002 Long-only - international 16,256,397 57,871,404 Real asset securities - public 2,576,436 2,682,625 Total marketable securities 163,897,623 250,174,084

Nonmarketable securities Equity Hedged equity - credit related 57,212,730 46,624,537 Hedged equity - multistrategy funds 159,204 159,822 Hedged equity - long/short funds 118,167,559 105,092,165 Hedged equity - diversifiers 98,280,800 145,448,010 Hedged equity - event driven 42,082,787 35,822,252 Long-only - emerging markets 27,922,335 42,508,727 Long-only - international 71,376,762 62,434,821 Global equity futures 8,176,519 3,723,017 Private equity 250,768,105 178,537,424 Fixed income - global fixed income fund 18,804,539 - Real assets Private funds 32,841,624 28,343,976 Closely held stock 121,412,829 102,690,699 Total nonmarketable securities 847,205,793 751,385,450

Total investments $ 1,011,103,416 $ 1,001,559,534

85 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

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Net investment returns consists of the following for the years ended June 30: 2020 2019

Interest and dividends $ 13,346,838 $ 12,267,026 Investment fees (6,790,688) (3,975,105) Net realized gains on investments carried at fair value 40,961,629 28,914,745 Net unrealized gains on investments carried at fair value 31,417,113 5,876,842 Change in fair value of perpetual trusts (13,308) (197,161)

Net investment returns $ 78,921,584 $ 42,886,347

Contributions, Interest, and Other Receivables

Unconditional contributions receivable, including amounts due under pledge agreements, are expected to be collected as follows at June 30: 2020 2019 Contributions receivable in Less than one year $ 32,462,626 $ 29,947,227 One year to five years 89,395,999 46,287,634 Over five years 47,223,952 47,148,899 169,082,577 123,383,760 Less: Unamortized discount (2.25% - 7.98%) 47,874,944 14,843,546 Allowance for uncollectible pledges 8,925,847 9,257,939

$112,281,786 $ 99,282,275

The Foundation has raised substantial conditional and unconditional contributions which, at least in part, are for the purpose of qualifying for the Pickens Legacy Scholarship match program. The matching funds are to be provided through the estate of a significant donor and as such are considered conditional; however, the funds raised to be matched by this conditional gift which are the result of cash payments and/or unconditional promises to give have been recognized as contribution revenue net of a discount to present value in the period in which the contribution was made and/or unconditional promise was received.

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Unconditional contributions receivable net of discount and allowance that are with donor restrictions are described in the table below at June 30: 2020 2019

Intercollegiate athletics $ 46,408,729 $ 52,348,196 General University support 21,421,039 18,801,309 Awards and scholarships 7,975,419 6,148,154 Facilities and equipment 36,034,053 21,287,435 Other 442,546 697,181

$112,281,786 $ 99,282,275

Conditional promises to give are substantially the result of the Foundation being named as the beneficiary in an estate plan or a valid will. No amounts have been recognized in the consolidated financial statements for conditional promises to give because the conditions on which they depend have not been substantially met. The Foundation does not currently have sufficient information to estimate the amounts of conditional promises to give. Interest and other receivables consist of the following at June 30: 2020 2019 Interest and other receivables Receivable from OSU $ 1,745,517 $ 1,473,749 Other receivables 450,176 2,005,289 Notes receivables 5,904,051 7,724,569

$ 8,099,744 $ 11,203,607

Interest and other receivables are expected to be collected within one year.

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Endowment Disclosures

The Foundation’s endowment consists of approximately 3,600 and 3,500 funds at June 30, 2020 and 2019, respectively, established for a variety of purposes. The endowment includes both donor- restricted endowment funds and funds designated by the trustees to function as endowments. As required by U.S. GAAP, net assets associated with endowment funds, including funds designated by the trustees to function as endowments, are classified and reported based on the existence or absence of donor-imposed restrictions.

Interpretation of Relevant Law

The trustees of the Foundation have chosen to preserve 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 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 in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are expended by the Foundation in a manner consistent with the standard of prudence prescribed by OK UPMIFA. In accordance with OK UPMIFA, the Foundation considers the following factors in making a determination to appropriate or accumulate donor- restricted endowment funds:

 The duration and preservation of the fund

 The purposes of the Foundation and the donor-restricted endowment fund

 General economic conditions

 The possible effect of inflation and deflation

 The expected total return from income and the appreciation of investments

 Other resources of the Foundation

 The investment policies of the Foundation

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Endowment net asset composition by type of fund as of June 30, 2020, is as follows: Without Donor With Donor Restrictions Restrictions Total

Donor-restricted endowment funds $ - $ 574,509,743 $ 574,509,743 Board-designated endowment funds 74,067,651 - 74,067,651

Total endowment funds $ 74,067,651 $ 574,509,743 $ 648,577,394

Endowment net asset composition by type of fund as of June 30, 2019, is as follows: Without Donor With Donor Restrictions Restrictions Total

Donor-restricted endowment funds $ - $ 547,171,049 $ 547,171,049 Board-designated endowment funds 95,316,869 - 95,316,869

Total endowment funds $ 95,316,869 $ 547,171,049 $ 642,487,918

89 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

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Changes in endowment net assets for the year ended June 30, 2020, are as follows:

Without Donor With Donor Restrictions Restrictions Total Endowment net assets, beginning of year$ 95,316,869 $ 547,171,049 $ 642,487,918 Investment return Interest and dividends 1,014,881 6,433,459 7,448,340 Investment fees (655,438) (4,260,989) (4,916,427) Net realized and unrealized gains 5,724,284 37,578,358 43,302,642 Total investment return 6,083,727 39,750,828 45,834,555 Donor-restricted additions Current-year endowment contributions transferred - 16,027,673 16,027,673 Collection of current- and prior-year pledges - 2,471,648 2,471,648 Transfers of prior-year contributions - 464,999 464,999 Total donor-restricted additions - 18,964,320 18,964,320 Management fee (1,456,494) (9,585,805) (11,042,299) Appropriation of endowment assets for expenditure (2,106,180) (22,449,485) (24,555,665) Reinvestment of amounts appropriated - 799,309 799,309 Reclassification - donor directed - 103,213 103,213 Transfers to Board-designated and donor-restricted endowment funds (23,770,271) (243,686) (24,013,957) Endowment net assets, end of year $ 74,067,651 $ 574,509,743 $ 648,577,394

90 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

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Changes in endowment net assets for the year ended June 30, 2019, are as follows:

Without Donor With Donor Restrictions Restrictions Total Endowment net assets, beginning of year$ 107,341,736 $ 535,524,821 $ 642,866,557

Investment return Interest and dividends 1,164,097 6,663,896 7,827,993 Investment fees (466,776) (2,585,006) (3,051,782) Net realized and unrealized gains 3,714,956 19,515,736 23,230,692 Total investment return 4,412,277 23,594,626 28,006,903

Donor-restricted additions Current-year endowment contributions transferred - 10,505,298 10,505,298 Collection of current- and prior-year pledges - 3,693,302 3,693,302 Transfers of prior-year contributions - 2,102,702 2,102,702 Total donor-restricted additions - 16,301,302 16,301,302

Management fee (1,649,699) (9,194,733) (10,844,432)

Appropriation of endowment assets for expenditure (2,049,620) (21,333,317) (23,382,937)

Reinvestment of amounts appropriated - 863,076 863,076

Reclassification - donor directed - 1,619,156 1,619,156

Transfers to Board-designated and donor-restricted endowment funds (12,737,825) (203,882) (12,941,707)

Endowment net assets, end of year $ 95,316,869 $ 547,171,049 $ 642,487,918

In addition to permanently restricted endowment funds, the Foundation also has interests in perpetual trusts and charitable remainder trusts which are managed by third parties, charitable trusts which are managed by the Foundation and permanently restricted contributions receivable. These assets are not a part of the Foundation’s endowment and therefore are not included in the endowment disclosures.

91 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

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Fair Value Measurements

The Foundation’s Investment Committee, appointed by the Board of Trustees, is responsible for the overall management of the Foundation’s investments, including the hiring and termination of investment managers, investment consultant(s), custodian banks, and securities lending agents. The Foundation’s Investment Office is responsible for sourcing, evaluating, and selecting investments for recommendation to the Foundation’s Investment Committee. The Foundation’s Investment Office is also responsible for the day-to-day operations involving due diligence and other testing procedures in regard to reviewing the reasonableness of fair value for all investments, which includes evaluating the accuracy and adequacy of information provided by custodians, brokers, and managers. The valuation process for investments is the responsibility of the Foundation’s Investment Office and all other fair value measurements are the responsibility of the Foundation’s accounting department. Fair value measurements for beneficial interests in trusts and funds held on behalf of OSU, Cowboy Athletics, and OSU Alumni Association are prepared by the Foundation’s accounting department and approved by the Board of Trustees during its review and approval of the Foundation’s periodic internal financial statements. The methods and assumptions used to estimate the fair value of assets and liabilities in the consolidated financial statements, including a description of the methodologies used for the classifications within the fair value hierarchy, are as follows:

Cash and Cash Equivalents

The asset’s carrying amount approximates fair value due to its short maturity.

Investments

All of the Foundation’s marketable securities are valued by nationally recognized third-party pricing services, except for certain commodities which are valued by the fund/account manager. The Foundation gives highest priority to quoted prices in active markets for identical assets accessed at the measurement date. An active market for the asset is a market in which transactions for the asset occur with sufficient frequency and volume to provide pricing information on an ongoing basis and the Foundation classifies all such assets as Level 1. The Foundation gives a Level 2 priority to valuation prices where the valuation process involves inputs other than quoted prices included in Level 1 that are observable for the asset, either directly or indirectly, using the market approach. Level 2 inputs under the market approach include quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets where there is not sufficient activity, and/or where price quotations vary substantially either over time or among market makers, or in which little information is released publicly. In certain cases where Level 1 or Level 2 inputs are not available, investments are classified within Level 3 of the hierarchy.

92 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

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Nonmarketable securities, except for closely held stock, are carried at fair value which is based on the NAV as provided by the fund manager and/or adjusted by the Foundation. The Foundation uses management agreements, analyst notes, audited financial statements, and underlying investment holdings to evaluate the fund manager’s valuation methodology, i.e., in determining whether the fund manager follows ASC 820 and considers various other factors including contributions and withdrawals to the fund and monitoring unaudited interim reporting to determine if any adjustment to the NAV is necessary. Closely held stock is carried at fair value which is based on independent appraisal or Foundation management. Closely held stock is categorized as Level 3 in the fair value hierarchy.

Contributions Receivable

The asset is carried at cost net of a discount to present value using a rate which is commensurate with the risks involved on the gift date and an allowance for uncollectible accounts at the financial reporting date. Risks associated with individual gifts are assessed annually through the Foundation’s review of the status of each gift. Fair value is the price a market participant would pay to acquire the right to receive the cash flows inherent in the promise to pay. Due to inclusion of a discount to net present value and allowance for uncollectible accounts, the carrying value approximates fair value.

Interest and Other Receivables

The asset is carried at cost, which approximates fair value due to the short maturity of such amounts.

Other Property Investments

The asset’s carrying amount is based on the fair value of the assets at the time of donation or purchase, i.e., cost basis, and reduced for impairments to their net realizable value based on facts and circumstances at the time of the determination. Property investments are not held for long- term investment purposes; therefore, management believes the carrying amount approximates fair value.

93 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

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Beneficial Interests in Trusts

The beneficial interest is carried at fair value, which is based on the present value of the expected future cash inflows from the trusts. The fair value of the underlying trust assets is based on quoted market prices when available or the best estimate of fair value as determined by the third-party trustee. The Foundation’s valuation technique considers the fair value of the assets held in the trust and applies a discount rate to convert such amounts to a single present value amount when appropriate. The discount rate used by the Foundation reflects current market conditions including the inherent risk in the underlying assets and the risk of nonperformance by the trustee. Due to the significant unobservable inputs required to estimate the expected future cash receipts from the trust agreements under the income approach, the Foundation’s beneficial interest is classified as Level 3 in the hierarchy.

Other Assets

The primary other asset is cash surrender values on life insurance policies for which the Foundation is the beneficiary, and as such, the carrying value approximates fair value.

OSU Support Payable and Accounts Payable and Accrued Liabilities

The carrying amount of the liabilities approximates fair value due to the short maturity of such amounts.

Funds Held on Behalf of OSU, OSU Alumni Association, and Foundation for the McKnight Center for the Performing Arts

The liabilities are carried at fair value as determined using the income approach (expected future cash outflows). Fair value is based on the fair value of the cash and investment assets held by the Foundation for the benefit of OSU, OSU Alumni Association, and Foundation for the McKnight Center for the Performing Arts. The specific assets held have been classified within the hierarchy for investments (as discussed above) or are cash and cash equivalents. The related and associated liability is classified as Level 3 in the hierarchy as there is no market for a similar liability and certain principal inputs, i.e., fair value inputs of nonmarketable assets in the portfolio and management’s allocation for shares in the pool, are unobservable and significant to the overall fair value measurement.

Obligations Under Split-Interest Agreements

The liabilities’ fair value is determined by discounting the future cash flows at rates that could currently be negotiated by the Foundation for borrowings of similar amounts. The carrying value approximates the liabilities’ fair value.

94 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

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The liabilities are carried at cost, which approximates fair value due to the short maturity of those amounts. Assets and liabilities measured at fair value on a recurring basis are classified within the fair value hierarchy at June 30, 2020, as follows: Total Level 1 Level 2 Level 3 Assets Marketable securities Fixed income Cash and short-term funds $ 65,777,891 $ 65,777,891 $ - $ - Global fixed income 70,344,840 5,742,263 64,602,577 - mutual funds U.S. fixed income 821,246 821,246 - - mutual funds Equities Long-only - domestic 5,563,983 5,563,983 - - Long-only - emerging markets 824,221 824,221 - - Long-only - global 1,732,609 1,732,609 - - Long-only - international 16,256,397 16,256,397 - - Real asset securities - public 2,576,436 2,576,436 - - Total marketable securities 163,897,623 99,295,046 64,602,577 -

Nonmarketable securities Nonmarketable securities at NAV (a) 725,792,964 - - - Closely held stock 121,412,829 - - 121,412,829 Total nonmarketable securities 847,205,793 - - 121,412,829

Total investments 1,011,103,416 99,295,046 64,602,577 121,412,829

Beneficial interests in trusts 12,698,686 - - 12,698,686

Total assets $ 1,023,802,102 $ 99,295,046 $ 64,602,577 $ 134,111,515

Liabilities Funds held on behalf of OSU $ 7,051,380 $ - $ - $ 7,051,380 Funds held on behalf of Cowboy Athletics 1,177,938 - - 1,177,938

Total liabilities $ 8,229,318 $ - $ - $ 8,229,318

(a) In accordance with ASC 820-10, certain investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position. 95 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 20: Discretely Presented Component Unit – Oklahoma State University Foundation (Not in Thousands) (Continued)

Assets and liabilities measured at fair value on a recurring basis are classified within the fair value hierarchy at June 30, 2019, as follows:

Total Level 1 Level 2 Level 3 Assets Marketable securities Fixed income Cash and short-term funds $ 40,990,551 $ 40,990,551 $ - $ - Global fixed income 99,715,038 5,866,315 93,848,723 - mutual funds U.S. fixed income 859,394 859,394 - - mutual funds Equities Long-only - domestic 45,387,877 45,387,877 - - Long-only - emerging markets 851,193 851,193 - - Long-only - global 1,816,002 1,816,002 - - Long-only - international 57,871,404 57,871,404 - - Real asset securities - public 2,682,625 2,682,625 - - Total marketable securities 250,174,084 156,325,361 93,848,723 -

Nonmarketable securities Nonmarketable securities at NAV (a) 648,694,751 - - - Closely held stock 102,690,699 - - 102,690,699 Total nonmarketable securities 751,385,450 - - 102,690,699 Total investments 1,001,559,534 156,325,361 93,848,723 102,690,699

Beneficial interests in trusts 14,126,504 - - 14,126,504

Total assets $ 1,015,686,038 $ 156,325,361 $ 93,848,723 $ 116,817,203

Liabilities Funds held on behalf of OSU $ 6,821,072 $ - $ - $ 6,821,072 Funds held on behalf of the McKnight Center for Performing Arts 10,032,101 - - 10,032,101 Funds held on behalf of OSU Alumni Association 16,078,786 - - 16,078,786

Total liabilities $ 32,931,959 $ - $ - $ 32,931,959

96 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

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The following tables summarize the changes in the fair value of the Foundation’s Level 3 assets and liabilities.

Assets Liabilities Funds Held on Funds Held on Funds Held Behalf of Foundation Beneficial Behalf of on Behalf of for the McKnight Closely Held Interests in Funds Held on Cowboy OSU Alumni Center for the Stock Trusts Behalf of OSU Athletics Association Performing Arts

Balance at July 1, 2018 $ 98,423,649 $ 15,172,459 $ 6,696,790 $ - $ 17,324,304 $ 4,802,518 Net realized and unrealized gains (losses) included in earnings 5,396,775 (197,161) 195,974 - 760,048 439,749 Distributions - (961,482) (71,692) - (2,212,014) (6,781,419) Contributions - 23,858 - - 206,448 11,571,253 Change in value of split-interests - 88,830 - - - - Sales of investments (1,129,725) - - - - -

Balance at June 30, 2019 102,690,699 14,126,504 6,821,072 - 16,078,786 10,032,101 Net realized and unrealized gains (losses) included in earnings 19,587,575 (13,308) 349,891 29,407 775,926 240,201 Distributions - - (159,583) (1,410,256) (17,552,355) (11,572,302) Contributions - - 40,000 2,558,787 697,643 1,300,000 Change in value of split-interests - 77,841 - - - - Sales of investments (865,445) (1,492,351) - - - -

Balance at June 30, 2020 $ 121,412,829 $ 12,698,686 $ 7,051,380 $ 1,177,938 $ - $ -

The summary of changes in fair value of Level 3 assets has been prepared to reflect the activity in the same categories as those provided in the consolidated statements of activities, except that none of the activity related to the funds held on behalf of OSU, OSU Alumni Association, or Foundation for the McKnight Center for the Performing Arts is reported in the consolidated statements of activities. All transactions in custodial accounts increase and/or decrease assets and liabilities simultaneously and do not impact the consolidated statements of activities and/or net assets.

97 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

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The Foundation’s Level 3 gains and losses included in the change in net assets are summarized as follows: 2020 2019 Total gains (losses) for the period included in change in net assets $ 19,574,267 $ 5,199,614

Change in unrealized gains (losses) for the period included in change in net assets for assets held at the end of the reporting period $ 19,574,267 $ 5,199,614

In the ordinary course of business, the Foundation is subject to risk from adverse fluctuations in foreign exchange, interest rates, and commodity prices. The Foundation manages these risks through use of derivative financial instruments, primarily future and forward contracts. These contracts are short-term commitments (approximately eight weeks) to buy or sell at a future date a commodity or currency at a contracted price and may be settled in cash or through delivery. Counterparties to these contracts are major financial institutions. The Foundation is exposed to credit loss in the event of nonperformance by these counterparties. There were no derivative assets at June 30, 2020. At June 30, 2019, the fair value of the derivative liability is $682,967. The net value of $682,967 is included in investments in the statement of financial position (global equity futures in the investment disclosures) and realized and unrealized gains (losses) are recorded as net investment returns in the consolidated statement of activities.

98 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

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The Foundation’s investments in certain entities that calculate net asset value (NAV) per share and for which there is not a readily determinable fair value are summarized by category as follows:

Redemption Fair Value Unfunded Commitments Frequency Redemption June 30, June 30, (If Currently Notice Lock Up 2020 2019 2020 2019 Eligible) Period Gate Period Holdback

Equities: Hedged equity - credit-related: Fund L $ - $ 4,878,942 $ - Quarterly 60 days Master Fund Level - 25% N/A 10% Fund Q 10,756,705 16,050,025 - - Quarterly 90 days Investor Level - 25% N/A 5% Fund BQ 15,471,983 17,912,354 - - Quarterly 60 days Master Fund Level - 20% N/A N/A Fund BR 8,021,619 7,783,216 - - Quarterly 90 days Investor Level - 25% 3 Year - Hard Lock N/A Fund DP 8,481,116 - - - Quarterly 90 days Investor Level - 25% Year - Hard and Soft Lock 5% Fund DV 4,610,273 - - - Quarterly 90 days Investor Level - 25% 1 Year - Hard Lock 5% Fund DY 1,623,368 - - - Quarterly 90 days Investor Level - 25% 4 Year - Hard Lock 5% Fund EA 3,247,666 - - - Monthly 90 days Investor Level - 25% 3 Year - Hard Lock 5% Fund EB 5,000,000 - - - Monthly 90 days Investor Level - 25% N/A 5%

Total hedged equity - credit-related 57,212,730 46,624,537 - -

Hedged equity - multistrategy funds 159,204 159,822 - - Illiquid N/A N/A N/A N/A

Hedged equity - long/short funds: Fund M 34,934,629 35,450,580 - - Quarterly 60 days Investor Level - 20% N/A 5% Fund O 15,119,977 13,356,949 - - Quarterly 45 days N/A N/A 5% Fund X 1,051,015 942,509 - - Quarterly 45 days N/A N/A 5% Fund Z 20,793,497 19,571,415 - - Quarterly 60 days Master Fund Level - 33% N/A 5% Fund AE 1,030,189 17,217,144 - - Quarterly 45 days Investor Level - 25% N/A 5% Fund CN 13,681,499 10,109,688 - - Quarterly 60 days N/A 3 Year - Soft Lock 5% Fund CQ 10,035,048 8,443,880 - - Monthly 30 days Investor Level - 25% 1 Year - Soft Lock N/A Fund DU 9,923,424 - - - Daily N/A N/A 1 Year - Hard Lock N/A Fund DZ 3,983,549 - - - Quarterly 60 days Fund Level - 20% 3 Year - Hard Lock 5% Fund EF 7,614,732 - - - Monthly 30 days N/A N/A N/A

Total hedged equity - long/short funds 118,167,559 105,092,165 - -

Hedged equity - diversifiers: Fund A 34,606,018 29,401,443 - - Monthly 60 days Master Fund Level - 20% N/A 10% Fund J 1,776,852 19,621,980 - - Quarterly 45 days Fund Level - 10% N/A N/A Fund N 10,886,067 14,487,704 - - Quarterly 60 days N/A N/A 10% Fund BK 18,518,375 9,968,261 - - Quarterly 65 days N/A N/A 5% Fund BS 79,459 24,971,983 - - Monthly 60 days N/A N/A 5% Fund BT 12,852,661 23,241,868 - - Monthly 14 days N/A N/A N/A Fund CO 2,384,258 2,433,716 - - Monthly 15 days N/A N/A N/A Fund CP 11,937,480 21,321,055 - - Monthly 26 days N/A N/A 10% Fund DS 5,239,630 - - - Monthly 45 days N/A N/A N/A Total hedged equity - diversifiers 98,280,800 145,448,010 - -

Hedged equity - event-driven Fund W 30,902,781 24,611,572 - - Biennial 90 days N/A 2 Years - Hard Lock 5% Fund BB 11,180,006 11,210,680 - - Quarterly 15 days Investor Level - 12.5% N/A 3% Total hedged equity - event-driven 42,082,787 35,822,252 - -

99 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

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Redemption Fair Value Unfunded Commitments Frequency Redemption June 30, June 30, (If Currently Notice Lock Up 2020 2019 2020 2019 Eligible) Period Gate Period Holdback Long-only - emerging markets Fund B $ 781,727 $ 760,671 $ - $ - Daily 28 days N/A N/A N/A Fund C 4,421,334 5,560,253 - - Daily 28 days N/A N/A N/A Fund BI 14,955,750 26,416,413 - - Daily 5 days Fund Level - 20% N/A N/A Fund BV 7,763,524 9,771,390 - - Quarterly 45 days N/A 3 Years - Hard Lock N/A Total long-only - emerging markets 27,922,335 42,508,727 - -

Equities: Long-only - international Fund AB 36,538,380 40,732,137 - - Monthly 6 days N/A N/A N/A Fund BC 14,184,251 21,702,684 - - Monthly 60 days Fund Level - 20% N/A N/A Fund EC 20,654,131 - Quarterly 90 days Fund Level - 50% 1 Year - Hard Lock N/A Total long-only - international 71,376,762 62,434,821 - -

Private equity Fund AF 4,406,393 5,541,695 - - Illiquid N/A N/A N/A N/A Fund AG 1,964,072 2,617,177 - - Illiquid N/A N/A N/A N/A Fund AH 5,920,854 7,560,198 - - Illiquid N/A N/A N/A N/A Fund AL 3,021,194 6,042,171 743,319 - Illiquid N/A N/A N/A N/A Fund AM 95,929 96,183 - - Illiquid N/A N/A N/A N/A Fund AN 417,176 718,908 - - Illiquid N/A N/A N/A N/A Fund AQ 211,221 470,398 - - Illiquid N/A N/A N/A N/A Fund AR 13,499,073 9,909,135 - 2,999,805 Illiquid N/A N/A N/A N/A Fund AS 37,320,006 30,940,460 2,212,232 2,360,555 Illiquid N/A N/A N/A N/A Fund BE 12,917,122 11,826,246 334,975 1,517,308 Illiquid N/A N/A N/A N/A Fund BF 14,478,474 11,995,948 1,798,696 1,798,696 Illiquid N/A N/A N/A N/A Fund BG 14,048,445 11,438,543 459,909 695,098 Illiquid N/A N/A N/A N/A Fund BH 1,045,023 630,013 720,431 1,280,547 Illiquid N/A N/A N/A N/A Fund BL 13,367,427 12,749,763 25,877 1,400,563 Illiquid N/A N/A N/A N/A Fund CI 5,646,077 4,005,719 1,000,864 2,270,738 Illiquid N/A N/A N/A N/A Fund CJ 17,036 811,003 - - Illiquid N/A N/A N/A N/A Fund BW - 1,232,882 - - Illiquid N/A N/A N/A N/A Fund BX 4,299,491 2,907,095 2,800,000 3,920,000 Illiquid N/A N/A N/A N/A Fund BY 1,968,201 2,238,299 6,511,085 7,364,833 Illiquid N/A N/A N/A N/A Fund BZ 2,044,699 1,229,345 400,000 910,000 Illiquid N/A N/A N/A N/A

Total forward 136,687,913 124,961,181 17,007,388 26,518,143

100 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 20: Discretely Presented Component Unit – Oklahoma State University Foundation (Not in Thousands) (Continued)

Redemption Fair Value Unfunded Commitments Frequency Redemption June 30, June 30, (If Currently Notice Lock Up 2020 2019 2020 2019 Eligible) Period Gate Period Holdback

Total forward $ 136,687,913 $ 124,961,181 $ 17,007,388 $ 26,518,143

Private equity (continued) Fund CA 383,292 207,050 132,500 292,500 Illiquid N/A N/A N/A N/A Fund CB 1,450,369 1,191,540 980,732 1,000,000 Illiquid N/A N/A N/A N/A Fund CC 3,173,568 1,435,045 4,060,000 5,320,000 Illiquid N/A N/A N/A N/A Fund CD 10,039,112 8,838,756 5,135,302 1,361,660 Illiquid N/A N/A N/A N/A Fund CE 8,502,677 7,037,926 1,657,663 3,202,868 Illiquid N/A N/A N/A N/A Fund CM 1,862,347 1,875,000 - - Illiquid N/A N/A N/A N/A Fund CR 12,921,441 4,961,922 3,115,800 - Illiquid N/A N/A N/A N/A Fund CS 7,077,490 2,244,629 3,911,423 7,665,803 Illiquid N/A N/A N/A N/A Fund CT 10,963,985 3,340,096 3,033,784 6,599,988 Illiquid N/A N/A N/A N/A Fund CU 845,019 1,008,972 - - Illiquid N/A N/A N/A N/A Fund CV 1,240,770 725,838 800,000 1,200,000 Illiquid N/A N/A N/A N/A Fund CW 690,469 2,940 6,091,260 6,940,836 Illiquid N/A N/A N/A N/A Fund CX 12,135,518 7,713,326 6,756,847 11,330,597 Illiquid N/A N/A N/A N/A Fund CY 1,018,798 1,011,667 - - Illiquid N/A N/A N/A N/A Fund CZ 4,394,914 2,428,854 3,220,000 4,585,000 Illiquid N/A N/A N/A N/A Fund DA 6,158,906 3,402,633 9,222,513 11,572,273 Illiquid N/A N/A N/A N/A Fund DB 861,848 1,499,995 - - Illiquid N/A N/A N/A N/A Fund DC 7,211,224 3,650,049 3,362,770 5,928,255 Illiquid N/A N/A N/A N/A Fund DD 1,000,005 1,000,005 - - Illiquid N/A N/A N/A N/A Fund DF 8,000,000 - - - Illiquid N/A N/A N/A N/A Fund DG 982,707 - 5,915,000 - Illiquid N/A N/A N/A N/A Fund DH 2,000,000 - - - Illiquid N/A N/A N/A N/A Fund DI 2,325,279 - 7,318,357 - Illiquid N/A N/A N/A N/A Fund DK 876,996 - 3,200,000 - Illiquid N/A N/A N/A N/A Fund DL 3,921,349 - 7,029,713 - Illiquid N/A N/A N/A N/A Fund DM 174,487 - 6,449,752 - Illiquid N/A N/A N/A N/A Fund DN 149,152 - 850,000 - Illiquid N/A N/A N/A N/A Fund DO 592,377 - 7,280,000 - Illiquid N/A N/A N/A N/A Fund DQ 2,851,496 - - - Illiquid N/A N/A N/A N/A Fund DT 214 - 6,814,174 - Illiquid N/A N/A N/A N/A Fund ED 275,123 - 2,700,000 - Illiquid N/A N/A N/A N/A Fund EE (740) - 14,754,766 - Illiquid N/A N/A N/A N/A - Total private equity 250,768,105 178,537,424 130,799,744 93,517,923

Fixed-income - global fixed-income fund Fund DX 502,386 - - - Illiquid N/A N/A N/A N/A Fund DR 18,302,153 - - - Daily 1 day N/A N/A N/A

Total fixed-income - global fixed income 18,804,539 - - -

101 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 20: Discretely Presented Component Unit – Oklahoma State University Foundation (Not in Thousands) (Continued)

Redemption Fair Value Unfunded Commitments Frequency Redemption June 30, June 30, (If Currently Notice Lock Up 2020 2019 2020 2019 Eligible) Period Gate Period Holdback

Global Equity Futures $ 8,176,519 $ 3,723,017 $ - $ - Daily N/A N/A N/A N/A

Private: Fund AT - 28,013 - 852,156 Illiquid N/A N/A N/A N/A Fund AU - 57,670 - 1,208,962 Illiquid N/A N/A N/A N/A Fund AV 5,876,579 6,291,825 1,793,076 3,138,506 Illiquid N/A N/A N/A N/A Fund AW 817,163 1,103,761 100,000 - Illiquid N/A N/A N/A N/A Fund BJ 7,774,611 6,886,123 - 150,262 Illiquid N/A N/A N/A N/A Fund CF 6,672,214 5,775,923 8,232,321 9,420,026 Illiquid N/A N/A N/A N/A Fund CG 4,747,046 4,393,305 1,637,558 2,843,974 Illiquid N/A N/A N/A N/A Fund DE 5,207,022 3,807,356 1,519,692 2,902,947 Illiquid N/A N/A N/A N/A Fund DJ 1,746,989 - 222,122 - Total private 32,841,624 28,343,976 13,504,769 20,516,833

$ 725,792,964 $ 648,694,751 $ 144,304,513 $ 114,034,756

Equities – hedged equity – credit-related – Funds which invest long and short in a variety of global debt and equity securities, with investment strategies including long/short corporate and asset- backed credit, credit arbitrage, and structured credit. Equities – hedged equity – multi-strategy funds – Fund that invests in a wide range of global investment strategies through master feeder fund structures. The investment strategies primarily include long/short equity, arbitrage, and other relative value strategies, corporate credit, structured credit, and global currencies. Equities – hedged equity – long/short funds – Funds which invest in global equity securities both long and short. Equities – hedged equity – diversifier funds – Funds that invest in a wide range of global investment strategies through master feeder structures. The strategies primarily include relative value, systematic, and discretionary global macro.

102 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 20: Discretely Presented Component Unit – Oklahoma State University Foundation (Not in Thousands) (Continued)

Equities – hedged equity – event-driven funds – A fund that invests across the capital structure in a wide range of global securities, with a focus on near- to medium-term catalyst. Equities – long-only – domestic equities fund – A fund that invests in common and preferred stock from issuers located primarily in the United States. Equities – long-only – emerging markets funds – Funds which invest in common and preferred stock from issuers in emerging market countries. Equities – long-only – international funds – Funds that invest in common and preferred stock from issuers in emerging market countries. Equities – private equity funds – Funds structured as limited partnerships and trusts, which invest in a variety of areas including foreign investments, growth equities, performing, and distressed debt, emerging markets, diversified fund of funds, and mid-market growth companies. The private equity category is mature, with existing commitments in their harvest periods. The Foundation anticipates receiving half of the distributions over the next three years and then remaining distributions will decrease until fully distributed by approximately 2027. The Foundation intends to utilize these distributions to acquire additional private equity investments. Fixed income – global fixed income fund – Fund which seeks to generate absolute returns regardless of market conditions through strategic investment in countries, currencies, sectors, and securities. Global equity futures – Funds which invest long and short in a wide range of equities. Real assets – private funds – Funds structured as limited partnerships to invest in private real assets. This category is mature, with existing commitments in their harvest periods. The Foundation anticipates receiving half of the distributions over the next three years and then remaining distributions will decrease until fully distributed by approximately 2027. The Foundation intends to utilize these distributions to acquire additional private equity investments.

103 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 20: Discretely Presented Component Unit – Oklahoma State University Foundation (Not in Thousands) (Continued)

The following table summarizes the valuation techniques and significant unobservable inputs used for the Foundation’s assets and liabilities that are categorized within Level 3 of the fair value hierarchy:

Assets Closely held stock$ 121,412,829 $ 102,690,699 Market approach EBITDA multiple (b) 9.86 (9.86) 8.80 (8.80) EBITDA transactions (b) 8.3 (8.3) 8.3 (8.3) Book guideline multiple (b) 1.72 (1.72) 1.49 (1.49) Income approach Capitalization rate (a) 11.9% (11.9%) 12.4% (12.4%) Discount for lack of marketability (a) 32% (32%) 32% (32%)

Beneficial interest Discounted in trusts 12,698,686 14,126,504 cash flows Discount rate (a) 0-1.2% (1.02%) 0-3.0% (.90%) Expected rate of return (d) 2.4-9.4% (5.39%) 2.4-9.4% (5.37%)

Liabilities Funds held on behalf of OSU 7,051,380 6,821,072 Income approach Present value of future cash outflows (e) - - Discount rate (a) 0% (0%) 0% (0%)

Funds held on behalf of OSU Alumni Association - 16,078,766 Income approach Present value of future cash - - outflows (e) Discount rate (a) 0% (0%) 0% (0%)

Funds held on behalf of Cowboy Athletics 1,177,938 - Income approach Present value of future cash - - outflows (e) Discount rate (a) 0% (0%) 0% (0%)

Funds held on behalf of Foundation for the McKnight Center for the Performing Arts - 10,032,101 Income approach Present value of future cash outflows (e) - - Discount rate (a) 0% (0%) 0% (0%)

104 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 20: Discretely Presented Component Unit – Oklahoma State University Foundation (Not in Thousands) (Continued)

a) Represents amounts used when the Foundation has determined that market participants would take into account these discounts or premiums when pricing the asset or liability. b) Represents amounts used when the Foundation has determined that market participants would use such multiples when pricing the investments. c) Significant increases or decreases in any of the above unobservable inputs in isolation may result in a significantly lower or higher fair value measurement. d) Represents the net fair market value of assets to be paid to the Foundation based on terms stated in the trust agreement. e) Represents the respective agency’s ownership interest in the Foundation’s investment pool, i.e., the underlying assets which are measured at fair value. The unobservable inputs for the custodial liability are the same as those for the Foundation’s investment pool as disclosed.

105 (This Page Intentionally Left Blank)

Notes to Financial Statements – National Center for Addiction Studies and Treatment Foundation

Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 21: Discretely Presented Component Unit – National Center for Addiction Studies and Treatment (Not in Thousands)

Nature of Operations and Reporting Entity

The National Center for Addiction Studies and Treatment Foundation (the “Foundation”), is a nonprofit 501(c)(3) Oklahoma corporation established in 2019. The Foundation is a component unit of Oklahoma State University. The mission of the Foundation is “to improve the lives of individuals in Oklahoma and across the nation that are affected by pain and substance abuse disorders through exceptional programs in research, education, prevention, treatment, and advocacy.” The Foundation was created as a result of a consent settlement agreement and decree between the State of Oklahoma and Purdue Pharma, Inc. (Purdue) in March 2019. The settlement was reached as a result of litigation filed by the Attorney General of Oklahoma on behalf of the state against Purdue alleging certain actions taken by Purdue that led to the opioid crisis within the state. The settlement agreement provided for a $102,500,000 payment to be made to the Foundation by Purdue. In addition, the owners of Purdue agreed within the settlement agreement to donate $75,000,000 to the Foundation.

Basis of Accounting and Presentation

The accompanying financial statements of the Foundation have been prepared on the accrual basis of accounting. Revenues, expenses, gains, losses, assets, and liabilities from exchange and exchange-like transactions are recognized when the exchange transaction takes place. Operating revenues and expenses include exchange transactions. Investment income is included in nonoperating revenues (expenses). When an expense is incurred that can be paid using either restricted or unrestricted resources, the Foundation’s policy is to use prudent decision processes to determine which resources will be applied based on availability of funding, donor intent, and returns available from idle funds.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash Equivalents

The Foundation considers all liquid investments with original maturities of three months or less to be cash equivalents. At December 31, 2019, cash equivalents consisted primarily of money market sweep accounts.

106 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 21: Discretely Presented Component Unit – National Center for Addiction Studies and Treatment (Not in Thousands) (Continued)

Investments and Investment Income

Investments are carried at fair value. Fair value is determined using quoted market prices. Investment income includes dividend and interest income.

Net Position

Net position of the Foundation is classified in two components on the accompanying balance sheet.

 Restricted expendable net position is made up of noncapital assets that must be used for a particular purpose, as specified by creditors, grantors, or donors external to the Foundation. At December 31, 2019, restricted expendable net position was available for support of the National Center for Addiction Studies and Treatment at Oklahoma State University’s Center for Health Sciences.

 Unrestricted net position is the remaining net position that does not meet the definition of net investment in capital assets or restricted net position.

Classification of Revenues

The Foundation has classified its revenues as either operating or nonoperating revenues according to the following criteria. Operating revenues include activities that have the characteristics of exchange transactions or nonexchange transactions that constitute the Foundation’s principal ongoing operations, such as: 1. Gifts and contributions 2. Settlement income Nonoperating revenues include activities that have the characteristics of nonexchange transactions, but do not constitute the Foundation’s principal ongoing operations, such as: 1. Other revenue sources that are defined as nonoperating revenues by Governmental Accounting Standards Board (GASB) Statement No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Government Entities That Use Proprietary Fund Accounting 2. GASB Statement No. 34, such as investment income

107 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 21: Discretely Presented Component Unit – National Center for Addiction Studies and Treatment (Not in Thousands) (Continued)

Income Taxes

The Foundation is organized as an Oklahoma nonprofit corporation and has been recognized by the Internal Revenue Service (IRS) as exempt from federal income taxes under Section 501(a) of the Internal Revenue Code as an organization described in 501(c)(3). Contributions to the Foundation qualify for the charitable contribution deduction under Section 170(b)(1)(A). The Foundation is annually required to file a Return of Organization Exempt from Income Tax (Form 990) with the IRS. In addition, the Foundation is subject to income tax on net income that is derived from business activities that are unrelated to its exempt purposes. The Foundation has determined it is not subject to unrelated business income tax and has not filed an Exempt Organization Business Income Tax Return (Form 990-T) with the IRS for the year ended December 31, 2019.

Deposits

Custodial credit risk is the risk that in the event of a bank failure, the Foundation’s deposits may not be returned to it. The Foundation’s deposit policy for custodial credit risk requires compliance with the provisions of state law. By Oklahoma statute, the State Treasurer is required to ensure that all state funds are either insured by the Federal Deposit Insurance Corporation (FDIC), collateralized by securities held by the cognizant Federal Reserve Bank in the Foundation’s name, or invested in U.S. government obligations. At December 31, 2019, none of the Foundation’s bank balances of $25,000 were exposed to custodial credit risk.

Investments

The Foundation may legally invest in direct obligations of and other obligations guaranteed as to principal by the U.S. Treasury and U.S. agencies and instrumentalities and in bank repurchase agreements. It may also invest to a limited extent in corporate bonds and equity securities. At December 31, 2019, the Foundation had deposits in a money market investment account of $103,618,570, which are included in cash and cash equivalents on the accompanying balance sheet.

Interest Rate Risk

Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of investments. Investments that are held for longer periods of time are subject to increased risk of adverse interest changes. Neither the Foundation nor state statutes limit investment maturities as a means of managing exposure to fair value losses arising from increasing interest rates. The money market mutual funds noted above are an investment with a maturity of less than one year because the average maturity of the funds is less than one year.

108 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 21: Discretely Presented Component Unit – National Center for Addiction Studies and Treatment (Not in Thousands) (Continued)

Credit Risk

Credit risk is the risk that the issuer or other counterparty to an investment will not fulfill its obligations. It is the Foundation’s policy to limit its investments in corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations. At December 31, 2019, the Foundation’s investments in money market mutual funds were rated AAA by Standard & Poor’s and Aaa by Moody’s Investors Service.

Custodial Credit Risk

For an investment, custodial credit risk is the risk that in the event of the failure of the counterparty the Foundation will not be able to recover the value of its investment or collateral securities that are in the possession of an outside party. Investments held by counterparty are held in the Foundation’s name.

Concentration of Credit Risk

The Foundation places no limit on the amount that may be invested in any one issuer. At December 31, 2019, no investments in any one organization (other than those issued or sponsored by the U.S. government) represented 5 percent of total investments.

Summary of Carrying Values

The carrying values of deposits and investments shown above are included in the accompanying balance sheet as follows:

Carrying value Deposits $ 25,000 Investments 103,618,570

$103,643,570

109 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 21: Discretely Presented Component Unit – National Center for Addiction Studies and Treatment (Not in Thousands) (Continued)

Disclosures About Fair Value of Assets

Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets.

Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets. Level 3 Unobservable inputs supported by little or no market activity and significant to the fair value of the assets.

Recurring Measurements

The money market mutual funds of $103,618,570 are recognized in the accompanying financial statements measured at fair value on a recurring basis and are considered Level 1 investments at December 31, 2019.

Investments

Where quoted market prices are available in an active market, investments are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using quoted prices of securities with similar characteristics or independent asset pricing services and pricing models, the inputs of which are market-based or independently sourced market parameters, including, but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections, and cash flows. Such investments are classified in Level 2 of the valuation hierarchy. In certain cases where Level 1 or Level 2 inputs are not available, investments are classified within Level 3 of the hierarchy. The Foundation had no Level 2 or Level 3 investments at December 31, 2019.

110 Oklahoma State University Notes to Financial Statements June 30, 2020 and 2019 (In Thousands)

Note 21: Discretely Presented Component Unit – National Center for Addiction Studies and Treatment (Not in Thousands) (Continued)

Contributions Receivable

The contribution receivable consisted of one contribution from the owners of Purdue of $75,000,000 to be paid out over five years beginning in January 2020 and continuing each January for the following four years. The discount rate was 2.2 percent for 2019 based on the risk-free rate of return at the time of the valuation of the contribution receivable. The contribution receivable at December 31, 2019, consisted of: Less than 1-5 1 Year Years Total

Unconditional promises $ 15,000,000 $ 60,000,000 $ 75,000,000 Less unamortized discount (1,234,134) (3,181,066) (4,415,200)

$ 13,765,866 $ 56,818,934 $ 70,584,800

111

Required Supplementary Information

Oklahoma State University Required Supplementary Information June 30, 2020 and 2019 Last 10 Fiscal Years** (in Thousands)

Schedule of the University’s Proportionate Share of the Net Pension Liability

Teachers' Retirement System of Oklahoma 2020 2019 2018 2017 2016 2015

University’s proportion of the net pension liability 5.5440% 5.9220% 5.5830% 5.5670% 5.1780% 4.9700% University’s proportionate share of the net pension liability $ 366,900 $ 360,499 $ 374,579 $ 475,317 $ 314,435 $ 269,092 University’s covered-employee payroll $ 243,507 $ 262,813 $ 267,127 $ 257,521 $ 261,793 $ 257,521 University’s proportionate share of the net pension liability as a percentage of its covered-employee payroll 150.67% 137.17% 140.23% 184.57% 120.11% 104.49% Plan fiduciary net position as a percentage of the total pension liability 71.56% 72.70% 69.30% 62.20% 70.30% 0.00%

The amounts presented for each fiscal year were determined as of the end of the preceding fiscal year.

** This schedule is presented to illustrate the requirements to show information for ten years. However, until a full ten-year trend is compiled, the University only presents information for those years for which information is available.

112 Oklahoma State University Required Supplementary Information June 30, 2020 and 2019 Last 10 Fiscal Years** (in Thousands)

Schedule of University Contributions

Teachers' Retirement System of Oklahoma 2020 2019 2018 2017 2016 2015

Contractually required contribution $ 19,906 $ 23,287 $ 24,581 $ 24,797 $ 25,362 $ 24,776 Contributions in relation to the contractually required contribution 19,906 23,287 24,581 24,797 25,362 24,776

Contribution deficiency (excess) $ - $ - $ - $ - $ - $ -

University’s covered-employee payroll $ 243,507 $ 262,813 $ 267,127 $ 257,521 $ 261,793 $ 257,521

Contributions as a percentage of covered-employee payroll 8.17% 8.86% 9.20% 9.63% 9.69% 9.62%

Notes to Schedule

Benefit Changes

There were no changes to benefit terms for OTRS for the years ended June 30, 2020, 2019, or 2018.

Changes of Assumptions

Actuarial assumptions used in the June 30, 2017, valuation were changed as follows: Salary increases were composed of 3.25 percent inflation, including 2.50 percent, plus a service-related component ranging from 0.00 percent to 8.00 percent based on years of service. Actuarial assumptions used in the June 30, 2016, valuation were changed as follows: Inflation was increased to 2.50 percent Investment Rate of Return was decreased to 7.50 percent There were no changes to assumptions in the valuation report for the years ended June 30, 2015, June 30, 2018, or June 30, 2019.

113

Supplementary Information

Oklahoma State University Revenue Bond Systems Outstanding Schedule of Revenues, Expenditures, and Changes in Fund Balance Year Ended June 30, 2020 (in Thousands)

jj Okmulgee SU 2002 Series 2004 Revenues and Other Additions Sales $ 20,966 $ - Other revenues 906 - Student activity fees 1,204 327 Investment income 228 -

Total revenues and other additions 23,304 327

Expenditures Compensation and employee benefits 4,677 - Utilities 655 - Travel 28 - Maintenance 670 - Equipment purchases 341 - Insurance 96 - Other operating expenses 14,605 2 Telephone 39 -

Total expenditures 21,111 2

Transfers Among Funds From (to) General University funds and accounts - - From (to) other funds (1,586) (224)

Total transfers (1,586) (224)

Net Increase for the Year 607 101

Fund Balance, Beginning of Year 7,903 411

Fund Balance, End of Year $ 8,510 $ 512

114 Oklahoma State University Combining Schedule of Net Position by Campus June 30, 2020 (in Thousands)

Oklahoma Oklahoma State Oklahoma State Oklahoma State University Oklahoma State University State University Institute of University Center for Health University Combined Stillwater Technology Oklahoma City Sciences Tulsa Totals Assets Current assets Cash and cash equivalents$ 74,235 $ 8,158 $ 12,305 $ 35,322 $ 4,013 $ 134,033 Accounts receivable, net 79,448 6,713 10,389 17,164 480 114,194 Investments 87,626 568 2,906 13,622 280 105,002 Interest receivable 282 - - 2 - 284 Current portion of student loans receivable, net 1,107 - 3 - - 1,110 Inventories 9,150 380 - 108 6 9,644 Total current assets 251,848 15,819 25,603 66,218 4,779 364,267

Noncurrent assets Cash and cash equivalents 77,709 2,961 2,391 42,741 3,670 129,472 Accounts receivable, net 32 - - - - 32 Investments 682 207 - - - 889 Loans to students, net 9,964 (1) 24 (1) - 9,986 Other postemployment benefits 2,677 168 131 362 90 3,428 Capital assets, net of accumulated depreciation 1,768,491 52,376 44,477 104,894 7,598 1,977,836 Total noncurrent assets 1,859,555 55,711 47,023 147,996 11,358 2,121,643

Total assets 2,111,403 71,530 72,626 214,214 16,137 2,485,910

Deferred outflows of resources 90,245 7,007 3,875 8,046 3,354 112,527

Liabilities Current liabilities Accounts payable 34,816 2,070 2,265 10,700 224 50,075 Unearned revenue 32,617 2,015 2,675 2,167 331 39,805 Assets held in trust for other institutions 483 - - - - 483 Student and other deposits 2,573 151 131 62 26 2,943 Accrued compensated absences 9,497 704 307 2,337 212 13,057 Accrued workers' compensation claims 1,630 - - - - 1,630 Current portion of revenue bonds and lease obligations 23,867 1,482 239 1,598 178 27,364 Total current liabilities 105,483 6,422 5,617 16,864 971 135,357

115 Oklahoma State University Combining Schedule of Net Position by Campus June 30, 2020 (in Thousands)

Oklahoma Oklahoma State Oklahoma State Oklahoma State University Oklahoma State University State University Institute of University Center for Health University Combined Stillwater Technology Oklahoma City Sciences Tulsa Totals Noncurrent liabilities Accrued compensated absences$ 11,865 $ 921 $ 525 $ 4,905 $ 460 $ 18,676 Landfill closure and postclosure costs 2,937 - - - - 2,937 Accrued workers' compensation claims 3,118 - - - - 3,118 Student deposits 299 227 - - - 526 Revenue bonds payable 494,075 805 - - - 494,880 Revenue bonds premium payable 44,880 - - - - 44,880 Accounts payable for noncurrent assets 2,535 - 33 1,839 203 4,610 Accrued interest payable 5,375 15 - - 19 5,409 Federal loan program contribution payable 10,104 - - - - 10,104 Pension liability 292,408 21,558 15,944 30,972 12,136 373,018 Other postemployment benefits 12,279 748 582 1,560 379 15,548 Asset retirement obligation 519 - 1 11 1 532 OCIA capital lease obligation 42,240 3,168 3,621 1,992 6,371 57,392 ODFA master lease program 226,255 9,696 8,733 34,337 260 279,281 Obligations under other capital leases - - - - 1,118 1,118 Total noncurrent liabilities 1,148,889 37,138 29,439 75,616 20,947 1,312,029

Total liabilities 1,254,372 43,560 35,056 92,480 21,918 1,447,386

Deferred inflows of resources 42,812 2,756 2,269 4,485 1,626 53,948

Net position Net investment in capital assets 966,340 37,225 31,851 65,128 (532) 1,100,012 Restricted for Nonexpendable 539 50 - - - 589 Expendable Scholarships, research, instruction, and other 6,211 (125) 474 31 (34) 6,557 Loans 4,151 227 13 182 - 4,573 Capital projects 32,235 4,366 2,260 42,669 3,442 84,972 Debt service 19,916 (15) - - (19) 19,882 Unrestricted (124,928) (9,507) 4,578 17,285 (6,910) (119,482)

Total net position $ 904,464 $ 32,221 $ 39,176 $ 125,295 $ (4,053) $ 1,097,103

116 Oklahoma State University Combining Schedule of Changes in Revenues, Expenses, and Net Position by Campus Year Ended June 30, 2020 (in Thousand)

Oklahoma Oklahoma State Oklahoma State Oklahoma State University Oklahoma State University State University Institute of University Center for Health University Combined Stillwater Technology Oklahoma City Sciences Tulsa Totals Operating Revenues Tuition and fees, net of scholarship allowance$ 255,983 $ 9,596 $ 9,270 $ 19,369 $ 9,014 $ 303,232 Federal appropriations 11,446 - - - - 11,446 Federal grants and contracts 62,786 1,411 16,314 18,469 1 98,981 State and local grants and contracts 13,668 32 379 3,062 - 17,141 Nongovernmental grants and contracts 30,810 (79) 868 1,776 - 33,375 Sales and services of educational departments 10,699 - (1) 55,245 - 65,943 Auxiliary enterprises charges 176,026 7,428 3,747 104,279 704 292,184 Interest earned on loans to students 236 - - - - 236 Other operating revenues 23,994 68 (12) (4,625) 361 19,786 Total operating revenues 585,648 18,456 30,565 197,575 10,080 842,324 Operating Expenses Compensation and employee benefits 487,172 22,412 21,727 93,817 16,440 641,568 Contractual services 96,185 2,282 15,771 107,006 1,485 222,729 Supplies and materials 38,968 2,714 765 3,636 483 46,566 Utilities 30,323 867 660 1,042 391 33,283 Communications 3,502 129 116 791 162 4,700 Other operating expenses 51,643 3,697 2,418 12,596 1,444 71,798 Scholarships and fellowships 50,356 2,487 7,189 3,572 168 63,772 Depreciation expense 77,043 2,673 2,161 4,178 728 86,783 Total operating expenses 835,192 37,261 50,807 226,638 21,301 1,171,199

Operating loss (249,544) (18,805) (20,242) (29,063) (11,221) (328,875) Nonoperating Revenues (Expenses) State appropriations 151,070 11,607 10,660 17,392 8,551 199,280 On-behalf payments from OTRS 13,410 826 743 2,000 551 17,530 Federal and state grants and contracts 61,618 5,721 9,676 144 - 77,159 Gifts 37,654 769 79 1,065 548 40,115 Investment income, net 6,016 163 148 662 89 7,078 Interest expense (29,092) (606) (505) (1,516) (344) (32,063) Net nonoperating revenues 240,676 18,480 20,801 19,747 9,395 309,099 Income (loss) before other revenues, expenses, gains, and losses (8,868) (325) 559 (9,316) (1,826) (19,776) Capital from grants, gifts, and affiliates 102,923 59 67 114 4 103,167 State appropriations restricted for capital purposes 955 772 772 - 772 3,271 On-behalf payments for OCIA capital leases 1,971 151 173 95 305 2,695 State school land funds 7,786 - - - - 7,786 Additions of permanent endowments 4 - - - - 4 (3,062) (9) - (760) - (3,831) Other additions, net 9,039 35 - 12,400 1,050 22,524 Interagency transfers (51) - - 60 (9) - Net Increase in Net Position 110,697 683 1,571 2,593 296 115,840 Net Position - Beginning of Year 793,767 31,538 37,605 122,702 (4,349) 981,263 Net Position - End of Year $ 904,464 $ 32,221 $ 39,176 $ 125,295 $ (4,053) $ 1,097,103

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APPENDIX C

DEFINITIONS OF CERTAIN TERMS AND SUMMARY OF CERTAIN PROVISIONS OF THE MASTER RESOLUTION

Brief descriptions of certain provisions of the Master Resolution are included hereafter in this Appendix C. Such descriptions do not purport to be comprehensive or definitive and references herein to such document are qualified in their entirety by reference to the definitive form of such document, copies of which are available for review at the offices of the Director of Administration and Finance Business Operations of the University. All references to the Bonds are qualified in their entirety by reference to the definitive forms thereof and the information with respect thereto included in the Master Resolution.

DEFINITIONS OF CERTAIN TERMS

As used in the Master Resolution, the following terms and expressions have the meanings set forth below:

“Annual Direct Obligation” means the amount budgeted each Fiscal Year by the Board with respect to each Financing System member to satisfy the Member’s proportion of debt service (calculated based on the Member’s Direct Obligation) due by the Board in such Fiscal Year on Outstanding Parity Debt.

“Annual Obligation” means, with respect to each Member and for each Fiscal Year, the Member’s Annual Direct Obligation plus the amount budgeted by the Board for such Fiscal Year to allow the Member to retire its obligation for intra-System advances made to it to satisfy part or all of a previous Annual Direct Obligation payment.

“Board,” “Board of Regents” and “Issuer” mean the Board of Regents for the Oklahoma Agricultural and Mechanical Colleges or any successor thereto.

“Credit Agreement” means, collectively, a loan agreement, revolving credit agreement, agreement establishing a line of credit, letter of credit, reimbursement agreement, insurance contract, commitments to purchase Parity Debt, purchase or sale agreements, interest rate swap agreements, or commitments or other contracts or agreements authorized, recognized and approved by the Board as a Credit Agreement in connection with the authorization, issuance, security, or payment of Parity Debt and on a parity therewith; provided, however, that any termination payments on any interest rate swap agreement or on any other derivative products may be subordinate to any debt service obligations on Parity Debt or on any other payments required in accordance with the terms of the Resolution and any Supplement thereto.

“Debt” of the Board means all:

(1) indebtedness incurred or assumed by the Board for borrowed money (including indebtedness arising under Credit Agreements) and all other financing obligations of the Board that, in accordance with generally accepted accounting principles, are shown on the liability side of a balance sheet;

(2) all other indebtedness (other than indebtedness otherwise treated as Debt hereunder) for borrowed money or for the acquisition, construction or improvement of property or capitalized lease obligations that is guaranteed, directly or indirectly, in any manner by the Board, or that is in effect guaranteed, directly or indirectly, by the Board through an agreement, contingent or otherwise, to purchase any such indebtedness or to advance or supply funds for the payment or purchase of any such indebtedness or to purchase property or services primarily for the purpose of

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enabling the debtor or seller to make payment of such indebtedness, or to assure the owner of the indebtedness against loss, or to supply funds to or in any other manner invest in the debtor (including any agreement to pay for property or services irrespective of whether or not such property is delivered or such services are rendered), or otherwise; and

(3) all Prior Encumbered Obligations and all indebtedness secured by any mortgage, lien, charge, encumbrance, pledge or other security interest upon property owned by the Board whether or not the Board has assumed or become liable for the payment thereof.

For the purpose of determining the “Debt” of the Board, there shall be excluded any particular Debt if, upon or prior to the Maturity thereof, there shall have been deposited with the proper depository (a) in trust the necessary funds (or investments that will provide sufficient funds, if permitted by the instrument creating such Debt) for the payment, redemption or satisfaction of such Debt or (b) evidence of such Debt deposited for cancellation; and thereafter it shall not be considered Debt. No item shall be considered Debt unless such item constitutes indebtedness under generally accepted accounting principles applied on a basis consistent with the financial statements of Oklahoma State University in prior Fiscal Years.

“Direct Obligation” means, for purposes of internal budgeting and management only, the proportionate share of Outstanding Parity Debt attributable to and the responsibility of each respective Financing System Member.

“Financing System Member” or “Member” means initially, Oklahoma State University, Stillwater Campus, Stillwater, Oklahoma, and OSU-Tulsa, Tulsa, Oklahoma, currently constituting components of Oklahoma State University and such institutions and branches constituting components of Oklahoma State University and hereafter designated by the Board to be a Member of the Financing System.

“Non-Recourse Debt” means any Debt secured by a pledge (other than a pledge on Pledged Revenues), liability for which is effectively limited to the property subject to such pledge with no recourse, directly or indirectly, to any other property of the Board attributable to the Financing System, provided that such Debt is being incurred in connection with the acquisition of property only, which property is not, at the time of such incurrence, owned by the Board and being used in the operations of a Member.

“Officer’s Certificate” means a certificate signed by an Oklahoma State University Representative.

“Oklahoma State University” means and includes each of the following existing and operating institutions, respectively:

Oklahoma State University, Stillwater Campus, Stillwater, Oklahoma (all agencies) OSU-Oklahoma City, Oklahoma City, Oklahoma OSU-Okmulgee, Okmulgee, Oklahoma (now OSU Institute of Technology–Okmulgee) OSU-Tulsa, Tulsa, Oklahoma OSU-Center for Health Sciences, Tulsa, Oklahoma together with every other institution or branch thereof now or hereafter operated by or under Oklahoma State University governed by the jurisdiction of the Board pursuant to law.

“Oklahoma State University Representative” means one or more of the following officers of the University acting by and on behalf of the Board of Regents, to wit: the Chair or Vice-Chair of the Board of Regents for the Oklahoma Agricultural and Mechanical Colleges or President of the University or Vice President for Administration and Finance of the University or the Associate Vice President for Administration

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and Finance of the University or the Chief Financial Officer of the University or such other officers as appointed by the Board.

“Outstanding” when used with respect to Parity Debt means, as of the date of determination, all Parity Debt theretofore delivered under the Master Resolution or any Supplement, except:

(1) Parity Debt theretofore cancelled and delivered to the Board or delivered to the Paying Agent or the Registrar for cancellation;

(2) Parity Debt deemed paid pursuant to the provisions of Section 12 of the Master Resolution or any comparable section of any Supplement;

(3) Parity Debt upon transfer of or in exchange for and in lieu of which other Parity Debt has been authenticated and delivered pursuant to the Master Resolution or any Supplement; and

(4) Parity Debt under which the obligations of the Board have been released, discharged or extinguished in accordance with the terms thereof;

provided, that, unless the same is acquired for purposes of cancellation, Parity Debt owned by the Board shall be deemed to be Outstanding as though it was owned by any other owner.

“Outstanding Principal Amount” means, with respect to all Parity Debt or to a series of Parity Debt, the outstanding and unpaid principal amount of such Parity Debt paying interest on a current basis and the outstanding and unpaid principal and compounded interest on such Parity Debt paying accrued, accreted, or compounded interest only at maturity as of any record date established by a Registrar in connection with a proposed amendment of the Master Resolution or any Supplement.

“Parity Debt” means all Debt of the Board which may be issued or assumed in accordance with the terms of the Master Resolution and a Supplement, secured by a pledge of the Pledged Revenues subject only to the prior pledges securing Prior Encumbered Obligations.

“Paying Agent” shall mean each entity designated in a Supplement as the place of payment of a series or issue of Parity Debt.

“Pledged Revenues” means, subject to the provisions of the Prior Encumbered Obligations, any or all revenues of the University now or hereafter lawfully available for the payment and derived from or attributable to any Member of the Financing System which are lawfully available for payments on Parity Debt; provided, however, that the following shall not be included in Pledged Revenues (i) revenues appropriated by the Oklahoma Legislature from tax receipts and (ii) funds whose purpose has been restricted by the donor, grantor or payor thereof for a purpose inconsistent with the payment of Parity Debt.

“Prior Encumbered Obligations” means those bonds or other obligations of an institution outstanding on the date it becomes a Member of the Financing System and which are payable from a pledge of the Prior Encumbered Revenues charged and collected at such institution and all existing obligations of the Board secured by a pledge of a portion of the Pledged Revenues which pledge is prior to the pledge of the Pledged Revenues established by the Master Resolution on behalf of Parity Debt.

“Prior Encumbered Revenues” means the revenues pledged to the payment of Prior Encumbered Obligations and the revenues of any revenue producing system or facility of an institution which hereafter

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becomes a Member of the Financing System and which are pledged to the payment of bonds or other obligations outstanding on the date such institution becomes a Member of the Financing System.

“Rating Agencies” means any of Moody’s, S&P or Fitch, then maintaining ratings on any Parity Debt at the request of the Board.

“Resolution” or “Master Resolution” means the Master Resolution establishing the Financing System.

“Revenue Financing System” or “Financing System” or “The Oklahoma State University General Revenue Financing System” means the Oklahoma State University General Revenue Financing System composed of the institutions and branches currently constituting parts of Oklahoma State University including Oklahoma State University, and such other institutions and branches now or hereafter under the control or governance of Oklahoma State University and governed by the Board on behalf of Oklahoma State University, and made a Member of the General Revenue Financing System by specific action of the Board.

“Subordinated Debt” means any Debt which expressly provides that all payment thereon shall be subordinated to the timely payment of all Parity Debt then Outstanding or subsequently issued.

“Supplement” or “Supplemental Resolution” means a resolution supplemental to, and authorized and executed pursuant to the terms of, the Master Resolution.

“University” means the Oklahoma State University and the Board of Regents or its officers acting on behalf of the University as the context permits.

SUMMARY OF CERTAIN PROVISIONS OF THE MASTER RESOLUTION

ESTABLISHMENT OF THE FINANCING SYSTEM AND ISSUANCE OF PARITY DEBT

The Board has established the Revenue Financing System for the purpose of providing a financing structure for revenue supported indebtedness of components of Oklahoma State University included as Members of the Financing System. The Master Resolution establishes a financing structure under which revenue supported indebtedness of the Financing System can be incurred. Each Supplement to the Master Resolution shall provide for the authentication, issuance, sale, delivery, form, characteristics, provisions of payment and redemption, and security of each issue or series of Parity Debt and any other matters related to Parity Debt not inconsistent with the Constitution and laws of the State of Oklahoma or the provisions of the Master Resolution.

SECURITY AND PLEDGE

Subject to the provisions of the resolutions authorizing Prior Encumbered Obligations, Parity Debt shall be secured by and payable from the Pledged Revenues. The Board has assigned and pledged the Pledged Revenues to the payment of the principal of and interest on Parity Debt and to the establishment and maintenance of any funds which may be provided to secure the repayment of Parity Debt in accordance with the Master Resolution and any Supplement. The Board may additionally secure Parity Debt with one or more Credit Agreements.

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Institutions which are not now Members of the Financing System may hereafter become Members and such institutions may, at such time, have outstanding obligations secured by the Prior Encumbered Revenues, and the security and pledge of the Pledged Revenues effective when such institutions become Members of the Financing System will be subject and subordinate only to such institutions’ outstanding Prior Encumbered Obligations.

Except as provided in the Master Resolution and while any Parity Debt is outstanding, no additional bonds or obligations may be issued or incurred by the Board on a parity with any Prior Encumbered Obligations.

RATE COVENANT; PLEDGED REVENUES

(a) Rate Covenant. The Board has covenanted in the Master Resolution that in each Fiscal Year that Parity Debt is outstanding, it will establish, charge and use its reasonable efforts to collect Pledged Revenues for such Fiscal Year that are sufficient, together with other funds available to the University for such purposes, to enable the University to meet all of its financial obligations for such Fiscal Year, including timely payment of the principal and interest due on Outstanding Parity Debt.

(b) Pledged Revenues. Subject to the provisions of the resolutions authorizing Prior Encumbered Obligations and to the other provisions of this Resolution and any Supplement, the Board covenants and agrees at all times to fix, levy, charge, and collect at each Member the Pledged Revenues, in such amounts, without any limitation whatsoever, as will be at least sufficient at all times, together with other legally available funds, including other Pledged Revenues, to provide the money, to make or pay the principal of, interest on, and other payments or deposits with respect to Outstanding Parity Debt when and as required. The Pledged Revenues shall be adjusted, if and when permitted or required by this Resolution or any Supplement, to provide Pledged Revenues sufficient to make when due all payments and deposits in connection with Outstanding Parity Debt. The Board may fix, levy, charge, and collect the Pledged Revenues in any manner it may determine within its discretion.

(c) Annual Obligation. If, in the judgment of the Board, any Member has been or will be unable to satisfy its Annual Obligation, the Board shall fix, levy, charge, and collect rates, fees, and charges for goods and services furnished by such Member, in amounts sufficient, without limit (subject to the provisions of (e) below), together with other legally available funds, including other Pledged Revenues attributable to such Member, to enable it to make its Annual Obligation payments.

(d) Anticipated Deficit. If the Board determines, for any reason whatsoever, that there are not anticipated to be sufficient legally available funds, including Pledged Revenues, to meet all financial obligations of the Board relating to the Financing System including the deposits and payments due on or with respect to Outstanding Parity Debt as the same mature or come due, or that any Member will be unable to pay its Annual Direct Obligation in full, then the Board shall fix, levy, charge, and collect the Pledged Revenues at each Member, effective at the next succeeding regular semester or semesters or summer term or terms, in such amounts, without any limitation whatsoever (other than as provided in (e) below), as will be at least sufficient to provide together with other legally available funds, including Pledged Revenues, the money for making when due all financial obligations of the Board relating to the Financing System including all payments and deposits due on or with respect to Outstanding Parity Debt when and as required by this Resolution or any Supplement.

(e) Economic Effect of Adjustments. Any adjustments in the rate of the Pledged Revenues at any of the Members pursuant to (c) or (d) above will be based upon a certificate and recommendation of an Oklahoma State University Representative, delivered to the Board, as to the rates and anticipated collection of the Pledged Revenues at the various Members which will be anticipated to result in (i) Pledged Revenues

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attributable to each Member being sufficient (to the extent possible) to satisfy the Annual Obligation of such Member and (ii) Pledged Revenues being sufficient, together with other legally available funds, to meet all financial obligations of the Board relating to the Financing System including all deposits and payments due on or in connection with Outstanding Parity Debt when and as required by this Resolution and any Supplement.

GENERAL COVENANTS

In the Master Resolution the Board has covenanted that it will (a) on or before each payment date make available to the Paying Agent money sufficient to pay the interest on, principal of, and premium, if any, on the Parity Debt as it becomes due and payable and the fees and expenses related to the Parity Debt, including the fees and expenses of the Paying Agent and any Registrar, trustee, remarketing agent, tender agent, credit provider or other authorized service provider; (b) faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions contained in the Master Resolution and in each Supplement; (c) cause all Parity Debt to be called for redemption and redeemed prior to maturity to the extent required by the Master Resolution or any Supplement; (d) maintain, preserve, and keep the real and tangible property of the Financing System and every part thereof in good condition, repair, and working order and operate, maintain, preserve, and keep the facilities, buildings, structures, and equipment pertaining thereto in good condition, repair, and working order; (e) not incur additional Debt secured by the Pledged Revenues except as permitted by the Master Resolution, or unless said Debt is junior and subordinate in all respects to the liens, pledges, covenants, and agreements of the Master Resolution and any Supplement hereto or permit any encumbrance against Pledged Revenues other than Permitted Encumbrances; (f) invest and secure money in all accounts and funds established under the Master Resolution and any Supplement in the manner prescribed by law for such funds and in accordance with written policies adopted by the Board; (g) keep proper books of record and account relating to all dealings, activities, and transactions of the Board; (h) permit any owner or owners of Outstanding Principal Amount, at all reasonable times to inspect records, accounts, and data of the Board related to Oklahoma State University; and (i) provide for the satisfaction by each Member of its Annual Obligation. In addition, the Board has represented that it lawfully owns, has title to or lawfully possesses the lands, buildings and facilities constituting Oklahoma State University and that it will defend the title to all properties that become a part of the Financing System and that it is lawfully qualified to pledge the Pledged Revenues in the manner prescribed in the Master Resolution, and has exercised such right.

ISSUANCE OF DEBT

In the Master Resolution, the Board reserves the right to issue Parity Debt for any purpose authorized by law. The Board may incur, assume, guarantee, or otherwise become liable in respect of any Parity Debt if the Board shall have determined, that it will have sufficient funds to meet the financial obligations of the Oklahoma State University Financing System, including sufficient Pledged Revenues to satisfy the Annual Debt Service Requirements of the Financing System and to meet all financial obligations of the Board relating to the Financing System.

The Board will not issue or incur Parity Debt unless an Oklahoma State University Representative delivers to the Board a certificate stating that, to the best of his or her knowledge, the Board is in compliance with all covenants contained in the Master Resolution and any Supplement, and is not in default in the performance and observance of any of the terms, provisions, and conditions thereof.

The Board has reserved the right to issue, without limit, Non-Recourse Debt and Subordinated Debt.

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WAIVER OF CERTAIN COVENANTS

The Board may omit in any particular instance to comply with any covenant or condition set forth above as a general covenant or its rate covenant, its covenants governing disposition of member assets or its covenants relating to admission and release of Members if the Holders of the same percentage in principal amount of all Parity Debt then Outstanding, shall waive such compliance.

DISPOSITION OF ASSETS ATTRIBUTABLE TO FINANCING SYSTEM MEMBERS

In the Master Resolution, the Board has reserved the right to convey, sell, or otherwise dispose of any properties of the Board attributable to a Member of the Financing System provided that:

(i) Such conveyance, sale, or disposition shall be in the ordinary course of business of a Member of the Financing System responsible for such properties; or

(ii) the Board determines that after the conveyance, sale, or other disposition, the Board shall have sufficient funds during each Fiscal Year to meet the financial obligations of Oklahoma State University, including sufficient Pledged Revenues to satisfy the Annual Debt Service Requirements of the Financing System and to meet all financial obligations of the Board relating to the Financing System.

COMBINATION, DIVISION, RELEASE, INITIAL MEMBER(S) AND ADMISSION OF FINANCING SYSTEM MEMBERS

(a) The Master Resolution recognizes that certain Members or institutions or branches which may be made Members of the Financing System may be combined or divided and provides that so long as such combined or divided institutions or branches continue to be governed by the Board such action shall not violate the Master Resolution or require any amendments thereof. The Master Resolution also provides that any Member or portion thereof may be closed and abandoned by law or may be removed from the Financing System (thus deleting the revenues, income, funds, and balances attributable to said Member or portion thereof from Pledged Revenues) without violating the Master Resolution upon satisfaction of the following requirements:

(i) the Board specifically finds that (based upon an Officers’ Certificate), after the release of the Member or portion thereof, the Board will have sufficient funds during each Fiscal Year in which Parity Debt shall thereafter be Outstanding to meet the financial obligations of Oklahoma State University, including sufficient Pledged Revenues to satisfy the Annual Debt Service Requirements of the Financing System and to meet all financial obligations of the Board relating to the Financing System and the unenhanced ratings, if any, being maintained at the request of the Board by any Rating Agencies on any Outstanding Parity Debt will not be reduced or withdrawn with the release of the Member; and

(ii) the Board shall have received an opinion of legal counsel stating that such release will not affect the status for Federal Income Tax purposes of interest on any Outstanding Parity Debt and that all conditions precedent provided in the Master Resolution or any Supplement relating to such release have been complied with; and

(iii) if the Member or portion thereof to be released is to remain under the governance and control of the Board, the Board must either (1) provide, from lawfully available funds, including Pledged Revenues attributable to the withdrawing Member, for the payment or discharge of that Member’s Direct Obligation; or (2) pledge to the payment of Parity Debt, additional

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resources not then pledged in an amount sufficient to satisfy the withdrawing Member’s Direct Obligation; or

(b) if the Member or portion thereof to be released is to no longer be under the governance and control of the Board, the Board must receive a binding obligation of the new governing body of the withdrawing institution or portion thereof, obligating the new governing body to make payments to the Board at the times and in the amounts equal to the withdrawing Member’s Annual Obligation or to pay or discharge that Member’s Direct Obligation, or, in the case of a portion of a Member being withdrawn, the proportion of the Member’s Annual Obligation or Direct Obligation, as the case may be, attributable to the withdrawing portion of the Member.

(c) Initial Member(s); Admission of Members. The initial Members of the Financing System shall be Oklahoma State University, Stillwater Campus, Stillwater, Oklahoma, and OSU-Tulsa, Tulsa Campus, Tulsa, Oklahoma, currently constituting components of Oklahoma State University. If, after the date of the adoption of this Resolution, the Board desires for a component of Oklahoma State University to become a Member of the Financing System, it may include said institution or branch in the Financing System with the effect set forth in this Resolution by the adoption of a Supplement to this Resolution, provided, however, that the inclusion of an additional Member shall only be permitted hereunder if the unenhanced ratings, if any, being maintained at the request of the Board by any of the Rating Agencies on any Outstanding Parity Debt is not reduced or withdrawn with the admission of the additional Member.

SPECIAL OBLIGATIONS; ABSOLUTE OBLIGATION TO PAY PARITY DEBT

The Master Resolution provides that all Parity Debt and the interest thereon shall constitute special obligations of the Board payable from the Pledged Revenues, and the owners thereof shall never have the right to demand payment out of funds raised or to be raised by taxation, or from any source other than specified in the Master Resolution or any Supplement. The obligation of the Board to pay or cause to be paid the amounts payable under this Resolution and each Supplement out of the Pledged Revenues shall be absolute, irrevocable, complete, and unconditional, and the amount, manner, and time of payment of such amounts shall not be decreased, abated, rebated, setoff, reduced, abrogated, waived, diminished, or otherwise modified in any manner or to any extent whatsoever.

REMEDIES

Any owner of Parity Debt in the event of default in connection with any covenant contained in the Master Resolution or in any Supplement, or default in the payment of the principal of or interest on any Parity Debt or any Prior Encumbered Obligations, or of any interest due thereon, or other costs and expenses related thereto, may require the Board, its officials and employees in their official capacity, and any appropriate official of the State of Oklahoma, to carry out, respect, or enforce the covenants and obligations of the Master Resolution or any Supplement, by all legal and equitable means, including specifically, but without limitation, the use and filing of mandamus proceedings in any court of competent jurisdiction against the Board, its officials and employees in their official capacity, or any appropriate official of the State of Oklahoma.

DEFEASANCE OF BONDS

Any Parity Debt and the interest thereon shall be deemed to be paid, retired, and no longer Outstanding (a “Defeased Debt”) within the meaning of the Master Resolution, except that the Board must provide for the services of the Paying Agent or other paying agent when the payment of all principal and interest payable with respect to such Parity Debt to the due date or dates thereof (whether such due date or dates be by reason of maturity, upon redemption, or otherwise) either (i) shall have been made or caused to

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be made in accordance with the terms thereof (including the giving of any required notice of redemption or provision for the giving of same having been made) or (ii) shall have been provided for on or before such due date by irrevocably depositing with or making available to the Paying Agent for such Parity Debt for such payment (l) lawful money of the United States of America sufficient to make such payment, (2) noncallable Government Obligations which mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money to provide for such payment, or (3) any combination of (1) and (2) above, and when proper arrangements have been made by the Board with each such Paying Agent for the payment of its services until after all Defeased Debt shall have become due and payable. At such times as Parity Debt shall be deemed to be Defeased Debt, such Parity Debt and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the Pledged Revenues, and such principal and interest shall be payable solely from such money or Government Obligations, and shall not be regarded as Outstanding for any purposes other than payment, transfer, and exchange.

Any money so deposited with or made available to a Paying Agent may at the written direction of the Board also be invested in Government Obligations maturing in the amounts and times as described above and all income from such Government Obligations received by the Paying Agent which is not required for the payment of the Parity Debt and interest thereof, with respect to which such money has been deposited, shall be turned over to the Board, or deposited as directed in writing by the Board.

The term “Government Obligations” as used in this paragraph, means direct obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America which may be United States Treasury obligations such as its State and Local Government Series, which may be in book-entry form.

AMENDMENT OF MASTER RESOLUTION

Amendments Without Consent. The Master Resolution and the rights and obligations of the Board and of the owners of the Outstanding Parity Debt may be modified or amended at any time without notice to or the consent of any owner of the Outstanding Parity Debt, solely for any one or more of the following purposes:

(i) to add the covenants and agreements of the Board contained in the Master Resolution, other covenants and agreements thereafter to be observed, or to surrender any right or power reserved to or conferred upon the Board in the Master Resolution;

(ii) to cure any ambiguity or inconsistency, or to cure or correct any defective provisions contained in the Master Resolution, upon receipt by the Board of an approving opinion of Bond Counsel, that the same is needed for such purpose, and will more clearly express the intent of the Master Resolution;

(iii) to supplement the security for the Outstanding Parity Debt;

(iv) to make such other changes in the provisions of the Master Resolution as the Board may deem necessary or desirable and which shall not, in the judgment of the Board, materially adversely affect the interests of the owners of Outstanding Parity Debt;

(v) to make any changes or amendments requested by a bond rating agency then rating or requested to rate Parity Debt, as a condition to the issuance or maintenance of a rating, which changes or amendments do not, in the judgment of the Board, materially adversely affect the interests of the owners of the Outstanding Parity Debt; or

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(vi) to make any amendments necessary or desirable by the Board to add or delete Members from the Financing System.

Amendments With Consent. Subject to the other provisions of the Master Resolution, the owners of Outstanding Parity Debt aggregating 51% in Outstanding Principal Amount shall have the right from time to time to approve any other amendment to the Master Resolution which may be deemed necessary or desirable by the Board, provided, however, that nothing contained in the Master Resolution shall permit or be construed to permit, without the approval of the owners of all of the Outstanding Parity Debt, the amendment of the terms and conditions in the Master Resolution so as to:

(i) grant to the owners of any Outstanding Parity Debt a priority over the owners of any other Outstanding Parity Debt; or

(ii) materially adversely affect the rights of the owners of less than all Parity Debt then Outstanding; or

(iii) change the minimum percentage of the Outstanding Principal Amount necessary for consent to such amendment.

NOTICE

If at any time the Board shall desire to amend the Master Resolution with the consent of the owners of Parity Debt, the Board is required to give or cause notice of the proposed amendment to be given in writing, by certified mail, to each owner of Parity Debt.

AMENDMENTS OF SUPPLEMENTS

Each Supplement shall contain provisions governing the ability of the Board to amend such Supplement; provided, however, that no amendment may be made to any Supplement for the purpose of granting to the owners of Outstanding Parity Debt under such Supplement a priority over the owners of any other Outstanding Parity Debt.

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FORM OF CONTINUING DISCLOSURE AGREEMENT

This Continuing Disclosure Agreement dated as of May 1, 2021 (this “Disclosure Agreement”), is executed and delivered by The Board of Regents for the Oklahoma Agricultural and Mechanical Colleges (the “Issuer”), on behalf of Oklahoma State University, in connection with the issuance of its General Revenue and Refunding Bonds, Tax-Exempt Series 2021A and General Revenue Refunding Bonds, Federally Taxable Series 2021B (collectively, the “Series 2021 Bonds”). The Bonds are being issued pursuant to a Master Resolution as previously supplemented and as supplemented by a Seventeenth Supplemental Resolution and an Eighteenth Supplemental Resolution, each authorized March 5, 2021, approved March 5, 2021, and dated as of May 1, 2021 (collectively, the “Resolution”). The Issuer hereby covenants and agrees as follows:

Section 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Issuer for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist each Participating Underwriter in complying with Rule 15c2-12(b)(5) of the Securities and Exchange Commission (the “Commission”). The Issuer represents that it will be the only “obligated person” (as defined in the Rule) with respect to the Bonds at the time the Bonds are delivered to each Participating Underwriter and that no other person presently is expected to become an obligated person with respect to the Bonds at any time after the issuance of the Bonds.

Section 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:

“Annual Report” shall mean any AnnualReport provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement.

“Beneficial Owner” shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes.

“Disclosure Representative” shall mean the Director of Administration and Finance Business Operations of Oklahoma State University or his or her designee, or such other officer or employee as the Issuer shall designate from time to time.

“Dissemination Agent” shall mean any entity designated by the Issuer to act as the Dissemination Agent hereunder.

“EMMA” means the MSRB’s Electronic Municipal Market Access System. Reference is made to Commission Release No. 34-59062, December 8, 2008 (the “Release”) relating to the EMMA system for municipal securities disclosure effective on July 1, 2009.

“Financial Obligation” shall mean a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term “Financial Obligation” shall not include municipal securities (as defined in the Securities Exchange Act of 1934, as amended) as to which a final official statement (as defined in the Rule) has been provided to the MSRB consistent with the Rule.

D-1 “Listed Event” shall mean any of the events listed in Exhibit B to this Disclosure Agreement.

“Listed Event Notice” means notice of a Listed Event in Prescribed Form.

“MSRB” means the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)(1) of the Securities Exchange Act of 1934.

“Official Statement” means the “final official statement,” as defined in the paragraph (f)(3) of the Rule, relating to the Bonds.

“Participating Underwriter” shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds.

“Prescribed Form” means, with regard to the filing of the Annual Report, Audited Financial Statements and notices of Listed Events with the MSRB at www.emma.msrb.org (or such other address or addresses as the MSRB may from time to time specify), such electronic format, accompanied by such identifying information, as shall have been prescribed by the MSRB and which shall be in effect on the date of filing of such information.

“Rule” means Rule 15c2-12 promulgated by the Commission under the Securities Exchange Act of 1934 (17 CFR Part 240, §240.15c2-12), as in effect on the date of this Disclosure Agreement, including any official interpretations thereof.

“State” shall mean the State of Oklahoma.

Section 3. Provision of Annual Reports.

(a) The Issuer shall, or shall cause the Dissemination Agent to, not later than 190 days after the end of the Issuer’s fiscal year (presently July 1 through June 30), commencing with the report for the 2021 Fiscal Year, provide to the MSRB in Prescribed Form the Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Agreement; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date but within 10 business days after they become available. If the Issuer’s fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5.

(b) If the Issuer fails to provide an Annual Report to the MSRB by the date required in subsection (a), the Issuer shall send a notice of such failure to the MSRB by a date not in excess of 10 business days after the occurrence of such failure.

Section 4. Content of Annual Reports. The Issuer’s Annual Report shall contain or include by reference the following:

(a) Annual audited financial statements of the Issuer and an annual update of all material financial and operating data of the Issuer, to the same extent as provided in those portions identified in Exhibit A hereto of the Official Statement and as required by applicable state law. The descriptions in the Official Statement of financial and operating data of the Issuer are of general categories of financial and operating data deemed to be material as of the date of the Official

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Statement. When such descriptions include information that no longer can be generated because the operations to which it related have been materially changed or discontinued, a statement to that effect shall be provided in lieu of such information. Any annual financial and operating data containing modified financial information or operating data shall explain, in narrative form, the reasons for the modification and the impact of the modification on the type of financial information or operating data being provided.

(b) The audited financial statements of the Issuer for the prior fiscal year, prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board; provided, however, that the Issuer may from time to time, if required by federal or State legal requirements, modify the basis upon which its financial statements are prepared. Notice of any such modification shall be provided to the MSRB, and shall include a reference to the specific federal or State law or regulation describing such accounting basis. If the Issuer’s audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report within 10 business days of when they become available.

Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Issuer or related public entities, which have been submitted to the MSRB. If the document included by reference is a final official statement, it must be available from the MSRB. The Issuer shall clearly identify each such other document so included by reference.

Section 5. Disclosure of Listed Events. The Issuer hereby covenants that it will disseminate in a timely manner, not in excess of 10 business days after the occurrence of the event, a Listed Event Notice to the MSRB in Prescribed Form. Notwithstanding the foregoing, notice of optional or unscheduled redemption of any Bonds or defeasance of any Bonds need not be given under this Disclosure Agreement any earlier than the notice (if any) of such redemption or defeasance is given to the owners of the Bonds pursuant to the Resolution. The Issuer is required to deliver such Listed Event Notice in the same manner as provided by Section 3(a) of this Disclosure Agreement.

Section 6. Duty To Update EMMA/MSRB. The Issuer shall determine, in the manner it deems appropriate, whether there has occurred a change in the MSRB’s e-mail address or filing procedures and requirements under EMMA each time it is required to file information with the MSRB.

Section 7. Termination of Reporting Obligation. The Issuer’s obligations under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such termination in the same manner as for a Listed Event Notice under Section 5.

Section 8. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Agreement.

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Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Issuer may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived, provided that the following conditions are satisfied:

(a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, or 5, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted;

(b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and

(c) The amendment or waiver either (i) is approved by the Holders of the Bonds in the same manner as provided in the Resolution for amendments to the Resolution with the consent of Holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds.

In the event of any amendment or waiver of a provision of this Disclosure Agreement, the Issuer shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event Notice under Section 5, and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.

Section 10. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or Listed Event Notice, in addition to that which is required by this Disclosure Agreement. If the Issuer chooses to include any information in any Annual Report or Listed Event Notice in addition to that which is specifically required by this Disclosure Agreement, the Issuer shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or Listed Event Notice.

Section 11. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Agreement, any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Resolution, and the sole remedy under this Disclosure Agreement in the event of any failure of the Issuer to comply with this Disclosure Agreement shall be an action to compel performance.

Section 12. Duties, Immunities and Liabilities of Dissemination Agent. The Resolution is hereby made applicable to this Disclosure Agreement as if this Disclosure Agreement were (solely for this purpose) contained in the Resolution. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and the Issuer agrees, to the extent permitted under State

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law, to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorney fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s willful misconduct or failure to exercise ordinary care in the performance of its duties hereunder. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent.

Section 13. Notices. Any notices or communications to the Issuer under this Disclosure Agreement may be given as follows: Oklahoma State University, 529 Scott Hall, Stillwater, Oklahoma 74078, Attention: Director of Administration and Finance Business Operations, Telephone: 405-744-5671.

Section 14. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Issuer, the Dissemination Agent, each Participating Underwriter and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

Section 15. Recordkeeping. The Issuer shall maintain records of all filings of Annual Reports and Listed Event Notices, including the content of such disclosure, the names of the entities with whom such disclosure was filed and the date of filing such disclosure.

Section 16. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

[Signatures Omitted – Exhibit A on Next Page]

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EXHIBIT A

DESCRIPTION OF PORTIONS OF OFFICIAL STATEMENT REQUIRING ANNUAL UPDATE

The following information under the following captions appearing on the following pages of Appendix A:

The table appearing under the subcaption “Academic Programs” on page A-4;

The tables appearing under the subcaption “Enrollment” on pages A-5 and A-6;

The tables appearing under the subcaption “Admissions” on pages A-6 and A-7;

The table appearing under the subcaption “Degrees Conferred” on page A-7;

The table appearing under the subcaption “Tuition and Fees” on page A-13;

The table entitled “Endowment Funds” appearing on page A-16;

The table entitled “Donor Base” appearing on page A-16;

The table entitled “General Revenue Bonds Outstanding” appearing on page A-18;

The table entitled “Debt Service Requirements on General Revenue Bonds” appearing on page A- 19;

The table entitled “Prior Encumbered Obligations Outstanding” appearing on page A-20; and

The table entitled “Debt Service Requirements on Prior Encumbered Obligations” appearing on page A-20.

Appendix B—Audited Financial Statements.

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EXHIBIT B

EVENTS WITH RESPECT TO THE BONDS FOR WHICH LISTED EVENT NOTICES ARE REQUIRED

1. Principal and interest payment delinquencies. 2. Nonpayment-related defaults, if material. 3. Unscheduled draws on debt service reserves reflecting financial difficulties. 4. Unscheduled draws on credit enhancements reflecting financial difficulties. 5. Substitution of credit or liquidity providers, or their failure to perform. 6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security. 7. Modifications to rights of security holders, if material. 8. Bond calls, if material. 9. Defeasances. 10. Release, substitution or sale of property securing repayment of the securities, if material. 11. Rating changes. 12. Tender offers. 13. Bankruptcy, insolvency, receivership or similar event of the Issuer1. 14. The consummation of a merger, consolidation or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. 15. Appointment of a successor or additional trustee or the change of name of a trustee, if material. 16. Incurrence of a Financial Obligation of the Issuer, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders, if material; and2 17. Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the Issuer, any of which reflect financial difficulties.

1This event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Issuer in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Issuer, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Issuer. 2The Issuer intends to comply with Events 16 and 17, and the definition of “Financial Obligation”, with reference to the Rule, any other applicable federal securities laws and the guidance provided by the Securities and Exchange Commission in Release No. 34-83885, dated August 20, 2018 (the “2018 Release”), and any further amendments or written guidance provided by the Securities and Exchange Commission or its staff with respect to the amendments to the Rule effected by the 2018 Release.

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APPENDIX E

PROPOSED FORM OFBOND COUNSEL OPINION

An opinion in substantially the following form will be delivered byThe Public Finance Law Group PLLC, Bond Counsel, upon delivery of the Bonds, assuming no material changes in facts or law.

May __, 2021

Board of Regents for the Oklahoma Agricultural and Mechanical Colleges Stillwater, OK

We have examined a certified copy of the Transcript of Proceedings of $______Board of Regents for the Oklahoma Agricultural and Mechanical Colleges (the “Board of Regents”), Oklahoma State University General Revenue and Refunding Bonds, Series 2021A (the “2021A Bonds”) dated as of the date of delivery, being issued as fully registered bonds in denominations of $5,000 each or any integral multiples thereof maturing serially on September 1 in each of the years 20__ through 20__, inclusive, and term bonds maturing in the years 20__ and 20__, and all bearing interest payable semi-annually on each March 1 and September 1, commencing September 1, 2021.

We have also examined a certified copy of the Transcript of Proceedings of $______Board of Regents for the Oklahoma Agricultural and Mechanical Colleges, Oklahoma State University General Revenue Refunding Bonds, Federally Taxable Series 2021B (the “2021B Bonds” and collectively with the 2021A Bonds, the “Bonds”) dated as of delivery, being issued as fully registered bonds in denominations of $5,000 each or any integral multiples thereof maturing serially on September 1 in each of the years 20__ through 20__, inclusive, and term bonds maturing in the years 20__ and 20__, and all bearing interest payable semi-annually on each March 1 and September 1, commencing September 1, 2021.

The Bonds have been issued by the Board of Regents in accordance with the provisions of a Master Resolution Establishing the Oklahoma State University General Revenue Financing System dated as June 19, 2009 (the “Master Resolution”), as previously supplemented and amended, and as further supplemented and amended by a Seventeenth Supplemental Resolution and an Eighteenth Supplemental Resolution adopted on March 5, 2021, but dated as of May 1, 2021 (collectively, the “Resolution”). The Bonds have been issued on a parity with the outstanding Parity Debt of the Board of Regents (the “Prior Bonds”). A description of the Pledged Revenues and the conditions under which bonds may be issued in the future payable from the Pledged Revenues on a parity with the Prior Bonds, are set forth in the Resolution.

The 2021A Bonds will be used to (i) finance certain academic and related facilities and infrastructure on the campus of Oklahoma State University, along with related costs; (ii) acquire the leased property allocable to the portion of the outstanding principal amount of certain lease purchase agreements pertaining to academic and related facilities on the campus of Oklahoma State University, along with related costs originally funded through the issuance of The Oklahoma Development Finance Authority’s (a) Master Real Property Lease Revenue Bonds, Series 2013A issued in the original principal amount of $7,105,000, to provide funds for construction of an information technology building, (b) Master Real Property Lease Revenue Bonds, Series 2014E issued in the original principal amount of $49,770,000, to provide funds to finance certain projects related to the North Dining Hall Facility, College of Human Sciences, Spears School of Business, (c) Master Real Property Lease Revenue Bonds, Series 2014F issued in the original principal amount of $8,680,000, to provide funds to finance certain projects related to the Atherton Hotel in the Student Union, (d) Master Real Property Lease Revenue Bonds, Series 2015B issued in the original principal amount of $42,145,000, to provide funds to finance the South Parking Garage, and (e) Master Real Property Lease Revenue Bonds, Series

E-1 2017A issued in the original principal amount of $37,060,000, to provide funds to finance the College of Engineering, Architecture and Technology Undergraduate Lab; and (iii) pay costs of issuance of the 2021A Bonds.

The 2021B Bonds will be used to (i) acquire the leased equipment and property allocable to the portion of the outstanding principal amount of certain lease purchase agreements pertaining to certain utility system improvements to the water distribution system on the campus of Oklahoma State University, along with related costs originally funded through the issuance of The Oklahoma Development Finance Authority’s (a) Master Equipment Lease Revenue Bonds, Series 2013A issued in the original principal amount of $8,115,000, to provide funds for energy efficiency equipment, (b) Master Real Property Lease Revenue Bonds, Federally Taxable Series 2014G issued in the original principal amount of $3,205,000, to provide funds to finance certain projects related to the Atherton Hotel in the Student Union, (c) Master Real Property Lease Revenue Bonds, Federally Taxable Series 2015C issued in the original principal amount of $75,315,000, to provide funds to finance the new Central Plant, (d) Master Real Property Lease Revenue Bonds, Federally Taxable Series 2015E issued in the original principal amount of $7,870,000, to provide funds to finance the new Central Plant and Clearwell at the campus water treatment plant, (e) Master Real Property Lease Revenue Bonds, Federally Taxable Series 2016E issued in the original principal amount of $17,295,000, to provide funds to finance the Electric Utility and Distribution Infrastructure, (f) Master Real Property Lease Revenue Bonds, Federally Taxable Series 2017B issued in the original principal amount of $13,075,000, to provide funds to finance Campus and Central Plant Utility Distribution Infrastructure and the Foundation Seed Stocks Building for the College of Agricultural Sciences and Natural Resources, and (ii) pay certain costs associated with the issuance of the 2021B Bonds.

Defined terms used herein and not otherwise defined shall have the meanings given said terms in the Resolution.

The Bonds are subject to redemption prior to stated maturity, at the redemption prices, for the reasons, and in the manner set out on the face thereof, and as prescribed by the Resolution.

The Bonds are not a liability or indebtedness, general or special, of the State of Oklahoma (the “State”) or any political subdivision thereof, and neither the faith and credit nor the taxing power of the State or any political subdivision thereof is pledged to the payment of the principal of, premium, if any, or interest on the Bonds.

We further advise that the Internal Revenue Code of 1986, as amended (the “Code”), establishes certain requirements that must be met subsequent to the issuance and delivery of the Bonds in order that interest on the 2021A Bonds be and remain excludable from gross income for Federal income tax purposes under Section 103 of the Code. The Arbitrage and Use of Proceeds Certificate of the Board of Regents, which will be delivered concurrently with the delivery of the 2021A Bonds, contains provisions and procedures relating to compliance with the requirements of the Code. The Board of Regents, in executing its Arbitrage and Use of Proceeds Certificate, has covenanted that it will at all times perform all acts and things necessary or appropriate under any valid provision of law to ensure that interest on the 2021A Bonds shall not be included in gross income for Federal income tax purposes under the Code. Noncompliance by the Board of Regents with the provisions of the Arbitrage and Use of Proceeds Certificate may require inclusion in gross income of the recipients of interest on the 2021A Bonds retroactive to the date of issuance of the 2021A Bonds, regardless of when such noncompliance occurs.

We have examined (i) the applicable laws of the State of Oklahoma, (ii) certified copies of the proceedings of the Board of Regents authorizing the issuance and sale of the Bonds; (iii) executed originals of the Resolution; and (iv) the executed and authenticated Bond No. R-1 with respect to the Bonds. We are of the

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opinion that such proceedings show lawful authority for the issuance of the Bonds under existing laws of the State of Oklahoma.

We have not been engaged or undertaken to review the accuracy, completeness or sufficiency of the Official Statement (the “Official Statement”) or other offering material relating to the Bonds and we express no opinion relating thereto (excepting only the matters set forth as our opinion in the Official Statement).

As to questions of fact material to our opinion, we have relied upon the representations of the Board of Regents contained in the Resolution and in the certified proceedings and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation.

Based upon the foregoing, we are of the opinion, under existing law, as follows:

1. The Board of Regents is duly created and validly existing, with full power and authority to adopt the Resolution and perform the agreements on its part contained therein and issue the Bonds.

2. The Resolution has been validly authorized and creates a valid lien on the Pledged Revenues in favor of the Bonds, on a parity with the Parity Debt and with any additional bonds, if any, to be issued by the Board of Regents under the Resolution as Parity Debt, subject only to the provision of the Prior Encumbered Obligations.

3. The Bonds have been duly authorized by the Board of Regents and are valid and binding special obligations of the Board of Regents, payable solely from the sources provided therefor in the Resolution, subject to the Prior Encumbered Obligations.

4. Assuming the Board of Regents comply with the provisions and procedures set forth in the Arbitrage and Use of Proceeds Certificate, under existing statutes and court decisions (i) interest on the 2021A Bonds will be excluded from gross income for Federal income tax purposes, and (ii) interest on the 2021A Bonds is not treated as a specific preference item in calculating the alternative minimum tax that may be imposed under the Code. The opinions set forth in the preceding sentences are subject to the condition that the Board of Regents complies with all requirements of Code, that must be satisfied subsequent to the issuance of the 2021A Bonds in order that interest thereon be, or continue to be, excluded from gross income for Federal income tax purposes. The Board of Regents has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the 2021A Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the 2021A Bonds. We express no opinion regarding other federal tax consequences arising with respect to the 2021A Bonds.

5. Interest on the 2021B Bonds is not excludable from the gross income of the recipients thereof pursuant to Section 103 of the Code for federal income tax purposes.

6. Interest on the Bonds is exempt from State of Oklahoma income tax.

7. The Bonds are exempt from registration under the Securities Act of 1933 and the Resolution is exempt from qualification under the Trust Indenture Act of 1939.

Except as stated in paragraphs 4, 5, and 6 above, we express no opinion regarding any other Federal or state or local tax consequences with respect to the Bonds. We render our opinion under existing statutes and court decisions as of the issue date. We express no opinion on the effect of any action hereafter taken or not taken in reliance upon an opinion of other counsel on the exclusion from gross income for Federal income tax purposes of interest on the Bonds, or under state and local tax law.

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It is to be understood that the rights of the holders of the Bonds and the enforceability of the Bonds and the Resolution may be subject to laws affecting creditors’ rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases.

In rendering the foregoing opinions regarding Federal income tax treatment of interest on the 2021A Bonds, we have relied upon and assumed (i) the material accuracy of the representations, statements of intention and reasonable expectations, and certifications of fact contained in the Arbitrage and Use of Proceeds Certificate of the Board of Regents; and (ii) continuing compliance by the Board of Regents with the covenants set forth in such Arbitrage and Use of Proceeds Certificate as to such matters. We do not undertake to advise you of matters which may come to our attention subsequent to the date hereof which may affect our legal opinions and conclusions expressed herein, and we bring to your attention the fact that our legal opinions and conclusions are an expression of professional judgment and are not a guarantee of a result.

Respectfully submitted,

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