THE OHIO UNIVERSITY Cusipno

This Preliminary Official Statement and the information contained herein are subject to change, completion or amendment without notice. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. * † Dated: DateofInitialDelivery N The Series2017ABondsindefinitive formareexpectedtobeavailablefordeliveryDTCinNew York, NewonoraboutMarch 1,2017. upon fortheUnderwritersbytheir counsel,SquirePattonBoggs(US)LLP.Prager&Co.,LLCisacting asmunicipaladvisortotheUniversity. passed uponbyJohnBiancamano, Esq.,anAssistantAttorneyGeneralandgeneralcounselfortheUniversity. Certainlegalmatterswillbepassed certain legalmattersrelatingtotheirissuancebyDinsmore&Shohl LLP,BondCounsel,andcertainotherconditions.Certainlegalmatterswillbe Official Statementtoobtaininformationasabasisformakinginformed investmentjudgments. on certaincorporations,includingthecorporatealternativeminimumtaxaportionofthatinterest.See“TAXEXEMPTION”herein. the networthbaseofcorporatefranchisetax.InterestonSeries2017ABondsmaybesubjecttocertainfederaltaxesimposedonly insurance companytax,thedealersinintangiblestaxleviedonbasisoftotalequitycapitalfinancialinstitutions,and therefrom, includinganyprofitmadeonthesalethereof,arefreefromallOhiostateandlocaltaxation,exceptestatetax,domestic corporations undertheInternalRevenueCodeof1986,asamended,and(ii)Series2017ABonds,transferthereof,income income taxpurposesandisnotanitemofpreferenceforthefederalalternativeminimumimposedonindividuals covenants andtheaccuracyofcertainrepresentations,interestonSeries2017ABondsisexcludiblefromgrossincomeforfederal

CERTAIN TERMSOFTHESERIES2017ABONDS–RedemptionPriortoMaturity”herein. See “APPENDIXC–BOOK‑ENTRYSYSTEM;DTC.” form willnotbetransferableorexchangeable,exceptfortransfertoanothernomineeofDTCasotherwisedescribedinthisOfficial Statement. $5,000 inexcessthereof.TherewillbenodistributionofSeries2017ABondstotheultimatepurchasers.The book‑entry method, and will be registered initiallyin the name of DTC. The Series 2017A Bonds will be issuedin denominations of $5,000 or any multipleof Bonds willbeoriginallyissuedonlyasfullyregisteredbonds,oneforeachmaturitybearingthesameinterestrate,underabook‑entry only on presentationandsurrendertotheTrustee,interesttransmittedeachJune1December1,beginning2017.TheSeries 2017A levied bytheOhioGeneralAssemblyforpaymentofprincipalandinterestonSeries2017ABonds. credit oftheUniversityisnotpledgedtotheirpayment.TheownersSeries2017ABondsshallhavenorightanyexcises ortaxes University andtopaycostsofissuance.See“PLANOFFINANCING.” Ohio, asTrustee(the“Trustee”).TheproceedsoftheSeries2017ABondswillbeusedtofinanceandrefinancecostscapitalfacilities ofthe Master TrustAgreementassupplemented,the“TrustAgreement”),eachbetweenUniversityandU.S.BankNationalAssociation,Cleveland, Fourteenth SupplementalTrustAgreementdatedasofMarch1,2017(the“FourteenthAgreement,”andtogetherwiththe 2001 (the “Master Trust Agreement”), as supplemented to date and asfurther supplemented by the and a Trust Agreement dated as of May 1, are specialobligationsofTheOhioUniversity(the“University”)pursuanttocertainresolutionstheBoardTrustees December 1

ew See inside cover Preliminary; subject tochange. Year I 07$2,475,000 2017 082,385,000 2018 092,475,000 2019 002,590,000 2020 012,715,000 2021 022,855,000 2022 033,000,000 2023 043,155,000 2024 051,020,000 2025 061,065,000 2026 The Series2017ABondsareofferedwhen,asandifissuedbythe University andacceptedbytheUnderwriters,subjecttoopinionon This Coverincludescertaininformationforquickreferenceonly. Itisnotasummaryofthebondissue.Investorsshouldreadentire In theopinionofDinsmore&ShohlLLP,BondCounsel,underexistinglaw(i)assumingcontinuingcompliancewithcertain The Series2017ABondsaresubjecttooptionalandmandatoryredemptionpriormaturity,asprovidedherein.*See“SUMMARYOF Principal andinterestwillbepayabletotheregisteredowner(initially,TheDepositoryTrustCompanyoritsnominee(“DTC”)),principal The Series2017ABondsarenotobligationsoftheStateOhio,andgeneralUniversity,fullfaith and The $148,295,000*OhioUniversity(AStateofOhio)GeneralReceiptsBonds,Series2017A(the“SeriesBonds”) ssue The HuntingtonInvestment Company –B ook Amount* Goldman, Sachs&Co. E The dateofthisOfficial StatementisFebruary__,2017, andtheinformationspeaksonly asofthatdate ntry $112,380,000* –____%TermBondsdueDecember 1,2047Yield CUSIPNo.______O PRELIMINARY OFFICIAL STATEMENT DATED JANUARY 27, 2017 nly Interest

Rate

General ReceiptsBonds,Series2017A $35,915,000* SERIES2017ASERIALBONDS Yield $112,380,000* SERIES2017ATERMBOND PRINCIPAL MATURITYSCHEDULE* (A StateUniversityofOhio)

THE OHIO UNIVERSITY CUSIPNo. $148,295,000*

† December 1 Year 07$1,125,000 2027 081,175,000 2028 091,235,000 2029 001,295,000 2030 011,360,000 2031 021,435,000 2032 031,510,000 2033 04965,000 2034 051,015,000 2035 061,065,000 2036 Amount* PNC CapitalMarketsLLC Barclays Interest Rate Due: December 1,asshownbelow Rating: (See “RATINGS”herein) Yield †

Moody’s: Aa3 CUSIPNo. S&P: A+ †

REGARDING USE OF THIS OFFICIAL STATEMENT This Official Statement does not constitute an offering of any security other than the original offering of the Series 2017A Bonds identified on the cover hereof. No dealer, broker, salesman or other person has been authorized by the University to give any information or to make any representation, other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by the University. 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 2017A Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. This Official Statement speaks only of its date, and the information contained herein is subject to change.

The information and descriptions in this Official Statement do not purport to be comprehensive or definitive. Statements regarding specific documents, including the Trust Agreement and the Series 2017A Bonds, are summaries and subject to the detailed provisions of those documents and are qualified in their entirety by reference to the appropriate document, copies of which will be made available upon request for examination at the offices of the Underwriters during the initial offering of the Bonds and thereafter at the designated corporate trust office of the Trustee.

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 a part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information.

Upon issuance, the Series 2017A Bonds will not be registered by the University under any federal or state securities law, and will not be listed on any stock or other securities exchange. Neither the Securities and Exchange Commission nor any other federal, state, municipal or other governmental entity or agency, except the University will have, at the request of the University, passed upon the accuracy or adequacy of this Official Statement or approved the Series 2017A Bonds for sale.

All financial and other information presented in this Official Statement has been provided by the University from its records, except for information expressly attributed to other sources. The presentation of information, including tables of receipts from appropriations, fees and other sources, is intended to show recent historic information, and is not intended to indicate future or continuing trends in the financial position or other affairs of the University. Insofar as the statements contained in this Official Statement involve matters of opinion or estimates, even if not expressly stated as such, such statements are made as such and not as representations of fact or certainty, no representation is made that any of such statements have been or will be realized, and such statements should be regarded as suggesting independent investigation or consultation of other sources prior to the making of investment decisions. Neither the University's independent auditors, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the prospective financial information and preliminary data contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the prospective financial information and preliminary data.

This Official Statement contains statements that the University believes may be "forward-looking statements." Words such as "plan," "estimate," "project," "budget," "anticipate," "expect," "intend," "believe" and similar terms are intended to identify forward-looking statements. The achievement of results or other expectations expressed or implied by such forward- looking statements involve known and unknown risks, uncertainties and other factors that are difficult to predict, may be beyond the control of the University and could cause actual results, performance or achievements to be materially different from any results, performance or achievements expressed or implied by such forward-looking statements. The University undertakes no obligation, and does not plan, to issue any updates or revisions to any of the forward-looking statements in this Official Statement.

References herein to provisions of Ohio law, whether codified in the Ohio Revised Code (the "Revised Code") or uncodified, or to the provisions of the Ohio Constitution or the University's resolutions, are references to such provisions as they presently exist. Any of these provisions may from time to time be amended, repealed or supplemented.

As used in this Official Statement, "Debt Service Charges" means principal (including any mandatory sinking fund requirements), interest and any premium payable on the obligations referred to; "Fiscal Year" means the University's fiscal year, currently the 12-month period from July 1 to June 30; "Fiscal Year 2017" means the fiscal year ending June 30, 2017; and "State" or "Ohio" means the State of Ohio.

CUSIP © is a registered trademark of the American Bankers Association. CUSIP Global Services is managed on behalf of the American Bankers Association by S&P Capital IQ. CUSIP data appearing on the Cover of this Official Statement is assigned by CUSIP Global Services, an independent company not affiliated with the University. The University is not responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness. These CUSIP numbers may also be subject to change after the issuance of the Series 2017A Bonds identified on the Cover, and neither the University nor the Underwriters have agreed to, and there is no duty or obligation to, update this Official Statement to reflect any change or correction to the CUSIP numbers.

TABLE OF CONTENTS Page INTRODUCTION ...... 3 General ...... 3 The Series 2017A Bonds and Sources of Payment and Security ...... 3 Constitutional and Statutory Authorization ...... 5 SUMMARY OF CERTAIN TERMS OF THE SERIES 2017A BONDS ...... 5 General ...... 5 Book Entry Only System ...... 5 Payments of Debt Service Charges on the Series 2017A Bonds ...... 5 Redemption Prior to Maturity ...... 6 SECURITY FOR AND SOURCES OF PAYMENT OF THE BONDS ...... 7 Introduction ...... 7 Pledge of General Receipts ...... 8 Covenant as to Sufficiency of General Receipts ...... 9 State Legislation Relative to University Fiscal Difficulties ...... 9 Annual Debt Service Charges ...... 11 OUTSTANDING GENERAL RECEIPTS BONDS ...... 12 PLAN OF FINANCING ...... 13 General ...... 13 Sources and Uses of Funds ...... 13 Refunded Bonds* ...... 14 2017 Projects ...... 15 Future Financing ...... 15 THE TRUST AGREEMENT ...... 15 University Budgeting Requirements...... 15 Funds and Accounts ...... 15 Covenants of the University ...... 17 Events of Default and Remedies ...... 17 Enforcement by Mandamus ...... 19 Defeasance ...... 19 Supplemental Trust Agreements...... 20 Additional Bonds ...... 20 Annual Reports and Records ...... 21 Trustee ...... 21 TAX EXEMPTION ...... 22 General ...... 22 Risk of Future Legislative Changes and/or Court Decisions ...... 23 Original Issue Premium ...... 24 Original Issue Discount ...... 24 CONTINUING DISCLOSURE ...... 25 LEGAL MATTERS ...... 25 ELIGIBILITY UNDER OHIO LAW FOR INVESTMENT AND AS SECURITY FOR THE DEPOSIT OF PUBLIC MONEYS ...... 26 LITIGATION ...... 26 RATINGS ...... 26

FINANCIAL ADVISOR ...... 27 UNDERWRITING ...... 27 INDEPENDENT AUDITORS ...... 27 VERIFICATION OF MATHEMATICAL COMPUTATIONS ...... 28 CONCLUDING STATEMENT AND SIGNATURES ...... 28 APPENDIX A THE OHIO UNIVERSITY ...... A-1 APPENDIX B AUDITED FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED JUNE 30, 2015 AND 2016 ...... B-1 APPENDIX C BOOK-ENTRY SYSTEM; DTC ...... C-1 APPENDIX D FORM OF OPINION OF BOND COUNSEL ...... D-1 APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE ...... E-1

THE OHIO UNIVERSITY (A State University of Ohio)

$148,295,000* GENERAL RECEIPTS BONDS, SERIES 2017A

SELECTED SUMMARY STATEMENT

The following summary supplements certain of the information on the cover page and summarizes other selected information in this Official Statement relating to the $148,295,000* The Ohio University (A State University of Ohio) General Receipts Bonds, Series 2017A (the "Series 2017A Bonds"). It is not intended as a substitute for the more detailed discussions in this Official Statement, to which reference should be made.

ISSUER. The Series 2017A Bonds are obligations of The Ohio University (the "University"), a state university of the State of Ohio.

SECURITY AND SOURCES OF PAYMENT. The Series 2017A Bonds are special obligations of the University and are payable from and secured by a pledge of and lien on the General Receipts of the University on a parity basis with the lien on General Receipts securing certain outstanding obligations of the University and any additional parity obligations that may be issued by the University. See "SECURITY FOR AND SOURCES OF PAYMENT FOR THE BONDS– Pledge of General Receipts," "THE TRUST AGREEMENT" and APPENDIX A for further information. Owners have no right to have excises or taxes levied by the General Assembly for the payment of the principal of, premium, if any, or interest on the Series 2017A Bonds.

PURPOSE OF SERIES 2017A BONDS. The Series 2017A Bonds are issued to (i) acquire, construct, equip, furnish, reconstruct, alter, enlarge, remodel, renovate, rehabilitate, and improve University facilities, (ii) refund Refunded Bonds (as defined herein) of the University, and (iii) pay costs of issuance. See "PLAN OF FINANCING."

PRIOR REDEMPTION.* The Series 2017A Bonds maturing on or after December 1, 2027 are subject to redemption at the option of the University prior to their stated maturities, on any date on or after ______1, 202_, in whole or in part (as selected by the University and in integral multiples of $5,000), at a redemption price equal to 100% of the principal amount redeemed, plus accrued interest to the redemption date. See "SUMMARY OF CERTAIN TERMS OF THE SERIES 2017A BONDS —Redemption Prior to Maturity."

FORM AND MANNER OF MAKING PAYMENTS. The Series 2017A Bonds will be issued as fully registered bonds, one for each maturity bearing the same interest rate, issued in $5,000 denominations and integral multiples thereof, issuable under a book-entry-only method and registered initially in the name of The Depository Trust Company, New York, New York, or its nominee Cede & Co. ("DTC"). There will be no distribution of Series 2017A Bonds to the ultimate purchasers. The Series 2017A Bonds in certificated form as such will not be transferable or exchangeable, except for transfer to another nominee of DTC or as otherwise described in this Official Statement. For further information regarding the book entry method see "APPENDIX C — BOOK-ENTRY SYSTEM; DTC."

TAX EXEMPTION. In the opinion of Bond Counsel, under existing law (i) assuming continuing compliance with certain covenants and the accuracy of certain representations, interest on the Series 2017A Bonds is excludible from gross income for federal income tax purposes and is not an item of tax preference

* Preliminary; subject to change.

for purposes of the federal alternative minimum tax imposed on individuals and corporations under the Internal Revenue Code of 1986, as amended, and (ii) the Series 2017A Bonds, the transfer thereof, and the income therefrom, including any profit made on the sale thereof, are free from all Ohio state and local taxation, except the estate tax, the domestic insurance company tax, the dealers in intangibles tax, the tax levied on the basis of the total equity capital of financial institutions, and the net worth base of the corporate franchise tax. Interest on the Series 2017A Bonds may be subject to certain federal taxes imposed only on certain corporations, including the corporate alternative minimum tax on a portion of that interest. See "TAX EXEMPTION" herein.

TRUSTEE, BOND REGISTRAR AND ESCROW AGENT. U.S. Bank National Association, acting through its designated corporate trust office in Cleveland, Ohio.

BOND COUNSEL. Dinsmore & Shohl LLP.

MUNICIPAL ADVISOR. Prager & Co., LLC.

UNDERWRITERS. Goldman, Sachs & Co., Barclays Capital Inc., The Huntington Investment Company and PNC Capital Markets LLC (collectively, the "Underwriters"). The Series 2017A Bonds have been purchased by the Underwriters at a price of $______. See "UNDERWRITING."

UNDERWRITERS' COUNSEL. Squire Patton Boggs (US) LLP.

VERIFICATION AGENT. Causey Demgen & Moore P.C.

[THIS SPACE INTENTIONALLY LEFT BLANK]

OFFICIAL STATEMENT

$148,295,000** THE OHIO UNIVERSITY (A State University of Ohio) General Receipts Bonds, Series 2017A

INTRODUCTION

General

This Official Statement is furnished to provide certain information in connection with the original issuance and sale by The Ohio University (the "University"), a state university of Ohio, of its General Receipts Bonds, Series 2017A (the "Series 2017A Bonds"), to be issued to (i) finance certain University Facilities, as defined herein, (ii) refund the Refunded Bonds, as defined herein, and (iii) pay costs of issuance. See "PLAN OF FINANCING".

The Series 2017A Bonds are being issued pursuant to Sections 3345.11 and 3345.12 of the Ohio Revised Code (the "Act"), the general bond resolution (the "General Bond Resolution") adopted by the Board of Trustees of the University (the "Board") on December 8, 2000, the series resolution with respect to the Series 2017A Bonds (the "Series 2017A Resolution") adopted by the Board on August 25, 2016, a Trust Agreement dated as of May 1, 2001 (the "Master Trust Agreement"), as supplemented to date and as supplemented by the Fourteenth Supplemental Trust Agreement dated as of March 1, 2017 to be entered into in connection with the issuance of the Series 2017A Bonds (the "Fourteenth Supplemental Trust Agreement," and collectively with the Master Trust Agreement as previously supplemented, the "Trust Agreement"), each between the University and U.S. Bank National Association (the "Trustee"), as successor trustee to National City Bank, with its designated corporate trust office in Cleveland, Ohio. The General Bond Resolution, the Series 2017A Resolution and the Trust Agreement are collectively referred to in this Official Statement as the "Agreement."

Pursuant to the Act, the University is authorized to acquire by purchase, lease, lease-purchase, lease with option to purchase, or otherwise, construct, equip, furnish, reconstruct, alter, enlarge, maintain, repair, and operate, and lease to and from others, "University Facilities" as hereinafter defined, and to pay all or part of the costs of the University Facilities, and to refund, fund or repay prior obligations issued for that purpose, by the issuance of obligations payable from General Receipts of the University. The General Bond Resolution and the Master Trust Agreement authorize the issuance of certain obligations of the University (the "Bonds"), and the Series 2017A Resolution and Fourteenth Supplemental Trust Agreement specifically authorize the issuance of the Series 2017A Bonds as a series of the Bonds under the Master Trust Agreement. See "THE TRUST AGREEMENT -- Additional Bonds".

The Series 2017A Bonds and Sources of Payment and Security

The Series 2017A Bonds are one in a series of the University's Bonds issued and to be issued under the General Bond Resolution and the Master Trust Agreement. See "PLAN OF FINANCING" and APPENDIX A – "THE UNIVERSITY - Outstanding Debt and Other Obligations".

The University's Bonds represent a type of financing of facilities by state universities of Ohio authorized by an amendment to the Ohio Constitution as implemented by the Act. Significant elements of

** Preliminary; subject to change.

the Series 2017A Bond financing are the broad scope and gross pledge character of the security afforded to the Bonds, including the Series 2017A Bonds, and the simplicity and flexibility provided by permitting all authorized types of facilities to be financed under one open-end trust agreement. Security provisions include the pledge to the Bonds of the General Receipts of the University, which include the full amount of every type and character of receipts, excepting only those specifically excluded. In Fiscal Year 2016, the pledged General Receipts of the University amounted to $564,220,981. The University estimates its General Receipts for Fiscal Year 2017 will be $589,900,000. See "SECURITY FOR AND SOURCES OF PAYMENT OF THE BONDS – Pledge of General Receipts".

The Series 2017A Bond proceedings provide for mandatory annual budgeting by the University of its General Receipts in an amount sufficient to pay the Debt Service Charges on all Bonds, including the Series 2017A Bonds, when due in each Fiscal Year. With respect to the Series 2017A Bonds, payments from the General Receipts are to be made to the Trustee not later than five business days prior to any date when Debt Service Charges are due and to be deposited in the Debt Service Account in the Debt Service Fund held in the custody of the Trustee. Amounts in the Debt Service Account are to be applied by the Trustee to pay Debt Service Charges on the Series 2017A Bonds when due. See "THE TRUST AGREEMENT – Funds and Accounts."

Other security provisions include the covenant of the University to fix, make, adjust and collect items of General Receipts to produce at all times General Receipts at least sufficient to pay Debt Service Charges on its Bonds, including the Series 2017A Bonds, and satisfy other requirements with respect to the Bonds and, together with other moneys available, to pay all costs and expenses necessary for the proper maintenance and successful and continuous operation of the University. See "SECURITY FOR AND SOURCES OF PAYMENT OF THE BONDS -- Covenant as to Sufficiency of General Receipts".

The General Bond Resolution and the Master Trust Agreement are the basic documents pertaining to all Bonds, including the Series 2017A Bonds, and prescribe the conditions for the issuance of additional Bonds ("Additional Bonds"). For each issue of Additional Bonds, a series resolution, setting forth detailed provisions for that issue, is to be adopted by the Board. The Master Trust Agreement requires a historical coverage test of General Receipts to be met as a condition of issuing Additional Bonds. See "THE TRUST AGREEMENT -- Additional Bonds".

The proceeds of all Bonds are to be applied solely to pay costs of "University Facilities," as hereinafter defined, or to refund outstanding obligations issued for that purpose, as specifically provided and allocated in the applicable Series Resolution.

University Facilities are defined in the General Bond Resolution as any "facilities," as defined in the Act, for the financing of which the University is authorized to issue Bonds. Under the Act, "facilities" include buildings, structures and other improvements, and equipment, real estate and interests in real estate therefor, to be used for or in connection with, classrooms or other instructional facilities, libraries, administrative and office facilities, and other facilities for student activity or student service facilities, housing and dining facilities, dining halls, and other food service and preparation facilities, vehicular parking facilities, bookstores, athletic and recreational facilities, faculty centers, auditoriums, assembly and exhibition halls, hospitals, infirmaries and other medical and health facilities, research, and continuing education facilities and includes any one, part of, or any combination of such facilities, and further includes site improvements, utilities, machinery, furnishings, and any separate or connected buildings, structures, improvements, sites, open space and green space areas, utilities or equipment to be used in, or in connection with the operation or maintenance of, or supplementing or otherwise related to the services or facilities to be provided by, such facilities.

Constitutional and Statutory Authorization

The Series 2017A Bonds are authorized pursuant to the Act, enacted under authority of the Ohio Constitution and particularly Section 2i of Article VIII thereof which provides in relevant part that the General Assembly may authorize the issuance of revenue obligations and other obligations for capital improvements for State supported and State assisted institutions of higher education, which obligations may be secured by a pledge under law of all or such portion of receipts of these institutions as the General Assembly authorizes. Section 2i further provides that the owners or holders of those obligations, such as holders of the Series 2017A Bonds, are not given the right to have excises or taxes levied by the General Assembly for the payment of principal or interest.

The Act implements that constitutional authority. It authorizes the issuance by the University of its Bonds, including the Series 2017A Bonds, to pay all or part of the cost of University Facilities and to refund and retire obligations previously issued for such purpose; authorizes the pledge to the Bonds, including the Series 2017A Bonds, of all or such part of the "available receipts" of the University as the University determines in the bond proceedings (referred to as "General Receipts" in the Agreement); and provides that the pledge of and lien on General Receipts may, as provided for in the Agreement, be made prior to all other expenses, claims or payments.

SUMMARY OF CERTAIN TERMS OF THE SERIES 2017A BONDS

General

The Series 2017A Bonds will be dated their date of delivery, and will bear interest from that date, such interest to be payable on each June 1 and December 1 (each, an "Interest Payment Date"), commencing June 1, 2017. The Series 2017A Bonds will mature on December 1 in the years and in the principal amounts set forth on the cover of this Official Statement. The Series 2017A Bonds are subject to optional and mandatory sinking fund redemption prior to maturity. The Series 2017A Bonds are issuable as fully registered bonds in denominations of $5,000 and integral multiples thereof. Interest on the Series 2017A Bonds will be calculated based on a year of 360 days, consisting of twelve 30-day months.

Book Entry Only System

The Series 2017A Bonds will be issued and issuable only as one fully registered bond for each maturity bearing the same interest rate in the name of Cede & Co., as nominee for The Depository Trust Company ("DTC"), New York, New York, as Holder of all the Series 2017A Bonds. The fully registered Series 2017A Bonds will be retained and immobilized in the custody of DTC. For discussion of the book entry system and DTC, see APPENDIX C – BOOK-ENTRY SYSTEM; DTC. DTC (or any successor securities depository), or its nominee, for all purposes under the Trust Agreement will be considered to be the sole Holder of the Series 2017A Bonds.

Payments of Debt Service Charges on the Series 2017A Bonds

The principal of the Series 2017A Bonds will be payable to the Holder (initially DTC, or its nominee) upon presentation and surrender of the Series 2017A Bonds at the designated corporate trust office of the Trustee as Paying Agent for the Series 2017A Bonds. The Series 2017A Bonds will bear interest on their unpaid principal amounts payable on each Interest Payment Date, beginning June 1, 2017 to the Holder (initially DTC, or its nominee) at the address shown on the Register as of the close of business on the 15th day of the calendar month next preceding such interest payment date (the "Regular Record Date"); provided that, so long as the Series 2017A Bonds remain in book-entry form, the Trustee for the Series 2017A Bonds will make any payment of Debt Service Charges by wire transfer of funds on each Interest Payment Date.

Redemption Prior to Maturity

The Series 2017A Bonds are subject to optional and mandatory sinking fund redemption prior to maturity as described below.

Optional Redemption*. The Series 2017A Bonds maturing on and after December 1, 2027 are subject to optional redemption by the University on or after ______1, 202_, in whole or in part on any date, in such order of maturity as the University shall determine, at a redemption price of 100% of the principal amount to be redeemed, plus interest accrued to the redemption date.

Mandatory Sinking Fund Redemption*. The Series 2017A Bonds maturing on December 1, 2047 (the "Series 2017A Term Bond") are subject to redemption prior to maturity by lot on each December 1 as shown below, under the mandatory sinking fund provisions of the Trust Agreement, at a redemption price equal to the principal amount thereof plus interest accrued to the redemption date, without premium, as follows:

December 1 Year Principal Amount* 2044 $26,025,000 2045 27,360,000 2046 28,760,000 2047† 30,235,000 †Maturity

At its option, to be exercised on or before the forty-fifth day next preceding any such mandatory redemption date, the University may receive a credit in respect of its mandatory redemption obligation for the Series 2017A Term Bond which prior to said date has been purchased (in the open market) or redeemed (otherwise than through the operation of the sinking fund) and cancelled by the Trustee and not theretofore applied as a credit against any mandatory redemption obligation. Each Series 2017A Term Bond so previously purchased or redeemed shall be credited by the Trustee at 100% of the principal amount thereof against the obligation of the University on such mandatory redemption date and any excess shall be credited on future sinking fund redemption obligations with respect to Series 2017A Term Bonds, as directed by the University, and the principal amount of such Series 2017A Bonds to be redeemed by operation of the sinking fund shall be accordingly reduced.

The University shall on or before the forty-fifth day immediately preceding each mandatory redemption date furnish the Trustee with its certificate indicating whether and to what extent it shall exercise its right for such credit against such mandatory redemption and confirm that such funds for the balance of the next succeeding prescribed mandatory redemption will be paid on or before the fifth business day next preceding December 1. The Trustee shall redeem such an aggregate principal amount of such Series 2017 Term Bonds at 100% of the principal amount thereof plus accrued interest to the redemption date as will exhaust as nearly as practicable such credit.

Notice of Redemption and Payments. Notice of call for redemption of the Series 2017A Bonds shall be given by the Trustee on behalf of the University by mailing a copy of the redemption notice, at least 30 days prior to the date fixed for redemption, to the person in whose name such Series 2017A Bond to be redeemed in whole or in part is registered on the Register at the close of business on the 10th day preceding that mailing, at the address then appearing therein; provided that failure to receive notice by mailing, or any defect in that notice, as to any Series 2017A Bond shall not affect the validity of the

* Preliminary; subject to change.

proceedings for the redemption of any Series 2017A Bond. Any notice of redemption of the Series 2017A Bonds shall either (a) explicitly state that the proposed redemption is conditioned on there being on deposit in the Debt Service Account on the redemption date sufficient money to pay the full redemption price of the Series 2017A Bonds or portions thereof to be redeemed, or (b) be sent only if sufficient money to pay the full redemption price of the Series 2017A Bonds or portions thereof to be redeemed is on deposit in the Debt Service Account. If the Series 2017A Bonds or portions thereof are duly called for redemption and if on the redemption date moneys for the redemption of all the Series 2017A Bonds or portions thereof to be redeemed, together with interest to the redemption date, are held in the Debt Service Fund or by the Trustee or Paying Agent so as to be available therefor, then from and after that redemption date those Series 2017A Bonds shall cease to bear interest and no longer shall be considered to be outstanding.

Notice of the call for redemption of the Series 2017A Bonds held under a book entry system will be sent by the Trustee only to DTC or its nominee as registered owner. Selection of book entry interests in the Series 2017A Bonds called, and notice of call to the owners of those interests called, is the responsibility of DTC, Direct Participants and Indirect Participants. Any failure of DTC to advise any Direct Participant, or of any Direct Participant or any Indirect Participant to notify the book entry interest owners, of any such notice and its content or effect will not affect the validity of any proceedings for the redemption of the Series 2017A Bonds. See "SUMMARY OF CERTAIN TERMS OF THE SERIES 2017A BONDS - Book Entry Only System" and "APPENDIX C – BOOK-ENTRY SYSTEM; DTC" herein.

When less than the entire unmatured portion of the Series 2017A Bonds are called for redemption at any time or from time to time, the selection of such Series 2017A Bonds or portions of the Series 2017A Bonds is to be made by lot in such manner as determined by the Trustee.

If any Series 2017A Bonds are not presented for payment at the date fixed for their redemption and the funds for such payment are available therefor, the Holders of such Series 2017A Bonds will thereafter be restricted exclusively to the funds available for redemption for the satisfaction of any claim relating to such Series 2017A Bonds. Any such funds remaining unclaimed for three years after becoming due and payable shall be paid to the University and the Holders of such Series 2017A Bonds shall thereafter be entitled to look only to the University for payment and only in an amount equal to the amounts received by or paid to or on behalf of the University, without any interest thereon.

SECURITY FOR AND SOURCES OF PAYMENT OF THE BONDS

Introduction

The Series 2017A Bonds are being issued pursuant to, and will be secured by, the Trust Agreement. The principal of and interest on the Series 2017A Bonds will be payable from General Receipts of the University.

Enforceability of the provisions of the Series 2017A Bonds and the Trust Agreement may be subject to bankruptcy, insolvency, reorganization, moratorium or other laws in effect from time to time affecting creditors' rights, and to the exercise of judicial discretion in accordance with general principles of equity.

The payment of Debt Service Charges on the Series 2017A Bonds shall be equally and ratably secured by a pledge and assignment of the Debt Service Fund and of the General Receipts without priority by reason of series, designation, form, number, date of authorization, issuance, sale, execution, authentication or delivery, or date or maturity of any Bonds issued pursuant to the Trust Agreement.

The Series 2017A Bonds shall be special obligations of the University payable solely from the General Receipts, the amounts deposited in the Debt Service Fund and other moneys as provided in the Trust Agreement. The Holders of the Series 2017A Bonds have no right to have the Board, the General Assembly of the State of Ohio or the legislative authority of any political subdivision levy any excises or taxes for the payment of Debt Service Charges.

The General Bond Resolution establishes the Debt Service Fund, a special fund held by the Trustee, for the payment of Debt Service Charges. The University is to make payments to the Debt Service Account of the Debt Service Fund not later than five (5) business days prior to each date Debt Service Charges are payable.

Pledge of General Receipts

General Receipts of the University pledged to the security of the Series 2017A Bonds include virtually all the receipts of the University, excepting only receipts expressly excluded by the Trust Agreement. Among receipts expressly excluded from General Receipts are State appropriations, which for the University's Fiscal Year 2016 accounted for approximately $161,462,302 or approximately 23% of the University's combined operating revenues and State appropriations.

The General Receipts, as defined in the General Bond Resolution, consist of all moneys received by the University including but not limited to all gross fees, deposits, charges, receipts and income from all or any part of the students of the University, whether designated as tuition, instructional fees, tuition surcharges, general fees, activity fees, health fees or other special purpose fees or otherwise designated; all gross income, revenues and receipts from the operation, ownership or control of University Facilities; all grants, gifts, donations and pledges and receipts therefrom; and the proceeds of the sale of obligations, including proceeds of obligations issued to refund or advance refund obligations previously issued, to the extent and as allocated to the payment of Debt Service Charges under the proceedings authorizing those obligations.

The exclusions from the General Receipts consist of: moneys raised by taxation and State appropriations until and unless their pledge to the payment of Debt Service Charges is authorized by law and is made by a supplemental trust agreement approved by the University's Board of Trustees; any grants, gifts, donations and pledges, and receipts therefrom, which under restrictions imposed in the grant or promise or as a condition of the receipt are not available for payment of Debt Service Charges or any special fee charged to restore any deficiency in debt service payments on lease-appropriation bonds issued by the State and receipts therefrom. That fee, relating to lease-appropriation bonds of the State, has never been required to be imposed and is not anticipated to be required to be imposed. There are no such State lease-appropriation bonds outstanding and to the knowledge of the University, no such lease- appropriation bonds of the State are intended to be issued. No moneys raised by taxation or State appropriations are pledged to the payment of Debt Services Charges.

The University covenants in the Trust Agreement to include in its budget for each Fiscal Year amounts from its General Receipts at least sufficient to pay the Debt Service Charges on its Bonds, including the Series 2017A Bonds, when due and to satisfy other requirements with respect to the Bonds. See "THE TRUST AGREEMENT -- University Budgeting Requirements".

Pursuant to the Act, upon their receipt by the University the General Receipts are immediately subject to the lien of the pledge made by the Trust Agreement, and the lien of that pledge is valid against all parties having claims of any kind, regardless of notice, and creates a perfected security interest without necessity for prior separation, physical delivery, filing or recording or further act by the University.

The total estimated General Receipts for the current Fiscal Year (2017) is $589,900,000. The General Receipts of the University for the five Fiscal Years ended June 30, 2016, are set forth in the chart below.

General Receipts

Fiscal Year 2012 2013 2014 2015 2016 Student Fees and Tuition(1) $347,307,594 $374,164,780 $379,789,082 $391,886,246 $404,421,772 Auxiliary Enterprises(2) 96,748,008 94,966,777 101,448,181 114,799,222 114,302,148 Other Unrestricted General 42,906,367 56,696,999 70,509,331 55,512,658 45,497,061 Income(3) Total General Receipts $486,961,969 $525,828,556 $551,746,594 $562,198,126 $564,220,981

(1) Student Fees and Tuition include: Instructional, Out-of-State Tuition Surcharge, General and all other student fees. (2) Includes income from intercollegiate athletics, residential housing, culinary services, parking and transportation services. (3) Includes sales and service revenue, royalty income, unrestricted investment income and all other unrestricted revenue sources. Source: Financial Statements and reports of the University for the Fiscal Years ended June 30, 2012, 2013, 2014, 2015 and 2016.

Covenant as to Sufficiency of General Receipts

The Series 2017A Bonds are further secured by the University's covenant in the General Bond Resolution that the University will fix, make, adjust and collect fees, rates, rentals and charges and other items of General Receipts as will produce at all times General Receipts at least sufficient to pay Debt Service Charges on its Bonds, including the Series 2017A Bonds, when due and, together with other moneys lawfully available, to pay all costs and expenses required to be paid under the proceedings for the Series 2017A Bonds and all other costs and expenses for the proper maintenance and successful and continuous operation of the University (see discussion of University fees and charges under APPENDIX A - "THE UNIVERSITY -- Fees and Charges.")

State Legislation Relative to University Fiscal Difficulties

The Ohio General Assembly has enacted Sections 3345.70 to 3345.78 of the Ohio Revised Code (hereinafter in this section the "Fiscal Watch Act") providing methods for dealing with fiscal difficulties of state-supported universities and colleges in Ohio.

Under the Fiscal Watch Act, a board of trustees of a state university may declare that the university is in a state of fiscal exigency. So long as such fiscal exigency exists, the board must (1) file quarterly reports on an annualized budget, comparing the budget to actual spending with projected expenses for the remainder of the year (those reports to include narrative explanations as appropriate); (2) place all residence hall and meal fees in a rotary account dedicated to the upkeep and maintenance of the dormitory buildings and to fund meal programs; (3) place moneys for the operation of residence hall and meal programs in separately maintained auxiliary funds in the university accounting system; and (4) file the minutes from their board of trustees meetings with the chancellor of higher education within thirty days of their meetings. The actions described in (2) and (3) above are subject to the applicable bond proceedings for the university's bonds, if any, and to any applicable pledges therefor in connection with those bonds. In addition, during such period of fiscal exigency, a university may not use State funds to provide grants or scholarships to out-of-state students or subsidize off-campus housing or subsidize transportation to and from off-campus housing.

In addition, pursuant to the Fiscal Watch Act, the Chancellor shall make a determination that a university is under "fiscal watch" if certain criteria are met. Those criteria include a variety of financial indicators and standards of using those indicators, including but not limited to the following: whether the university fails to submit its fiscal year financial statements to the State Auditor, whether the university

fails to obtain audited year-end financial statements, if the university fails to meet certain composite result financial ratios (viability, primary reserve and net income) established by the State, if the university requests an advance of State subsidy money, whether the university is delayed or fails to make any payments to applicable retirement systems required to be made, if the university fails to make any scheduled payroll payments, whether the university fails to make any payments to vendors as a result of a cash deficiency or a substantial deficiency in the payment processing system of the university, if the university fails to make any scheduled payment of principal or interest for short-or long-term debt, whether the university revises its original budget for the fiscal year and the revision will result in a substantially reduced ending fund balance or larger deficit, and if the university projects a significant negative variance between its most recently adopted annual budget and actual revenues or expenses at the end of the fiscal year.

Further, under certain circumstances the Chancellor of Higher Education may, after consultation with the State Office of Budget and Management, determine that a university under fiscal watch is experiencing such fiscal difficulties to warrant the appointment of a conservator. Under those circumstances, the Chancellor shall request certification from the State Office of Budget and Management that the university is experiencing sufficient fiscal difficulties to warrant the appointment of a conservator, and upon receipt of that certification, the Chancellor shall then certify this determination to the Governor.

After a conservator is appointed, all duties, responsibilities and powers of the institution's board of trustees are suspended and the management and control of the institution are assumed by the conservator, who also assumes custody of all property of the institution and the duties of the institution's president or chief executive officer. The conservator also conducts a preliminary performance evaluation of the institution's president or chief executive officer.

Within 30 days after the appointment of a conservator, the Governor must appoint, with the advice and consent of the State Senate, a five-member governance authority (the "Authority"). The Authority appoints an executive director and conducts a final evaluation of the institution's president or chief executive officer, who may be reinstated or terminated by the Authority. The Authority assumes management and control of the institution and its property from the conservator. The Authority also must prepare periodic reports about the institution including any progress in implementing reforms at the institution.

At least annually, the Authority must apply the fiscal watch criteria to the institution to determine whether sufficient fiscal stability has been achieved to warrant terminating the Authority's governance of the institution, and if so, the Authority must certify such finding to the Governor. The Governor may then issue an order terminating the Authority and fill vacancies on the board of trustees of such institution, which board assumes management and control of the institution and its property from the Authority.

The administration of the University has reviewed applicable portions of the Fiscal Watch Act and the applicable rules of the State Office of Budget and Management, as well as records pertaining to the University's circumstances with respect to the Fiscal Watch Act, and is of the opinion that, with respect to the University, no circumstances or conditions exist that will cause a fiscal watch condition to be determined to exist under the Fiscal Watch Act.

Annual Debt Service Charges

The following table represents the annual Fiscal Year Debt Service Charges for all outstanding General Receipts Bonds (all outstanding Bonds and excluding indebtedness incurred outside of the Master Trust Agreement).

Debt Service Charges on Outstanding General Receipts Bonds1

Series 2017A Bonds Fiscal Year Ending Outstanding General Total Debt June 30 Receipts Debt Service2 Principal Interest Total Service 2017 $ 42,939,127 2018 40,823,797 2019 40,328,993 2020 37,429,921 2021 33,835,401 2022 33,803,682 2023 33,822,834 2024 33,008,697 2025 32,809,252 2026 30,593,837 2027 30,566,204 2028 30,157,742 2029 28,086,518 2030 28,087,663 2031 28,077,063 2032 28,081,506 2033 25,219,588 2034 25,211,888 2035 24,566,113 2036 24,570,250 2037 24,553,163 2038 23,208,225 2039 23,224,750 2040 23,209,175 2041 23,206,125 2042 23,194,575 2043 23,203,300 2044 20,842,500 2045-21143 13,975,000 2115 256,987,500

(1) Numbers rounded to the nearest dollar. (2) Net of Federal subsidy payments with respect to Tax Credit QECB Bond issued by the State of Ohio Air Quality Development Authority for the benefit of the University; column includes debt service on bonds anticipated to be refunded by Series 2017A Bonds. (3) Interest on the Series 2014 Bonds beginning in Fiscal Year 2045 and ending in Fiscal Year 2114 is $13,975,000 per year and the aggregate debt service over the period is $978,250,000. (4) Does not include Ohio University Foundation Debt.

OUTSTANDING GENERAL RECEIPTS BONDS

The University has issued from time to time its Bonds secured by the pledge of its General Receipts or revenue from income producing facilities. The University has never failed to pay punctually and in full all amounts due on any indebtedness.

The University's General Receipts Bonds outstanding as of January 1, 2017, including the original par amount of those Bonds at the time of issuance, consists of the following:

Original Principal Principal Amount General Receipts Bonds Amount Outstanding

Series 2006A† $ 28,145,000 $14,950,000 Series 2006B† 29,170,000 17,920,000 Series 2008A† 13,345,000 7,540,000 Series 2009 26,645,000 9,190,000 Series 2012 76,470,000 59,025,000 OAQDA — Series 2012A 20,140,370 12,761,483 OAQDA — Series 2012B 8,500,000 8,500,000 Series 2013 145,170,000 128,650,000 Series 2014 250,000,000 250,000,000

Total General Receipts Bonds $597,585,370 $508,536,483

Original Principal Principal Amount Other Debt Amount Outstanding Term Loan (OU Inn) $ 4,000,000 $1,607,300 Housing for Ohio†† 31,985,000 23,375,000

Total Other Debt $35,985,000 $24,982,300

Total Debt $633,570,370 $533,518,783

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† All or a portion of outstanding securities expected to be refunded by the Series 2017A Bonds. †† Indebtedness to be completely extinguished on February 1, 2017.

PLAN OF FINANCING

General

The Series 2017A Bonds are being issued to (i) finance a portion of the 2017 Projects, described below, which constitute University Facilities, (ii) refund the Refunded Bonds, described below, and (iii) pay costs of issuance of the Bonds.

Sources and Uses of Funds

The proceeds of the Series 2017A Bonds (exclusive of any accrued interest), are expected to be applied for the following uses and in the following respective amounts:

Sources of Funds: Par Amount of the Series 2017A Bonds Net Original Issue Premium Total Sources

Uses of Funds: Deposit to Series 2017A Projects Account for University Facilities Deposit to Escrow Account for Advance Refunded Bonds Deposit to Debt Service Fund for Current Refunded Bonds Costs of Issuance(1) Total Uses (1) Including underwriters' discount, verification fees, legal fees, trustee fees, printing and other costs of issuance.

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Refunded Bonds*

On the date of delivery of the Series 2017A Bonds, a portion of the proceeds of the Series 2017A Bonds will be used to refund the following maturities of outstanding Bonds (the "Refunded Bonds")*:

Bond Maturity Date Interest Rate Par Amount Call Date Call Price

Series 2006A 12/01/2017 5.000% $1,580,000.00 03/01/2017 100.000% 12/01/2018 5.000% 1,660,000.00 03/01/2017 100.000 12/01/2019 4.200% 1,735,000.00 03/01/2017 100.000 12/01/2020 4.750% 1,815,000.00 03/01/2017 100.000 12/01/2021 4.750% 1,900,000.00 03/01/2017 100.000 12/01/2022 4.750% 1,990,000.00 03/01/2017 100.000 12/01/2023 4.750% 2,085,000.00 03/01/2017 100.000 12/01/2024 4.750% 2,185,000.00 03/01/2017 100.000

Series 2006B 12/01/2017 4.250% 990,000.00 03/01/2017 100.000 12/01/2019 4.125% 1,165,000.00 03/01/2017 100.000 12/01/2021 5.000% 1,270,000.00 03/01/2017 100.000 12/01/2023 5.000% 1,405,000.00 03/01/2017 100.000 12/01/2026 4.375% 2,360,000.00 03/01/2017 100.000 12/01/2031 5.000% 4,740,000.00 03/01/2017 100.000 12/01/2036 4.500% 5,990,000.00 03/01/2017 100.000

Series 2008A 12/01/2018 4.500% 315,000.00 06/01/2018 100.000 12/01/2019 4.250% 325,000.00 06/01/2018 100.000 12/01/2020 4.375% 340,000.00 06/01/2018 100.000 12/01/2021 4.450% 355,000.00 06/01/2018 100.000 12/01/2022 4.500% 375,000.00 06/01/2018 100.000 12/01/2023 4.550% 390,000.00 06/01/2018 100.000 12/01/2028 4.800% 2,260,000.00 06/01/2018 100.000 12/01/2033 5.000% 2,880,000.00 06/01/2018 100.000

On the date of delivery and payment, a portion of the proceeds of the Series 2017A Bonds will be used to (i) redeem the Refunded Bonds shown above that are callable on March 1, 2017 (the "Current Refunded Bonds"), and (ii) purchase eligible government obligations (the "Defeasance Obligations") to be held in trust by U.S. Bank National Association, as escrow agent for the Refunded Bonds shown above that are callable June 1, 2018 (the "Advance Refunded Bonds"), to provide for payment of principal of and interest on the Advance Refunded Bonds as and when due and the redemption of those Advance Refunded Bonds on their earliest permitted call date, June 1, 2018, as shown above. The mathematical accuracy of (a) the computations of the adequacy of the cash and the maturing principal and interest earned on the Defeasance Obligations to be purchased to provide for the payment of the principal and interest due and to be due on the Advance Refunded Bonds, and (b) the computations supporting the conclusion by Bond Counsel that the Series 2017A Bonds are not "arbitrage bonds" under Section 148 of the Internal Revenue Code of 1986, as amended, will be verified by Causey Demgen & Moore P.C.

Upon the purchase and deposit of the cash and the Defeasance Obligations, receipt of the verification report and compliance with the other defeasance provisions of the Master Trust Agreement, the Advance Refunded Bonds will be deemed to have been paid and will no longer be considered

* Preliminary; subject to change.

outstanding debt of the University, and will be called for redemption on their earliest permitted call date of June 1, 2018 and at the call price shown above.

2017 Projects

A portion of the proceeds of the Series 2017A Bonds will be used to pay the costs of the "2017 Projects," being the acquisition, construction, renovation, rehabilitation, improvements and upgrades to academic buildings, student housing and student dining facilities, including, but not limited to, the McCracken Hall renovation and addition, Grover Center expansion, Alden Library renovation, Clippinger Renovation Phase I, Engineering Research/Consolidation and expansion, Facilities/RMS/Administrative relocation, HCOM Athens, Ellis Hall upgrades, Tanaka Hall, Luchs Hall, Sowle Hall, Carr Hall and Jefferson Hall, Jefferson Dining Hall, Shively Dining Hall, and Nelson Dining Hall.

To the extent revenues from the 2017 Projects are included in the "General Receipts" of the University, those revenues are pledged for repayment of the Bonds, including the Series 2017A Bonds. However, the lawfully authorized and pledged sources of payment for the Bonds, including the Series 2017A Bonds, are not limited to the revenues that are General Receipts associated with the 2017 Projects. All of the General Receipts of the University are pledged to the payment of the Debt Service Charges on the Bonds, including the Series 2017A Bonds.

Future Financing

The University periodically evaluates cost savings which could be achieved by restructuring its outstanding Bonds. In addition, the University periodically reviews its various capital needs, including projects to address deferred maintenance.

THE TRUST AGREEMENT

The following is a summary of certain provisions of the Master Trust Agreement, as supplemented and including as supplemented by the Fourteenth Supplemental Trust Agreement, and does not purport to be complete. The Trust Agreement contains provisions, among others, as to funds, Series 2017A Bond authentication, registration, transfer, exchange and replacement; redemption; events of default and remedies; duties of the Trustee (and any successor); supplemental trust agreements; and defeasance. Certain provisions of the Trust Agreement as to University budgeting requirements, funds, University covenants, events of default and remedies, enforcement by mandamus, defeasance, supplemental trust agreements, Additional Bonds, annual reports and records, and the Trustee are summarized below.

University Budgeting Requirements

In the Trust Agreement the University has covenanted that it will include in its budget for each Fiscal Year and provide annually from General Receipts in amounts at least sufficient to pay in that year the Debt Service Charges on the Bonds and satisfy other requirements with respect to the Bonds. The budgeted amounts from various sources of General Receipts must, in the aggregate, at all times be sufficient in amounts and times of collection to meet all payments required to be made into the Debt Service Fund from General Receipts in that Fiscal Year. Those budgets can and must be revised from time to time during a Fiscal Year to reflect any changes necessary to meet those requirements.

Funds and Accounts

Debt Service Fund. The Debt Service Fund (the "Debt Service Fund") is held by the Trustee and the moneys and investments in it are pledged to and are to be applied exclusively to the payment of Debt

Service Charges. The Trust Agreement establishes the Debt Service Account, as an account of the Debt Service Fund, and permits other accounts to be established as special accounts within the Debt Service Fund as may be provided in any series resolution in connection with the issuance of Additional Bonds and in certain other circumstances. Other accounts may include a debt service reserve account for one or more series of Bonds. No debt service reserve is provided for the Series 2017A Bonds.

The Debt Service Account is pledged to, and is to be used solely for, the payment of Debt Service Charges as they fall due upon stated maturity or by operation of mandatory redemption requirements. Not later than five (5) days prior to any date upon which any Debt Service Charges fall due, the University is to pay to the Trustee, from General Receipts, (i) amounts to the credit of the Debt Service Account which, together with other available moneys in that account, are sufficient to pay the Debt Service Charges then coming due, and (ii) amounts to any debt service reserve account which are sufficient to meet any requirement in a series resolution for funding such a reserve. No debt service reserve is provided for the Series 2017A Bonds.

Facilities Fund and Series 2017A Projects Account. The Trust Agreement establishes the Series 2017 Projects Account within the Facilities Fund (the "Series 2017A Projects Account") in the custody of the University or the Trustee. The proceeds of the Series 2017A Bonds applicable to the 2017 Projects (excluding accrued interest and capitalized interest, if any, which will be deposited in the Debt Service Account) will be deposited in the Series 2017A Projects Account. The Series 2017A Projects Account may be disbursed only for costs of the 2017 Projects, including costs associated with the issuance of the Series 2017A Bonds. The Series 2017A Projects Account is not pledged to the payment of the Series 2017A Bonds. Upon completion of the 2017 Projects, any amount remaining in the Series 2017A Projects Account shall be transferred to the Debt Service Account.

Rebate Fund. The Trust Agreement established the Rebate Fund. While Bonds, including the Series 2017A Bonds, are outstanding and subject to the rebate requirements of Section 148(f) of the Code and implementing regulations (and subject to change consistent with rebate requirements), the University is to calculate, or to have calculated, the amount of the arbitrage earnings on the proceeds of the Bonds. If the amount of arbitrage earnings in the Rebate Fund is less than the arbitrage earnings, the University is required to pay an amount equal to the deficiency to the Trustee for deposit in the Rebate Fund. If the amount attributable to arbitrage earnings on deposit in the Rebate Fund is greater than the arbitrage earnings, the Trustee will pay the excess in the Rebate Fund to the University. The Trustee is required to use the moneys in the Rebate Fund to make any required payments of arbitrage earnings to the United States in accordance with Section 148(f) of the Code.

Any amounts on deposit in the Rebate Fund are not pledged to the payment of Debt Service Charges.

Eligible Investments. Under the Trust Agreement, amounts in the Debt Service Fund may be invested in Eligible Investments, as more fully described in the Trust Agreement, and including bonds or other obligations which as to principal and interest constitute (i) direct obligations of, or obligations which are unconditionally guaranteed by, the United States of America; (ii) obligations issued by any agency or instrumentality of the United States of America; (iii) tax-exempt general obligations of any state of the United States or any political subdivision thereof, provided such obligation carries the highest ratings of Moody's or Standard & Poor's; (iv) certain certificates of deposit or similar instruments of banks or trust companies, including the Trustee, organized under the laws of the United States or any state thereof, and which are members of the Federal Deposit Insurance Corporation, which have combined capital and surplus of $10,000,000; (v) any repurchase agreement for a period not to exceed 30 days with an institution described in clause (iv) above that is fully collateralized by certain pledged securities in the

possession of the Trustee, based upon the market value of such securities; and (vi) any money market fund invested solely in obligations described in clauses (i), (ii) and (iii) above.

Moneys credited to the Debt Service Fund may be invested in Eligible Investments maturing or redeemable at the times and in the amounts necessary to provide moneys to meet the payment of Debt Service Charges as they fall due.

Moneys credited to the Series 2017A Projects Account of the Facilities Fund may be invested in any investment which is a lawful investment for the University maturing not later than the times when such moneys are required to pay any costs payable from such Account.

Interest earnings from the investment of moneys in any fund or account, and any gain or loss on such investment, shall be credited to the respective fund or account from which such investment was made.

Covenants of the University

In the Trust Agreement, the University covenants, among other things:

(a) To pay, or cause to be paid, the Debt Service Charges on each and all Bonds on the dates, at the places and in the manner provided in the Trust Agreement and in the Bonds;

(b) To fix, make, adjust and collect fees, rates, rentals and charges and other items of General Receipts as will produce at all times General Receipts at least sufficient to pay Debt Service Charges when due and to satisfy all other requirements with respect to the Bonds and, together with other money lawfully available for the purpose, to pay all costs and expenses required to be paid under the Bond proceedings and all other costs and expenses for the proper maintenance and successful and continuous operation of the University;

(c) Not to make any pledge or assignment of or create or suffer any lien or encumbrance upon the Debt Service Fund or the General Receipts prior to or on a parity with the pledge under the Trust Agreement, except as authorized or permitted in the Trust Agreement; and

(d) To faithfully observe and perform all agreements, covenants, undertakings, stipulations and provisions contained in the Trust Agreement and in any and every Bond executed, authenticated and delivered under the Trust Agreement, and in all other proceedings pertaining to the Bonds.

See also the discussion under the caption "SECURITY FOR AND SOURCES OF PAYMENTS OF THE BONDS -- Covenant as to Sufficiency of General Receipts."

Events of Default and Remedies

Under the Trust Agreement, each of the following is an Event of Default:

(a) Failure to pay any interest on any Bond, when and as the same shall have become due and payable;

(b) Failure to pay the principal of or any redemption premium on any Bond, when and as the same shall have become due and payable, whether at maturity or by mandatory redemption or mandatory purchase;

(c) Failure to pay the amounts due to the Holder of any Bond tendered or deemed tendered to the University or the Trustee pursuant to the Trust Agreement; and

(d) Failure to perform or observe any other covenant, condition or agreement contained in the Bonds or the Trust Agreement and to be performed by the University, which failure shall have continued for a period of 60 days after written notice given to the University by the Trustee or the Holders of not less than 25% in aggregate principal amount of the Bonds then outstanding.

The Trust Agreement does not require the furnishing of periodic evidence to the Trustee as to the absence of defaults or Events of Default under, or compliance with, the terms of the Trust Agreement.

Upon the occurrence of any Event of Default as referenced in subparagraph (a) or (b) above, the Trustee shall, and upon the occurrence of any event of Default as referenced in subparagraph (c) or (d) above, the Trustee may, and upon the written request of Holders of not less than 25% in aggregate principal amount of Bonds then outstanding, shall:

(a) By mandamus or other suit, action or proceeding at law or in equity enforce all the rights of Holders, including the compelling of the performance of all duties of the University and the enforcement of the payment of Debt Service Charges on the Bonds;

(b) Bring suit upon the Bonds;

(d) In the event of the occurrence of an Event of Default as referenced in subparagraph (a) or (b) above:

(i) Apply to a court having jurisdiction of the cause to appoint a receiver, who may be the Trustee, to receive and administer the General Receipts with full power to pay and to provide for payment of Debt Service Charges, and with such powers, subject to the discretion of the court, as are accorded receivers in general equity cases, excluding any power to pledge additional revenue or receipts or other income or moneys of the University to the payment of Debt Service Charges, and excluding the power to take possession of, mortgage or cause the sale or otherwise dispose of any University Facilities, or

(ii) By notice in writing delivered to the University, declare the principal of all Bonds then outstanding and the interest accrued on those Bonds immediately due and payable and thereupon that principal and interest shall become and be immediately due and payable.

If at any time after that declaration and prior to the entry of judgment in a court of law or equity for enforcement or the appointment of a receiver hereunder, all sums payable under the Trust Agreement (except the principal and interest on bonds which have not reached their stated maturity dates and which are due and payable solely by reason of that declaration of acceleration, plus interest (to the extent permitted by law) on any overdue installments of interest at the rate borne by the Bonds in respect of which such Event of Default shall have occurred, shall have been duly paid or provided for by deposit with the Trustee and all existing defaults shall have been made good, then and in every such case the Trustee shall waive that Event of Default and its consequences and

shall rescind and annul that declaration, but no such waiver and rescission shall extend to or affect or impair any rights consequent on any subsequent Event of Default.

No remedy conferred upon or reserved to the Trustee (or to the Bondholders) is intended to be exclusive of any other remedy, but each and every remedy shall be cumulative and shall be in addition to any other remedy given to the Trustee or to the Bondholders.

Before taking remedial action the Trustee may require that a satisfactory indemnity bond be provided for the reimbursement of all expenses to which it may be put and to protect it against all liability, except liability which is adjudicated to have resulted from its negligence, bad faith or willful default, by reason of any action so taken. The Trustee may act without such indemnity, in which case its expenses are to be reimbursed by the University from available General Receipts.

The Bondholders shall not be entitled to enforce the provisions of the Trust Agreement or to institute any suit, action or proceeding for the enforcement of the Trust Agreement or for the execution of any trust thereof or for the appointment of a receiver, except as provided in the Trust Agreement.

Enforcement by Mandamus

The Act establishes that the duties of the University, of the Board and its members, and of University officers and employees provided for by the Trust Agreement, the Bonds and other resolutions and agreements regarding the issuance, sale and security of the Bonds, are duties enforceable by mandamus, and a covenant for that enforcement is contained in the Trust Agreement.

Defeasance

If the University pays or causes to be paid all Debt Service Charges due or to become due on the Bonds and provision is made for paying all other sums payable under the Trust Agreement, then and in that event the Trust Agreement (with certain exceptions) shall cease, determine and become null and void, and the covenants, agreements and other obligations of the University under it shall be discharged and satisfied. Thereupon the Trustee is to assign and deliver to the University any funds at the time subject to the lien of the Trust Agreement which may then be in its possession except such held for the payment of Debt Service Charges (subject to the provisions for unclaimed moneys described below).

All Debt Service Charges due or to become due on outstanding Bonds will be deemed to have been paid or caused to be paid for purposes of defeasance if:

(a) The Trustee holds, in trust for and irrevocably committed thereto, sufficient moneys, or

(b) The Trustee holds, in trust for and irrevocably committed thereto, non-callable direct obligations of the United States certified by bond counsel or an independent public accounting firm of national reputation to be payable in such amounts and on such dates as will, without further investment or reinvestment of either principal or investment earnings (likewise to be held in trust and committed, except as described below), be sufficient together with moneys referred to in (a) above, for the payment at their maturity or redemption date of all Debt Service Charges to the date of maturity or redemption, as the case may be; provided, that if any Bonds are to be redeemed prior to maturity, notice of redemption has been given or provision satisfactory to the Trustee has been made for the giving of that notice.

Any moneys held in cash by the Trustee in accordance with these provisions shall be invested only in direct obligations of the United States of which the maturities or redemption dates of which (at the option of the holder) shall be not later than the time or times at which the moneys will be required for these purposes. Any income or interest earned by, or increment to, those investments shall, to the extent not required for the applicable purposes, be transferred in accordance with the direction of the University.

Supplemental Trust Agreements

The Trustee and the University may without consent of or notice to any of the Holders enter into agreements supplemental to the Trust Agreement for any one or more of the following purposes to: (i) cure ambiguity, inconsistency or formal defect or omission in the Trust Agreement; (ii) grant or confer upon the Trustee for the benefit of the Holders any additional rights, remedies, powers or authority that may be lawfully granted to or conferred upon the Holders or the Trustee; (iii) subject additional revenues or receipts to the lien and pledge of the Trust Agreement; (iv) add to the covenants and agreements of the University contained in the Trust Agreement other covenants and agreements thereafter to be observed for the protection of the Holders or to surrender or limit any right, power or authority reserved to or conferred upon the University in the Trust Agreement, including the limitation of rights of redemption so that in certain instances Bonds of different series will be redeemed in some prescribed relationship to one another; (v) evidence any succession to the University and the assumption by the successor of the covenants and agreements of the University contained in the Trust Agreement; (vi) in connection with the issuance of Additional Bonds in accordance with the provisions of the Trust Agreement; (vii) permit certain coupon Bonds or a book entry system; (viii) permit the Trustee to comply with any obligations imposed upon it by law; (ix) specify further the duties and responsibilities of, and to define further the relationship among, the Trustee, the Registrar, any Remarketing Agents and any Authenticating Agents or Paying Agents; (x) achieve compliance of the Trust Agreement with any applicable federal securities or tax law; (xi) evidence the appointment of a new Remarketing Agent; and (xii) permit any other amendment which, in the judgment of the Trustee, is not to the prejudice of the Trustee or the Holders.

Exclusive of supplemental trust agreements referred to above, the holders of not less than a majority in aggregate principal amount of the Bonds then outstanding must consent to and approve the execution by the University and the Trustee of any other supplemental trust agreements. However, no supplemental trust agreement shall permit, or be construed as permitting (i) without the consent of the Holder of each Bond so affected, a change in the redemption provisions or an extension of the maturity of the principal amount of any Bond or the rate of interest or redemption premium thereon, or a reduction in the amount or extension of the time of any payment by any mandatory sinking fund requirements or mandatory redemption requirements, or (ii) without the consent of the Holders of all of the Bonds then outstanding, (a) the creation of a privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (b) a reduction in the aggregate outstanding amount required for consent to that supplemental trust agreement.

Additional Bonds

Additional Bonds, as they may from time to time be authorized by series resolutions, are issuable on a parity as to General Receipts with then outstanding Bonds, without limitation as to amount except as provided in the General Bond Resolution or as may subsequently be provided by law, and as may be provided in the applicable Series Resolution. Additional Bonds may be secured by a credit support instrument or reserve account which need not be applicable to other Bonds.

The Trust Agreement requires, together with other conditions for the issuance of Additional Bonds, that the General Receipts for the most recently completed Fiscal Years were at least 1.25 times the

maximum Debt Service Charges required to be paid in any subsequent Fiscal Year on all Bonds to be outstanding upon the original delivery of the Additional Bonds.

For purposes of this computation, historic General Receipts and future Debt Service Charges are subject only to certain adjustments set forth in the Trust Agreement.

Among other conditions to be met for issuance of Additional Bonds are that the University is not in default, and as a result of the authentication and delivery of the Additional Bonds will not be in default, of any of its covenants or obligations under the Trust Agreement, and that other requirements provided in the Trust Agreement (such as appropriate opinions by counsel concerning the validity of the Bond proceedings) for issuance have been met.

Annual Reports and Records

The University is to submit to the Trustee, within 180 days after the close of each Fiscal Year, a copy of an annual report for such Fiscal Year, accompanied by a report, opinion or certificate of certified public accountants or certified municipal accountants of the University, setting forth financial statements which present fairly the financial position of the University as of the end of the preceding Fiscal Year and the results of the operations and the changes in the financial position of the University for the Fiscal Year then ended, all in conformity with generally accepted accounting principles applied (except as noted in such report, opinion or certificate) on a basis consistent with the prior Fiscal Year. If such report, opinion or certificate of certified public accountants or certified municipal accountants is not then available, the University shall nevertheless file its financial statements with the Trustee within the time limit set forth above, and shall file such reports, opinion or certificate with the Trustee as soon as possible after such report, opinion or certificate becomes available.

Trustee

The Trustee, U.S. Bank National Association, is a national bank organized and existing under the laws of the United States, and is authorized to exercise corporate trust powers in the State of Ohio and regularly acts as trustee for revenue bond issues of the University.

The Trustee will, prior to the occurrence of an Event of Default and after the cure of any Event of Default, which may have occurred, undertake to perform only such duties as are specifically set forth in the Trust Agreement. At the time of an event of default and during its continuation, the Trustee will exercise such of the rights and powers vested in the Trustee by the Trust Agreement, and is to use the same degree of care and skill in their exercise as a prudent corporate trustee would exercise or use under a trust agreement securing securities of a public entity.

The Trustee is entitled to act upon opinions of counsel as provided in the Trust Agreement, and is not responsible for any loss or damage resulting from good faith reliance on those opinions of counsel. The Trustee is also entitled to rely on certain instruments, and is not liable for any action reasonably taken or omitted to be taken by it in good faith and reasonably believed by it to be within the discretion conferred upon it by the Trust Agreement.

The Trustee may be removed at any time by (i) an instrument or concurrent instruments in writing delivered to the Trustee and to the University and signed by or on behalf of the holders of not less than a majority in aggregate principal amount of Bonds then outstanding, or (ii) so long as there is no event of default which has occurred and is continuing, by written notice of the University delivered to the Trustee not less than 60 days before the removal is to take effect.

U.S. Bank National Association, by acceptance of its duties as Trustee under the Trust Agreement, has not reviewed this Official Statement and has made no representations as to the information contained herein, including but not limited to, any representations as to the financial feasibility or related activities.

TAX EXEMPTION

General

In the opinion of Dinsmore & Shohl LLP, Bond Counsel to the University, under existing law: (i) interest on the Series 2017A Bonds is excludible from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code, as amended (the "Code") and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; and (ii) the Series 2017A Bonds, the transfer thereof, and the income therefrom, including interest therefrom and any profit made on the sale thereof, are free from all Ohio state and local taxation, except the estate tax, the domestic insurance company tax, the dealers in intangibles tax, the tax levied on the basis of the total equity capital of financial institutions, and the net worth base of the corporate franchise tax. Interest on the Series 2017A Bonds may be subject to certain federal taxes imposed only on certain corporations. Bond Counsel expresses no opinion as to any other tax consequences regarding the Series 2017A Bonds.

The opinions on tax matters will be based on and will assume the accuracy of certain representations and certifications, and continuing compliance with certain covenants, of the University contained in the transcript of proceedings and that are intended to evidence and assure the foregoing, including that the Series 2017A Bonds are and will remain obligations the interest on which is excludible from gross income for federal income tax purposes. Bond Counsel will not independently verify the accuracy of such certifications and representations, or the continuing compliance with covenants, of the University.

The opinions of Bond Counsel are based on current legal authority and cover certain matters not directly addressed by that authority. They represent Bond Counsel's legal judgment as to excludability of interest on the Series 2017A Bonds from gross income for federal income tax purposes but is not a guaranty of that conclusion. The opinions are not binding on the Internal Revenue Service ("IRS") or any court. Bond Counsel expresses no opinion as to (i) the effect of future changes in the Code and the applicable regulations under the Code or (ii) the interpretation and the enforcement of the Code or those regulations by the IRS.

The Code prescribes a number of qualifications and conditions for the interest on state and local government obligations to be and to remain excluded from gross income for federal income tax purposes, some of which require future or continued compliance after issuance of the obligations. Noncompliance with these requirements may cause the loss of such status and result in the interest on the Series 2017A Bonds being included in gross income for federal income tax purposes retroactively to the date of issuance of the Series 2017A Bonds. The University has covenanted to take actions required of it for the interest on the Series 2017A Bonds to be and to remain excluded from gross income for federal income tax purposes and not to take any actions that would adversely affect that exclusion. After the date of issuance of the Series 2017A Bonds, Bond Counsel will not undertake to determine (or to so inform any person) whether any actions taken or not taken, or any events occurring or not occurring, or any other matters coming to Bond Counsel's attention, may adversely affect the exclusion from gross income for federal income tax purposes of interest on the Series 2017A Bonds or the market value of the Series 2017A Bonds.

A portion of the interest on the Series 2017A Bonds earned by certain corporations may be subject to a federal corporate alternative minimum tax. In addition, interest on the Series 2017A Bonds may be subject to a federal branch profits tax imposed on certain foreign corporations doing business in the United States and to a federal tax imposed on excess net passive income of certain S corporations. Under the Code, the exclusion of interest from gross income for federal income tax purposes may have certain adverse federal income tax consequences on items of income, deduction or credit for certain taxpayers, including financial institutions, certain insurance companies, recipients of Social Security and Railroad Retirement benefits, those that are deemed to incur or continue indebtedness to acquire or carry tax-exempt obligations, and individuals otherwise eligible for the earned income tax credit. The applicability and extent of these and other tax consequences will depend upon the particular tax status or other tax items of the owner of the Series 2017A Bonds. Bond Counsel will express no opinion regarding those consequences.

Payments of interest on tax-exempt obligations, including the Series 2017A Bonds, are generally subject to IRS Form 1099-INT information reporting requirements. If a Series 2017A Bond owner is subject to backup withholding under those requirements, then payments of interest will also be subject to backup withholding. Those requirements do not affect the exclusion of such interest from gross income for federal income tax purposes.

Bond Counsel's engagement with respect to the Series 2017A Bonds ends with the issuance of the Series 2017A Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the University or the owners or Beneficial Owners of the Series 2017A Bonds regarding the tax status of interest on the Series 2017A Bonds in the event of an audit examination by the IRS. The IRS has a program to audit tax-exempt obligations to determine whether the interest thereon is includible in gross income for federal income tax purposes. If the IRS does audit the Series 2017A Bonds, under current IRS procedures, the IRS will treat the University as the taxpayer and the owners and Beneficial Owners of the Series 2017A Bonds will have only limited rights, if any, to obtain and participate in judicial review of such audit. Any action of the IRS, including but not limited to selection of the Series 2017A Bonds for audit, or the course or result of such audit, or an audit of other obligations presenting similar tax issues, may affect the market values of the Series 2017A Bonds.

Prospective purchasers of the Series 2017A Bonds upon their original issuance at prices other than the respective prices indicated on the Cover of this Official Statement, and prospective purchasers of the Series 2017A Bonds at other than their original issuance should consult their own tax advisers regarding other tax considerations such as the consequences of market discount, as to all of which Bond Counsel expresses no opinion.

Risk of Future Legislative Changes and/or Court Decisions

Legislation affecting tax-exempt obligations is regularly considered by the United States Congress and may also be considered by the State legislature. Court proceedings may also be filed, the outcome of which could modify the tax treatment of obligations such as the Series 2017A Bonds. There can be no assurance that legislation enacted or proposed, or actions by a court, after the date of issuance of the Series 2017A Bonds will not have an adverse effect on the tax status of interest or other income on the Series 2017A Bonds or the market value or marketability of the Series 2017A Bonds. These adverse effects could result, for example, from changes to federal or state income tax rates, changes in the structure of federal or state income taxes (including replacement with another type of tax), or repeal (or reduction in the benefit) of the exclusion of interest on the Series 2017A Bonds from gross income for federal income tax purposes or of the Series 2017A Bonds from gross income for state income tax purposes for all or certain taxpayers.

For example, recent presidential and legislative proposals would eliminate, reduce or otherwise alter the tax benefits currently provided to certain owners of state and local government bonds, including proposals that would result in additional federal income tax on taxpayers that own tax-exempt obligations if their incomes exceed certain thresholds. Investors in the Series 2017A Bonds should be aware that any such future legislative actions (including federal income tax reform) may retroactively change the treatment of all or a portion of the interest on the Series 2017A Bonds for federal income tax purposes for all or certain taxpayers. In such event, the market value of the Series 2017A Bonds may be adversely affected and the ability of owners and Beneficial Owners to sell their Bonds in the secondary market may be reduced. The Series 2017A Bonds are not subject to special mandatory redemption, and the interest rates on the Series 2017A Bonds are not subject to adjustment in the event of any such change in the tax treatment of interest on the Series 2017A Bonds.

Investors should consult their own financial and tax advisers to analyze the importance of these risks.

Original Issue Premium

The Series 2017A Bonds ("Premium Bonds") as shown on the Cover may be offered and sold to the public at a price in excess of their stated redemption price at maturity (the principal amount). That excess constitutes bond premium. For federal income tax purposes, bond premium is amortized over the period to maturity of a Premium Bond, based on the yield to maturity of that Premium Bond (or, in the case of a Premium Bond callable prior to its stated maturity, the amortization period and yield may be required to be determined on the basis of an earlier call date that results in the lowest yield on that Premium Bond), compounded semiannually. No portion of that bond premium is deductible by the owner of a Premium Bond. For purposes of determining the owner's gain or loss on the sale, redemption (including redemption at maturity) or other disposition of Premium Bond, the owner's tax basis in the Premium Bond is reduced by the amount of bond premium that is amortized during the period of ownership. As a result, an owner may realize taxable gain for federal income tax purposes from the sale or other disposition of a Premium Bond for an amount equal to or less than the amount paid by the owner for that Premium Bond. A purchaser of a Premium Bond in the initial public offering at the price for that Premium Bond stated on the Cover of this Official Statement who holds that Premium Bond to maturity (or, in the case of a callable Premium Bond, to its earlier call date that results in the lowest yield on that Premium Bond) will realize no gain or loss upon the retirement of that Premium Bond.

Owners of Premium Bonds should consult with their own tax advisers as to the determination for federal income tax purposes of the amount of bond premium properly amortizable in any period with respect to the Premium Bonds and as to other federal tax consequences and the treatment of bond premium for purposes of state and local taxes on, or based on, income.

Original Issue Discount

The Series 2017A Bonds ("Discount Bonds") as shown on the Cover may be offered and sold to the public at an original issue discount ("OID"). OID is the excess of the stated redemption price at maturity (the principal amount) over the "issue price" of a Discount Bond. The issue price of a Discount Bond is the initial offering price to the public (other than to bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) at which a substantial amount of the Discount Bonds of the same maturity is sold pursuant to that offering. For federal income tax purposes, OID accrues to the owner of a Discount Bond over the period to maturity based on the constant yield method, compounded semiannually (or over a shorter permitted compounding interval selected by the owner). The portion of OID that accrues during the period of ownership of a Discount Bond (i) is interest excluded from the owner's gross income for federal income tax purposes to the same extent, and subject

to the same considerations discussed above, as other interest on the Series 2017A Bonds, and (ii) is added to the owner's tax basis for purposes of determining gain or loss on the maturity, redemption, prior sale or other disposition of that Discount Bond. A purchaser of a Discount Bond in the initial public offering at the price for that Discount Bond stated on the Cover of this Official Statement who holds that Discount Bond to maturity will realize no gain or loss upon the retirement of that Discount Bond.

Owners of Discount Bonds should consult their own tax advisers as to the determination for federal income tax purposes of the amount of OID properly accruable in any period with respect to the Discount Bonds and as to other federal tax consequences and the treatment of OID for purposes of state and local taxes on, or based on, income.

CONTINUING DISCLOSURE

In accordance with the Securities and Exchange Commission Rule 15c2-12 (the "Rule") and so long as the Series 2017A Bonds are outstanding, the University as the "Obligated Person" will agree pursuant to a Continuing Disclosure Certificate, dated the date of delivery of the Series 2017A Bonds, to provide or cause to be provided such operating data, audited financial statements and notices in such manner as may be required for purposes of the Rule. See APPENDIX E – FORM OF CONTINUING DISCLOSURE CERTIFICATE for the proposed form of Continuing Disclosure Certificate, along with a description of the annual information to be provided.

The Continuing Disclosure Certificate provides Bondholders with certain enforcement rights in the event of a failure by the Obligated Person to comply with the terms thereof; however, a default under the Continuing Disclosure Certificate does not constitute a default under the Series 2017A Bonds or the Trust Agreement. The Continuing Disclosure Certificate may be amended or terminated under certain circumstances in accordance with the Rule as more fully described therein. Bondholders should be read APPENDIX E – FORM OF CONTINUING DISCLOSURE CERTIFICATE in its entirety for more complete information regarding its contents.

The University has delivered continuing disclosure certificates or agreements for each issue of Bonds it has issued since the effective date of the Rule. The annual audited financial statements and operating data of the University have been provided and the annual audited financial statements have been made available through the website maintained by the State Auditor of Ohio and by the University, however the annual financial information, reports and operating data have not been provided to the Municipal Securities Rulemaking Board through its Electronic Municipal Market Access System ("EMMA") on a consistent basis in compliance with the Rule and the University's undertakings. The University corrected that oversight in February 2012 by filing historical annual financial information on EMMA. It is unclear whether such historical annual operating data was filed and indexed correctly on EMMA and as a result, the University subsequently re-filed its historical annual operating data on EMMA. The University has taken steps to assure it will maintain full and timely compliance with its undertakings in such continuing disclosure certificates and agreements.

LEGAL MATTERS

Legal matters incident to the issuance of the Bonds and with regard to the tax-exempt status of the interest on the Series 2017A Bonds (see "TAX EXEMPTION") are subject to the legal opinion of Dinsmore & Shohl LLP, Bond Counsel. The proposed text of Bond Counsel's legal opinion with respect to the Series 2017A Bonds is set forth as APPENDIX D. The legal opinion to be delivered may vary from that text if necessary to reflect facts and law on the date of delivery. A signed copy of that opinion, dated and premised on law in effect as of the date of original delivery of the Bonds, will be delivered to the Underwriters at the time of original delivery. Certain legal matters will be passed

upon for the University by its general counsel, John Biancamano, Esq., an Assistant Attorney General of the State of Ohio. Certain legal matters will be passed for the Underwriters by their counsel, Squire Patton Boggs (US) LLP.

While Bond Counsel has participated in the preparation of portions of this Official Statement, it has not been engaged to confirm or verify, and expresses and will express no opinion as to, the accuracy, completeness or fairness of any statements in this Official Statement, or in any other reports, financial information, offering or disclosure documents or other information pertaining to the University or the Bonds that may be prepared or made available by the University or others to the Bondholders or others.

In addition to rendering the legal opinion, Bond Counsel and John Biancamano, Esq., director of legal affairs and general counsel to the University, will assist the University in the preparation of and advise the University concerning documents for the Bond transcript.

ELIGIBILITY UNDER OHIO LAW FOR INVESTMENT AND AS SECURITY FOR THE DEPOSIT OF PUBLIC MONEYS

To the extent that the matter as to the particular investor is governed by Ohio law, and subject to any applicable limitations under other provisions of Ohio law, under the Act the Series 2017A Bonds are lawful investments for banks, societies for savings, savings and loan associations, deposit guaranty associations, trust companies, trustees, fiduciaries, insurance companies (including domestic life and domestic not for life), trustees or other officers having charge of sinking and bond retirement or other special funds of political subdivisions and taxing districts of the State, the commissioners of the sinking fund, the administrator of workers' compensation in accordance with the investment policy approved by the bureau of workers' compensation board of directors pursuant to the Revised Code, and State retirement systems (Teachers, Public Employees, Public School Employees, and Police and Firemen's), notwithstanding any other provisions of the Revised Code with respect to investments by them and are also acceptable as security for the deposit of public moneys.

LITIGATION

There is no litigation or administrative action or proceeding pending or threatened to restrain or enjoin, or seeking to restrain or enjoin, the issuance and delivery of the Series 2017A Bonds, or to contest or question the proceedings and authority under which the Series 2017A Bonds are authorized and are to be issued, sold, executed or delivered, or the validity of the Series 2017A Bonds. A no-litigation certificate to that effect will be delivered by the University at the time of original delivery of the Series 2017A Bonds.

The University is a party to various legal proceedings seeking damages or injunctive or other relief and generally incidental to its operations, but unrelated to the Series 2017A Bonds. The ultimate disposition of these proceedings is not presently determinable; but in the opinions of the University's legal counsel and the Vice President for Administration and Finance, the disposition of these proceedings will not have a material adverse effect on the Projects or on the Series 2017A Bonds or the security for or sources of payment of the Series 2017A Bonds.

RATINGS

Moody's Investors Service, Inc. ("Moody's") and S&P Global Ratings, a division of S&P Global ("S&P"), have assigned their long-term bond ratings of "Aa3" (stable outlook) and "A+" (stable outlook), respectively, to the Series 2017A Bonds. No application was made to any other rating agency for the purpose of obtaining an additional rating on the Series 2017A Bonds. Each rating reflects only the view

of the respective rating agency. An explanation of the significance of a rating may only be obtained from the respective rating agency.

The University furnished to Moody's and S&P certain information and materials, some of which may not have been included in this Official Statement, relating to the Series 2017A Bonds and the University. Generally, rating services base their ratings on such information and materials and on their own investigation, studies and assumptions. There can be no assurance that the ratings assigned will continue for any given period of time or that a rating will not be lowered or withdrawn entirely by the rating agency if in its sole judgment circumstances so warrant. Any such downward change in or withdrawal of a rating may have an adverse effect on the marketability and/or market price of the Series 2017A Bonds.

The University expects to furnish the rating services with information and materials that they may request. However, the University assumes no obligation to furnish requested information and materials, and may issue debt for which a rating is not requested. Failure to furnish requested information and materials, or the issuance of debt for which a rating is not requested, may result in the suspension or withdrawal of a rating on the Series 2017A Bonds.

FINANCIAL ADVISOR

Prager & Co., LLC (“Prager”) has been retained by the University to act as its financial advisor in connection with the issuance of the Series 2017A Bonds. Although Prager has assisted in the preparation of this Official Statement, Prager is not obligated to undertake, and has not undertaken to make, any independent verification or to assume responsibility for the information contained in the Official Statement.

UNDERWRITING

Goldman, Sachs & Co., as senior manager, for itself and for the co-senior manager, Barclays Capital Inc., and co-managers The Huntington Investment Company and PNC Capital Markets LLC (collectively, the "Underwriters"), has agreed to purchase the Series 2017A Bonds, subject to certain conditions precedent contained in the Bond Purchase Agreement dated February ___, 2017 between the University and the Underwriters, at a price of $______, which is par, plus net original issue premium of $______, less an underwriters' discount of $______.

The Series 2017A Bonds are being offered for sale to the public at the initial offering prices that produce the yields shown on the cover page hereof. The Underwriters reserve the right to lower such initial offering prices as it deems necessary in connection with the marketing of the Series 2017A Bonds. The Underwriters may offer and sell the Series 2017A Bonds to certain dealers (including dealers depositing the Series 2017A Bonds into investment trusts) and others at prices lower than the initial public offering price or prices. The Underwriters reserve the right to join with dealers and other underwriters in offering the Series 2017A Bonds to the public. The Underwriters may over-allot or effect transactions which stabilize or maintain the market price of the Series 2017A Bonds at levels above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time.

INDEPENDENT AUDITORS

The financial statements of the University as of June 30, 2015 and 2016, and for the years then ended, are included in APPENDIX B to this Official Statement and have been audited by Plante & Moran, PLLC, independent auditors, as stated in their report appearing in APPENDIX B. The financial

statements of the University for certain prior fiscal years may be obtained from the University and from the Auditor of State of Ohio on the auditor's website.

VERIFICATION OF MATHEMATICAL COMPUTATIONS

The accuracy of the mathematical computations of the adequacy of the maturing principal of and interest on the investments included in the Escrow Fund to be established for the payment of the Advance Refunded Bonds, together with any cash held therein, to pay when due principal and interest on such Refunded Bonds becoming due at maturity or earlier redemption will be examined by Causey Demgen & Moore P.C. (the "Verification Agent"). Such computations will be based solely on the assumptions and information supplied by the Underwriter in connection with such matters. The Verification Agent will restrict its procedures to examining the arithmetical accuracy of the computations described herein and will not make any study or evaluation of the assumptions and information on which the computations are based and accordingly, will not express an opinion on the data used, the reasonableness of the assumptions, or the achievability of the forecasted outcome. The Verification Agent's report of its examination will state that it has no obligation to update the report because of events occurring or data or information coming to its attention subsequent to the date of its report.

CONCLUDING STATEMENT AND SIGNATURES

Quotations in this Official Statement from, and summaries and explanations of, the provisions of the Ohio Constitution, the Revised Code, the General Bond Resolution, the Series 2017A Resolution, the Master Trust Agreement, the Fourteenth Supplemental Trust Agreement and the Bond Purchase Agreement do not purport to be complete, and reference is made to the pertinent provisions of the Constitution, Revised Code and those documents for all complete statements of their provisions. Those documents are available for review at the University during regular business hours at the office of the Vice President for Finance and Treasurer. During the initial offering period, copies of those documents will also be available for review at the offices of the Underwriters.

To the extent that any statements in this Official Statement involve matters of estimate or opinion, whether or not expressly stated to be such, those statements are made as such and not as representations of fact or certainty, and no representation is made that any of those statements will be realized. Information in this Official Statement has been derived by the University from official and other sources and is believed by the University to be reliable, but information other than that obtained from official records of the University has not been independently confirmed or verified by the University and its accuracy is not guaranteed.

This Official Statement is not to be construed as or as part of a contract or agreement with the original purchasers or holders of the Series 2017A Bonds.

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This Official Statement has been prepared, approved and delivered by the University, and executed for and on its behalf and in his official capacity by the officer indicated below.

THE OHIO UNIVERSITY

Dated: February ___, 2017 By: Treasurer

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APPENDIX A

THE OHIO UNIVERSITY [THIS PAGE INTENTIONALLY LEFT BLANK]

TABLE OF CONTENTS

General Information ...... A-1 History ...... A-1 Community ...... A-2 Map of Ohio University Locations ...... A-3 Governance and Administration ...... A-4 Academic Programs ...... A-8 Accreditation ...... A-11 Campus Map ...... A-13 Physical Plant ...... A-14 Enrollment ...... A-17 Admissions ...... A-18 Graduation and Retention ...... A-19 Other Institutions: Ohio Department of Higher Education (formerly the Ohio Board of Regents) ...... A-19 Fees and Charges ...... A-20 State Appropriations ...... A-22 Faculty and Employees ...... A-24 Retirement Systems ...... A-24 Insurance Coverage ...... A-26 Grants and Contracts ...... A-27 Student Financial Aid ...... A-27 The Ohio University Foundation/Housing for Ohio, Inc...... A-29 Financial Operations ...... A-29 Capital Programs ...... A-33 Gifts and Endowments/Foundation ...... A-34

NOTICE REGARDING FORWARD-LOOKING STATEMENTS Forward -Looking Statements Certain statements included or incorporated by reference in this Appendix A constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget,” “intend,” projection,” or other similar words. Such forward-looking statements include, but are not limited to, certain statements contained in the information in this Appendix A. A number of important factors, including factors affecting the University’s financial condition and factors which are otherwise unrelated thereto, could cause actual results to differ materially from those stated in such forward-looking statements. THE OHIO UNIVERSITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS CHANGE, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR. Projections The projections and preliminary data set forth in this Appendix A were not prepared with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information and preliminary data, but, in the view of the University’s administration, were prepared on a reasonable basis, reflect the best currently available estimates and judgments, and present, to the best of the administration’s knowledge and belief the expected course of action and the expected future financial performance of the University. However, this information and preliminary data is not fact and should not be relied upon as being necessarily indicative of future results, and readers of this Appendix A are cautioned not to place undue reliance on the prospective financial information and preliminary data. Neither the University’s independent auditors, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to the prospective financial information and preliminary data contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the prospective financial information and preliminary data.

General Information

Established in 1804, The Ohio University (the "University") is the oldest of the 14 state- assisted universities in Ohio. The main campus is in the City of Athens, located in southeastern Ohio, about 75 miles from Ohio's capital city, Columbus. The enrollment on the main campus for the 2015-16 academic year was 23,701, including 1,320 graduate students and 712 students enrolled in the University’s Heritage College of Osteopathic Medicine. Athens eLearning Programs enrolled 5,978 students. Approximately 10,346 students are served by the University’s five Ohio regional campuses in Ironton, St. Clairsville, Lancaster, Zanesville, and Chillicothe, three Ohio centers in Proctorville, Pickerington, and Beavercreek, as well as Heritage College of Osteopathic Medicine extension campuses in Dublin, Ohio and Cleveland, Ohio. The University enrolled over 1,740 international students from 116 countries. Total enrollment for the 2015-16 academic year was 36,872. Approximately 77% of the students enrolled were Ohio residents.

The University is organized academically into 11 colleges: Arts and Sciences, Business, Communication, Education, Engineering and Technology, Fine Arts, Health Sciences and Professions, Honors Tutorial, University, Graduate, and Osteopathic Medicine. The University offers 302 undergraduate majors. On the graduate level, the University grants master’s degrees in nearly all of its major academic divisions, as well as doctoral degrees in selected departments. The Doctor of Osteopathic Medicine degree is granted through the Heritage College of Osteopathic Medicine. The University employed 1,176 full-time faculty members in the 2015- 16 academic year. The University is accredited by the Higher Learning Commission of the North Central Association of Colleges and Schools.

The University is the largest employer in Athens County, Ohio. The Athens campus consists of about 1,800 acres and about 209 buildings.

History

The University was chartered by the State of Ohio (the “State”) in 1804 and is the oldest university in the Northwest Territory. Located in the scenic Appalachian foothills of southeastern Ohio, its classic residential campus is one of the most attractive in the nation. The charm of tree- lined brick walkways on the University’s College Green makes you feel as if you are at a small college rather than a large university. One can walk between most campus buildings within about 10 minutes. It is possible to live a mile away from the University buildings in a residential neighborhood and walk to work, or to live on a farm within a 20-minute drive. The City of Athens, Ohio is surrounded by a patchwork of hardwood forests that constitute the Wayne National Forest.

The University’s roots are in post-Revolutionary War America. In 1786 a group of veterans petitioned Congress to purchase, through the Ohio Company of Associates, one-and-a- half million acres north and west of the Ohio River.

Revenue from two townships in the Ohio Company purchase was set aside for support of a university. In 1808 the University opened with three students, and in 1815 awarded its first two bachelor’s degrees.

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The University graduated a total of only 145 students until after the Civil War. By 1920 it had 1,072 students, but it was not until after World War II that the University began to approach its present size.

In the 1950s the student population grew from 4,600 to 8,000, and the 1960s saw enrollment burgeon from about 10,000 to some 18,000 students on the Athens Campus. In the early 1970s, during the Vietnam era, the student population fell below 13,000. Today the Athens Campus serves more than 29,000 students.

Since 1946 the University’s service as the major educational and cultural institution in southeastern Ohio has included Ohio regional campuses in Chillicothe, Ironton, Lancaster, St. Clairsville, and Zanesville. The University also has established Ohio centers in Beavercreek, Pickerington, and Proctorville, while the institution’s Heritage College of Osteopathic Medicine has expanded its presence to include Dublin, Ohio and Cleveland, Ohio. Today, the Ohio regional campuses and centers enroll about 10,000 students, making the full-time, part-time, and e-learning unduplicated enrollment for the University more than 36,000.

Under the 2015 Carnegie Foundation for the Advancement of Teaching classifications, the University is designated a doctoral university (higher research activity) under the Basic Classification category. Only 107 schools—2.3 percent—of the 4,665 schools assessed by the Carnegie Foundation are classified as a doctoral university (higher research activity). The University’s institutional peers are all classified as either a doctoral university (highest research activity) or a doctoral university (higher research activity).

Community

The main campus of the University is located in the City of Athens, Ohio, a small community with a population of approximately 24,000 residents located approximately 75 miles southeast of Columbus, the state capital. The University and community are mutually interdependent, working together to provide such area services as educational outreach, social services, medical services, regional planning, small business initiation, and support for the arts, as well as a number of other services.

Small farms and woodlands make up much of the area surrounding the city. Dow Lake, part of a 2,600-acre state park, is just a 10-minute drive from campus, and Lake Hope, in Zaleski State Forest, is about 20 miles from Athens. Both parks are used by the University for educational and research projects, as well as for recreation.

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Map of Ohio University Locations

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Governance and Administration

Board of Trustees. The University is governed by a Board of Trustees consisting of nine voting members who are appointed by the Governor with the advice and consent of the State Senate. Voting members are appointed to nine-year, nonrenewable terms. The Board of Trustees also includes two student trustees, two national trustees and the chair of the Ohio Alumni Association Board of Directors, all of whom are non-voting members. In addition, there are four non-voting trustees, two students, and two national trustees. The current officers and voting members of the Board of Trustees, and the year in which their terms expire, are as follows:

Trustee Term Ends Occupation and Residence

David A. Wolfort, Chair 2017 President, Olympic Steel, Inc., Bedford Heights, Ohio

Janetta King, Vice Chair 2018 Board Chair, Innovation Ohio, Founder of Innovation Ohio, Worthington, Ohio

Cary Cooper 2023 Attorney, Marshall & Melhorn, LLC, Toledo, Ohio

N. Victor Goodman 2020 Attorney, Benesch, Friedlander Coplan & Aronoff, New Albany, Ohio

Peggy Viehweger 2024 Serves on various Boards. Former president and CEO of Supresta, Loveland, Ohio

Kevin B. Lake, D.O. 2019 HighGate Management, LLC, Leesburg, Ohio

Dave Scholl 2021 Venture Partner with Athenian Venture Partners, Mason, Ohio

Janelle Simmons 2022 President, L Brands Foundation & Chief Diversity Officer, L Brands, Inc., Columbus, Ohio

Diane Smullen 2025 Vice President of Finance for Cameron Mitchell Restaurants

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The student non-voting members, currently Patrick J. Roden and Brooke Mauro, are appointed to a two-year term by the Governor. The Board of Trustees invites two distinguished out-of-state University alumni to participate in the deliberations of the Board and the life of the University. These national trustees are appointed to terms not to exceed three years. The current national trustees are David Pidwell and Laura Brege. Ronald Teplitzky is the current alumni trustee.

David R. Moore, Ph.D., serves as the secretary to the Board of Trustees, and Deborah M. Shaffer, Vice President for Finance and Administration and Chief Financial Officer, serves as the treasurer of the Board of Trustees.

Administrative Officers. The principal administrative officers who manage the affairs of the University include:

Name Office David Descutner, Ph.D. Interim President Pam Benoit, Ph.D. Executive Vice President and Provost Deborah Shaffer, B.S.F. Vice President for Finance and Administration, Chief Financial Officer and Treasurer Stephen T. Golding, M.S. Senior Vice President for Strategic Initiatives Joseph Shields, Ph.D. Vice President for Research and Creative Activity and Dean, Graduate College J. Bryan Benchoff, M.A. Vice President for University Advancement and President and CEO of The Ohio University Foundation Jason B. Pina, Ed.D. Vice President for Student Affairs John Biancamano, J.D. General Counsel Jeffrey Davis, CPA, CIA, CISA, CFE Chief Audit Executive Renea Morris, M.A. Chief Marketing Officer Eric Burchard, B.A. Director of Government Relations James Schaus, M.A.A. Director of Athletics Jennifer Kirksey, M.A. Chief of Staff

David Descutner, Ph.D., was appointed as Interim President effective February 18, 2017. The University’s 20th president, Dr. Roderick J. McDavis, accepted a position outside the University effective March 1, 2017, and his final day at the University will be February 17, 2017. Before his retirement from the University in 2015, Dr. Descutner served as the dean of University College and executive vice provost for undergraduate education. A professor of communication studies, Dr. Descutner started his career with the University as a member of the faculty in 1979. He was recognized numerous times for his teaching and mentoring, as well as for his advocacy on behalf of the regional campus faculty, and he served two terms on the University’s Faculty Senate. Dr. Descutner also served as chair of the Vision OHIO Steering Committee, and from 2012-14 was the interim vice provost for diversity and inclusion. Dr. Descutner received a bachelor’s degree from Slippery Rock State University and his master’s and doctoral degrees from the University of Illinois. Dr. Descutner will assist with the transition when a new president is named by the University’s search committee, and the search committee plans to fill the position by June 30, 2017.

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Pam Benoit, Ph.D., began serving as Executive Vice President and Provost of the University in July 2009. She previously served as Vice Provost for Advanced Studies and Dean of the Graduate School at the University of Missouri. Dr. Benoit received a master’s degree in communication from Central Michigan University and a doctorate in communication from Wayne State University.

Deborah Shaffer, B.S.F., a graduate of the Kellogg School of Management Executive Leadership Program, was named Vice President for Finance and Administration, CFO and Treasurer in 2016. Previously, she served as the University’s Senior Associate Vice President for Finance and Administration and was responsible for the departments of Human Resources and Finance. When she joined the University in 2013, she brought her extensive financial and executive-level experience from positions in healthcare, higher education consulting, and over eight years as Carnegie Mellon University’s vice president for finance and chief financial officer. She received her Bachelor of Science in Finance from Indiana University of Pennsylvania.

Stephen T. Golding, M.S., was named Senior Vice President for Strategic Initiatives in 2016. Previously, he served as the University’s Vice President for Finance and Administration and Treasurer. He previously served as the lead consultant to the President and Executive Vice President for Finance and Administration at Cornell University. Prior roles in higher education include Vice President for Finance and Budget at the University of Colorado four-campus system and Vice President for Finance at the University of Pennsylvania. Mr. Golding’s background also includes roles with Morgan Stanley Investment Management and in state government in Delaware, with the Department of Transportation and as the state’s Budget Director and then Secretary of Finance from 1983 to 1991. Mr. Golding received a bachelor’s degree in history from Washington College and a master’s degree in political science from the University of Delaware.

Joseph Shields, Ph.D., was named Vice President for Research and Creative Activity in December 2011 after serving in that position in an interim capacity since June 2011, and also serves as Dean of the University’s Graduate College. Dr. Shields is a professor and former chair in the Department of Physics and Astronomy. Dr. Shields joined the University in 1996. He received a bachelor’s degree in physics and astronomy from the University of Kansas and a Ph.D. in astronomy from the University of California at Berkeley. He is a recipient of the Robert J. Trumpler Award for the Outstanding Dissertation in Astronomy in North America and a prestigious NASA Hubble Fellowship.

J. Bryan Benchoff, M.A., was named Vice President for University Advancement in July 2011. He previously served as the President and CEO of the University of South Dakota Foundation since 2008. He also served in a variety of positions with the West Virginia University Foundation. Positions included Assistant Director of Development (1990-1992), Director of Development (1992-1997), Senior Director of Development for Major Gifts (1997- 2001), Assistant Campaign Director (1997-2004), Assistant Vice President for Constituency Development (2001-2004), and Associate Vice President for Development (2004-2007).

Jason B. Pina, Ed.D., joined the University in June 2016 as the Vice President for Student Affairs, following more than 20 years of professional experience at public and private

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four-year institutions. He previously served as Vice President for Student Affairs and Enrollment Management at Bridgewater State University. Dr. Pina holds a doctoral degree in higher educational leadership from Johnson & Wales University, master’s and educational specialist’s degrees in educational leadership from the University of Northern Colorado, and a bachelor’s degree in economics from Occidental College.

John Biancamano, J.D., has served as General Counsel at the University since August 2008. From 1992 to 2008 he was on the legal staff at Ohio State University. He served as First Assistant Attorney General under Ohio Attorney General Anthony J. Celebrezze, Jr. from 1983 to 1990 and General Counsel with Ohio Attorney General Lee Fisher during 1991. Mr. Biancamano earned his B.A. from Yale University and his law degree from the University of Notre Dame.

Jeffrey Davis, C.P.A., C.I.A., C.I.S.A., C.F.E., has served as Chief Audit Executive at the University since February 2012. Mr. Davis served as Audit Manager and Senior Auditor in the Internal Audit Office from 2005 to 2012. Prior to coming to the University, Mr. Davis was employed by the Ohio Auditor of State from 1993 to 2005.

Renea P. Morris, M.Ed., was appointed Executive Director of University Communications and Marketing at the University in February 2009. She received her master’s degree in education administration with an emphasis in organizational leadership from Ohio University’s Patton College of Education in 2012. Before her career in higher education, she worked for 20 years in corporate and non-profit organizations.

Eric Burchard, B.A., was named Director of Government Relations in May 2011 following three years as the Director of Corporate and Foundation Relations at the University. Previously, Mr. Burchard spent 18 years working in and around state and federal government, serving as a political advisor, among other roles. In 2001, he founded Capital Insight, LLC, a full-service fundraising consulting firm specializing in political and issue fundraising. Mr. Burchard earned his bachelor’s degree in public relations management from the University.

James Schaus, M.A.A., was named Director of Athletics in April 2008. Previously, he served Wichita State University in the same capacity for nine years and, prior to that served in the collegiate athletics administration at the University of Oregon, University of Cincinnati, University of Texas-El Paso, and Northern Illinois University. Mr. Schaus received a bachelor’s degree from Purdue University (1983) and a master’s degree in athletics administration from West Virginia University (1987).

Jennifer Kirksey, M.A., was named Chief of Staff in June 2012. Ms. Kirksey first joined the Office of the President in August 2005 as a Strategic Communication Advisor and Developer. Previously, she served Ohio University Communications and Marketing as a media specialist and worked at a financial communications firm in New York, N.Y., where she focused on national media relations. Ms. Kirksey holds a bachelor of science in journalism and a master of arts degree in organizational communication from the University.

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Academic Programs

The University’s academic programs are organized in these colleges:

College of Arts and Sciences College of Fine Arts College of Health Sciences and Professions College of Business Scripps College of Communication Honors Tutorial College Patton College of Education Graduate College Russ College of Engineering and Technology University College Heritage College of Osteopathic Medicine

The College of Arts and Sciences holds the distinction of being the largest and oldest college at the University. Comprising 19 departments, the College of Arts and Sciences is central to the University’s transformative learning experience. The foundational instruction for the entire University, delivered through the general education and liberal arts curriculum, is provided by the College of Arts and Sciences. The College provides the primary instruction for approximately one-third of the undergraduate majors on campus, as well as half of the undergraduate credit hours on the Athens campus. In addition, the College offers a number of master’s programs, and eight departments offer doctoral degrees.

The College of Health Sciences and Professions is composed of five academic units including the School of Nursing, the School of Applied Health Sciences and Wellness, the School of Rehabilitation and Communication Sciences, the Department of Social and Public Health, and The Department of Interdisciplinary Health Studies. In 2015, the College opened a new facility at the University's Dublin, Ohio regional campus in central Ohio. This facility houses new programs in physician assistant studies, health leadership, clinical informatics, and integrated health studies, among others. The College’s mission is to educate students from various backgrounds in the health professions through rigorous curricular activities that prepare them to take leadership roles in a competitive, technological, culturally diverse and global environment. The College strives to engage students and faculty in the discovery of knowledge that will define the future of health disciplines through applied and basic research, innovation and entrepreneurship. Finally, the College serves as an integral part of the University’s efforts to meet the needs of its surrounding community through enriching the quality of lives, especially for individuals in underserved and vulnerable populations, through interprofessional and community collaborations.

The College of Business provides a distinctive learning environment that actively engages students, faculty, and the business community in developing the knowledge and skills needed for success in today’s complex, global economy. This learning environment results in graduates who possess: a) the ability to apply a holistic, integrated approach to business problems; b) the communication, leadership, team and technological skills needed to succeed in their business careers; c) an understanding of how to work with people from other cultures and to operate effectively in other countries; and d) an understanding of the social responsibilities of corporations and the ability to evaluate the ethical dimensions of decision-making. The academic departments offer major fields of study in accounting, business economics, business prelaw, finance, general business, international business, management, management information systems, marketing, and sport management.

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The Scripps College of Communication seeks to not only educate its students about today’s communication industry but to produce innovative leaders who will shape the future of communication and its methods of delivery in a rapidly changing technological landscape. The Scripps College of Communication includes the School of Communication Studies, the J. Warren McClure School of Information and Telecommunication Systems, the E. W. Scripps School of Journalism, the School of Media Arts and Studies (formerly the School of Telecommunications), and the School of Visual Communication. New forms of communication, the growth of communication systems, and the need for better communication among people, races, economic groups, and nations were all factors in the University’s decision to prepare graduates both for traditional roles and for a variety of new opportunities.

The Gladys W. and David H. Patton College of Education provides learning-centered experiences that foster a diverse academic community. This community serves the economic and cultural needs of the region and benefits the state, nation and world by generating new knowledge and educating future citizens and leaders. The academic departments offer major fields of study in Counseling and Higher Education, Human and Consumer Sciences, Educational Studies, Recreation and Sport Pedagogy, and Teacher Education.

The Russ College of Engineering and Technology offers degree programs through the School of Electrical Engineering and Computer Science and the Departments of Biomedical Engineering, Chemical & Biomolecular Engineering, Civil Engineering, Engineering Technology and Management, Industrial and Systems Engineering, Aviation and Mechanical Engineering. Engineering curricula are focused on the engineering profession, in which a knowledge of the mathematical and natural sciences—gained by study and experience—is applied to develop ways to use economically the materials and forces of nature for the benefit of society and the environment. Graduates have both the theoretical and practical training to begin a professional career or continue advanced work at the graduate level. Program flexibility is provided through technical electives so students can concentrate their studies in a chosen area or use the electives in other areas.

The College of Fine Arts includes the schools of Art, Dance, Film, Interdisciplinary Arts, Music, and Theater. The College offers a broad cultural education in the fine arts, as well as specialized training in a wide range of career fields. All programs of study within the College of Fine Arts are intended to provide students with a strong foundation in the arts and culture, as well as an opportunity for specialized professional training. Every effort is made through careful individual advising and a flexible curriculum to meet the individual needs of each student.

The Honors Tutorial College offers more than 30 challenging programs of study that provide a unique undergraduate educational experience to a select number of qualified students. Students admitted to the College undertake a substantial portion of the core curriculum in their respective disciplines through a series of tutorials. A tutorial consists of a full-time faculty member meeting with students either singly or in small seminars. In pursuing this method of instruction, the College draws upon the rich educational traditions of British universities, such as Cambridge and Oxford. Although other colleges and universities have adopted some aspects of the tutorial model, the University remains the only institution in the United States with a degree- granting college incorporating all the essential features of a tutorial-based education. The

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success of the College’s approach to undergraduate education is evident in its distinguished history and the impressive achievements of its alumni.

The Heritage College of Osteopathic Medicine is a leader in training dedicated primary care physicians who are prepared to address the most pervasive medical needs in the state and the nation. The College offers a program leading to the Doctor of Osteopathic Medicine (D.O.) degree and admits over 200 students annually. Doctors of Osteopathic Medicine practice in all branches of medicine and surgery, but most are family-oriented primary care physicians. The College was established by the Ohio General Assembly in 1975 with the mission of training osteopathic family physicians for underserved areas of Ohio. Medical students study in one of two tracks—a Clinical Presentation Continuum (CPC) curriculum, or a Patient-Centered Continuum (PCC) curriculum, both of which view medical education as an organized building process that extends from the first day of medical school through residency training and beyond. Clinical rotations and clerkships are conducted at the sites of the Centers for Osteopathic Research and Education (CORE) system and its 27 teaching hospitals located throughout the state.

University College serves both undecided/undeclared students who are exploring the University’s options before selecting a major and degree program and students who are seeking to earn the Bachelor of Specialized Studies, the Bachelor of Criminal Justice, or an associate’s degree. University College advances the mission of the University by providing institutional leadership across colleges to promote teaching and learning. The College provides a number of University-wide services. University College staff members manage advising programs and orientation programs such as Bobcat Student Orientation that assist students in reviewing their interests, planning academic programs, and adjusting to University life. In addition, the College oversees the University’s General Education program and fosters student success through such initiatives as learning communities, Army and Air Force ROTC, study skills, tutoring programs, and workshops to promote academic success.

Graduate College offers more than 188 master’s and 58 doctoral programs in nearly all major academic divisions. The small student-to-faculty ratio ensures that graduate students can have a strong, one-on-one mentorship with world renowned scholars.

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Accreditation

The University is accredited by the Higher Learning Commission of the North Central Association of Colleges and Schools. The University received its initial accreditation from the association (then North Central Association) in 1913. In 1974, The North Central Association granted the University the status of a mature doctoral-granting institution.

Programs offered by the University are periodically evaluated and are currently accredited by the following specialized accrediting agencies:

Accreditation Board for Engineering and Technology Inc. Accreditation Commission for Education in Nursing Accreditation Council for Education in Nutrition and Dietetics Accrediting Council on Education for Journalism and Mass Communication American Association of Family & Consumer Sciences American Chemical Society American Psychological Association Association to Advance Collegiate Schools of Business Association of Technology, Management & Applied Engineering (formerly NAIT) Commission for Collegiate Nursing Education Commission on Accreditation of Allied Health Education Programs Commission on Accreditation of Athletic Training Education Commission on Accreditation for Physical Therapy Education Commission on Osteopathic College Accreditation Commission on Sport Management Accreditation Council on Academic Accreditation of the American Speech-Language & Hearing Association Council for Accreditation of Counseling and Related Educational Programs Council on Accreditation of Parks, Recreation, Tourism & Related Professions Council on Rehabilitation Education Council on Social Work Education Forensic Science Education Programs Accreditation Commission National Association of Board of Examiners National Association of Schools of Dance National Association of Schools of Music National Association of Schools of Theater National Council for Accreditation of Teacher Education National Environmental Health Science & Protection Accreditation Council National Recreation & Park Association Ohio Board of Nursing Professional Association of Therapeutic Horsemanship University and College Intensive English Programs

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Since its start over 200 years ago, the University has developed a reputation for outstanding academic programs. The University has been cited for academic quality and value by such publications as U.S. News and World Report and Washington Monthly. The John Templeton Foundation also has recognized the University as one of the top character-building institutions in the country. Backed by a supportive staff and dedicated faculty mentors, the University students rank among the best in the nation in winning nationally competitive awards such as prestigious Fulbright scholarships.

The Manasseh Cutler Scholars Program, a University merit scholarship program modeled on the Morehead Scholars of the University of North Carolina and the Rhodes Scholars of Oxford University, emphasizes development of recipients’ leadership potential. The scholarship, renewable for four years, provides full tuition and room and board. The scholarship also includes a stipend to cover structured summer internships and travel. Other University scholarship initiatives that continue to advance the institution’s commitment to providing access and opportunity to a greater number of students include the Urban Scholars Program, the Appalachian Scholars Program, and the OHIO Signature Award Program.

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Campus Map

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Physical Plant

Athens was founded in 1794 by an act of the Northwest Territory Legislature. The town plat contained a square for a college and house lots for academics to live in. Originally, Athens County had about 1.5 million acres, carved from Washington County to the east. Today Athens County has about 325,400 acres, since neighboring counties carved into Athens County. The University's main campus, which includes The Ridges (the former Athens Mental Health Center property), plus some outlying properties in the City of Athens, consists of approximately 209 buildings, many of which feature collegiate Georgian architecture and approximately 1,800 acres of land.

The portion of the Athens campus north of the Hocking River includes most of the academic, administrative, athletic, residential, recreation, and physical support buildings. The campus is divided by a series of greens: College, East, North, South, West, River Greens, Union Street Green, Ridges Green, and Research and Enterprise Park. The College Green is where the campus began and is part of the "Ohio University Campus Green Historic District." Cutler Hall, the central administration building, was constructed in 1816 and is a registered National Historic Landmark.

The Baker University Center at the southern edge of the College Green is the physical connector between lower and upper campus, and is intended to promote out-of-class learning and growth, support classroom instructional activity, and contribute to the overall quality of campus life. The facility includes a 550-seat ballroom, dining facilities, student government offices, student organization offices, a small theater, art galleries, and meeting and conference rooms.

There are 43 residence hall buildings located on the main campus. The residence halls have a capacity of approximately 8,300 students. The occupancy rate is typically near 100% at the onset of the academic year. All freshmen and sophomore students, with limited exemptions, must reside in University-owned housing and participate in one of the various board plans. Four dining halls are located across the campus to serve the residence hall residents and outside boarders. The Baker University Center also provides some food service options for residence hall residents as well as the campus and community. The University is engaged in a major rehabilitation of the residence hall system. In years past, in order to accomplish this, the University has removed a building from the system annually and renovated that facility as funding permitted. Three residence halls were demolished in August 2016, prior to start the 2016-17 school year.

The University Libraries have approximately 3.3 million bound volumes and approximately 33,000 periodical subscriptions. There are approximately 5.5 million other materials such as maps, slides, photographs, records, tapes and film.

The University facilities also include television and radio stations, operated by the Scripps College of Communication, in harmony with the Public Broadcasting System (PBS). A major project was completed to renovate the former Baker Center building. The newly renovated building, Schoonover Center, is the home of the Scripps College of Communication. The first phase of this two-phase project was completed in the summer of 2013. The second phase was completed in the summer of 2015.

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The Convocation Center, constructed in 1968, services the University’s athletic department and has a seating capacity of 13,000. This facility is also used for major non-athletic events, such as graduation. In addition, the University has a 24,000-seat stadium for football, an aquatic center, an ice skating facility/hockey arena, six outdoor and four indoor tennis courts, a 2,000-seat baseball facility, a softball facility, a soccer field, a multi-purpose field for field hockey/lacrosse with adjoining track facilities, and a regulation nine-hole golf course. There is a student recreation center with a number of different types of courts and health/fitness facilities. In 2014, a fieldhouse was completed and is used by intercollegiate athletics, students for recreation and for academic classes.

The University owns and operates the Gordon K. Bush Airport, a general aviation airport located nine miles west of the main campus in Albany, Ohio, and containing about 386 acres. The facility includes a 5,600-foot runway and parallel taxiway, an administration/terminal building, maintenance and storage hangars for airport operations, facilities for the Department of Aviation (an academic program), and both an administration building and hangar for the Avionics Engineering Center. The Ridges is located south of the Hocking River, and is a resource of both land and buildings that are being utilized to support functions of the University. The Ridges contains approximately 722 acres of land and approximately 678,000 square feet of existing buildings. There are 43 buildings concentrated on the northeast plateau just south of the main campus. Several of the buildings have been renovated to accommodate various programs and services, including an art museum, the Voinovich School of Leadership and Public Affairs, a small performance auditorium, administrative offices, research facilities, graduate art studios, child care center, mail services, surplus property/recycling, and various storage functions. There is also a central heating and central chilled water plant to serve these facilities. In October 2015, the University completed a “Framework Plan” that provides strategic guidance for the future of The Ridges land and buildings. That Framework Plan addresses the current state of The Ridges land and buildings, investigates potential uses and adaptability thereof, identifies global issues bearing on access and integration with the rest of campus, and outlines financial strategies to realize the potential of this resource.

The City of Athens provides water, sewage disposal service, and fire protection for the Athens campus and The Ridges. Electrical service is provided by American Electric Power to the University’s own substation and distribution system, an arrangement that provides for a significantly lower electric rate. Natural gas for the Athens campus is provided by Columbia Gas. The Athens campus has its own central heating facilities, including one on the main campus and a second at The Ridges. The main campus system has been tied into The Ridges system to provide flexibility and reduce the operating costs for the two plants. The University’s central chilled water system serves about 25% of the campus buildings, and is expanded with every major renovation and new construction project, with a goal of supplying cooling capacity to almost every campus building. The system is currently undergoing expansion to serve projects under construction. The University has an energy management program in place that saves more than $2 million per year through mechanical system efficiencies and consumer awareness.

Research facilities on the Athens campus include the Avionics Engineering Center, Contemporary History Institute, Edison Biotechnology Institute, the Edwards Accelerator

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Laboratory, the Clippinger Laboratories, the Multiphase Corrosion Laboratory, the Biochemistry Building, the Life Sciences Building, and The Academic & Research Center collectively containing a total of more than 120,000 square feet of research space. There are also research facilities in several other campus buildings and off-campus locations. The entire physical plant is estimated to have a total replacement value of approximately $2.7 billion. This figure includes a content value of approximately $255 million. The University receives state capital improvements appropriations biennially. The University also receives grants, gifts, and/or other funding for new capital projects on an intermittent basis. Other capital projects are funded through University bond sales. In 2016, the University completed an update of the 10-year campus master plan, including a comprehensive plan for all areas of the Athens location. In addition to the main campus in Athens, the University has five regional campuses, all located in the State as follows: Eastern (located outside of St. Clairsville in Belmont County), Chillicothe, Southern (located in Ironton in Lawrence County with a satellite operation in Proctorville and Hanging Rock), Lancaster (which has a satellite operation in Pickerington) and Zanesville. The regional campuses have a total of 20 main academic and administrative buildings and 36 smaller support structures located on approximately 976 acres. The Zanesville campus is co-located with Zane State College, and some facilities are shared between the two institutions.

In 2012, the University acquired property in the City of Dublin, Ohio to establish a new campus with the Heritage College of Osteopathic Medicine (HCOM) as the primary academic unit. An economic development agreement with the City of Dublin outlined a multi-step approach to acquiring additional acreage which provides opportunity for future expansion. The University recently completed a “Framework Plan” for the HCOM campus which provides a strategic and physical roadmap for the development of that campus into a mixed-use community. That Framework Plan provides an outline for opportunities for high-impact initiatives and programs that are complementary to the central Ohio community, and which advance the University’s interests. It develops a mixed-use (retail, hospitality, housing, community service, arts) environment that supports a vibrant knowledge community. It is centered on creating a pedestrian-friendly, walkable campus district that can be implemented in a phased approach over time. Currently, the Dublin Campus contains three renovated buildings and the Dublin Integrated Education Center (DIEC) that was built with a private partner. The DIEC houses the College of Health Sciences and Profession’s (CHSP) Physician Assistant (PA) Program as well as Columbus State Community College. In July of 2015, the University signed a lease with Cleveland Clinic and opened its doors to students establishing HCOM’s presence in Northeast Ohio. The Cleveland Campus includes over 62,000 Net Assignable Square Feet and is strategically located on the South Pointe Hospital Campus of the Cleveland Clinic at 4180 Warrensville Center Road, Warrenville Heights, Ohio, a predominantly African American, working-class community adjacent to Cleveland. HCOM has had a three-decade history of working with the Cleveland Clinic in the training of medical students and residents. The relationship has expanded to include training other health professionals like Physician Assistants. The campus will enable the University to have an impact in an urban setting of high need.

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Enrollment

General. The University attracts students from a variety of backgrounds and geographical areas, with representation from over 50 states and territories and 116 foreign countries in Fiscal Year 2016. For the Academic Year 2016-17, Ohio residents represent 88% of the entering freshman class while 12% are from other states and 1% are international students.

The University’s main campus Fall Term headcount enrollment (full-time and part-time students) as well as full-time equivalent (FTE) enrollment for recent and current Academic Years is as follows:

Annual Enrollment – Main Campus

Academic Medical Full-Time Year Undergraduate Graduate(a) College Total Equivalent(b) 2009-10 18,589 3,595 463 22,647 21,895 2010-11 20,996 3,645 467 25,108 23,297 2011-12 21,655 4,054 492 26,201 23,859 2012-13 22,685 4,204 513 27,402 23,016 2013-14 23,504 4,743 539 28,786 23,700 2014-15 23,571 5,036 610 29,217 24,167 2015-16 23,943 5,024 712 29,679 24,720 2016-17* 23,788 5,119 805 29,712 24,861

(a) Graduate students at all University locations are registered through the main campus. (b) Total Fall Term Credit Hours Divided by 15 (except for College of Medicine). (*) Numbers as of September 5, 2016 (Census).

Fall headcount enrollments for all campuses are as follows:

Fall Enrollment – All Campuses

Graduate Academic & Full-Time Year Undergraduate Medical Total Equivalent(a) 2009-10 26,782 4,058 30,840 29,014 2010-11 29,371 4,112 33,483 30,755 2011-12 29,819 4,546 34,365 30,974 2012-13 30,549 4,717 35,266 29,532 2013-14 30,903 5,282 36,185 29,959 2014-15 30,847 5,646 36,493 30,341 2015-16 31,136 5,736 36,872 30,681 2016-17* 30,486 5,924 36,410 30,534

(a) Total Fall Term Credit Hours Divided by 15 (except for College of Medicine). (*) Numbers as of September 5, 2016 (Census).

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Admissions

The following tables show for the indicated Academic Years the total applications received, the number and percentage of those applicants accepted for admission, the number enrolled, and the percentage of the accepted applicants that became enrollees, for the University’s main campus.

Total Undergraduate Freshman and Transfer Applications

Academic Percent Applicants Percent Year Received Accepted Accepted Enrolled Enrolled 2009-10 15,620 12,664 81 4,650 37 2010-11 14,800 12,343 83 4,471 36 2011-12 14,844 12,472 84 4,423 35 2012-13 18,956 14,636 77 4,470 31 2013-14 22,288 16,193 73 4,762 29 2014-15 22,476 16,534 74 4,924 30 2015-16 22,581 16,658 74 4,986 30 2016-17 21,944 16,366 75 4,854 30

Total Freshman Applications

Academic Percent Applicants Percent Year Received Accepted Accepted Enrolled Enrolled 2009-10 14,204 11,591 82 4,072 35 2010-11 13,366 11,372 85 3,976 35 2011-12 13,392 11,437 85 3,883 34 2012-13 17,466 13,571 78 3,888 29 2013-14 20,765 15,149 73 4,244 28 2014-15 20,934 15,548 74 4,379 28 2015-16 21,000 15,628 74 4,423 28 2016-17 20,623 15,437 75 4,309 28

The University has a selective admission policy for both incoming freshmen and transfer students. The University has established general guidelines as well as more specific guidelines for some of its specific colleges/majors. Guidelines for freshmen are based on ACT/SAT test score and high school GPA. Also considered are the student’s high school rank, high school curriculum, grade trend, activities, and community involvement, as well as the high school’s profile. Transfer students must have a 2.0 GPA and have completed 30 quarter or 20 semester hours of college work. Students must be academically prepared and fulfill prerequisites in order to be directly admitted to their chosen major depending on the selectivity of the program.

For the Academic Year 2016-17, the average University freshman composite score on the American College Test (ACT) was 24.0, compared to the national average (for 2015-16) of 21.0. On average, the 2016-17 freshman class was in the top 32% of their high school graduating class, and had an average high school GPA of 3.48.

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Graduation and Retention

In Academic Year 2015-16, the completion or graduation rate for students who entered the University in Academic Year 2009-2010 as full-time students was 67 percent. The University freshman retention rate (freshmen returning as sophomores) in Academic Year 2015-16 was 82 percent.

The study of student retention enables University officials to learn why students leave the University before they graduate. Programs to assist students in fulfilling their goal of a college education have been developed with the use of information from ongoing retention studies. The University’s retention rate from the freshman to the sophomore year has improved steadily from 67 percent in 1977 to 81 percent in 2015. This retention rate is among the highest in the nation for public universities.

The University’s four-year, five-year and six-year graduation rates are third highest in the State of Ohio and exceed the six-year national average for comparable institutions by over 13.7 percent.

Other Institutions: Ohio Department of Higher Education (formerly the Ohio Board of Regents)

The Ohio Department of Higher Education is a Cabinet-level agency for the Governor of the State of Ohio that oversees higher education for the State. The agency’s main responsibilities include authorizing and approving new degree programs, managing State-funded financial aid programs and developing and advocating policies to maximize higher education’s contributions to the State and its citizens.

As a member of the Governor’s Cabinet, the Chancellor of the Ohio Department of Higher Education advises the Governor on higher education policy and implements the Governor’s plan to make college more affordable for Ohioans and drive the State’s economic advancement through the public universities and colleges of Ohio, the State’s network of public universities, regional campuses, community colleges, and adult workforce and adult education centers. The Chancellor is responsible for carrying out the responsibilities of the agency, including authorizing and approving new degree programs and managing State-funded financial aid programs.

The Ohio Board of Regents, a nine-member advisory board to the Chancellor with two ex-officio representatives from the State legislature, was created in 1963 by the General Assembly. Members of the Board of Regents are appointed by the Governor with the advice and consent of the Senate.

Publicly owned higher education institutions in Ohio now include 14 State universities, and 23 two-year technical and public community colleges. Those institutions all receive State assistance and conduct full-time educational programs in permanent facilities.

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Fees and Charges

The University operates its programs on a two semester year and two summer session basis. Under the semester academic calendars, the Academic Year is approximately 30 weeks in addition to summer sessions of varying lengths. Tuition and fees as well as financial aid and scholarships are divided between two semesters. Payment in full including all fees is required to be made prior to official enrollment in any class of instruction. The University implemented the Ohio Guarantee in Fall 2015. This is a cohort based, level-rate tuition, housing, dining, and fee model that assures students and their families a set of comprehensive rates for the pursuit of an undergraduate degree at the University. Tuition, housing, dining, and fee rates established at enrollment remain unchanged for 12 consecutive semesters.

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The per-full-time-student instructional (tuition) and general fees and the tuition surcharge for resident and non-resident students for the main campus regular academic year are set forth in the following table.

2012-13 2013-14 2014-15 2015-16 2016-17 Ohio Resident: Undergraduate $10,216 $10,446 $10,602 $11,548 $11,744 Graduate 9,510 9,510 9,510 9,510 9,510 Medical 29,878 31,306 32,806 34,380 35,584

2012-13 2013-14 2014-15 2015-16 2016-17 Non-Resident: Undergraduate $19,246 $19,410 $19,566 $20,512 $21,208 Graduate 17,502 17,502 17,502 17,502 17,502 Medical 42,268 44,316 45,816 48,040 49,722

Room and board charges for the regular Academic Year are as follows: 2012-13 2013-14 2014-15 2015-16 2016-17 Room and Board: Standard-double $5,648 $5,846 $6,050 $6,370 $6,592 20-Meal Plan 4,362 4,384 4,428 4,494 4,584 Total $10,010 $10,230 $10,478 $10,864 $11,176

At their January 2017 meeting, the Board of Trustees of the University approved the following rate increases for Fiscal Year 2018 (July 1, 2017 through June 30, 2018): 3.3% to the undergraduate guaranteed tuition and fee rate for the incoming cohort; 3.5% to residential housing rates; 2% to culinary services rates; and a 2% tuition increase for continuing students who were enrolled prior to the implementation of The OHIO Guarantee. Consistent with the principles of the program, students within an existing OHIO Guarantee cohort do not experience any increase to their rates.

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For the 2016-2017 academic year, total instructional and general fees at the main campuses of other Ohio public universities for an incoming full-time undergraduate student who is an Ohio resident ranged from $6,246 to $14,736. Annual room and board charges for undergraduates at the other state universities ranged from $8,522 to $13,310. The table below shows for the 2016-2017 academic year (Fall term) information compiled by the Ohio Department of Education as to the undergraduate instructional and other fees, and room and board charges (based on varying numbers of "standard" meals per week), charged full-time first- year students by the University and by the other 12 state universities in Ohio. For the University, the fees below (including room & board) will be held firm for four years reflecting the University’s Tuition Promise granted to first-year students commencing Fall of 2016.

Fall 2016 Annualized Full-Time Undergraduate Total Fees and Charges

Annual Instructional & Other Fees(1) Annual Total Student Charges In-State Out-of-State Room & Board(2) In-State Out-of-State(3) Miami University $14,736 $32,556 $12,060 $26,796 $44,616 Ohio University 11,744 21,208 10,450(4) 22,194 31,658 University of Cincinnati 11,000 26,334 13,310 24,310 39,644 Bowling Green State Univ. 10,726 18,262 8,690 19,416 26,952 University of Akron 10,270 18,801 11,086 21,356 29,887 The Ohio State University 10,037 28,229 11,576 21,613 39,805 Kent State University 10,012 18,376 10,720 20,732 29,096 Cleveland State University 9,768 13,819 10,798 20,566 24,617 University of Toledo 9,380 18,718 10,826 20,206 29,544 Wright State University 8,730 17,350 8,552 17,282 25,902 Youngstown State University 8,317 14,317 8,990 17,307 23,307 Shawnee State University 7,364 13,031 9,384 16,748 22,415 Central State University 6,246 6,346 9,934 16,180 16,280

(1) Includes the general fee and other mandatory fees assessed uniformly to all students each term (e.g., facility fees, technology fees or parking fees). (2) Institutions offer a variety of room and board plans. Rates shown are computed based on average Fall 2016 double-occupancy room rates, a specified number of meals per week, and either 2 semesters or 3 quarters. (3) Does not factor in any discount programs for neighboring counties in adjacent states. (4) Based upon 14-meal plan. Source: Ohio Department of Higher Education Fall 2016 Survey of Student Charges. See .

State Appropriations

All State universities in Ohio receive State financial assistance for both operations and designated capital improvements through appropriations by the General Assembly. These appropriations contribute substantially to the successful maintenance and operation of the University. The State Share of Instruction (“SSI”) is the most significant support colleges and universities receive from the State.

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Beginning in Fiscal Year 2010, the SSI transitioned from an input-based allocation methodology to an outcome-based methodology by the following:

• Course and degree completion • Recruitment and retention of at-risk students, including academic, financial, age, and race factors • Promotion of fields of study, including science, technology, engineering, mathematics and medicine (STEM)

For Fiscal Year 2017, the Ohio Department of Education incorporated a change to the at- risk weighting calculation to incorporate all applicable students in the weighting calculation instead of Main Campus traditional students.

The annual SSI Allocations to the University, and statewide to Public Universities are presented below (Fiscal Year 2017 figures are preliminary):

$ in Millions FY13 FY14 FY15 FY16 FY17 Ohio University $136.40 $146.40 $154.10 $155.80 $156.90 Growth 3.6% 7.3% 5.3% 1.1% 0.8% Statewide Total 1,347.60 1,378.40 1,399.10 1,464.60 1,523.20 Growth 0.9% 2.3% 1.5% 4.7% 4.0%

The State grants capital improvement funding through a biennial appropriation. The 2017 biennial State capital bill passed in May 2016, included $26.8 million supporting University projects. The Ohio University Capital Improvement Plan designates State capital appropriations for deferred maintenance projects.

There can be no assurance that State-appropriated funds for operating or capital improvement purposes will be made available in the amounts required by the University or as originally approved by the legislature. The General Assembly has the responsibility of determining such appropriations biennially. State income and budget constraints may compel a stabilization or reduction of the level of State assistance and support for higher education in general and the University in particular.

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Faculty and Employees

For the Academic Year 2015-16, the University had 5,458 employees. The staff for that year, including the academic ranking of the faculty and instructional staff, was as follows:

Main Regional Full-time Faculty Campus Campuses Total Professor 212 9 221 Associate Professor 334 74 408 Assistant Professor 183 32 215 Lecturer 62 5 67 Instructor 223 42 265 Total 1,014 162 1,176 Part-time Faculty Teaching Assistants (FTE)* 158 0 158 Other Teaching Staff 437 518 955 Total 595 518 1,113 TOTAL FACULTY 1,609 680 2,289

Administrative Support 1,787 134 1,921 Classified Support Staff 1,138 110 1,248 TOTAL EMPLOYEES 4,534 924 5,458

Percent of Tenured Faculty (Full-time) 74% Percent of Terminal Degrees – Faculty (Full-time) 78% * estimated values

The University’s total payroll in Fiscal Year 2016 was $343,725,637 (including part-time student employees).

The University is a party to collective bargaining agreements with the American Federation of State, County and Municipal Employees (AFSCME), Ohio Council 8, Local 1699, and the Fraternal Order of Police (FOP), Ohio Labor Council, Inc. The AFSCME bargaining unit covers 617 full-time and part-time classified employees and the FOP bargaining unit covers 24 classified employees. Currently, a Request for Recognition as a Collective Bargaining Unit has been filed by the FOP, on behalf of the Ohio University Police Department’s Lieutenants, and the request is pending with the State Employment Relations Board. This unit would cover approximately four classified employees. The remaining University employees have not elected to join a bargaining unit. There have been no strikes or job actions undertaken by any bargaining unit in the last 17 years. Retirement Systems

The University participates in contributory retirement plans administered by the State Teachers Retirement System of Ohio (“STRS”) and the Ohio Public Employees Retirement System (“OPERS”). As an alternative to STRS and OPERS, eligible employees may elect to

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participate in the University’s Alternative Retirement Plan (“ARP”), which is legislatively mandated.

STRS and OPERS are two of five statewide public employee retirement systems created by and operating pursuant to Ohio law, all of which currently have unfunded actuarial accrued liabilities. The Ohio General Assembly has the power to amend the format of those systems and to revise rates and methods of contributions to be made by public employers and their employees and eligibility criteria, benefits or benefit levels for members.

STRS and OPERS both offer three separate retirement plans: a defined benefit plan, a defined contribution plan, and a combined plan.

• The STRS and OPERS defined benefit plans are cost-sharing multiple-employer defined benefit pension plans. Subject to eligibility requirements, the defined benefit plans currently provide for retirement benefits, disability benefits, postretirement health care coverage, and death benefits.

• The STRS and OPERS defined contribution plans are plans in which the member selects where both member and employer contributions are invested.

• The STRS and OPERS combined plans have features of both a defined contribution plan and a defined benefit plan. Under the combined plans, the employee contributions are invested in self-directed investments, and the employer contributions are used to provide a reduced defined benefit. Subject to eligibility requirements, the combined plans currently provide for retirement benefits, disability benefits, postretirement health care coverage, and death benefits.

STRS (faculty) and OPERS (non-teaching staff) are funded from both employer and employee contributions based on earnable salary. In June 2016, approximately 3,670 University employees were enrolled in OPERS and 2,188 in STRS. The statutory employee contribution rates were 10% for OPERS and 13% for STRS. The employer contribution rates are 14% for OPERS and STRS. These rates are established by State law and are actuarially based. The University is current with all obligations with respect to both OPERS and STRS.

Ohio law requires the University to offer the ARP to certain employees. The ARP is a tax-qualified, defined contribution plan under Section 401(a) of the Internal Revenue Code and is maintained for eligible full-time and part-time faculty and staff with a FTE of .67 or higher.

Pursuant to the University’s ARP policy, full-time and part-time salaried faculty and staff with a FTE of .67 or higher have 120 days from date of hire to choose to participate in the appropriate state system (OPERS or STRS) or in an alternative retirement plan. As of June 2016, there were nine approved private ARP providers. Approximately 1,104 employees were enrolled in the ARP in June 2016. The employee rates of contribution are the same with the ARP as with the appropriate state retirement system. However, 4.5% (mitigating rate) of the employer contribution must be paid to STRS (for STRS-eligible employees) while the balance 9.5% is paid to the selected ARP. In addition, 0.77% (mitigating rate) of the employer contribution must be

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paid to OPERS (for OPERS-eligible employees) while the remaining 13.23% is sent to the selected ARP.

The employee and employer ARP contributions plus the mitigating rate are equal to the amount the University would have contributed to STRS or OPERS. The employee ARP contribution amount remains the same; however, the employer ARP amount is adjusted by the state retirement system mandated “mitigating rate”. The mitigating rate is set independently by OPERS and STRS; therefore, the rates may differ between the two retirement systems. Contributions to STRS, OPERS and the ARP are subject to limits under the Internal Revenue Code.

The University also maintains a tax-qualified retirement plan and a related Section 415(m) plan for eligible employees whose contributions to STRS, OPERS or the ARP are limited under the Internal Revenue Code. Contributions may be funded from both employer and employee contributions. In addition, optional supplemental retirement programs (403(b) and 457(b) plans) are available for eligible employees.

Federal law requires University employees hired after March 31, 1986, to participate in the federal Medicare program. The current rate for Medicare is 1.45% of covered wages for both the employer and the employee. Otherwise, University employees do not currently contribute to the federal Social Security system.

GASB Statement No. 68, Accounting and Financial Reporting for Pensions, which was effective Fiscal Year 2015, was adopted and requires governments that participate in defined benefit pension plans to report in their statement of net position a net pension liability, which is the difference between the total pension liability and the net assets set aside to pay pension benefits. For cost-sharing employers, the net pension liability is equal to the employer’s proportionate share of the collective net pension liability for the plan. The University participates in two cost-sharing defined benefit pension plans, which are administered by STRS and OPERS.

For additional information on the retirement plans, refer to Note 11 of the University’s Audited Financial Statements for the Years Ended June 30, 2016 and 2015.

Insurance Coverage

The University participates in a consortium, along with other State of Ohio universities, for the acquisition of commercial property and liability insurance. Membership in the Inter- University Council-Insurance Consortium (IUC-IC) effectively reduces costs, and facilitates control over the impact of significant risks through the group-purchase of insurance and risk sharing. In association with the IUC-IC, the University purchases insurance through Marsh, a multinational insurance brokerage firm.

Property Insurance. Property insurance, which is provided by commercial carriers, is included in this consortium-based program. Protection is afforded for nearly $2.8 billion in total insured value for scheduled buildings and contents. Coverage for each building and its contents, for replacement cost, is subject to a policy limit of $1 billion. All risks of direct physical loss are covered, subject to policy exclusions; there is a $100,000 deductible for each claim. While there is no coverage for physical damage all motor vehicles, owned or leased, are covered for liability.

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Liability Insurance. Pursuant to enactment by the Ohio General Assembly of the Court of Claims Act, the Ohio Court of Claims retains jurisdiction over claims made against the State, including its agencies; the University, as an agency of the State, falls within the purview of this court. Adverse judgments made by the Court are payable either from University funds or by the insurance carrier. Currently, the University insurance includes bodily injury, property damage, and educator’s legal liability. These coverages are also subject to a $100,000 self-insured retention. Aviation liability insurance protects the University against qualifying exposures arising from operation of owned corporate aircraft, the University’s airport, and flight training program.

Worker’s Compensation. Effective January 1, 2013, the University became self-insured against claims of work-related, occupational injuries. In addition to premium cost savings, other immediate advantages realized from this initiative have included greater program efficiency, more control and improved management of such processes as treatment options, reporting, communications, and monitoring, following receipt of notice of a worker’s injury.

HCOM is protected by the University’s general liability insurance. HCOM currently maintains its own professional liability insurance; the University will assume a portion of medical malpractice risk associated with student internships and similar/other exposures, pending finalization of the University Medical Associates (UMA)/Ohio Health joint venture. The University maintains professional liability insurance for risks related to the Student Health Center; this coverage is subject to a $25,000 deductible.

Grants and Contracts

During Fiscal Year 2016, the University received $27,297,630 in research grants and contracts. Additional awards of $34,842,035 supported instructional and public service activities for a total of $62,139,665 in external support. Federal agencies accounted for 59% of the research activity; state and local governments 11% of the total; and private sector partners (business, industry, and foundations) provided 30% of the support for basic and applied research. Primary federal research sponsors include the following: U.S. Department of Transportation – $1,885,029; National Science Foundation - $3,081,593; U.S. Department of Health and Human Services/National Institutes of Health - $3,815,390; U.S. Department of Energy – $1,712,748.

Comparative amounts since Fiscal Year 2012 are included in the following table: Basic & Applied Other Sponsored Fiscal Year Research Activity 2012 $30,550,264 $33,666,536 2013 29,253,910 35,488,639 2014 26,295,322 28,455,941 2015 32,019,224 34,348,146 2016 27,297,630 34,842,035

Student Financial Aid

Approximately 77% of the University’s students receive financial aid. The primary responsibility for this function rests with the Office of Student Financial Aid and

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Scholarships. During Fiscal Year 2016, students received total assistance amounting to approximately $448 million. The primary sources included the Federal Direct Loans (Stafford), Federal Pell Grant Program, Federal Perkins Loans, Federal Work-Study, Federal Supplemental Educational Opportunity Grant, Ohio Instructional Grant, and University grants, scholarships, loans, employment, student fee waivers, private loans and student sponsor agreements.

The following table summarizes the amounts of financial aid provided to University students for recent Academic Years. All programs financed by the federal and state governments are subject to appropriations and funding. There can be no assurance that the amounts of federal and state financial aid to students will be available in the future at the same levels:

2011-12 2012-13 2013-14 2014-15 2015-16 Grants & Scholarships Pell $43,369,413 $41,873,765 $39,939,036 $38,134,003 $36,410,660 State Funds 2,306,599 3,063,398 3,647,125 4,034,422 4,906,814 Other Federal 2,112,840 2,301,984 2,110,348 2,211,378 2,636,556 University 30,199,287 30,438,865 35,914,703 38,081,796 42,692,839 Athletics 6,136,770 6,290,046 6,768,626 6,949,051 8,162,492 Other Funds 26,696,568 29,172,074 37,360,262 39,484,723 39,695,496 Fee Waivers 39,753,566 40,044,280 44,776,081 44,659,686 45,106,043

Total Grants & Scholarships $150,575,044 $153,184,412 $170,516,181 $173,555,059 $179,610,900

Loans Federal Direct Loans $211,375,811 $199,582,907 $208,410,453 $210,956,791 $209,279,990 Federal Perkins 926,518 1,776,936 1,976,899 1,530,166 1,253,918 Federal Miscellaneous 256,000 32,000 0 655,351 817,990 State 0 209,999 26,250 33,750 29,250 University 2,069,752 556,398 451,979 28,850 5,365 Other Miscellaneous 26,891,440 29,125,400 31,048,609 33,030,145 38,556,930

Total Loans $241,519,521 $231,283,640 $241,914,190 $246,235,053 $249,943,443

Student Employment Federal Work Study $1,096,223 $1,181,993 $1,300,769 $1,119,872 $1,293,619 Centralized Employment 14,242,908 11,187,429 14,672,461 15,655,853 16,949,240 PACE 660,229 620,086 550,140 570,803 582,105

Total Student Employment $15,999,360 $12,989,508 $16,523,370 $17,346,528 $18,824,964

Federal reports show a Three Year Official Cohort Default Rate of 11.1% for Fiscal Year 2012 which is based on the William D. Ford Federal Direct Loan Program loans made to students attending the University. This compares to the national average of 11.8%. The Perkins Loan default rates for the five-year period on the table above were 3.85%, 3.81%, 3.34%, 3.05% and 2.95% respectively.

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The Ohio University Foundation/Housing for Ohio, Inc.

The Ohio University Foundation (the “Foundation”), a 501(c)(3) organization incorporated in Ohio in 1945 to support the educational undertakings of the University, is reported in the University’s statements as a discretely presented component unit. Housing for Ohio, Inc. (“Housing”), a 501(c)(3) organization controlled by the Foundation and included in such reports as part of such unit, is the beneficiary of the proceeds of Athens County Port Authority Adjustable Rate University Housing Revenue Bonds, Series 2000 (Housing for Ohio, Inc. Project), dated September 26, 2000, maturing June 1, 2032 and currently outstanding in the principal amount of $23,375,000 (the “Housing Bonds”). The Housing Bonds financed the construction of a 182-unit, 580-bed student housing complex on land leased by the University to Housing. The Housing Bonds are variable rate obligations subject to tender by the holders thereof under the terms of the trust indenture, and are supported by a letter of credit issued by Barclays Bank in the amount of the outstanding principal amount of the bonds plus a period of interest at the maximum rate, which expires October 13, 2017. The University issued a guaranty to the letter of credit provider of certain reimbursement obligations of Housing with respect to draws on the letter of credit securing the Housing Bonds in October 2013. It is expected that the University's obligations under that guaranty will terminate and be extinguished on February 1, 2017.

Financial Operations

The General Receipts of the University for the five Fiscal Years ended June 30, 2012, 2013, 2014, 2015 and 2016 were as follows:

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The financial statements of the University have been prepared in accordance with generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board (GASB) including GASB No. 34 and No. 35. The presentation required by GASB No. 34 and No. 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, and changes in net position, and the direct method of cash flow presentation.

GASB No. 39, Determining Whether Certain Organizations Are Component Units, an amendment of GASB No. 14, was implemented by the University effective July 1, 2003. The University has determined that The Ohio University Foundation, a 501(c)(3) organization incorporated in Ohio in October 1945 to support the educational undertakings of the University, is to be reported in the University’s statements as a discretely presented component unit. Beginning with Fiscal Year 2015, it was determined that Tech GROWTH Ohio Fund and University Medical Associates, Inc. are component units of the University and their financial results have been presented in a blended format in the University’s financial statements.

The University implemented GASB No 68, Accounting and Financial Reporting for Pensions—an Amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date, effective July 1, 2014. Statement No. 68 requires governments providing defined benefit pensions to recognize their unfunded pension benefit obligation as a liability for the first time, and to more comprehensively and comparably measure the annual costs of pension benefits. Statement No. 71 is a clarification of GASB 68 requiring a government to recognize a beginning deferred outflow of resources for its pension contributions, if any, made subsequent to the measurement date of the beginning net pension liability. The Statements also enhance accountability and transparency through revised note disclosures and required supplementary information (RSI). Please refer to Notes 1, 11, and 17.

As of June 30, 2016, the University retrospectively applied Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurement and Application. GASB Statement No. 72 provides guidance for determining a fair value measurement for reporting purposes and applying fair value to certain investments and disclosures related to all fair value measurements.

The University’s accounts are audited by professional certified public accounting firms, whose audit reports are provided to the Board of Trustees and to the Auditor of State. The latter has overall audit responsibility for public agencies in the State, including the University. The University’s audited financial statements for Fiscal Year 2016 are included in this Official Statement as APPENDIX B.

The University adopts an operating budget for each Fiscal Year based on prior years’ budgets, funding requests submitted by each of the University’s planning units and guidelines developed by the President and Board of Trustees in consultation with University leadership and the University Budget Planning Council. These requests are reviewed by the appropriate planning units, the University Budget Planning Council, University leadership, and then the President, prior to review and final approval by the Board of Trustees.

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The University, as part of its budgeting process, submits a biennial capital request to the State of Ohio Department of Higher Education for specific line items. In addition, the University receives instructional subsidy and performance funding allocations from the Department of Higher Education. The Board of Trustees considers the amount of State appropriations, along with the University’s budget requirements and other revenue sources, in establishing student tuition and fees for each academic year.

Every other year, the University prepares and updates its six-year capital improvement program. The University Planning and Space Management department works with University planning units to prioritize capital needs. This provides the basis for a State capital appropriation request which is submitted to the Department of Higher Education. The request identifies the projects proposed to be financed with State appropriations by the General Assembly and the purpose, priority and amount and source of funds for those projects. The Department of Higher Education and the General Assembly may approve, modify or decline aspects of the University’s capital appropriation programs.

The University’s current funds operating budget is composed of a restricted fund budget and an unrestricted fund budget, and the unrestricted fund budget is further divided into a general fund budget and auxiliary fund budget. The general fund budgets include Athens Colleges, the College of Medicine, the Regional campus system, and administrative and academic support. The general fund expenditure budget includes instruction and departmental research, separately budgeted research, public service, academic support, institutional support, operation and maintenance of plant, scholarships and fellowships and reserves. The auxiliary fund budget includes expenditures supported by other revenue sources, including room and board, parking, intercollegiate athletic and related income. The restricted fund budget includes expenditures supported by revenue from grants, contracts, gifts, and donations.

The Board of Trustees adopts an annual budget inclusive of both operating and nonoperating funds. The Board delegates authority to modify the budget to the President, the Provost and the Vice President for Finance and Administration to the extent that unrestricted resources are available. The President and senior officers review forecasted revenues and expenditures throughout the year, and modify the budgets as appropriate. Financial forecasts and changes to budget are communicated to the Board of Trustees.

In the University’s financial statements, The Ohio University Foundation is presented discretely as a component unit of the University.

Set forth below is a summary of the University’s revenues, expenses and changes in net position for the five most recent Fiscal Years. These summaries are derived from the audited financial statements of the University for each of the Fiscal Years shown.

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A-31

Statements of Revenues, Expenses and Changes in Net Position (Dollars in Thousands)

Fiscal Year 2012 2013 2014 2015 2016 OPERATING REVENUE: Student tuition and fees $347,313,985 $374,172,489 $380,145,215 $392,062,045 $404,587,892 Less: Pell grants (36,385,924) (36,383,579) (33,496,473) (32,661,455) (30,795,925) Less: Other scholarships (28,011,937) (31,387,122) (36,512,529) (38,489,391) (43,977,085) Net Student tuition and fees 282,916,124 306,401,788 310,136,213 320,911,199 329,814,882 Auxiliary enterprises 96,748,008 100,419,557 101,448,181 114,799,222 114,302,148 Less: Pell grants-room and board (2,358,732) (2,563,364) (2,825,662) (2,328,069) (2,532,849) Less: Other scholarships-room and board (7,329,582) (7,862,805) (8,008,265) (7,992,024) (9,237,197) Net Auxiliary enterprises 87,059,694 89,993,388 90,614,254 104,479,129 102,532,102 Federal grants and contracts 31,709,532 33,234,217 26,615,696 26,843,597 24,023,414 State and local grants and contracts 8,947,427 8,930,894 7,300,853 8,633,612 10,485,203 Private grants and contracts 8,511,441 8,732,387 11,725,508 13,687,059 13,326,930 Royalties 9,657,819 10,237,675 10,584,970 10,133,481 6,641,811 Sales and services 8,331,864 8,823,843 16,290,831 14,054,755 15,657,406 Other sources 13,178,593 17,695,240 20,575,799 33,963,350 29,052,036 Total operating revenue 450,312,494 484,049,432 493,844,124 532,706,182 531,533,784

OPERATING EXPENSES: Educational and general: Instruction and departmental research 231,424,236 252,853,205 254,675,549 248,199,396 259,123,400 Separately budgeted research 42,516,967 45,849,130 45,196,225 44,750,624 38,951,805 Public service 27,134,973 27,883,360 28,675,082 28,081,220 30,258,913 Academic support 62,991,384 67,416,554 77,509,564 79,378,564 80,761,392 Student services 29,137,388 31,372,445 41,073,453 51,152,513 56,038,625 Institutional support 34,038,345 39,144,473 52,275,969 60,032,232 59,940,513 Operation and maintenance of plant 52,731,919 61,504,994 48,949,560 52,841,001 50,392,267 Student aid (including Pell grants of $4,706,399 in 2012, 10,575,082 11,493,470 10,262,608 8,647,508 8,479,525 $4,921,374 in 2013, $3,737,036 in 2014, $3,077,532 in 2015 and $2,829,193 in 2016 for Ohio University) Depreciation 34,828,661 35,150,724 36,428,683 37,919,010 43,020,802 Auxiliary enterprises 68,545,176 70,563,577 72,782,997 76,920,143 82,930,782 Total operating expenses 593,924,131 643,231,932 667,829,690 687,922,211 709,898,024 OPERATING LOSS $(143,611,637) $(159,182,500) $(173,985,566) $(155,216,029) $(178,364,240)

NONOPERATING REVENUE (EXPENSES): State appropriations 136,636,074 141,351,804 151,216,997 159,027,530 161,462,302 Federal grants – Pell 43,451,055 43,868,317 40,059,171 38,067,056 36,157,967 Federal grants – other nonexchange 1,656,583 2,078,589 2,060,444 1,937,952 2,044,478 State and local grants nonexchange 2,198,331 2,731,913 2,402,264 2,528,416 3,532,248 Private gifts 4,413,232 4,618,051 4,560,193 4,839,879 5,029,693 Investment income (loss), net 3,658,908 13,651,449 28,471,319 2,511,783 (4,401,323) Interest on debt (6,130,158) (6,083,629) (9,993,972) (18,554,472) (24,168,870) Other nonoperating expense (578,404) (478,687) (137,416) (272,925) (4,351,097) Net nonoperating revenue 185,305,621 201,737,807 218,639,000 190,085,219 175,305,398 INCOME (LOSS) BEFORE OTHER REVENUE 41,693,984 42,555,307 44,653,434 34,869,190 (3,058,842) OTHER REVENUE: State capital appropriations 6,200,109 4,935,547 7,376,727 13,957,113 13,802,435 Capital grants and gifts 11,468,690 3,869,353 12,320,018 4,819,265 5,223,040 Additions to permanent endowments 6,567 4,694 9,471 12,382 4,626 Total other revenue 17,675,366 8,809,594 19,706,216 18,788,760 19,030,101 INCREASE (DECREASE) IN NET POSITION 59,369,350 51,364,901 64,359,650 53,657,950 15,971,259 NET POSITION: Beginning of year 737,024,823 796,394,173 847,759,074 912,118,724 594,656,264 Adjustment for change in accounting principle - - - (371,120,410) - Beginning of year, as restated 737,024,823 796,394,173 847,759,074 540,998,314 594,656,264 End of year $796,394,173 $847,759,074 $912,118,724 $594,656,264 $610,627,523

A-32

Capital Programs

The University has an on-going capital improvement program consisting of new construction and the renovation of existing facilities.

At June 30, 2016 the University was committed to future capital expenditures as follows:

Contractual commitments $65,516,512 Estimated completion costs of projects 79,831,725 Total $145,348,237

These projects will be funded by:

State appropriations $30,754,049 University funds (Including Bonds funds) 111,243,792 Gifts, grants, etc. 3,350,396 Total $145,348,237

Biennially the University updates its six year capital improvement plan by identifying and analyzing the University’s capital needs and assessing projects in several dimensions. In August 2016, the University completed the Fiscal Years 2017-22 capital improvement plan, which calls for an additional $325 million in capital spending financed through debt over that time period. The University expects to take a phased approach to debt issuance with the first tranche of $125 million of projects being funded by the Series 2017A. The University’s approach to debt financing will be driven by ongoing capital needs as well as the University’s financial performance.

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A-33

Gifts and Endowments/Foundation

The Ohio University Foundation received more than $31.9 million in gifts of cash and property during Fiscal Year 2016.

The following table shows the amount of cash and property received over the past five years. Amounts below do not include pledges receivable or revocable deferred gifts.

Current Fiscal Year Operations Endowment Real Estate Total 2012 $10,045,183 $8,759,563 $ - $18,804,746 2013 8,846,540 6,037,452 - 14,883,992 2014 10,047,243 10,569,618 305,547 20,922,408 2015 11,959,771 13,556,183 - 25,515,954 2016 18,079,293 13,814,897 82,500 31,976,690

The combined market values of the endowment for the Foundation and the University were as follows for the Fiscal Years indicated:

Fiscal Year Market Value 2012 $408,987,366 2013 446,747,523 2014 515,912,532 2015 506,989,247 2016 481,777,085

[End of Appendix A]

A-34

APPENDIX B

AUDITED FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED JUNE 30, 2015 AND 2016

[THIS PAGE INTENTIONALLY LEFT BLANK] Ohio University (a component unit of the State of Ohio)

Financial Statements for the Years Ended June 30, 2016 and 2015

Board of Trustees Ohio University West Union Street Office Center, Suite 275 1 Ohio University Athens, Ohio 45701

We have reviewed the Independent Auditor’s Report of the Ohio University, Athens County, prepared by Plante & Moran, PLLC, for the audit period July 1, 2015 through June 30, 2016. Based upon this review, we have accepted these reports in lieu of the audit required by Section 117.11, Revised Code. The Auditor of State did not audit the accompanying financial statements and, accordingly, we are unable to express, and do not express an opinion on them.

Our review was made in reference to the applicable sections of legislative criteria, as reflected by the Ohio Constitution, and the Revised Code, policies, procedures and guidelines of the Auditor of State, regulations and grant requirements. The Ohio University is responsible for compliance with these laws and regulations.

Dave Yost Auditor of State

December 27, 2016

ZZ 120- " 20##2Q'$2&*--0Q-*3+ 31Q&'-VUTSWVUWRX !&-,#SXSVVVXXVVWSV-0ZRRVTZTVRUYR 6SXSVVVXXVVV[R Thispageintentionallyleftblank. Ohio University Contents

Independent Auditor’s Report 1-3

Financial Statements

Management’s Discussion and Analysis 4-12

Statements of Net Position 13-14

Statements of Revenues, Expenses, and Changes in Net Position 15-16

Statements of Cash Flows 17-18

Notes to Financial Statements 19-68

Required Supplementary Information 69

Schedule of University’s Proportionate Share of the Net Pension Liability 70

Schedule of University Contributions 71

Supplementary Information 72

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 73-74

Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance 75-76

Schedule of Expenditures of Federal Awards 77-86

Notes to Schedule of Expenditures of Federal Awards 87-88

Schedule of Findings and Questioned Costs 89

Thispageintentionallyleftblank. Independent Auditor's Report

To the Board of Trustees Ohio University

Report on the Financial Statements We have audited the accompanying basic financial statements of Ohio University (the "University") and its discretely presented component unit as of and for the years ended June 30, 2016 and 2015, and the related notes to the financial statements, which collectively comprise the University's financial statements as listed in the table of contents. These financial statements are reported as a component unit of the State of Ohio. 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 an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and in accordance with the standards applicable to financial audits contained in Governement Auditing Standards, issued by the Comptroller General of the United States. 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.

1 To the Board of Trustees Ohio University

Opinions In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of Ohio University as of June 30, 2016 and 2015 and the changes in its financial position and, where applicable, its cash flows thereof for the years then ended, in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1 to the basic financial statements, during the year ended June 30, 2016, the University adopted the provisions of Governmental Accounting Standards Board Statement No. 72, Fair Value Measurement and Application. Our opinion is not modified with respect to this matter. As explained in Notes 2 and 18, the financial statements include investments that are not listed on national exchanges nor for which quoted market prices are available. These investments include limited partnerships, hedge funds, funds-of-funds, and commingled funds that are not mutual funds. Such investments totaled $70,693,685 (11.6 percent of University net position) and $71,357,380 (12.0 percent of University net position) and $98,483,206 (19.7 percent of discretely presented component unit net position) and $102,359,346 (20.0 percent of discretely presented component unit net position) at June 30, 2016 and 2015, respectively. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, as indicated on the table of contents, and the schedule of the University's proportionate share of the net pension liability, and the schedule of university contributions, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, which 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 audit 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 audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the University's basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the "Uniform Guidance"), and is not a required part of the basic financial statements.

2 To the Board of Trustees Ohio University

The schedule of expenditures of federal awards 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 schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 6, 2016 on our consideration of Ohio University's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Ohio University's internal control over financial reporting and compliance.

October 6, 2016

3 Ohio University Management’s Discussion and Analysis

Management’s discussion and analysis (MD&A) The Ohio University Foundation (the “Foundation”) provides an unaudited overview of the financial has been determined to be a component unit of the position and activities of Ohio University for the year University. Accordingly, the Foundation is discretely ended June 30, 2016, with selected comparative presented in the University’s financial statements. information for the years ended June 30, 2015 and The Foundation’s primary function is fundraising to 2014. The financial statements are prepared on the supplement resources that are available to the accrual basis of accounting, whereby revenue is University in support of its programs. The recognized when earned and expenses are recorded Foundation is governed by a separate board of when the related liability is incurred. As the MD&A trustees comprised of graduates and friends of the presentation includes highly summarized University. Nearly all the assets of the Foundation are information, it should be read in conjunction with the restricted by donors to activities of the University. accompanying financial statements and related notes Ohio University provides both support for to the financial statements. The financial statements, advancement operations as well as administrative footnotes, and this discussion are the responsibility of support to the Foundation for critical business University management. functions.

Financial Highlights The University’s financial position remained strong, with assets of $1,663.8 million and liabilities of $1,116.6 million at June 30, 2016, compared to assets of $1,661.5 million and liabilities of $1,053.6 million at June 30, 2015. Net position, which represents the residual interest in the University’s assets and deferred outflows of resources after liabilities and deferred inflows of resources are deducted, totaled $610.6 million at June 30, 2016 as compared to $594.7 million at June 30, 2015. The change in net position was a positive $16.0 million at June 30, 2016 as compared to $53.7 million at June 30, 2015. Factoring into the net position change is the new accounting standard, Governmental Accounting Standards Board (GASB) Statement No. 68, which requires the recognition of a liability for the unfunded pension liability from the state retirement systems. The table below represents the activity for the University without the changes for the recognition of the pension liability.

Changes in net position represent the University’s results for the year and are summarized for the years ended June 30, 2016, 2015, and 2014 as follows:

(in thousands) 2016 2015 2014 Operating revenues and state appropriations$ 692,996 $ 691,734 $ 645,062 Total expenses 738,418 706,750 677,961 Net results before items below (45,422) (15,016) (32,899)

Net investment income (loss) (4,401) 2,512 28,471 Gifts and other nonoperating revenues, net 65,794 66,162 68,788 Increase in net position 15,971 53,658 64,360

Less: Amounts related to changes in the unfunded pension liability included in expenses above 6,810 (6,080) -

Increase in net position without effects of GASB 68$ 22,781 47,578$ $ 64,360

4 Ohio University Management’s Discussion and Analysis (Continued)

The unfunded pension liability will change each Statement of Net Position year resulting from changes in plan assumptions The statement of net position is the University’s about economic and demographic factors, balance sheet. It reflects the total assets, deferred differences between actual and expected outflows of resources, liabilities, deferred inflows of experience, and differences between actual and resources, and net position (equity) of the University expected investment earnings. The current year as of the end of the fiscal year. Net position impact from these factors is a decrease to net represents the residual interest in the University’s position of $6.8 million. The impact for fiscal assets and deferred outflows of resources after the year 2015 was an increase to net position of $6.1 deduction of its liabilities and deferred inflows of million. resources. The change in net position measures whether the overall financial condition has improved Without the effects of the accounting standard or deteriorated during the year. Except for capital related to the unfunded pension liability, net assets, all other assets and liabilities are measured at position for the University increased $22.8 a point in time using current values. Capital assets are million during fiscal year 2016 as compared to recorded at historical costs less an allowance for an increase of $47.6 million in fiscal year 2015. depreciation. Net student tuition and fees increased $8.9 million in fiscal year 2016. This increase was The following table depicts a summary of the caused by a combination of increased enrollment composition of the statement of net position for the and tuition increases, but was partially offset by three years ended June 30, 2016: an increase in university scholarships. Investment income decreased $6.9 million in (in thousands) 2016 2015 2014 fiscal year 2016. The University’s investment Assets: income is comprised of interest, dividends, Current assets$ 369,134 387,467$ $ 426,004 realized gains (losses), and unrealized gains Capital assets, net 967,952 909,397 765,845 (losses). Investment income stems from two Other assets 326,738 364,640 191,634 primary sources. First, the University’s Total assets 1,663,824 1,661,504 1,383,483 endowment assets, as well as a portion of its working capital, are invested in a long-term, Deferred outflows of broadly diversified portfolio. This “diversified resources 87,882 33,656 3,128 pool” achieved a return of -3.15 percent for fiscal year 2016, underperforming its diversified Liabilities: benchmark of -1.17 percent for the same period. Current liabilities 131,161 133,767 135,173 Additionally, a portion of the University’s Noncurrent liabilities 985,412 919,832 339,319 working capital is invested in a pool of Total liabilities 1,116,573 1,053,599 474,492 investment-grade fixed income securities. This Deferred inflows of “liquidity pool” achieved a return of 4.30 percent resources 24,505 46,905 - for fiscal year 2016, underperforming the Total net position$ 610,628 594,656$ $ 912,119 Barclays U.S. Aggregate Bond Index, which returned 6.00 percent for the same period. The University strategically issues debt to Assets - Total assets grew by $2.3 million as a finance its facility and infrastructure result of the following changes: investments. On November 14, 2014, the o Cash and cash equivalents decreased $30.7 University issued a $250 million taxable bond million due primarily to capital project with a final maturity in 100 years. Proceeds from expenditures and Century Bond debt service this Century Bond are being used to establish a payments. Century Bond project capital sustainable approach to investing in the expenditures of $5.9 million were payable to University’s buildings and infrastructure. operating cash as of June 30, 2016 and Concurrent with the approval of the University’s reimbursed in fiscal year 2017 from the fiscal year 2017- fiscal year 2022 Capital Century Bond proceeds. Capital Improvement Plan, the Board approved the expenditures for projects not paid from issuance of tax exempt bonds not to exceed $170 Century Bond proceeds will be partially million in fiscal year 2017. The majority of this reimbursed by a future bond issuance in debt issuance will fund the Capital Improvement fiscal year 2017. As of June 30, 2016, the Plan and projects previously approved by the University’s operating cash has paid $10.7 Board. 5 Ohio University Management’s Discussion and Analysis (Continued)

million of the Century Bond debt service Net Position - is classified into three major payment short-fall with the expectation that categories: this will be reimbursed with future earnings o and internal loan pool payments. Net Investment in capital assets - the net o Current investments increased $17.1 million equity in property, plant, and equipment owned by the University. partly because short-term and intermediate- o term working capital investments earned Restricted - owned by the University, but the $6.0 million of investment income, which use or purpose of the funds is restricted by an was offset by investment losses of $2.9 external source or entity. The restricted million on long-term working capital category is subdivided further into investments. Cash totaling $13.7 million expendable and nonexpendable. was also added to the working capital Restricted nonexpendable - endowment investment pools throughout the fiscal year. funds whose principal may be invested; o Restricted cash and cash equivalents however, only interest, dividends, and decreased by $7.3 million due to the capital gains may be spent. continued spending of the prior years’ bond Restricted expendable - may be spent by funds during fiscal year 2016. the institution, but only for the purpose o Noncurrent investments decreased by $25.2 specified by the donor, grantor, or other million due to spending of the Century bond external entity. This category includes funds on construction projects. the unspent balance in grant funds, loan o Capital assets increased by $58.6 million funds, and debt service funds. o mainly due to spending on capital projects. Unrestricted - resources derived primarily from student tuition, fees, state Deferred Outflows of Resources - increased appropriations, and auxiliary enterprises. $54.2 million as a result of the following These are used for the general obligations of changes: the University and may be used at the discretion of the board of trustees for any o Deferred outflows of resources related to purpose furthering the University’s mission. pensions increased $54.6 million mainly due to a difference between projected and actual Net position for the three years ended June 30, 2016 earnings on pension plan investments as is displayed as follows: described in Note 11. o Deferred charge on refunding of bonds (in thousands) 2016 2015 2014 decreased $0.4 million. This deferred Net Investment in charge is being amortized over the life of the capital assets 651,057$ 595,030$ $ 536,487 2003 and 2004 bonds. Restricted: Liabilities - Total liabilities increased by $63.0 Nonexpendable 22,160 22,296 22,364 million as a result of the following changes: Expendable 32,063 34,539 39,670 o Net pension liability increased $83.8 million Unrestricted (94,652) (57,209) 313,598 as described in Note 11. Although the University is required to record this liability, Total net position$ 610,628 594,656$ $ 912,119 the University is not setting aside reserve cash balances or budgeting to fund this liability. o Long-term debt decreased $18.5 million. Total net position increased $16.0 million between This decrease is due to principal payments fiscal year 2015 and 2016. Without the current year on the existing bonds. Please see Note 7 for impact of the GASB 68 unfunded pension liability more information on issuances and changes, that increase would have been $22.8 repayments of debt. million. There is a long-term strategy in place to improve the University’s financial strength and enable the continued pursuit of strategic priorities. Deferred Inflows of Resources - decreased This strategy encompassed prudent resource planning $22.4 million. The only item in this category is and utilization including: the deferral of items related to the unfunded pension liability. See Note 11 for more Conservative revenue forecasting information. 6 Ohio University Management’s Discussion and Analysis (Continued)

Creating reserves for protection from revenue Operating revenue increased $1.2 million for shortfalls and improvement in the financial fiscal year 2016. There were many factors strength of the University causing this increase. Net student tuition and fee Revenue generation through the creation of new revenue increased $8.9 million. programs and strategic growth that leveraged Federal grants and contracts included in the existing programs operating revenue category experienced a Elimination of the reliance on investment income decrease of $2.8 million for fiscal year 2016 due in support of unrestricted operations to the cyclical nature of grant funding. Management of debt in a strategic manner Royalty revenue decreased $3.5 million and is offset by a corresponding decrease in royalty Statement of Revenues, Expenses, and Changes in expense in the operating expense category of Net Position separately budgeted research. The statement of revenues, expenses, and changes in Other revenue sources decreased $4.9 million, of net position is the University’s income statement and which $2.7 was related to the University’s presents the results of operations. It should be noted component units University Medical Associates, that the required subtotal for net operating income or Inc. and Tech GROWTH Ohio Fund. loss will generally reflect a loss for state-supported Operating expenses increased $21.9 million colleges and universities. partially due to the current year charge for the unfunded pension liability. In fiscal year 2015 In accordance with the GASB reporting principles, there was a credit to pension expense of $6.1 the revenues and expenses are primarily reported as million in operating expenses. In fiscal year either operating or nonoperating. Revenue is 2016 there is a charge to pension expense of $6.8 generated by providing goods and services to million. This caused a $12.9 million increase to customers, predominately students. Nonoperating operating expenses from fiscal year 2015 to revenue includes the instructional subsidy from the fiscal year 2016. State of Ohio, which Ohio University relies upon for Depreciation expense increased $5.1 million for current operations. Other revenue includes state fiscal year 2016 due to the increased capital capital appropriations. Operating expenses include all expenditures in recent years. expenses except for interest on debt and disposal and Net nonoperating revenue decreased $14.8 write-offs of plant facilities, which are reported as million mainly due to decreases in investment nonoperating expenses. income of $6.9 million and increases in interest expense of $5.6 million. There was also a loss The following is a summary of the statement of on disposal of facilities of $4.1 million in the revenue, expenses, and changes in net position for the other nonoperating expense line item related to three years ended June 30, 2016: three residence halls torn down during fiscal year 2016 as part of the Phase I Housing (in thousands) 2016 2015 2014 Development project. Offsetting those decreases Operating revenue $ 531,534 532,706$ 493,844$ were increases to state appropriations of $2.4 Operating expenses 709,898 687,922 667,830 million.

Net operating loss (178,364) (155,216) (173,986) One of the University’s operational strengths are the Net nonoperating revenue 175,305 190,085 218,639 diverse streams of revenue that supplement its Income (loss) before student tuition and fees. This includes private support other revenue (3,059) 34,869 44,653 from individuals, foundations, and corporations, Other revenue 19,030 18,789 19,707 along with government and other sponsored Increase in net position 15,971 53,658 64,360 programs, state appropriations, and investment Adjustments to beginning income. Consistent with its mission, the University net position - (371,120) - continues to seek funding from all possible sources to Net position - End of year$ 610,628 594,656$ 912,119$ supplement student tuition and to responsibly manage financial resources used to fund operating activities. Highlights from the statement of revenue, expenses, and changes in net position include:

7 Ohio University Management’s Discussion and Analysis (Continued)

A comparison of operating and nonoperating revenues for the three years ended June 30, 2016 is as follows:

% of % of % of (in thousands) 2016 Total 2015 Total 2014 Total Student tuition and fees, net$ 329,815 43.7%$ 320,911 42.2%$ 310,136 41.8% State appropriations 161,462 21.4% 159,028 20.9% 151,217 20.4% Auxiliary enterprises, net 102,532 13.6% 104,479 13.7% 90,614 12.2% Gifts, grants, and contracts 63,665 8.4% 63,289 8.5% 66,986 9.0% Pell grants 36,158 4.8% 38,067 5.0% 40,059 5.4% Other sources 29,057 3.9% 33,977 4.5% 20,585 2.8% Sales and services 15,657 2.1% 14,055 1.8% 16,291 2.2% State capital appropriations 13,802 1.8% 13,957 1.8% 7,377 1.0% Royalties 6,642 0.9% 10,133 1.3% 10,585 1.4% Investment income (loss), net (4,401) -0.6% 2,512 0.3% 28,471 3.8% Total operating and nonoperating revenues $ 754,389 100.0%$ 760,408 100.0%$ 742,321 100.0%

Student tuition and fees, the largest of the revenue activities of the institution. This is critical as the streams, comprises 43.7 percent of total revenues for University continues to face significant financial fiscal year 2016. This is up from 42.2 percent of total pressures, mainly in the areas of deferred revenue for fiscal year 2015, and up from 41.8 maintenance of buildings and infrastructure as well as percent from 2014. State appropriations continue to compensation and benefits. In addition to a increase and are up $2.4 million for fiscal year 2016. functional classification of expenses below, the University has prepared operating expenses by The University continues to make cost containment a natural classification in Note 9 to the financial priority. This strategy will allow the University to statements. direct financial resources to the most strategic

A comparison of operating and nonoperating expenses for the three years ended June 30, 2016 is as follows:

% of % of % of (in thousands) 2016 Total 2015 Total 2014 Total Instruction and departmental research$ 259,123 35.1%$ 248,199 35.1%$ 254,676 37.6% Auxiliary enterprises 82,930 11.2% 76,920 10.9% 72,783 10.7% Academic support 80,761 10.9% 79,379 11.2% 77,510 11.4% Institutional support 59,941 8.1% 60,032 8.5% 52,276 7.7% Student services 56,039 7.7% 51,153 7.3% 41,073 6.1% Operation and maintenance of plant 50,392 6.8% 52,841 7.5% 48,950 7.2% Depreciation 43,021 5.8% 37,919 5.4% 36,429 5.4% Separately budgeted research 38,952 5.3% 44,751 6.3% 45,196 6.7% Public service 30,259 4.1% 28,081 4.0% 28,675 4.2% Interest on debt 24,169 3.3% 18,554 2.6% 9,994 1.5% Student aid 8,480 1.1% 8,648 1.2% 10,262 1.5% Other nonoperating expense 4,351 0.6% 273 0.0% 137 0.0% Total operating and nonoperating expenses $ 738,418 100.0%$ 706,750 100.0%$ 677,961 100.0%

8 Ohio University Management’s Discussion and Analysis (Continued)

The biggest change is the increase of $10.9 million in million in the Grover E112 Expansion project, and a the instruction and departmental research category. $3.6 million investment in the on-going phases This increase is due to the functional allocation of (projects) of the Energy Infrastructure Initiative, a costs for the unfunded pension liability as well as campaign to upgrade/rehabilitate the aged increased faculty salaries and benefits. infrastructures that provide steam, heating, cooling, and utilities to the campus overall. Student aid listed as a functional expenditure is when a student receives financial aid in excess of his or her Cumulative costs associated with capital projects tuition and fees for a given term, a disbursement will continuing after the fiscal year ended June 30, 2016 be issued that is considered student aid. total approximately $67.4 million.

Statement of Cash Flows More detailed information about the University’s The statement of cash flows provides additional capital assets are presented in Note 5 to the financial information about the University’s financial results statements. and presents detailed information about the major sources and uses of cash for the institution for the Debt Administration fiscal year. The cash flow analysis is divided into As of June 30, 2016, the University had $526.2 four sections: (1) operating activities, (2) noncapital million in bonds and notes outstanding, compared to financing activities (which include state $543.3 million at the end of 2015. On November 14, appropriations as well as gift revenue), (3) capital and 2014, the University issued a $250 million taxable related financing activities (which include debt Century Bond with annual interest payments and activity), and (4) investing activities. principal balloon maturity in 2114. The proceeds from the Century Bond will be used to establish a A comparative summary of the statement of cash sustainable approach to investing in the University’s flows for the three years ended June 30, 2016 is as buildings and infrastructure. Detailed information follows: exists in Note 7 related to borrowings and retirements for fiscal years 2016 and 2015. (in thousands) 2016 2015 2014 Cash (used in) provided by: Ohio University takes its stewardship responsibility Operating activities $ (126,549) $ (128,274) $ (114,771) seriously and works diligently to manage the Noncapital financing activities 212,748 200,480 208,616 institution’s resources effectively, including the use Capital financing activities (133,668) 53,552 (123,754) Investing activities 9,493 (247,706) (38,863) of debt to finance capital projects. The University is Net (decrease) increase in cash (37,976) (121,948) (68,772) committed to using debt conservatively in order to Cash - Beginning of year 81,654 203,602 272,374 maintain an acceptable credit rating and debt burden Cash - End of year $ 43,678 81,654$ $ 203,602 ratio. A solid debt rating and debt burden ratio is a key measurement of financial strength. Standard & Poor reaffirmed its long-term credit rating in Capital Assets December 2015 and Moody’s reaffirmed its long- The University made significant additions to capital term credit rating in November 2014. Standard & assets during fiscal year 2016. These capital asset Poor’s Rating Services’ long-term rating on Ohio additions were financed with University funds, bond University’s outstanding general and subordinated funds, state capital appropriations, gifts, and grants. general receipts bonds is an “A+” with a “stable” The largest additions to capital during the fiscal year outlook and Moody’s Investors Service’s rating is an were the completion of the Phase I Housing “Aa3” with a “stable” outlook. Development project, creating five new student housing facilities, completion of the OUHCOM Additional debt issuances may be needed in the near Dublin Campus Development project, creating a new future for the purpose of various academic and campus for our nursing program, the completion of auxiliary facility needs. Phase II of the Schoonover Center Redevelopment, and the Park Place Tunnel repairs. Senate Bill 6 Ratios Senate Bill 6 ratios, enacted into law in 1997 by the Major investments to construction in progress, which Ohio General Assembly, are used to assist the state in will greatly enhance the University’s assets in fiscal monitoring the financial accountability of state year 2017, include $19.7 million in the McCracken colleges and universities by using a standard set of Hall Renovation and Expansion project, $4.6 million measures with which to monitor the fiscal health of in the Jefferson Hall Renovations project, $2.2 campuses. In order to meet the legislative intent, 9 Ohio University Management’s Discussion and Analysis (Continued) there are three ratios from which four scores are The methodology for calculating the three ratios is as generated. The data and methodology used to follows: compute the ratios are as follows: Viability Ratio = Expendable Net Position/Plant Debt o Expendable net position - The sum of This ratio measures the availability of unrestricted net position and restricted expendable net position to cover debt should expendable net position the institution need to settle its obligations as of the balance sheet date. Plant debt - Total debt, including bonds payable, Primary Reserve Ratio = Expendable Net notes payable, and capital lease obligations Position/Total Operating Expenses Total revenue - Total operating revenue, plus o This ratio provides a snapshot of financial nonoperating revenue, plus capital strength and flexibility by indicating how appropriations, capital grants and gifts, and long the institution could function using its additions to permanent endowments expendable reserves without relying on Total operating expenses - Total operating additional net position generated by expenses, plus interest on long-term debt operations. Total nonoperating expenses - All expenses Net Income Ratio = Change in Total Net reported as nonoperating with the exception of Position/Total Revenue interest expense o This ratio offers a measure of profitability as a percentage of all institutional revenue Change in total net position - Total revenue less including revenue received for capital needs. total expenses (operating and nonoperating)

Based on the calculations, each ratio is assigned a score ranging from zero to five according to the table below. A score of 5 indicates the highest degree of fiscal strength in each category.

Scores 012345 Viability Ratio less than 0 0 to 0.29 0.30 to 0.59 0.6 to 0.99 1.0 to 2.5 greater than 2.5 Primary Reserve Ratio less than -0.1 -0.1 to 0.049 0.05 to 0.099 0.10 to 0.249 0.25 to 0.49 0.5 or greater Net Income Ratio less than -.05 -0.05 to 0 0 to 0.009 0.01 to 0.029 0.03 to 0.049 0.05 or greater

Based on these scores, a summary score, termed the composite score, is determined, which is the primary indicator of fiscal health. The composite score equals the sum of the assigned viability score multiplied by 30 percent, the assigned primary reserve score multiplied by 50 percent, and the assigned net income score multiplied by 20 percent.

In an effort to appropriately recognize the incorporation of the GASB 68 unfunded pension liability elements as an accounting change rather than a structural change in the true financial condition of the institution, the Ohio Department of Higher Education will calculate institutional financial ratios from fiscal year 2015 onward both including and excluding associated impacts of GASB 68. Pursuant to administrative rule (126:3-1-01) established in response to Senate Bill 6 of the 122nd General Assembly, a composite score of or below 1.75 for two consecutive years results in an institution being placed on fiscal watch. For the purposes of this determination, the Chancellor will utilize composite scores excluding associated impacts of GASB 68.

We have presented the scores with and without the effects of GASB 68 as summarized below:

10 Ohio University Management’s Discussion and Analysis (Continued)

The viability ratio, which uses debt as the and long-term enrollment goals, improved financial denominator, had decreased due to the Century Bond health, and the capital campaign. issuance in fiscal year 2015. The numerator, expendable net position, has decreased in fiscal year In light of the existing economic challenges, the 2016 causing the lower score. The net income ratio University continues to focus efforts on moving the decreased due to increased interest payments related institution forward while remaining committed to the to the Century Bond as well as increased operating financial health of the institution. Due to expenses and decreased investment income. Overall management’s deliberative strategic planning efforts the composite score decreased from 3.9 to 3.4 over the last several years, the University is well without the effects of GASB 68. positioned to make progress in each of these areas.

Economic Outlook The University will continue to utilize its long-term Ohio University continues to show steady investment strategy to maximize total returns, at an improvement and a strengthening of its institutional appropriate level of risk, while employing a spending balance sheet. This is due to the disciplined approach rate policy to preserve endowment principal and to spending, clearly focused strategic goals and minimize the impact of market volatility on objectives around core programs, and a commitment operations. to continual assessment of the University’s competitive environment. While it is not possible to predict the results, management believes that prudent planning and Ohio University’s vision: to be the nation’s best aligning resources to strategic priorities will allow the transformative learning community, and highlight our University to both maintain a strong financial four fundamental objectives: inspired teaching and position and successfully invest in strategic research, innovative academic programs, exemplary initiatives. student support services, and integrative co-curricular activities. There are also four supporting strategic priorities: effective total compensation, short-term 11 Ohio University Management’s Discussion and Analysis (Continued)

Requests for Information Further questions may be addressed to: Ohio This management’s discussion and analysis is University Controller’s Office, 204 West Union intended to provide additional information for the Street Office Center, Athens, Ohio 45701. reader of the audited financial statements that follow.

12 Ohio University Statements of Net Position

June 30, 2016 June 30, 2015

The Ohio The Ohio University University Ohio University Foundation Ohio University Foundation Assets and Deferred Outflows of Resources Current Assets Cash and cash equivalents $ 36,621,749 $ 23,498,369 $ 67,329,945 $ 16,833,423 Investments 260,326,183 41,534,474 243,265,210 46,275,909 Accounts and pledges receivable, net 56,811,234 9,605,279 61,835,789 9,435,972 Interest and dividends receivable 749,763 65,392 345,895 79,546 Notes receivable, net 1,366,264 - 1,403,245 - Prepaid expenses 10,502,990 1,371,979 10,302,272 1,467,571 Inventories 2,755,478 49,620 2,985,261 41,785

Total current assets 369,133,661 76,125,113 387,467,617 74,134,206

Noncurrent Assets Restricted cash and cash equivalents 7,055,643 4,946,298 14,323,886 4,156,544 Pledges receivable, net - 8,520,499 - 10,529,743 Bequests receivable - 7,917,850 - 2,706,305 Cash surrender value of life insurance - 1,175,159 - 1,143,126 Charitable gift annuities and trusts - 18,736,235 - 20,576,166 Investments - noncurrent 232,525,937 5,481,596 257,736,273 5,900,782 Endowment investments 74,947,734 380,174,696 80,602,914 400,352,874 Notes receivable - noncurrent, net 12,121,001 - 11,977,446 - Assets held for sale 88,000 17,765,231 - - Capital assets, net 967,952,454 11,901,438 909,396,502 29,721,811

Total noncurrent assets 1,294,690,769 456,619,002 1,274,037,021 475,087,351

Total assets 1,663,824,430 532,744,115 1,661,504,638 549,221,557

Deferred Outflows of Resources Deferred outflows related to pensions 85,551,545 - 30,926,019 - Deferred charge on refunding 2,330,920 - 2,729,687 -

Total deferred outflows of resources 87,882,465 - 33,655,706 -

TOTAL ASSETS AND DEFERRED OUTFLOW OF RESOURCES $ 1,751,706,895 $ 532,744,115 $ 1,695,160,344 $549,221,557

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

13 Ohio University Statements of Net Position (Continued)

June 30, 2016 June 30, 2015

The Ohio The Ohio University University Ohio University Foundation Ohio University Foundation Liabilities, Deferred Inflows of Resources, and Net Position

Current Liabilities Accounts payable and accrued liabilities $ 71,896,538 $ 2,355,375 $ 75,883,839 $ 2,994,409 Unearned revenue 34,092,741 - 33,839,326 - Deposits and other liabilities 4,666,354 5,185,671 4,363,211 6,507,784 Long-term debt - current portion 18,917,322 1,219,900 18,307,342 1,201,300 Funds held on behalf of others 1,589,274 397,413 1,373,645 395,616

Total current liabilities 131,162,229 9,158,359 133,767,363 11,099,109

Noncurrent Liabilities Compensated absences 18,706,237 - 18,651,740 - Other noncurrent liabilities 687,897 - 487,814 - Long-term debt 525,839,511 23,915,000 544,297,018 25,134,900 Net pension liability 432,896,747 - 349,060,791 - Refundable advances, federal student loans 7,281,752 - 7,333,999 -

Total noncurrent liabilities 985,412,144 23,915,000 919,831,362 25,134,900

Total liabilities 1,116,574,373 33,073,359 1,053,598,725 36,234,009

Deferred Inflows of Resources Deferred inflows related to pensions 24,504,999 - 46,905,355 -

Total deferred inflows of resources 24,504,999 - 46,905,355 -

Net Position Net investment in capital assets 651,056,598 10,323,262 595,029,592 7,542,155 Restricted: Nonexpendable 22,159,570 205,062,891 22,296,237 192,394,581 Expendable 32,062,922 286,234,157 34,539,384 312,421,371 Unrestricted (94,651,567) (1,949,554) (57,208,949) 629,441

Total net position 610,627,523 499,670,756 594,656,264 512,987,548

TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND NET POSITION $ 1,751,706,895 $ 532,744,115 $ 1,695,160,344 $ 549,221,557

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

14 Ohio University Statements of Revenues, Expenses, and Changes in Net Position Years Ended June 30, 2016 and 2015

2016 2015 The Ohio The Ohio University University Ohio University Foundation Ohio University Foundation OPERATING REVENUE: Student tuition and fees $-404,587,892 $ $-392,062,045 $ Less: Pell grants (30,795,925) - (32,661,455) - Less: Other scholarships (43,977,085) - (38,489,391) - Net Student tuition and fees 329,814,882 - 320,911,199 - Auxiliary enterprises 114,302,148 - 114,799,222 - Less: Pell grants-room and board (2,532,849) - (2,328,069) - Less: Other scholarships-room and board (9,237,197) - (7,992,024) - Net Auxiliary enterprises 102,532,102 - 104,479,129 - Federal grants and contracts 24,023,414 - 26,843,597 - State and local grants and contracts 10,485,203 - 8,633,612 - Private grants and contracts 13,326,930 - 13,687,059 - Royalties 6,641,811 - 10,133,481 - Sales and services 15,657,406 - 14,054,755 - Other sources 29,052,036 11,389,042 33,963,350 11,322,787

Total operating revenue 531,533,784 11,389,042 532,706,182 11,322,787

OPERATING EXPENSES: Educational and general: Instruction and departmental research 259,123,400 9,634,161 248,199,396 12,340,204 Separately budgeted research 38,951,805 1,088,280 44,750,624 621,428 Public service 30,258,913 377,706 28,081,220 464,248 Academic support 80,761,392 1,925,460 79,378,564 1,582,956 Student services 56,038,625 227,115 51,152,513 458,854 Institutional support 59,940,513 17,440,863 60,032,232 14,992,719 Operation and maintenance of plant 50,392,267 - 52,841,001 - Student aid (including Pell grants of $2,829,193 in 2016 and $3,077,532 in 2015 for Ohio University) 8,479,525 5,947,293 8,647,508 5,240,972 Depreciation 43,020,802 1,789,592 37,919,010 1,838,981 Auxiliary enterprises 82,930,782 - 76,920,143 - Operating expenses - Related entities - 7,137,102 - 7,083,015

Total operating expenses 709,898,024 45,567,572 687,922,211 44,623,377

OPERATING LOSS $ (178,364,240) $ (34,178,530) $ (155,216,029) $ (33,300,590)

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

15 Ohio University Statements of Revenues, Expenses, and Changes in Net Position (Continued) Years Ended June 30, 2016 and 2015

2016 2015 The Ohio The Ohio University University Ohio University Foundation Ohio University Foundation NONOPERATING REVENUE (EXPENSES): State appropriations $-161,462,302 $ $-159,027,530 $ Federal grants - Pell 36,157,967 - 38,067,056 - Federal grants - other nonexchange 2,044,478 - 1,937,952 - State and local grants nonexchange 3,532,248 - 2,528,416 - Private gifts 5,029,693 17,414,518 4,839,879 17,517,462 University support - 5,261,952 - 4,116,877 Investment income (loss), net (4,401,323) (14,510,808) 2,511,783 (6,031,950) Interest on debt (24,168,870) - (18,554,472) - Other nonoperating expense (4,351,097) - (272,925) -

Net nonoperating revenue 175,305,398 8,165,662 190,085,219 15,602,389

INCOME (LOSS) BEFORE OTHER REVENUE (3,058,842) (26,012,868) 34,869,190 (17,698,201)

OTHER REVENUE: State capital appropriations 13,802,435 - 13,957,113 - Capital grants and gifts 5,223,040 - 4,819,265 - Additions to permanent endowments 4,626 12,696,076 12,382 13,680,523

Total other revenue 19,030,101 12,696,076 18,788,760 13,680,523

INCREASE (DECREASE) IN NET POSITION 15,971,259 (13,316,792) 53,657,950 (4,017,678)

NET POSITION: Beginning of year 594,656,264 512,987,548 912,118,724 517,005,226 Adjustment for change in accounting principle - - (371,120,410) - Beginning of year, as restated 594,656,264 512,987,548 540,998,314 517,005,226

End of year $ 610,627,523 $ 499,670,756 $ 594,656,264 $ 512,987,548

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

16 Ohio University Statements of Cash Flows Years Ended June 30, 2016 and 2015

Ohio University 2016 2015 CASH FLOWS FROM OPERATING ACTIVITIES: Student tuition and fees $ 330,462,474 $ 313,704,802 Grants and contracts 52,361,670 44,081,228 Payments to suppliers (168,360,701) (157,181,640) Payments to or on behalf of employees (455,904,737) (438,857,001) Payments for scholarships and fellowships (40,300,378) (32,194,451) Loans issued to students (2,904,854) (2,698,558) Collection of loans to students 2,661,777 2,463,741 Auxiliary enterprise sales 105,700,467 102,507,023 Royalties 7,720,373 10,678,481 Sales and services 20,112,792 9,400,738 Other receipts 21,902,225 19,821,218 Net cash used in operating activities (126,548,892) (128,274,419) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: State appropriations 161,462,302 159,027,530 Gifts and grants for other than capital purposes 46,769,002 47,385,685 Federal direct student loan program receipts 214,431,442 201,349,108 Federal direct student loan program disbursements (211,709,516) (204,386,868) Student organization agency transactions 1,794,868 (2,895,199) Net cash provided by noncapital financing activities 212,748,098 200,480,256 CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES: Proceeds from capital debt - 250,000,000 State capital appropriations 11,400,228 14,259,346 Capital grants and gifts received 4,632,994 4,895,932 Purchases of capital assets (106,311,266) (178,248,238) Principal paid on capital debt and leases (17,177,763) (16,862,361) Interest paid on capital debt and leases (26,212,506) (20,492,651) Net cash (used in) provided by capital financing activities (133,668,313) 53,552,028 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sales and maturities of investments 200,414,589 389,284,843 Investment income 10,727,107 9,763,120 Purchase of investments (201,649,028) (646,754,405) Net cash provided by (used in) investing activities 9,492,668 (247,706,442) NET DECREASE IN CASH AND CASH EQUIVALENTS (37,976,439) (121,948,577) CASH AND CASH EQUIVALENTS - Beginning of year 81,653,831 203,602,408 CASH AND CASH EQUIVALENTS - End of year $ 43,677,392 $ 81,653,831

SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES - Construction in process in accounts payable $ 16,282,600 $ 20,814,000

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

17 Ohio University Statements of Cash Flows (Continued) Years Ended June 30, 2016 and 2015

Ohio University 2016 2015 RECONCILIATION OF OPERATING LOSS TO NET CASH USED IN OPERATING ACTIVITIES: Operating loss $ (178,364,240) $ (155,216,029) Adjustments to reconcile operating loss to net cash from operating activities: Depreciation expense 43,020,802 37,919,010 Changes in operating assets and liabilities and deferred inflows of resources and deferred outflows of resources which provided (used) cash: Accounts receivable - Net 5,024,554 (2,934,575) Notes receivable - Net (106,573) (225,971) Prepaid expenses (200,718) 917,763 Inventories 229,785 (137,827) Deferred outflows of resources (54,226,759) (8,773,489) Deferred inflows of resources (22,400,356) 46,905,355 Accounts payable and accrued liabilities (3,409,906) 577,902 Unearned revenue 144,186 1,330,314 Refunds and other liabilities 303,144 (4,424,723) Net pension liability 83,437,189 (44,212,149)

NET CASH USED IN OPERATING ACTIVITIES $ (126,548,892) $ (128,274,419)

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

18 Ohio University Notes to Financial Statements June 30, 2016 and 2015

Note 1 - Organization, Basis of Presentation, and report for the Foundation is available by contacting Significant Accounting Policies The Ohio University Foundation, 168 West Union Street Office Center, Athens, Ohio 45701, or by Organization - Ohio University (the “University”) is calling 740-593-1901. See Note 18 for additional a public institution established by the State of Ohio disclosures regarding the Foundation. (“State”) in 1804 under Chapter 3337 of the Ohio Revised Code (“ORC”). As such, it is a component Basis of Accounting - The University is a special- unit of the State and is included as a discretely purpose government entity engaged in business-type presented entity in the State’s Comprehensive Annual activities. Accordingly, the financial statements are Financial Report. The University is the oldest of the presented using an economic resources measurement State-assisted universities in Ohio. It is defined by focus and are presented on the accrual basis of statute to be a body politic and corporate and an accounting. Under the accrual basis, revenue is instrumentality of the State. recognized when earned and expenses are recorded when incurred. All significant interfund transactions The University is governed by a Board of Trustees have been eliminated. The financial statements of its composed of nine Trustees and two student Trustees, component unit are also presented under the accrual all appointed by the governor. The Board shall also basis of accounting. include two national Trustees and the chair of the Ohio University Alumni Association Board of Cash and Cash Equivalents - Cash consists Directors or his or her designee. The two national primarily of petty cash, cash in banks, and money Trustees are appointed by the Board for staggered market accounts. Cash equivalents are short-term three-year terms. The nine Trustees appointed by the highly liquid investments readily convertible to cash governor will hold voting privileges. The two with original maturities of three months or less. student trustees, the two national trustees, and the chair of the Ohio University Alumni Association Investments - All investments are carried at fair Board of Directors may not vote on Board matters, value. Investments in publicly traded securities are but their opinions and advice will be actively stated at fair value as established by major securities solicited and welcomed in Board deliberations. markets. Nonpublicly traded investments are valued based on independent appraisals and estimates Basis of Presentation - The financial statements of considering market prices of similar investments. the University have been prepared in accordance with Changes in unrealized gain (loss) on the carrying generally accepted accounting principles. The value of investments are reported as a component of presentation provides a comprehensive, entity-wide investment income (loss) in the statements of perspective of the University’s assets, deferred revenues, expenses, and changes in net position. outflows of resources, liabilities, deferred inflows of Included in long-term investments is $221.5 million resources, net position, revenues, expenses, and and $250.0 million of unspent bond proceeds as of changes in net position, and the direct method of cash June 30, 2016 and 2015, respectively, to be used to flow presentation. promote a sustainable approach to investing in the University’s buildings and infrastructure. Certain organizations warrant inclusion as part of the financial reporting entity because of the nature and Accounts Receivable - Accounts receivable consists significance of their relationship with the primary of amounts due for tuition and fees, grants and government, including their ongoing financial contracts, and auxiliary enterprise services. Grants support of the primary government. The University and contracts receivable include amounts due from has determined that The Ohio University Foundation the federal government, state and local governments, (the “Foundation”) meets this definition and it is or private sources, as reimbursement for certain therefore included as a discretely presented expenditures made in accordance with agreements. component unit in the University’s financial Uncollectible amounts have been reserved. statements. The Foundation’s financial statements have been prepared on the accrual basis of Inventories - Inventories are stated at the lower of accounting in accordance with generally accepted weighted-average cost or net realizable value. accounting principles as prescribed by the Financial Accounting Standards Board. A separate financial

19 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Restricted Cash and Cash Equivalents - Restricted treasures are not depreciated. Any impairment of cash and cash equivalents are funds restricted for capital assets and insurance recoveries is disclosed. capital expenditures subject to bond and note agreements held by bond trustees. In addition, it Deferred Outflows of Resources - In addition to includes funds held in escrow based on terms and assets, the statements of net position report a separate conditions of various agreements. section for deferred outflows of resources. This separate financial statement element, deferred Assets Held for Sale - Assets held for sale are outflows of resources, represents a consumption of recorded at the lower of cost or market value. At net position that applies to future periods and so will June 30, 2016, a small piece of Ohio University land not be recognized as an outflow of resources located near the Housing For Ohio, Inc. facilities was (expense/expenditure) until then. The University’s for sale on the market. As required by accounting deferred outflows of resources is related to the net standards, these were classified on the balance sheet pension liability—see Note 11 for more information. as assets held for sale. They also consist of deferred charges arising from the amount transferred to the escrow agent to defease the Capital Assets - Purchased or constructed capital 2003 and 2004 bond issues, in excess of the carrying assets are recorded at cost. Donated capital assets are value of those bonds. recorded at their estimated fair market value as of the date received. Depreciation is calculated using the Deferred Inflows of Resources - In addition to straight-line method over the estimated useful life of liabilities, the statements of net position report a the asset. separate section for deferred inflows of resources. This separate financial statement element, deferred The following are the capitalization levels and inflows of resources, represents an acquisition of net estimated useful lives of the University asset classes: position that applies to a future periods and so will not be recognized as an inflow of resources (revenue) Estimated until that time. The University’s deferred inflows of Useful resources is related to the net pension liability. More Life in detailed information can be found in Note 11. Asset Class Capitalize At years Unearned Revenue - Unearned revenue includes Land Any amount N/A amounts for tuition and fees, grants and contracts, Land improvements $100,000 N/A and certain auxiliary activities received prior to the Works of art and historical end of the fiscal year, related to the subsequent treasures $5,000 N/A accounting period. Infrastructure 100,000 10-50 Buildings Any amount 40 Compensated Absences - University employees earn Machinery and equipment 5,000 5-25 vacation and sick leave benefits based, in part, on Library books and publications Any amount 10 length of service. Upon separation from service, Transportation equipment $5,000 5-10 employees are paid their accumulated vacation and sick pay based upon the nature of separation Purchased software $500,000 5-10 (termination, retirement, or death). Certain limits are Internally developed software $500,000 5-10 placed on the hours of vacation and sick leave that employees may accumulate and carry over for payment at termination, retirement, or death. Unused Building renovations that significantly increase the hours exceeding the limits are forfeited. The value or extend the useful life of the structure are also estimated and accrued liability is recorded at year end capitalized. The costs of normal maintenance and in the statements of net position, and the net change repairs are not capitalized. Interest incurred during from the prior year is recorded as a component of the construction of capital assets is included in the operating expense in the statements of revenues, cost of the asset when capitalized. Land, land expenses, and changes in net position. improvements, and works of art and historical

20 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Net Pension Liability - For purposes of measuring restricted or unrestricted resources, the University’s the net pension liability, deferred outflows of policy is to apply the expense at the discretion of resources and deferred inflows of resources related to University management. pensions, and pension expense, information about the fiduciary net position of the Ohio Public Employees Income Taxes - The University is an organization Retirement System (OPERS) and State Teachers described in Section 115 of the Internal Revenue Retirement System of Ohio (STRS) Pension Plan and Code (the “Code”) and has further been classified as additions to/deductions from OPERS’ and STRS’ an organization that is not a private foundation in fiduciary net position have been determined on the accordance with Sections 509(a)(1) and same basis as they are reported by OPERS and 170(b)(1)(A)(ii) of the Code. However, certain STRS. Both OPERS and STRS use the economic revenues are considered unrelated business income resources measurement focus and the full accrual and are taxable under Code Sections 511 through basis of accounting. Contribution revenue is 513. recorded as contributions are due, pursuant to legal requirements. Benefit payments (including refunds Classification of Revenue - Revenue is classified as of employee contributions) are recognized as expense either operating or nonoperating. when due and payable in accordance with the benefit terms. Investments are reported at fair value. Operating revenue include revenues from activities that have characteristics similar to Net Position - Net position is classified into three exchange transactions. These include student major categories: tuition and fees (net of scholarship discounts and allowances), sales and services of auxiliary Net investment in capital assets - the net equity enterprises (net of scholarship discounts and in property, plant, and equipment owned by the allowances), and certain federal, state, local and University. private grants, and contracts. The presumption is Restricted - owned by the University, but the use that there is a fair exchange of value between all or purpose of the funds is restricted by an parties to the transaction. external source or entity. The restricted net position category is subdivided further into Nonoperating revenue includes revenue from expendable and nonexpendable. activities that have the characteristics of o Restricted expendable - may be spent by the nonexchange transactions, such as state institution, but only for the purpose appropriations, and certain federal, state, local specified by the donor, grantor, or other and private gifts, and grants. The implication is external entity. This category includes the that such revenues are derived from more passive unspent balance in grant funds, loan funds, efforts related to the acquisition of the revenue, debt service funds, and bond funded capital rather than the earning of it. projects. o Restricted nonexpendable - endowment Scholarship Discounts and Allowances - Student funds whose principal may be invested; tuition and fee revenue, and certain other payments however, only interest, dividends, and recorded as auxiliary enterprises revenue, are net of capital gains may be spent. scholarship discounts and allowances in the Unrestricted - resources derived primarily from statements of revenues, expenses, and changes in net student tuition, fees, state appropriations, and position. Scholarship discounts and allowances are auxiliary enterprises. They are used for the the difference between the charge for tuition and fees, general obligations of the University and may be and the amount paid by students or by third parties on used at the discretion of the Board of Trustees the students’ behalf. Scholarship discounts and for any purpose furthering the University’s allowances were $86,543,056 (of which $74,773,010 mission. is netted against student tuition and fees and $11,770,046 is netted against auxiliary enterprises Restricted Versus Unrestricted Resources - When revenue) and $81,470,939 (of which $71,150,846 is an expense is incurred that can be paid using either netted against student tuition and fees and

21 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

$10,320,093 is netted against auxiliary enterprises Use of Estimates - The preparation of financial revenue) as of June 30, 2016 and 2015, respectively. statements in conformity with accounting principles generally accepted in the United States of America Operating Revenue - Other Sources - Other (GAAP) may require management to make estimates sources revenue is primarily from component unit and assumptions that affect certain amounts reported activity, rebates from contractual agreements, and in the financial statements. The estimates and noncredit training programs. assumptions are based on currently available information and actual results could differ from those Auxiliary Enterprises - Auxiliary revenue is estimates. primarily from residence halls, dining services, intercollegiate athletics, printing services, and Reclassifications - Certain amounts from the prior parking services. It is shown net of scholarship year have been reclassified. On the statements of net discounts and allowances for room and board. position, the deferred inflows of resources related to pensions have been reclassified to deferred outflows Component Units - Management has determined of resources related to pensions in the amount of that Tech GROWTH Ohio Fund and University $30.9 million to accurately reflect the nature of these Medical Associates, Inc. are component units of the amounts separately. Net position has not been University. Their financial results have been affected by this change. presented in a blended format in the University’s financial statements. Newly Adopted Accounting Pronouncements

Tech GROWTH Ohio Fund was established in The GASB issued GASB Statement No. 68, August 2008, within the meaning of Section Accounting and Financial Reporting for 501(c)(3) of the Internal Revenue Code of 1986, as Pensions—an Amendment of GASB Statement amended. The exclusive purpose of the organization No. 27, and GASB Statement No. 71, Pension is for charitable, educational, and scientific endeavors Transition for Contributions Made Subsequent to in areas involving the advancement of technology, the Measurement Date. Statement No. 68 and increasing technology-based and/or other requires governments providing defined benefit entrepreneurial commercialization ventures pensions to recognize their unfunded pension throughout southeast Ohio, with a focus on strategic benefit obligation as a liability for the first time, technology-based sectors that offer economic and to more comprehensively and comparably development prospects for the region. measure the annual costs of pension benefits. Statement No. 71 is a clarification to GASB 68 University Medical Associates, Inc. (the requiring a government to recognize a beginning “Corporation”) is a not-for-profit organization deferred outflow of resources for its pension incorporated in the state of Ohio and has been contributions, if any, made subsequent to the recognized as tax-exempt pursuant to Section measurement date of the beginning net pension 501(c)(3) of the Internal Revenue Code and liability. The Statements also enhance applicable state statutes. The membership of the accountability and transparency through revised Corporation consists of many physicians who are note disclosures and required supplementary faculty members of the Ohio University Heritage information (RSI). June 30, 2014 amounts have College of Osteopathic Medicine. The Corporation not been restated to reflect the impact of GASB provides medical services in private physician offices 68 because the information is not available to and clinic settings on the campus of Ohio University calculate the impact on pension expense for the and surrounding locations. fiscal year ended June 30, 2014. In accordance with the statement, the University has reported a Eliminations - The University eliminates interfund net pension liability (net of deferred outflow of assets and liabilities and revenue and expenses resources) in the amount of $371,120,410 as a related to internal activities and to blended change in accounting principle adjustment to component units. unrestricted net position as of July 1, 2014.

22 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

As of June 30, 2016, the University retrospectively applied Governmental The University’s investment portfolio may include Accounting Standards Board (GASB) Statement investments in the following: No. 72, Fair Value Measurement and Obligations of the U.S. Treasury and other Application. GASB Statement No. 72 provides federal agencies and instrumentalities guidance for determining a fair value Municipal and State bonds measurement for reporting purposes and Certificates of deposit applying fair value to certain investments and Repurchase agreements disclosures related to all fair value Mutual funds measurements. Commercial paper Newly Issued Accounting Pronouncements Corporate bonds and notes Common and preferred stock In June 2015, the GASB issued Statement No. Asset-backed securities 75, Accounting and Financial Reporting for Hedge funds Postemployment Benefits Other Than Pensions Private equity and venture capital which addresses reporting by governments that Real assets provide postemployment benefits other than pensions (OPEB) to their employees and for The University’s endowment fund operates with a governments that finance OPEB for employees long-term investment goal of preserving the of other governments. This OPEB standard will purchasing power of the principal in a diversified require the University to recognize on the face of portfolio. the financial statements its proportionate share of the net OPEB liability related to its participation U.S. government and agency securities are invested in the OPERS and STRS plans. The Statement through trust agreements with banks that keep the also enhances accountability and transparency securities in their safekeeping accounts at the Federal through revised note disclosures and required Reserve Bank in “book entry” form. The banks supplementary information (RSI). The internally designate the securities as owned by or University is currently evaluating the impact this pledged to the University. Common stocks, corporate standard will have on the financial statements bonds, money market instruments, mutual funds, and when adopted. The provisions of this statement other investments are invested through trust are effective for the University’s financial agreements with banks that keep the investments in statements for the year ending June 30, 2018. their safekeeping account in the appropriate custodial bank in “book entry” form. The banks internally Note 2 - Deposits with Financial Institutions, Cash designate the securities as owned by or pledged to the and Cash Equivalents, and Investments University.

As of June 30, 2016, the carrying amount of the The values of investments as of June 30, 2016 and University’s cash and cash equivalents for all funds 2015 are as follows: was $43,677,392 compared to bank balances of $43,574,103. As of June 30, 2015, the carrying amount of the University’s cash and cash equivalents for all funds was $81,653,831 compared to bank balances of $84,450,744. The difference in carrying amounts and bank balances is caused by outstanding checks and deposits-in-transit. At June 30, 2016, of the bank balances, $16,341,903 is covered by the Federal Deposit Insurance Corporation (FDIC) and $27,232,200 is uninsured but collateralized by pools of securities pledged by the depository banks and held in the name of the respective banks.

23 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Investment Type 2016 2015 the potential for changes in the value of financial Money markets $ 24,624,756 $ 116,577,291 US government obligations 34,163,449 1,583,338 instruments due to market changes, including interest US government agency obligations 4,884,640 4,634,485 and foreign exchange rate movements and rate Mortgage-backed securities 20,362,568 169,289 Corporate bonds and notes 73,214,488 3,124,739 fluctuations embodied in forwards, futures, Municipal bonds 2,309,355 179,971,269 commodities, or security prices. Market risk is Bond mutual funds 144,199,641 2,112,609 Convertible notes 1,101,735 1,505,425 directly impacted by the volatility and liquidity of the US common and preferred stock 4,658,457 1,439,786 markets in which the related underlying assets are US equity mutual funds 67,303,753 65,639,811 International equity mutual funds 94,838,266 106,461,556 traded. Hedge funds 55,860,292 57,261,513 Real assets 28,081,181 29,893,891 Private equity funds 12,197,273 11,229,395 Interest Rate Risk - Interest rate risk is the risk that Total $ 567,799,854 $ 581,604,397 changes in interest rates will adversely affect the fair value of an investment. Investments with interest The University’s investment strategy incorporates rates that are fixed for longer periods are likely to be certain financial instruments that involve, to varying subject to more variability in their fair values as a degrees, elements of market risk in excess of amounts result of future changes in interest rates recorded in the financial statements. Market risk is

As of June 30, 2016, maturities of the University’s interest-bearing investments are as follows:

Investment Maturities Less Than 1 to 5 6 to 10 More Than Investment Type Market Value 1 Year Years Years 10 Years Money markets $ 24,624,756 $-24,624,756 $-$-$ U.S. government obligations 34,163,449 140,822 30,323,029 - 3,699,598 U.S. government agency obligations 4,884,640 516,017 4,368,623 - - Mortgage-backed securities 20,362,568 1,815 4,766,674 5,223,371 10,370,708 Corporate bonds and notes 73,214,488 9,662,192 57,722,663 3,262,515 2,567,118 Bond mutual funds 144,199,641 47,332,299 85,142,528 7,976,669 3,748,145 Municipal bonds 2,309,355 456,391 1,468,895 384,069 - Convertible notes 1,101,735 1,101,735 - - - Total $ 304,860,632 $ 83,836,027 $ 183,792,412 $ 16,846,624 $ 20,385,569

24 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

As of June 30, 2015, maturities of the University’s interest-bearing investments are as follows:

Investment Maturities Less Than 1 to 5 6 to 10 More Than Investment Type Market Value 1 Year Years Years 10 Years

Money markets $ 116,577,291 $-116,577,291 $-$-$ U.S. government obligations 1,583,338 140,129 1,443,209 - - U.S. government agency obligations 4,634,485 338,697 4,295,788 - - Mortgage-backed securities 169,289 2,487 57,908 54,002 54,892 Corporate bonds and notes 3,124,739 308,338 2,285,291 296,770 234,340 Bond mutual funds 179,971,269 126,398 36,759,469 142,779,515 305,887 Municipal bonds 2,112,609 870,462 1,242,147 - - Convertible notes 1,505,425 1,505,425 - - - Total $ 309,678,445 $ 119,869,227 $ 46,083,812 $ 143,130,287 $ 595,119

Credit Risk - Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The University’s risk of loss in the event of counterparty default is typically limited to the amounts recognized in the statement of net position and is not represented by the contract or notional amounts of the instruments. Credit quality, as commonly expressed in terms of credit ratings issued by nationally recognized statistical rating organizations such as Moody’s Investors Service, Standard & Poor’s, or Fitch Ratings, provides a current depiction of potential variable cash flows and credit risk.

25 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

The credit ratings of the University’s interest-bearing investments as of June 30, 2016 are as follows:

Credit Quality (S&P) Market Value AAA AA A BBB BB B Unrated Money markets $ 24,624,756 $-1,906,408 $-$-$-$ $- $ 22,718,348 U.S. government obligations 34,163,449 32,776,083 1,387,366 - - - - - U.S. government agency obligations 4,884,640 - 4,884,640 - - - - - Mortgage-backed securities 20,362,568 20,158,118 102,854 - - - - 101,596 Corporate bonds and notes 73,214,488 32,838,817 9,553,572 14,553,966 15,367,735 - - 900,398 Bond mutual funds 144,199,641 99,009 13,410,118 88,853,563 11,566,374 18,085,278 376,415 11,808,884 Municipal bonds 2,309,355 153,398 894,885 354,739 - - - 906,333 Convertible notes 1,101,735 ------1,101,735 Total $ 304,860,632 $87,931,833 $ 30,233,435 $103,762,268 $26,934,109 $18,085,278 $376,415 $ 37,537,294

The credit ratings of the University’s interest-bearing investments as of June 30, 2015 are as follows:

Credit Quality (S&P) Market Value AAA AA A BBB BB B Unrated Money markets $-116,577,291 $-$-$ $-16,296 $ $- $116,560,995 U.S. government obligations 1,583,338 ------1,583,338 U.S. government agency obligations 4,634,485 - 4,634,485 - - - - - Mortgage-backed securities 169,289 ------169,289 Corporate bonds and notes 3,124,739 - 1,051,362 856,432 502,370 - - 714,575 Bond mutual funds 179,971,269 - 149,961,544 5,423,745 - 11,178,345 - 13,407,635 Municipal bonds 2,112,609 - 784,586 150,702 - - - 1,177,321 Convertible notes 1,505,425 ------1,505,425 Total $ 309,678,445 $ - $156,431,977 $ 6,430,879 $ 518,666 $11,178,345 $ - $135,118,578

Custodial Credit Risk - Custodial credit risk is the Valuation of Alternative Investments - Because risk that, in the event of failure of the counterparty, financial data for many private investments are not the University will not be able to recover the value of available until several months after fiscal year end, its investment or collateral securities that are in some reported alternative investment valuations possession of an outside party. As of June 30, 2016 represent an estimate of the June 30, 2016 value, and 2015, the University had no custodial credit risk. while the remaining valuations represent March 31, 2016 reported valuations that have been adjusted by Concentration of Credit Risk - Concentration of cash added to and cash distributed from these credit risk is the risk of loss attributed to the accounts through June 30. Management considers magnitude of a government’s investment in a single information that becomes available after the financial issuer. As of June 30, 2016 and 2015, there were no statements are compiled but before they are released, single-issuer investments that exceeded 5 percent of to determine whether an adjustment to the reported total investments. fair value of investments should be made. At June 30, 2016 and 2015, there was $73.1 million and $73.3 Foreign Currency Risk - Foreign currency risk is million, respectively, in investment assets reported at the risk that changes in exchange rates will adversely the estimated values described above. affect the fair value of an investment or deposit. The University’s exposure to foreign currency is limited Fair Value Measurements - The University to its investment in international equity mutual funds. categorizes its fair value measurements within the The value of this investment was $94.8 million and fair value hierarchy established by generally accepted $106.5 million as of June 30, 2016 and 2015, accounting principles. The hierarchy is based on the respectively. valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are

26 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015 significant other observable inputs; Level 3 inputs are are categorized based on the lowest level input that is significant unobservable inputs. Investments that are significant to the valuation. The University’s measured at fair value using the net asset value per assessment of the significance of particular inputs to share (or its equivalent) as a practical expedient are these fair value measurements requires judgment and not classified in the fair value hierarchy below. considers factors specific to each asset or liability. In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety

The University has the following recurring fair value measurements as of June 30, 2016 and 2015:

Fair Value at Reporting Date Using Significant Quoted Prices in Other Significant Active Markets for Observable Unobservabl Balance at Identical Assets Inputs e Inputs June 30, 2016 (Level 1) (Level 2) (Level 3) Investments by fair value level Fixed income investments US government obligations $-34,163,449 $ $-34,163,449 $ US government agency obligations 4,884,640 - 4,884,640 - Mortgage-backed securities 20,362,568 - 20,362,568 - Corporate bonds and notes 73,214,488 - 73,214,488 - Municipal bonds 2,309,355 - 2,309,355 - Bond mutual funds 143,764,010 143,764,010 - - Subtotal fixed income investments 278,698,510 143,764,010 134,934,500 - Public equity investments US common and preferred stock 3,336,864 3,336,864 - - US equity mutual funds 67,303,753 67,303,753 - - International equity mutual funds 90,286,707 90,286,707 - - Commodities 21,499,535 21,499,535 - - REITs 3,950,098 3,950,098 - - Subtotal public equity investments 186,376,957 186,376,957 - - Alternative investments Convertible notes 1,101,735 - - 1,101,735 Direct private equity investments 1,321,593 - - 1,321,593 Subtotal alternative investments 2,423,328 - - 2,423,328 Total investments by fair value level $ 467,498,795 $ 330,140,967 $ 134,934,500 $ 2,423,328 Investments measured at net asset value (NAV) Money market commingled funds 406,133 Bond commingled funds 435,631 International equity mutual funds 4,551,559 Hedge funds 55,860,292 Commodities 2,631,548 Private equity funds 12,197,273 Subtotal investments measured at NAV 76,082,436 Total investments measured at fair value$ 543,581,231

27 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Fair Value at Reporting Date Using Quoted Prices Significant in Active Markets Other Significant for Identical Observable Unobservable Balance at Assets Inputs Inputs June 30, 2015 (Level 1) (Level 2) (Level 3) Investments by fair value level Fixed income investments US government obligations $-1,583,338 $ $-1,583,338 $ US government agency obligations 4,634,485 - 4,634,485 - Mortgage-backed securities 169,289 - 169,289 - Corporate bonds and notes 3,124,739 - 3,124,739 - Municipal bonds 2,112,609 - 2,112,609 - Bond mutual funds 43,014,289 43,014,289 - - Subtotal fixed income investments 54,638,749 43,014,289 11,624,460 - Public equity investments US common and preferred stock 972,096 972,096 - - US equity mutual funds 65,639,811 65,639,811 - - International equity mutual funds 101,892,945 101,892,945 - - Commodities 23,735,459 23,735,459 - - REITs 3,295,389 3,295,389 - - Subtotal public equity investments 195,535,700 195,535,700 - - Alternative investments Convertible notes 1,505,425 - - 1,505,425 Direct private equity investments 467,690 - - 467,690 Subtotal alternative investments 1,973,115 - - 1,973,115 Total investments by fair value level$ 252,147,564 $ 238,549,989 $ 11,624,460 $ 1,973,115 Investments measured at net asset value (NAV) Bond commingled funds 136,956,980 International equity mutual funds 4,568,611 Hedge funds 57,261,513 Commodities 2,863,043 Private equity funds 11,229,395 Subtotal investments measured at NAV 212,879,542 Total investments measured at fair value$ 465,027,106

28 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

As of June 30, 2016 and 2015, the University investments, at June 30, 2016 and 2015 was invested in money market funds in the amounts of determined primarily based on level 3 inputs. The $24,218,623 and $116,577,291, respectively, which Organization estimates the fair value of these are not included in the table above. investments using the University’s own estimates using pricing models, discounted cash flow Investments classified in Level 1 are valued using methodologies, or similar techniques taking into prices quoted in active markets for those securities. account the characteristics of the asset.

The fair value of many investment income securities, The valuation method for investments measured at including US government obligations, US the net asset value (NAV) per share (or its government agency obligations, mortgage-backed equivalent) is presented in the following table. securities, corporate bonds and notes, and municipal bonds, at June 30, 2016 and 2015 was determined Investments in Entities that Calculate Net Asset primarily based on level 2 inputs. The University Value per Share - The University holds shares or estimates the fair value of these investments using interests in investment companies at where the fair other inputs such as interest rates and yield curves value of the investments are measured on a recurring that are observable at commonly quoted intervals. basis using net asset value per share (or its equivalent) of the investment companies as a The fair value of certain alternative investments, practical expedient. including convertible notes and direct private equity

At year end, the fair value, unfunded commitments, and redemption rules of those investments are as follows:

June 30, 2016 June 30, 2015 June 30, 2016

Redemption Redemption Unfunded Frequency, Notice Fair Value Fair Value Commitment if Eligible Period Fixed income investments Money market mutual funds (1) $ 406,133 $ - $ - Daily None Bond mutual funds (2) 435,631 136,956,980 - Daily 1 day International equity mutual funds (3) 4,551,559 4,568,611 - Monthly 30 days Hedge funds (4) 55,860,292 57,261,513 - Quarterly 60 days Commodities (5) 2,631,548 2,863,043 - Monthly 10-30 days Private equity funds (6) 12,197,273 11,229,395 15,502,825 None None Total $ 76,082,436 $ 212,879,542 $ 15,502,825

(1) Money market mutual funds invest in short-term debt securities such as US Treasury bills and commercial paper. The fair values of the investments in this class have been estimated using the net asset value per share of the investments. (2) Bond mutual funds include an open-ended commingled fund that invests in core fixed income securities, including US Treasury bonds, corporate bonds, mortgage-backed securities and other asset-backed securities. The fair values of the investments in this class have been estimated using the net asset value per share of the investments. (3) International equity mutual funds include a fund which seeks to achieve total return in excess of the MSCI Emerging Markets Index through investing in the world's emerging stock markets. The fair values of the investments in this class have been estimated using the net asset value per share of the investments.

29 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

(4) Hedge funds include absolute and total return funds that are broadly diversified across managers, investment strategies, and investment venues. This asset category includes both fund investments, as well as fund of funds investments. The fair values of the investments in this class have been estimated using the net asset value per share of the investments. (5) Commodities funds include investments in areas that offer strong relative performance in rising inflation environments and are broadly diversified across the commodities markets, including futures, options on futures, and forward contracts on exchange traded agricultural goods, metals, minerals, and energy products. The fair values of the investments in this class have been estimated using the net asset value per share of the investments. (6) Private equity funds are broadly diversified across managers, investment stages, geography, industry sectors, and company size. This asset category includes private equity, private real estate, and venture capital funds. It also includes individual fund investments, as well as fund of funds investments. The fair values of the investments in this class have been estimated using the net asset value of the University’s ownership interest in partners’ capital. The investments in the private equity asset class above cannot be redeemed with the funds. Distributions from each fund will be received only as the underlying investments of the funds are liquidated. It is estimated that the underlying assets of the fund will be liquidated over the next one to ten years.

Note 3 - Accounts Receivable repayments, federal contributions under Perkins, and various Health Professions loan programs. The composition of accounts receivable at June 30, 2016 and 2015 is summarized as follows: The University distributed $211,709,516 and $204,386,868 for student loans through the U.S. 2016 2015 Department of Education Federal Direct Lending program during the years ended June 30, 2016 and Student tuition and fees$ 47,348,565 $ 45,024,279 2015, respectively. These distributions and the Grants and contracts 11,724,963 15,494,857 related funding sources are included as cash Student loans 1,677,747 4,397,770 disbursements and cash receipts in the accompanying Other 9,565,729 9,409,829 statement of cash flows.

Total accounts receivable 70,317,004 74,326,735 The composition of notes receivable at June 30, 2016 Less allowance for and 2015 is as follows: doubtful accounts (13,505,770) (12,490,946)

Accounts receivable, net$ 56,811,234 $ 61,835,789 2016 2015 Student loan program $ 14,022,649 $ 13,867,795 Other 1,716,155 1,844,377 Note 4 - Notes Receivable Total notes receivable 15,738,804 15,712,172

The University’s notes receivable at June 30, 2016 Less allowance for doubtful accounts (2,251,539) (2,331,481) and 2015 is net of allowance for doubtful accounts of Notes receivable, net 13,487,265 13,380,691 $2,251,539 and $2,331,481, respectively. Principal Less current portion (1,366,264) (1,403,245) repayment and interest terms vary. Federal loan Notes receivable - noncurrent, net $ 12,121,001 $ 11,977,446 programs are funded primarily through borrower

30 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Note 5 - Capital Assets

Capital asset activity for the year ended June 30, 2016 was as follows:

Balance Balance July 1, 2015 Additions Transfers Retirements June 30, 2016 Capital assets not being depreciated:

Land $-24,978,824 $ $-(88,000) $ $ 24,890,824 Land improvements 4,701,091 - - - 4,701,091 Construction in progress 193,034,598 55,364,655 (179,677,146) (1,304,338) 67,417,769 Works of art and historical treasures 17,054,933 29,050 - - 17,083,983

Total capital assets not being depreciated 239,769,446 55,393,705 (179,765,146) (1,304,338) 114,093,667

Capital assets being depreciated: Infrastructure 129,924,270 5,847,147 12,382,581 - 148,153,998 Buildings 948,554,863 27,776,281 167,294,565 (8,350,878) 1,135,274,831 Machinery and equipment 158,220,542 16,341,437 - (11,123,670) 163,438,309 Library books and publications 76,490,515 952,696 - (24,689) 77,418,522 Total capital assets being depreciated 1,313,190,190 50,917,561 179,677,146 (19,499,237) 1,524,285,660

Total capital assets 1,552,959,636 106,311,266 (88,000) (20,803,575) 1,638,379,327

Less accumulated depreciation: Infrastructure 69,048,212 5,491,547 - - 74,539,759 Buildings 390,789,471 27,091,093 - (5,499,777) 412,380,787 Machinery and equipment 114,660,008 8,710,268 - (10,485,048) 112,885,228 Library books and publications 69,065,443 1,727,894 - (172,238) 70,621,099 Total accumulated depreciation 643,563,134 43,020,802 - (16,157,063) 670,426,873 Total capital assets being depreciated, net 669,627,056 7,896,759 179,677,146 (3,342,174) 853,858,787 Capital assets, net $ 909,396,502 $ 63,290,464 $ (88,000) $ (4,646,512) $ 967,952,454

31 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Capital asset activity for the year ended June 30, 2015 was as follows:

Balance Balance July 1, 2014 Additions Transfers Retirements June 30, 2015 Capital assets not being depreciated: Land $-24,978,824 $-$-$ $ 24,978,824 Land improvements 4,701,091 - - - 4,701,091 Construction in progress 68,714,560 134,485,672 (10,165,046) (588) 193,034,598 Works of art and historical treasures 17,054,933 - - - 17,054,933

Total capital assets not being depreciated 115,449,408 134,485,672 (10,165,046) (588) 239,769,446

Capital assets being depreciated: Infrastructure 122,474,568 6,383,353 1,066,349 - 129,924,270 Buildings 907,920,739 31,535,427 9,098,697 - 948,554,863 Machinery and equipment 154,554,505 8,493,889 - (4,827,852) 158,220,542 Library books and publications 75,640,183 1,102,548 - (252,216) 76,490,515

Total capital assets being depreciated 1,260,589,995 47,515,217 10,165,046 (5,080,068) 1,313,190,190 Total capital assets 1,376,039,403 182,000,889 - (5,080,656) 1,552,959,636

Less accumulated depreciation: Infrastructure 64,160,314 4,887,898 - - 69,048,212 Buildings 368,147,983 22,641,488 - - 390,789,471 Machinery and equipment 110,491,804 8,466,228 - (4,298,024) 114,660,008 Library books and publications 67,394,263 1,923,396 - (252,216) 69,065,443

Total accumulated depreciation 610,194,364 37,919,010 - (4,550,240) 643,563,134 Total capital assets being depreciated, net 650,395,631 9,596,207 10,165,046 (529,828) 669,627,056

Capital assets, net $ 765,845,039 $ 144,081,879 $ - $ (530,416) $ 909,396,502

32 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Note 6 - Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities at June 30, 2016 and 2015 consisted of the following:

2016 2015 Accrued payroll $ 17,163,231 $ 17,229,198 Accrued workers' compensation 8,805,873 10,263,770 Accrued self-insurance claims 3,868,000 3,279,000 Accrued compensated absences - current portion 2,234,524 1,978,423 Accrued royalties 572,287 2,565,500 Other accrued liabilities 4,701,771 4,608,471 Vendor and other payables 34,550,852 35,959,477 Total accounts payable and accrued liabilities $ 71,896,538 $ 75,883,839

Note 7 - Long-term Debt

The University’s long-term debt at June 30, 2016 is summarized as follows:

July 1, 2015 Additions Reductions June 30, 2016 Current General receipts bonds - Series 2014 $-250,000,000 $-$ $-250,000,000 $ General receipts bonds - Series 2013 137,335,000 - 4,240,000 133,095,000 4,445,000 General receipts bonds - Series 2012A & B 24,725,448 - 1,716,619 23,008,829 1,747,346 General receipts bonds - Series 2012 70,850,000 - 5,850,000 65,000,000 5,975,000 General receipts bonds - Series 2009 14,615,000 - 2,655,000 11,960,000 2,770,000 General receipts bonds - Series 2008A & B 8,120,000 - 295,000 7,825,000 285,000 Subordinated general receipts bonds - Series 2006B 19,765,000 - 905,000 18,860,000 940,000 Subordinated general receipts bonds - Series 2006A 17,915,000 - 1,450,000 16,465,000 1,515,000

Total bonds and notes payable 543,325,448 - 17,111,619 526,213,829 17,677,346 Bond premiums 21,460,394 - 1,195,446 20,264,948 1,194,955 Bond discounts (2,204,022) - (22,263) (2,181,759) (22,263) Capital lease obligations 22,540 503,419 66,144 459,815 67,284 Total long-term debt $ 562,604,360 $ 503,419 $ 18,350,946 $ 544,756,833 $ 18,917,322

33 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

The University’s long-term debt at June 30, 2015 is summarized as follows:

July 1, 2014 Additions Reductions June 30, 2015 Current General receipts bonds - Series 2014 $ - $-250,000,000 $ $-250,000,000 $ General receipts bonds - Series 2013 142,945,000 - 5,610,000 137,335,000 4,240,000 General receipts bonds - Series 2012A & B 26,411,879 - 1,686,431 24,725,448 1,716,619 General receipts bonds - Series 2012 74,825,000 - 3,975,000 70,850,000 5,850,000 General receipts bonds - Series 2009 17,170,000 - 2,555,000 14,615,000 2,655,000 General receipts bonds - Series 2008A & B 8,400,000 - 280,000 8,120,000 295,000 Subordinated general receipts bonds - Series 2006B 21,105,000 - 1,340,000 19,765,000 905,000 Subordinated general receipts bonds - Series 2006A 19,310,000 - 1,395,000 17,915,000 1,450,000

Total bonds and notes payable 310,166,879 250,000,000 16,841,431 543,325,448 17,111,619 Bond premiums 22,659,968 - 1,199,574 21,460,394 1,195,446 Bond discounts - (2,226,285) (22,263) (2,204,022) (22,263) Capital lease obligations 43,470 - 20,930 22,540 22,540 Total long-term debt $ 332,870,317 $ 247,773,715 $ 18,039,672 $ 562,604,360 $ 18,307,342

Note: Series 2003, Series 2004, Series 2006A, and Series 2006B bonds were designated “subordinate” upon their issuance due to the existence of a prior trust agreement; that trust agreement has since been defeased and the aforementioned bonds are now parity debt service obligations.

34 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

On November 14, 2014, the University issued general On June 2, 2009, the University issued general receipts bonds (federally taxable) Series 2014 in the receipts bonds Series 2009 in the amount of amount of $250,000,000. The proceeds are being $26,645,000. The proceeds were used to purchase used for new construction and upgrades to capital and implement a new student information system and facilities, including capital expenditures for deferred to upgrade the University’s existing information maintenance of various campus facilities and energy technology network infrastructure. infrastructure facilities. Proceeds were also used to pay costs of issuance of the Series 2014 Bonds. On July 10, 2008, the University issued general receipts bonds Series 2008A in the amount of On May 22, 2013, the University issued general $13,345,000 and taxable general receipts bonds receipts bonds Series 2013 in the amount of Series 2008B in the amount of $2,005,000. The $145,170,000. The proceeds are being used to proceeds were used to refund the general receipts develop extension campuses in Columbus and bond anticipation notes and acquire a facility on the Cleveland, Ohio for a number of programmatic edge of the University’s campus. initiatives including the expansion of the Heritage College of Osteopathic Medicine, for renovations to On April 6, 2006, the University issued $29,170,000 multiple academic buildings, for construction of a in subordinated general receipts bonds, Series 2006B. new Indoor Multi-Purpose Facility for various The proceeds were used for various capital projects instructional, athletic, and recreational uses, and to on the Athens campus. complete the Housing Development Phase I, which will consist of the construction of a new residential On February 16, 2006, the University issued housing facility, student support spaces, and $28,145,000 in subordinated general receipts bonds, residential housing administration office space. Series 2006A. The proceeds were used to refund the Proceeds were also used to refund the 2001 bonds Series 1999 bonds. and the 2004 bonds as described below. On March 15, 2004, the University issued On July 31, 2012, the University issued general $52,885,000 in subordinated general receipts bonds, receipts notes, Ohio Air Quality Development Series 2004. The proceeds were used to refund the Authority (“OAQDA”) Series 2012A & B in the Series 2003B notes, and for capital equipment and amount of $28,640,370. The Series 2012A is an construction costs on various building projects. On OAQDA tax-exempt bond for $20,140,370 and February 29, 2012, the Series 2004 bonds were Series 2012B is an OAQDA tax-credit revenue bond partially refunded with $15,395,000 being (Qualified Energy Conservation Bond) for incorporated into the Series 2012 bonds. On May 22, $8,500,000. The proceeds were used for financing the 2013, the Series 2004 bonds were again partially costs of air quality facilities in order to promote the refunded with $22,935,000 being incorporated into public purposes of Chapter 3706, of the ORC. the Series 2013 Bonds.

On February 29, 2012, the University issued general On September 3, 2003, the University issued receipts bonds Series 2012 in the amount of $47,860,000 in subordinated general receipts Bonds, $76,470,000. The proceeds are being used to develop Series 2003. The proceeds were used to refund the an extension campus in Columbus, Ohio for a Series 1993 bonds and the Series 2003A notes. On number of programmatic initiatives including the February 29, 2012, the Series 2003 bonds were expansion of the Heritage College of Osteopathic partially refunded with $14,465,000 being Medicine, for renovations to multiple academic incorporated into the Series 2012 bonds. buildings, for infrastructure improvements including a chilled water expansion, and for additional These obligations are secured by a gross pledge of upgrades to the University’s existing information and first lien on the general receipts of the technology network. Proceeds were also used to University. The general receipts include the full refund portions of the 2003 and 2004 bonds as amount of every type and character of campus described below.

35 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015 receipts, except for State appropriations and receipts as of May 1, 2009, a Ninth Supplemental Trust previously pledged or otherwise restricted. Agreement dated as of February 1, 2012 entered into in connection with the issuance of the Series 2012 The University’s bonds are secured by a Trust bonds, each between the University and U.S. Bank Agreement dated as of May 1, 2001 (“Master Trust National Association, a Tenth Supplemental Trust Agreement”), as supplemented by a First Agreement dated as of July 1, 2012 entered into in Supplemental Trust Agreement dated as of May 1, connection with the issuance of the Series 2012A & 2001, a Second Supplemental Trust Agreement dated B bonds, each between the University and U.S. Bank as of September 1, 2003, a Third Supplemental Trust National Association, a Twelfth Supplemental Trust Agreement dated as of October 1, 2003, a Fourth Agreement dated as of June 1, 2013 entered into in Supplemental Trust Agreement dated as of March 15, connection with the issuance of the Series 2013 2004, a Fifth Supplemental Trust Agreement dated as bonds, each between the University and U.S. Bank of February 1, 2006, a Sixth Supplemental Trust National Association, and a Thirteenth Supplemental Agreement dated as of April 1, 2006, a Seventh Trust Agreement dated as of November 1, 2014 Supplemental Trust Agreement dated as of July 1, entered into in connection with the issuance of the 2008, an Eighth Supplemental Trust Agreement dated Series 2014 bonds.

Details of the series are as follows:

Maturity Initial Issue Outstanding at Series Interest Rate Fiscal Year Amount June 30, 2016 2006A 3.50%-5.00% 2025$ 28,145,000 $ 16,465,000 2006B 3.75%-5.00% 2037 29,170,000 18,860,000 2008A&B 4.17%-5.00% 2034 15,350,000 7,825,000 2009 2.00%-5.00% 2020 26,645,000 11,960,000 2012 2.00%-5.00% 2043 76,470,000 65,000,000 2012A&B 2.00%-5.00% 2028 28,640,370 23,008,829 2013 2.00%-5.00% 2044 145,170,000 133,095,000 2014 5.59% 2115 250,000,000 250,000,000 $ 526,213,829

36 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Principal and interest payment requirements for the Note 8 - Operating Leases bonded debt for the years subsequent to June 30, 2016 are summarized as follows: The University leases various facilities and equipment under operating lease agreements. These Years Ending facilities and equipment are not recorded as assets on June 30 Principal Interest Total the statements of net position. The total rental 2017$ 17,677,346 $ 25,517,631 $ 43,194,977 expense under these agreements was $3,751,363 and 2018 16,193,624 24,886,023 41,079,647 $1,988,963 for the years ended June 30, 2016 and 2019 16,275,461 24,309,382 40,584,843 2015, respectively. 2020 13,962,868 23,722,903 37,685,771 2021 10,825,856 23,265,395 34,091,251 2022-2026 55,514,636 109,653,297 165,167,933 Future minimum payments for all significant 2027-2031 46,469,038 98,629,442 145,098,480 operating leases with initial terms in excess of one 2032-2036 38,570,000 89,079,344 127,649,344 year at June 30, 2016 are as follows: 2037-2041 37,090,000 80,311,438 117,401,438 2042-2115 273,635,000 1,028,842,875 1,302,477,875 Total$ 526,213,829 $ 1,528,217,730 $ 2,054,431,559 Minimum Years Ending Lease June 30 Payments The University has $459,815 in capital lease obligation that has a maturity date through fiscal year 2017 $ 2,973,377 2021 with an interest rate of 3.4 percent. These lease 2018 1,888,373 arrangements are being used to provide partial financing for certain equipment. Capital asset 2019 2,240,537 balances as of June 30, 2016 that are financed under 2020 2,869,139 capital leases are $503,419. 2021 2,816,224 2022-2031 24,946,159 The scheduled maturities of these leases at June 30, Total minimum 2016 are as follows: operating lease payments $ 37,733,809 Minimum Years Ending Lease June 30 Payments 2017 $ 81,864 2018 81,864 2019 81,864 2020 81,864 2021 178,314 Total minimum lease payments 505,770 Less amount representing interest 45,955 Net minimum capital lease payments 459,815 Less current portion 67,284 Noncurrent capital lease obligations$ 392,531

37 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Note 9 - Operating Expenses by Natural Classification

The University reports operating expenses by functional classification on the statements of revenues, expenses, and changes in net position. Operating expenses by natural classification for the two years ended June 30, 2016 and 2015 are summarized as follows:

Year ended June 30, 2016 Compensation Supplies and Professional Travel and and Benefits Services Services Utilities Entertainment Total Instruction and departmental research $ 227,929,877 $ 7,625,978 $ 16,627,395 $ 27,422 $ 6,912,728 $ 259,123,400 Separately budgeted research 23,802,856 7,246,991 5,688,214 6,122 2,207,622 38,951,805 Public service 20,098,842 4,429,110 4,920,055 128,298 682,608 30,258,913 Academic support 61,917,409 13,078,047 2,661,235 215,476 2,889,225 80,761,392 Student services 32,607,392 18,680,012 2,457,571 78,252 2,215,398 56,038,625 Institutional support 44,291,269 9,494,295 4,971,661 96,580 1,086,708 59,940,513 Operation and maintenance of plant 28,549,908 8,387,957 1,132,440 11,961,099 360,863 50,392,267 Auxiliary enterprises 51,494,868 23,286,608 942,154 3,357,993 3,849,159 82,930,782 Total $ 490,692,421 $ 92,228,998 $ 39,400,725 $ 15,871,242 $ 20,204,311 $ 658,397,697 Student Aid 8,479,525 Depreciation 43,020,802 Total Operating Expenses$ 709,898,024

Compensation Supplies and Professional Travel and Year ended June 30, 2015 and Benefits Services Services Utilities Entertainment Total Instruction and departmental research $ 216,888,225 $ 10,057,244 $ 15,256,509 $ 55,778 $ 5,941,640 $ 248,199,396 Separately budgeted research 21,356,474 7,883,387 13,210,115 7,203 2,293,445 44,750,624 Public service 19,718,250 5,491,752 2,073,629 107,370 690,219 28,081,220 Academic support 59,303,942 16,143,441 688,482 360,319 2,882,380 79,378,564 Student services 26,463,185 9,813,311 13,104,427 78,608 1,692,982 51,152,513 Institutional support 42,218,224 11,067,730 5,718,249 17,989 1,010,040 60,032,232 Operation and maintenance of plant 21,003,869 18,042,881 941,625 12,513,293 339,333 52,841,001 Auxiliary enterprises 41,341,374 27,660,673 971,514 3,737,270 3,209,312 76,920,143 Total $ 448,293,543 $ 106,160,419 $ 51,964,550 $ 16,877,830 $ 18,059,351 $ 641,355,693 Student Aid 8,647,508 Depreciation 37,919,010 Total Operating Expenses$ 687,922,211 Note 10 - Compensated Absences

Per University policy, eligible salaried administrative appointments and administrative hourly employees earn vacation at the rate of 21 days per year with a maximum accrual of 32 days. Upon termination, they are entitled to a payout of their accumulated balance up to a maximum of 32 days. Hourly classified employees earn vacation at rates per years of service, ranging from 10 to 25 days per year. The accrual is equal to the amount earned in three years, up to a maximum of 600 hours, which is subject to payout upon termination. Other hourly, non-exempt employees are also eligible to elect compensatory time off in lieu of overtime pay. The use of compensatory time is scheduled with supervisory approval or subject to payout upon termination or transfer to another department. The estimated liability for accrued vacation and compensatory time at June 30, 2016 and 2015 was $13,998,141 and $13,404,558, respectively.

38 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

All University employees are entitled to a sick leave credit equal to 15 days per year (earned on a pro rata monthly basis for salaried employees and on a pro rata hourly basis for classified hourly and administrative hourly employees). Salaried and administrative hourly employees with 10 or more years of service are eligible to receive a payout upon retirement of 25 percent of unused days up to a maximum of 30 days. Hourly classified employees with 10 or more years of service are eligible for payout upon retirement of 50 percent of unused days up to a maximum of 60 days, except for hourly classified employees under American Federation of State, County and Municipal Employees contract, where the maximum is 80 days.

The estimated liability for accrued sick leave at June 30, 2016 and 2015 was $6,942,620 and $7,225,605, respectively.

Compensated absences at June 30, 2016 and 2015 are summarized as follows:

Beginning Ending Current Balance Additions Reductions Balance Portion For the year ended: June 30, 2016$ 20,630,163 $25,233,324 $ (24,922,726) $20,940,761 $ 2,234,524

June 30, 2015$ 17,813,712 $26,555,787 $ (23,739,336) $20,630,163 $ 1,978,423

Note 11 - Retirement Plans

Based on rules governed by the Ohio Revised Code Retirement Plan Funding - Chapter 3307 of the (ORC), employees of Ohio University are covered ORC limits the maximum rate of contributions. The under one of three retirement plans, unless eligible retirement boards of the systems individually set for exemption as in the case of most student contributions rates within the allowable limits. The employees. The particular system in which an adequacy of employer contribution rates is employee is eligible to enroll is dependent on his or determined annually by actuarial valuation using the her position with the University. Generally, faculty entry age normal cost method. Under these appointments are eligible for enrollment in a defined provisions, each employer entity’s contribution is benefit plan, administered by the State Teachers expected to finance the costs of benefits earned by its Retirement System of Ohio (“STRS Ohio”), and all employees during the year, with an additional amount other employees are eligible for enrollment in a to finance a portion of the defined benefit plans’ defined benefit plan, administered by the Ohio Public unfunded accrued liability. Employees Retirement System (“OPERS”). In addition, full-time employees may opt out of the state The employee and employer rates are the same for retirement system and choose a defined contribution ARP employees as the retirement system under plan, also referred to as an Alternative Retirement which they would otherwise be covered. However, Plan (“ARP”), with one of nine independent for those who would otherwise be covered by STRS providers. STRS Ohio and OPERS also offer a Ohio and who instead elect the ARP, 4.5 percent of defined contribution plan and a combined plan with the employer contribution goes to the STRS Ohio features of both a defined contribution plan and a retirement system and 0.77 percent of the employer defined benefit plan. All options are discussed below contribution goes to the OPERS systems as of August in more detail. 1, 2007. The University’s contributions each year are equal to its required contributions.

39 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Member contributions are 10 percent of gross wages for all plans, set at the maximums authorized by the ORC.

The plans’ 2016 and 2015 contribution rates on covered payroll to each system are:

Employer Contribution Rate Post Retirement Death Pension Healthcare Benefit Total STRS - Faculty 14.00% 0.00% 0.00% 14.00% OPERS - State Employees 12.00% 2.00% 0.00% 14.00% OPERS - Law Enforcement 16.10% 2.00% 0.00% 18.10%

University contributions for the current and preceding year are summarized as follows:

Employer Contributions STRS Ohio OPERS ARP 2016 $ 14,809,723 $ 17,518,016 $ 10,882,643 2015 14,461,472 17,091,376 9,929,472

The payroll for employees covered by OPERS and service credit regardless of age. Beginning August 1, STRS Ohio for the year ended June 30, 2016 was 2015, eligibility requirements for an unreduced $163,491,464 and $145,513,486, respectively. The benefit will change. The maximum annual retirement payroll for employees covered by OPERS and STRS allowance, payable for life considers years of Ohio for the year ended June 30, 2015 was credited service, final average salary (3-5 years) and $155,361,858 and $138,569,272, respectively. For multiplying by a factor ranging from 2.2 percent to the years ended June 30, 2016 and 2015, the 2.6 percent with 0.1 percent incremental increases for University’s total payroll was $343,725,637 and years greater than 30-31, depending on retirement $331,322,479, respectively. Contributions made to age. OPEB were $2,450,630, $3,250,678, and $3,054,334 for the years ended June 30, 2016, 2015, and 2014, A defined benefit plan or combined plan member respectively. with five or more years of credited service who is determined to be disabled (illness or injury Benefits Provided preventing individual’s ability to perform regular job duties for at least 12 months) may receive a disability STRS - Plan benefits are established under Chapter benefit. Additionally, eligible survivors of members 3307 of the Revised Code, as amended by Substitute who die before service retirement may qualify for Senate Bill 342 in 2012, which gives the Retirement monthly benefits. New members on or after July 1, Board the authority to make future adjustments to the 2013, must have at least 10 years of qualifying member contribution rate, retirement age and service service credit to apply for disability benefits. requirements, and the cost-of-living adjustment as the need or opportunity arises, depending on the A death benefit of $1,000 is payable to the retirement system’s funding progress. beneficiary of each deceased retired member who participated in the plan. Death benefit coverage up to Any member may retire who has (1) five years of $2,000 can be purchased by participants in all three service credit and attained age 60; (2) 25 years of of the plans. Various other benefits are available to service credit and attained age 55; or (3) 30 years of members’ beneficiaries.

40 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

OPERS - Plan benefits are established under Chapter Defined Benefit Plans - The defined benefit plans of 145 of the Ohio Revised Code, as amended by STRS Ohio and OPERS are cost-sharing, multiple- Substitute Senate Bill 343 in 2012. The requirements employer public employee retirement plans. Both to retire depend on years of service (15 to 30 years) systems provide retirement and disability benefits, and from attaining the age of 48 to 62, depending on annual cost-of-living adjustments, survivor benefits, when the employee became a member. Members and postretirement health care (including Medicare B retiring before age 65 with less than 30 years of premiums) to retirees and beneficiaries who elect to service credit receive a percentage reduction in receive those benefits. The authority to establish and benefit. Member retirement benefits are calculated amend benefits is provided by the ORC. Each on a formula that considers years of service (15-30 retirement system issues a publicly available years), age (48-62 years) and final average salary, financial report that includes financial statements and using a factor ranging from 1.0 percent to 2.5 required supplementary information for the pension percent. and post-employment health care plans. Interested parties may obtain a copy of the STRS Ohio report A plan member who becomes disabled before age 60 by making a written request to STRS Ohio, 275 East or at any age, depending on when the member Broad Street, Columbus, Ohio 43215-3771, by entered the plan, and has completed 60 contributing calling toll free 888-227-7877, or by visiting the months is eligible for a disability benefit. STRS Ohio website at www.strsoh.org. The OPERS report may be obtained by making a written request A death benefit of $500 - $2,500 is determined by the to OPERS, 277 East Town Street, Columbus, OH number of years of service credit of the retiree. 43215-4642, or by calling 614-222-5601 or 800-222- Benefits may transfer to a beneficiary upon death 7377. with 1.5 years of service credits with the plan obtained within the last 2.5 years, except for Law Net Pension Liability, Deferrals, and Pension Enforcement and Public Safety personnel who are Expense - At June 30, 2016 and 2015, the University eligible immediately upon employment. reported a liability for its proportionate share of the net pension liability of both STRS and OPERS. The Benefit terms provide for annual cost-of-living net pension liability was measured as of June 30, adjustments to each employee’s retirement allowance 2015 for the STRS plan and December 31, 2015 for subsequent to the employee’s retirement date. The the OPERS plan. The total pension liability used to annual adjustment, if applicable, is 3 percent. 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 a projection of its long-term share of contributions to the pension plan relative to the projected contributions of all participating reporting units, actuarially determined.

Measurement Net Pension Liability Proportionate Share Percent Plan Date 2016 2015 2016 2015 Change STRS June 30$ 274,039,342 $ 242,888,149 0.992% 0.999% -0.007% OPERS December 31$ 158,857,405 $ 106,172,642 0.910% 0.878% 0.032% $ 432,896,747 $ 349,060,791

41 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

For the years ended June 30, 2016 and 2015, the University recognized pension expense of $50,136,890 and $35,590,653, respectively.

For the years ended June 30, 2016 and 2015, the University reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

2016 2015 Deferred outflows of resources: Differences between expected and actual experience $ 12,512,699 $ 2,338,329 Changes in assumptions -- Net difference between projected and actual earnings on pension plan investments 46,749,649 5,692,955 Changes in proportion and differences between University contributions and proportionate share of contributions 2,915,607 - University contributions subsequent to the measurement date 23,373,591 22,894,735 Total deferred outflows of resources$ 85,551,545 $ 30,926,019

2016 2015 Deferred inflows of resources: Differences between expected and actual experience $ 3,175,540 $ 1,943,961 Changes in assumptions -- Net difference between projected and actual earnings on pension plan investments 19,708,609 44,935,229 Changes in proportion and differences between University contributions and proportionate share of contributions 1,620,850 26,165 University contributions subsequent to the measurement date -- Total deferred inflows of resources$ 24,504,999 $ 46,905,355

42 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as increases or (decreases) in pension expense as follows:

Years ending June 30 Amount 2017 $ 6,707,765 2018 7,426,058 2019 7,228,964 2020 16,386,171 2021 (15,721) Thereafter (60,284) $ 37,672,953

In addition, the contributions subsequent to the measurement date will be included as a reduction of the net pension liability in the next year (2017).

Actuarial Assumptions - The total pension liability in the actuarial valuations was determined using the following actuarial assumptions, applied to all periods included in the measurement as of June 30, 2016:

STRS - as of July 1, 2015 OPERS - as of December 31, 2015

Valuation date July 1, 2015 December 31, 2015

Actuarial cost method Entry age normal Individual entry age

Cost of living 2.0 percent 3.0 percent

Salary increases, including inflation 2.75 percent - 12.25 percent 4.25 percent - 10.05 percent

Inflation 2.75 percent 3.00 percent

Investments rate of return 7.75 percent, net of pension plan 8.00 percent, net of pension plan investment expense investment expense Experience study date Period of 5 years ended July 1, 2012 Period of 5 years ended December 31, 2010 Mortality basis RP-2000 combined mortality table RP-2000 mortality table (Projection 2022-Scale AA) projected 20 years using Projection Scale AA

The following actuarial assumptions, applied to all periods included in the measurement for the period ended June 30, 2015, were as follows:

43 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

STRS - as of July 1, 2014 OPERS - as of December 31, 2014 Valuation date July 1, 2014 December 31, 2014 Actuarial cost method Entry age normal Individual entry age Cost of living 2.0 percent 3.0 percent Salary increases, including inflation 2.75 percent - 12.25 percent 4.25 percent - 10.05 percent Inflation 2.75 percent 3.00 percent Investments rate of return 7.75 percent, net of pension plan 8.00 percent, net of pension plan investment expense investment expense Experience study date Period of 5 years ended July 1, 2012 Period of 5 years ended December 31, 2010 Mortality basis RP-2000 combined mortality table RP-2000 mortality table (Projection 2022-Scale AA) projected 20 years using Projection Scale AA Discount Rate - The discount rates used to measure The long-term expected rate of return on pension the pension liabilities at June 30, 2016 and 2015 were plan investments was determined using a building- 7.75 percent for STRS and 8.0 percent for OPERS. block method in which best-estimate ranges of The projection of cash flows used to determine the expected future real rates of return (expected returns, discount rate assumed that employee contributions net of pension plan investment expense and inflation) will be made at the current contribution rate and that are developed for each major asset class. These employer contributions will be made at contractually ranges are combined to produce the long-term required rates for all plans. Based on those expected rate of return by weighting the expected assumptions, each pension plan’s fiduciary net future real rates of return by the target asset position was projected to be available to make all allocation percentage and by adding expected projected future benefit payments for current active inflation. and inactive employees. Therefore, the long-term expected rate of return on pension plan investments The target allocation and best estimates of arithmetic was applied to all periods of projected benefit real rates of return for each major asset class are payments to determine the total pension liability. summarized in the following tables:

44 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

STRS - as of 7/1/15 OPERS - as of 12/31/15 Long-term Long-term Expected Expected Target Real Rate of Target Real Rate of Investment Category Allocation Return Investment Category Allocation Return Domestic Equity 31.00% 8.00% Domestic Equity 20.70% 5.84% International Equity 26.00% 7.85% International Equity 18.30% 7.40% Alternatives 14.00% 8.00% Alternatives 10.00% 9.25% Fixed Income 18.00% 3.75% Fixed Income 23.00% 2.31% Real Estate 10.00% 6.75% Real Estate 10.00% 4.25% Liquidity Reserves 1.00% 3.00% Liquidity Reserves 18.00% 4.59% 100.00% 100.00%

STRS - as of 7/1/14 OPERS - as of 12/31/14 Long-term Long-term Expected Expected Target Real Rate of Target Real Rate of Investment Category Allocation Return Investment Category Allocation Return Domestic Equity 31.00% 5.50% Domestic Equity 23.00% 2.31% International Equity 26.00% 5.35% International Equity 19.90% 5.84% Alternatives 14.00% 5.50% Alternatives 10.00% 4.25% Fixed Income 18.00% 1.25% Fixed Income 10.00% 9.25% Real Estate 10.00% 4.25% Real Estate 19.10% 7.40% Liquidity Reserves 1.00% 0.50% Liquidity Reserves 18.00% 4.59% 100.00% 100.00%

Sensitivity of the Net Pension Liability to Changes in the Discount Rate - The following presents the net pension liability of the University, calculated using the discount rate listed below, as well as what the University’s net pension liability would be if it were calculated using a discount rate that is 1.00 percentage point lower or 1.00 percentage point higher than the current rate:

Sensitivity of Net Pension Liability/(Asset) to Changes in the Discount Rate

Plan 1% Decrease Current Discount Rate 1% Increase STRS 6.75%$ 380,661,318 7.75%$ 274,039,342 8.75%$ 183,874,565 OPERS 7.00% 253,602,738 8.00% 158,857,405 9.00% 78,958,741 $ 634,264,056 $ 432,896,747 $ 262,833,306

Pension Plan Fiduciary Net Position - Detailed information about the pension plan’s fiduciary net position is available in the separately issued STRS and OPERS financial reports.

45 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Defined Contribution Plans - The ARP is a defined Other Postemployment Benefits - In addition to the contribution pension plan, under IRS Section 401(a), pension benefits described above, Ohio Law provides and established by Ohio Amended Substitute House that the University fund postretirement healthcare Bill 586 (ORC 3305.02) on March 31, 1998, for benefits to retirees and their dependents through public institutions of higher education. The employer contributions to OPERS and STRS Ohio. University’s Board of Trustees adopted the University’s plan on April 18, 1998. Full-time OPERS provides retirement, disability, and survivor employees are eligible to choose a provider, in lieu of benefits as well as postemployment healthcare STRS Ohio or OPERS, from the list of nine providers coverage to qualifying members of its plans. A currently approved by the Ohio Department of portion of each employer’s contribution to OPERS is Insurance and who hold agreements with the allocated for funding of postretirement health care. University. Employee and employer contributions The portion of employer contributions, for all equal to those required by STRS Ohio and OPERS employers, allocated to health care was 2.0 percent are required for the ARP, less any amounts required during calendar year 2015. to be remitted to the state retirement system in which the employee would otherwise have been enrolled. STRS Ohio provides access to healthcare coverage to retirees who participated in the Defined Benefit or Combined Plans, and their dependents. Coverage Eligible employees have 120 days from their date of under the current program includes hospitalization, hire to make an irrevocable election to participate in physicians’ fees, prescription drugs, and partial the ARP. Under this plan, employees who would reimbursement of monthly Medicare Part B have otherwise been required to be in STRS Ohio or premiums. Pursuant to the ORC, the State Teachers OPERS, and who elect to participate in the ARP, Retirement Board (the “Board”) has discretionary must contribute the employee’s share of retirement authority over how much, if any, of the healthcare contributions to one of nine private providers costs will be absorbed by STRS Ohio. All benefit approved by the Ohio Department of Insurance. The recipients pay a portion of the healthcare cost in the legislation mandates that the employer must form of a monthly premium. contribute an amount to the state retirement system to which the employee would have otherwise belonged, The ORC grants authority to STRS Ohio to provide based on an independent actuarial study healthcare coverage to eligible benefit recipients, commissioned by the Ohio Retirement Study Council spouses, and dependents. By Ohio law, healthcare and submitted to the Ohio Board of Regents. That benefits are not guaranteed and the cost of the amount is 4.5 percent for STRS Ohio and 0.77 coverage paid from STRS Ohio funds shall be percent for OPERS for the years ended June 30, 2016 included in the employer contribution rate, currently and 2015. The employer also contributes what would 14 percent of covered payroll. have been the employer’s contribution under STRS Ohio or OPERS, less the aforementioned The Board allocates employer contributions to the percentages, to the private provider selected by the Health Care Stabilization Fund from which employee. The University plan provides these healthcare benefits are paid. Effective July 1, 2014, employees with immediate plan vesting. the Board discontinued allocating 1 percent of employer contributions to the Health Care The ARP does not provide disability benefits, Stabilization Fund. The balance in the Health Care survivor benefits, or postretirement health care. Stabilization Fund was $3.454 billion on January 1, Benefits are entirely dependent on the sum of 2015, the date of the most recent information contributions and investment returns earned by each available from STRS Ohio. participant’s choice of investment options. For the fiscal year ended June 30, 2015, the date of STRS Ohio and OPERS also offer a defined the most recent information available from STRS, net contribution plan and a combined plan with features healthcare costs paid by STRS Ohio were of both a defined contribution plan and a defined $672,600,000. There were 158,116 eligible benefit benefit plan. recipients.

46 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Note 12 - Risk Management and Contingencies Commercial Insurance Coverage - The University has the following commercial insurance policies: Legal - During the normal course of operations, the University has become a defendant in various legal Type Deductible Coverage and administrative actions. Liabilities are reported Aircraft Liability (Flight Training) $ - $ 5,000,000 when it is probable that a loss has occurred and the Aircraft Liability (Corporate) - 50,000,000 amount of that loss can be reasonably estimated. Airport Liability 10,000 10,000,000 However, in the opinion of in-house legal counsel General and Auto Liability 100,000 50,000,000 and University management, the disposition of all Educator's Liability 100,000 30,000,000 Medical Malpractice Liability 25,000 1,000,000 pending litigation would not have a significant Foreign Liability - 1,000,000 adverse effect on the University’s financial position. Crime 100,000 5,000,000 Property ($900 million shared Self-insurance - The University provides medical w ith other Inter-University and dental coverage for its employees on a self- Council Insurance Consortium insurance basis. Expenses for claims are recorded on member s ) 100,000 1,000,000,000 an accrual basis based on the date claims are incurred. Workers’ Compensation Coverage - Beginning Changes in the self-insurance claims liability for the January 1, 2013 the University became self-insured three years ended June 30, 2016 are summarized as for workers' compensation claims. For claims follows: initiated prior to that date, the University participates 2016 2015 2014 in a plan that pays workers’ compensation benefits to Accrued claims liability- employees who have been injured on the job. The beginning of year $ 3,279,000 $ 3,388,000 $ 3,413,000 Ohio Bureau of Workers’ Compensation calculates Incurred claims-net of the estimated amount of cash needed in the favorable settlements 52,695,055 46,510,478 45,849,148 subsequent fiscal year to pay the claims for these Claims paid (52,106,055) (46,619,478) (45,874,148) workers and sets rates to collect this estimated Accrued claims liability - amount from participating state agencies and end of year $ 3,868,000 $ 3,279,000 $ 3,388,000 universities in the subsequent year.

Liability for claims is accrued based on estimates of During the fiscal year ended June 30, 2014, the the claims liabilities made by the University’s third- University entered into negotiations with the Ohio party actuary. These estimates are based on past Bureau of Workers’ Compensation to buy out the experience and current claims outstanding. Actual claims incurred prior to January 1, 2013. claims experience may differ from the estimate. Negotiations are still ongoing. Amounts are included in accounts payable and accrued liabilities detailed in Note 6.

47 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Note 13 - Capital Project Commitments

At June 30, 2016, the University is committed to future capital expenditures as follows:

Contractual commitments $ 65,516,512 Estimated completion costs of projects 79,831,725 Total $ 145,348,237

These projects will be funded by: State appropriations $ 30,754,049 University funds (including bond funds) 111,243,792 Gifts, grants, and other 3,350,396 Total $ 145,348,237

Note 14 - Other Noncurrent Liabilities

Refundable Advances for Federal Student Loans - Refundable advances for federal student loans for the two years ended June 30, 2016 are summarized as follows:

Beginning Reductions - Ending Current Balance Net Balance Portion For the year ended: June 30, 2016 $ 7,333,999 $ (52,247) $ 7,281,752 $ -

June 30, 2015 $ 7,394,403 $ (60,404) $ 7,333,999 $ -

Note 15 - Pollution Remediation site in fiscal year 2009 was estimated at 40 years. The liability is accrued based on reasonably expected The GASB requires the University to account for potential outlays for performing this monitoring. The pollution (including contamination) remediation current value of expected cash flows method was used obligations. to measure the estimated liability using the prior year expenditures as an estimate of future annual obligations. Future expected payments for pollution remediation Future expected payments for all significant pollution activities include legal obligations due to commencing remediation activities include the following: purchase orders for asbestos removal. This liability is measured at the cost of the construction contract including consultants and the amount assumes no unexpected change orders. Pollution remediation obligations continued to include expected payments imposed by the Ohio Environmental Protection Agency (OEPA). The violation of OAC Rule 3745-27-13(A) and ORC Rule 3734.02 (H) lists the University as responsible for the methane gas level monitoring of a disposal site on the University's Southern Campus. The University's monitoring on this

48 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Years Ending Minimum 2016 2015 June 30 Payments Restricted - nonexpendable: Permanent endowments $ 22,159,570 $ 22,296,237 2017$ 271,896 Restricted - expendable: 2018 5,000 Sponsored programs and 2019 5,000 component units $ 7,857,328 $ 7,234,141 Loans 9,797,199 9,425,013 2020 5,000 Unspent endowment funds 2021 5,000 (available through the endowment spending policy) 1,434,792 1,295,684 2022-2050 140,000 Grant funded capital projects and debt service funds 2,330,920 3,285,234 Total minimum payments $ 431,896 Endowments- net income and appreciation 10,642,683 13,299,312

Total restricted - expendable $ 32,062,922 $ 34,539,384 These amounts are included in the current portion of Unrestricted - allocated: accounts payable and accrued liabilities, as well as in Auxiliaries $ 64,800,700 $ 55,773,889 other long-term liabilities on the statements of net Quasi endowments 46,471,261 49,100,166 position. Capital projects and reserves 39,154,148 119,239,801 GASB 68-unfunded pension liability (371,850,201) (365,040,127) Note 16 - Donor-restricted Endowments Ongoing academic and research programs, Under the standard established by Section 1715.56 of the reserves, and component units 126,772,525 83,717,322 ORC, an institution may appropriate as much as is Total unrestricted - allocated $ (94,651,567) $ (57,208,949) prudent of the realized and unrealized net appreciation of the fair value of the assets of the endowment fund over the historic dollar value of the fund for the uses and purposes for which an endowment fund is established. The University’s endowment spending policy is based on Restricted net position is subject to external restrictions the concept of total return, and the spending rate for fiscal and is categorized as either nonexpendable or years 2016 and 2015 was 6 percent, which included a 2 expendable. Restricted nonexpendable net position percent administrative fee. consists entirely of endowments whose corpus is held in perpetuity. Restricted expendable net position is made The amounts of net appreciation on investments of donor- up of the categories above. restricted endowments that are available for authorization for expenditure by the Board were $10,642,683 and Unrestricted net position is not subject to external $13,299,312 for June 30, 2016 and 2015, respectively. restrictions; however, the University’s unrestricted net Those amounts are reported as restricted expendable net position has been internally designated for specific position purposes or for contractual purchase obligations. This category includes amounts set aside for auxiliaries, Note 17 - Net Position academic and research programs, reserves, and capital projects. Restricted and unrestricted net position for the years ended June 30, 2016 and 2015 are as follows: Note 18 - The Ohio University Foundation

The Ohio University Foundation (the “Foundation”) was incorporated in Ohio in October 1945 to support the educational undertakings of Ohio University (the “University”). The Foundation is authorized to solicit and receive gifts and contributions for the benefit of the University and to ensure that funds and property received are applied to the uses specified by the donor.

The Foundation’s wholly owned subsidiary, Inn-Ohio of Athens, Inc. (the “Inn”), owns and operates a 139-room hotel and restaurant facility in Athens, Ohio known as The Ohio University Inn (see Note 10).

49 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Another controlled entity, Housing for Ohio, Inc. Use of Estimates - The preparation of financial (“Housing”), constructed and operates a 182-unit statements in conformity with accounting principles student housing facility in Athens, Ohio (see Note 11). generally accepted in the United States of America It has been granted tax-exempt status under Section requires management to make estimates and 501(a)(3) of the Internal Revenue Code (the “Code”) as assumptions that affect the reported amounts of assets an organization described in Section 501(c)(3). and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial The Foundation entered into an agreement with the statements and the reported amount of revenue and Sugar Bush Foundation (“Sugar Bush”), an Ohio not- expenses during the reporting period. Actual results for-profit corporation, in August 2005. Sugar Bush is a could differ from those estimates. supporting organization as defined in Code Section 509(a)(3) and the Foundation is its primary supported Concentration of Credit Risk - Financial instruments, organization receiving 51 percent of its charitable which potentially subject the Foundation to a distributions. This agreement was further amended in concentration of credit risk, consist principally of August 2007 with Sugar Bush pledging to commit all of pledges receivable, investments for the Foundation, and its charitable distributions to the Foundation. Upon receivables related to operations of the Inn and Russ dissolution of Sugar Bush and payment of all Sugar Research Center LLC. Exposure to losses on pledges Bush liabilities, all of its assets shall be transferred to receivable is principally dependent on each donor’s the Foundation, provided the Foundation is then financial condition. The Foundation monitors the recognized as a nonprofit Ohio corporation and as a tax- exposure for credit losses and maintains allowances for exempt organization under Section 501(c)(3) of the anticipated losses on receivables. Code. The Foundation consolidates this supporting organization that is deemed to be financially Investments are recorded at fair value. Investment interrelated. securities are exposed to various risks, such as interest rate, market, and credit risks. Due to the level of risk During 2009, the Foundation created three limited associated with certain investment securities, it is at liability companies to receive property distributions least possible that changes in the value of investment from The Dolores H. Russ Trust for the benefit of the securities will occur in the near term and that such Russ College of Engineering. The three limited liability changes could materially affect the Foundation’s companies are Fritz J. and Dolores H. Russ Holdings consolidated statements of financial position and LLC, Russ North Valley Road LLC, and Russ Research activities. Center LLC. A fourth limited liability company, Russ Center North LLC, was established during 2016 for the The management companies that operate the Inn and the purpose of purchasing and holding property adjacent to Russ Research Center are responsible for collection of the Russ Research Center LLC. Collectively, these receivables. Each entity provides a reserve for any entities are referred to as the “Russ LLCs”. The limited estimated uncollectible balances, as appropriate. liability companies are treated as disregarded entities for federal income tax purposes. The Foundation is the sole Gifts and Contributions - Contributions are recorded member of Fritz J. and Dolores H. Russ Holdings LLC. at their fair value on the date of receipt. All Fritz J. and Dolores H. Russ Holdings LLC is the sole contributions are considered to be available for member of Russ North Valley Road LLC, and Russ unrestricted use unless specifically restricted by the Research Center LLC, and Russ Center North LLC. donor. Contributions received that are designated for future periods or restricted by the donor for specific Summary of Significant Accounting Policies purposes are reported as temporarily restricted or permanently restricted support that increases those net Basis of Accounting - The consolidated financial asset categories. When a donor restriction expires (when statements of the Foundation have been prepared on the a stipulated time restriction ends or the purpose of accrual basis of accounting. The accompanying restriction is accomplished), temporarily restricted net consolidated financial statements present the financial assets are reclassified as unrestricted net assets and position and results of activities of the Foundation and reported in the consolidated statements of activities as its wholly owned subsidiary and other related entities - net assets released from restrictions. the Inn, Housing, one supporting organization, and three limited liability companies. All intercompany Contributed property is recorded at fair value at the date transactions have been eliminated. of donation. If donors stipulate how long the assets must be used or restrict the use of such assets for a specific 50 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015 purpose, the contributions are recorded as restricted publicly traded are either stated at cost, which support. In the absence of such stipulations, approximates market, or at appraised market values contributions of property are recorded as unrestricted when applicable. Alternatives are recorded at their most support. recent available valuation as provided by the investment custodian. Purchases and sales of investments are Contributions of charitable gift annuities are reduced by accounted for as of the trade date. See Note 5 for the the actuarially determined liability resulting from valuation policy for alternative investments. acceptance of the gift. Contributions are held in charitable trusts at the present value of their estimated Income from Investments - All investment income future benefits to be received when the trust assets are earned on permanently restricted, temporarily restricted, distributed upon notification of the donor’s death (see and unrestricted investments is credited to unrestricted Note 9). net assets unless otherwise restricted by the donor or by state law. Pledges Receivable - Unconditional promises to give that are expected to be collected within one year are Property and Equipment - Property and equipment are recorded at net realizable value. Unconditional recorded at the estimated fair value, if received as a gift, promises to give that are expected to be collected in or at the purchase cost, plus any expenditures for future years are recorded at the present value of their improvements. estimated future cash flows. The discount on those amounts is computed using an assumed inflation rate at Depreciation of buildings is recorded over periods the time the pledge is made. The discount rate utilized ranging from 20 to 40 years using the straight-line was 2.69 and 2.86 percent for the years ended June 30, method. Depreciation and amortization of other 2016 and 2015, respectively. Amortization of the property, equipment, and improvements are recorded discounts is included in contribution revenue. over periods ranging from 3 to 15 years using the Unconditional promises to give, which are silent as to straight-line method. the due date, are presumed to be time restricted by the donor until received and are reported as temporarily Annually, or more frequently if events or circumstances restricted net assets. Conditional promises to give are change, a determination is made by management to not included as support until the conditions on which ascertain whether property and equipment and they depend are substantially met. intangibles have been impaired based on the sum of expected future undiscounted cash flows from operating Intentions - The Foundation receives communications activities. If the estimated net cash flows are less than from donors indicating that the Foundation has been the carrying amount of such assets, the Foundation will included in the donor’s will or life insurance policy as recognize an impairment loss in an amount necessary to beneficiary, representing intentions to give rather than write down the assets to a fair value as determined from promises to give. Such communications are not expected future discounted cash flows. Based upon its unconditional promises to give because the donors most recent analysis, the Foundation has determined retain the ability to modify their wills and insurance that no impairment to the carrying value of its long- policies during their lifetimes. The total realizable value lived assets existed at June 30, 2016 and 2015. of these intended gifts has not been established, nor have the intended gifts been recognized as an asset or Cash - At times, cash may exceed federally insured contribution revenue. Such gifts are recorded when the amounts. The Foundation believes it mitigates risks by Foundation is notified of the donor’s death, the will is depositing cash with major financial institutions. The declared valid by a probate court, and the proceeds are Foundation held $26,828,222 and $18,968,322 in cash measurable. that was uninsured by the Federal Deposit Insurance Corporation (FDIC) at June 30, 2016 and 2015, Cash Surrender Value of Insurance Policies - The respectively. Foundation records as an asset the cash surrender value of insurance policies for which it is the owner and Cash Equivalents - The Foundation considers all beneficiary. highly liquid investments purchased with original Investments - Investments in securities are recorded at maturities of three months or less to be cash equivalents. fair value based on quoted market values, with changes in market value during the year reflected in the Restricted Cash - Restricted cash represents cash that, consolidated statements of activities. Investments not under terms of the bond issue trust indenture agreement (the “Trust Indenture”) (related to Housing for Ohio, 51 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Inc., see Note 11), is restricted for various purposes. In Fair Value of Financial Instruments - The carrying accordance with the terms of the Trust Indenture and values of the Foundation’s financial instruments in the related agreements, the proceeds from the bonds not accompanying consolidated statements of financial used to construct the student housing facility and certain position approximate their respective estimated fair equipment and improvements were deposited with the value at June 30, 2016 and 2015. trustee. The Foundation is also required to deposit all revenue directly into a designated revenue fund. The The Foundation has estimated the fair values of its trustee is then authorized, without further direction from financial instruments using available quoted market the Foundation, to transfer funds out of the revenue fund information and other valuation methodologies. to other funds as outlined in the Trust Indenture. Accordingly, the estimates presented are not necessarily indicative of the amounts that the Foundation could Functional Allocation of Expenses - The costs of realize in a current market exchange. Determinations of providing the various programs and support services fair value are based on subjective data and significant have been summarized on a functional basis in the judgment relating to timing of payments and collections consolidated statements of activities. Certain costs have and the amounts to be realized. Different market been allocated among the programs and support services assumptions and/or estimation methodologies might benefited. Although methods of allocation used are have a significant effect on the estimated fair value considered appropriate, other methods could be used amounts. that would produce different amounts. The fair values of short-term financial instruments, Income Taxes - The Internal Revenue Service has including cash equivalents and trade accounts receivable determined that the Foundation is an exempt and payable, approximate the carrying amounts in the organization under Section 501(c)(3) of the Internal accompanying consolidated financial statements due to Revenue Code, except for taxes on unrelated income. the short maturity of such instruments. The fair value of The provision for income taxes for the Inn, including long-term obligations approximates the carrying deferred tax expenses, totaled $155,700 and $156,506 amounts in the accompanying consolidated financial for the years ended June 30, 2016 and 2015, statements. The carrying value of the debt respectively. The provision is mostly comprised of approximates fair value based on current borrowing federal and city taxes. Of these amounts, $49,700 and rates. The inputs are based upon terms in contractual $80,206 represent current tax expense for the years agreements. The fair value of these financial ended June 30, 2016 and 2015, respectively. The instruments is determined using Level 2 inputs (see deferred taxes are a result of differences between book Note 5). and tax depreciation and are presented as long-term other liabilities on the statements of financial position. Advertising Costs - Advertising costs of the Inn are included in marketing expenses and are expensed as Accounting principles generally accepted in the United incurred. States of America require management to evaluate tax positions taken by the Foundation and to recognize a tax Upcoming Accounting Pronouncements - During liability if the Foundation has taken an uncertain May 2014, the Financial Accounting Standards Board position that more likely than not would not be released Accounting Standards Update (ASU) 2014-09, sustained upon examination by the IRS or other Revenue from Contracts with Customers (Topic 606). applicable taxing authorities. Management has analyzed The amendments in the ASU clarify the principles for the tax positions taken by the Foundation and has recognizing revenue and develop a common revenue concluded that as of June 30, 2016 and 2015, there are standard for U.S. GAAP that removes inconsistencies no uncertain positions taken or expected to be taken that and weaknesses in revenue requirements, provides a would require recognition of a liability or disclosure in more robust framework for addressing revenue issues, the consolidated financial statements. The Foundation is improves comparability of revenue recognition practices subject to routine audits by taxing jurisdictions; across entities, industries, jurisdictions, and capital however, there are currently no audits for any tax markets, provides more useful information to users of periods in progress. Management believes that it is no financial statements through improved disclosure longer subject to income tax examinations for years requirements, and simplifies the preparation of financial prior to June 30, 2013. statements by reducing the number of requirements to which an entity must refer. The Foundation will be

52 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015 required to adopt and implement this accounting update Temporarily Restricted Net Assets - Temporarily as of and for the year ending June 30, 2020. restricted net assets consist of funds that are restricted for a specific use or time determined by the donor. In February 2016, the Financial Accounting Standards Temporarily restricted net assets are reclassified to Board issued ASU No. 2016-02, Leases, which will unrestricted net assets and reported in the consolidated supersede the current lease requirements in ASC 840. statements of activities as net assets released from The ASU did not significantly change the accounting restrictions when the restrictions are satisfied either by requirements for lessors, and accordingly, application of the passage of time or by actions of the Foundation. the new lease standard is not expected to have a significant effect on the Foundation’s financial Temporarily restricted net assets as of June 30, 2016 statements. The new lease guidance will be effective for and 2015 are available for the following purposes: the Foundation’s year ending June 30, 2021. 2016 2015 The Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-14, Not- Academic support $ 13,465,046 $ 14,656,172 for-Profit Entities (Topic 958): Presentation of Alumni relations 156,396 227,952 Financial Statements of Not-for-Profit Entities in Fundraising and developme 835,313 841,831 Institutional support 10,933,002 12,877,689 August 2016. ASU 2016-14 requires significant Instruction and changes to the financial reporting model of departmental 201,540,398 216,585,362 organizations who follow FASB not-for-profit rules, Intercollegiate athletics 7,247,619 6,489,711 including changing from three classes of net assets to Public service 634,724 576,748 two classes, net assets with donor restrictions and net Research 2,308,202 2,474,275 Student aid 52,870,308 60,681,301 assets without donor restrictions. The ASU will also Student services 1,598,338 1,860,493 require changes in the way certain information is aggregated and reported by the Foundation, including Total $ 291,589,346 $ 317,271,534 required disclosures about the liquidity and availability Permanently Restricted Net Assets - Permanently of resources. The new standard is effective for the restricted net assets consist of funds arising from a gift Foundation’s year ending June 30, 2019 and thereafter or bequest in which the donor has stipulated, as a and must be applied on a retrospective basis. The condition of the gift, that the principal be maintained in Foundation is currently evaluating the impact this perpetuity and only the investment income from standard will have on the financial statements. investment of the funds be expended. Certain donor endowments also specify that a portion of the earnings Net Assets from the investment be reinvested as principal, or that all income earned over a period of time be reinvested. Unrestricted Net Assets - The unrestricted net assets Amounts are also transferred for specific uses as consist of operating funds available for any purpose authorized from time to time by the donor. Earnings, authorized by the board of trustees. gains, and losses on restricted net assets are classified as unrestricted unless otherwise restricted by the donor or Unrestricted net assets as of June 30, 2016 and 2015 are by applicable state laws. available for the following purposes: 2016 2015 Permanently restricted net assets as of June 30, 2016 Designated: and 2015 are available for the following purposes: Board-designated 1804 grants $ - $ 8,552 Designated underwater accounts (335,966) (12,377) 2016 2015

Subtotal designated (335,966) (3,825) Academic support $ 10,008,327 $ 9,814,599 Undesignated: Alumni relations 69,808 20,348 Fundraising and developmen 107,173 106,718 The Inn 4,978,526 4,644,351 Institutional support 3,441,686 3,435,413 Housing 1,259,166 315,436 Instruction Other (2,883,207) (1,634,529) and departmental research 82,768,178 80,523,523 Subtotal undesignated 3,354,485 3,325,258 Intercollegiate athletics 2,001,564 1,959,091 Public service 1,372,343 1,371,273 Total unrestricted net assets$ 3,018,519 $ 3,321,433 Research 1,339,295 1,200,825 Student aid 100,931,387 91,065,442 Student services 3,023,130 2,897,349

Total $ 205,062,891 $ 192,394,581 53 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Pledges Receivable

The following amounts are included in pledges receivable for unconditional promises to give at June 30, 2016 and 2015: Temporarily Permanently At June 30, 2016 Restricted Restricted Total Gross amounts due in: Less than one year $ 5,737,984 $ 4,483,210 $ 10,221,194 One to five years 7,156,566 2,834,338 9,990,904 More than five years 1,090,267 - 1,090,267 Gross pledges receivable 13,984,817 7,317,548 21,302,365 Less allowance for uncollectible pledges (1,635,708) (855,883) (2,491,591) Less discount to present value (1,027,979) (236,605) (1,264,584) Total pledges receivable - Net $ 11,321,130 $ 6,225,060 $ 17,546,190

Temporarily Permanently At June 30, 2015 Restricted Restricted Total Gross amounts due in: Less than one year $ 6,375,093 $ 4,166,582 $ 10,541,675 One to five years 7,835,831 4,935,941 12,771,772 More than five years 1,603,700 142,857 1,746,557 Gross pledges receivable 15,814,624 9,245,380 25,060,004 Less allowance for uncollectible pledges (2,489,029) (1,455,111) (3,944,140) Less discount to present value (1,257,190) (446,388) (1,703,578) Total pledges receivable - Net $ 12,068,405 $ 7,343,881 $ 19,412,286

The allowance for uncollectible contributions is a The Foundation’s investments include endowed funds, general valuation based on the percentage of prior as well as a portion of working capital funds. The years’ pledge write-offs. Specific pledges deemed Foundation’s investment policy provides that the long- uncollectible are charged against the allowance for term objective of the investment pool is to maximize uncollectible pledges in the period in which the the real return, or the nominal return less inflation, of determination is made. Both the general allowance and the assets over a complete market cycle with emphasis the specific write-offs are reported as a loss on fair on preserving capital and reducing volatility through value of pledges receivable in the statement of prudent diversification. Further, the investment strategy activities. As of June 30, 2016, the Foundation has seeks to provide real growth of assets in excess of approximately $91.0 million in numerous outstanding endowment spending requirements plus inflation. pledges that are considered to be intentions to give and are contingent upon future events. These pledges are The Foundation reports investments and split-interest not accrued as pledges receivable or recognized as agreements at estimated fair value, in accordance with revenue because they do not represent unconditional the fair value hierarchy prescribed by Financial promises to give. It is not practicable to estimate the Accounting Standards Board Accounting Standards ultimate realizable value of these commitments or the Codification (ASC) 820, Fair Value Measurements and period over which they might be collected. Disclosures. The framework for determining fair value is based on a hierarchy that prioritizes the valuation techniques and inputs used to measure fair value, as Fair Value Measurements follows:

54 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Level 1 - Inputs that reflect unadjusted quoted prices in that are valued using an actuarial approach. The active markets for identical assets or liabilities that the Foundation has processes in place to select the Foundation has the ability to access. The Foundation’s appropriate valuation technique and unobservable Level 1 assets consist primarily of fixed-income or inputs to perform Level 3 fair value measurements. equity mutual funds, publicly traded large- and small- These processes include quarterly meetings with the cap stocks, and REITs. Prices for these investments Foundation's investment committee for calibration and are widely available through major financial reporting review of Level 3 investment monthly or quarterly services. fund manager statements and annual audited financial statements. The Foundation cannot independently Level 2 - Inputs other than quoted prices that are assess the value of these underlying positions through a observable, either directly or indirectly. These may public exchange or over-the-counter market. The include quoted prices for similar assets and liabilities in Foundation utilizes a third-party investment advisor to active markets, and other inputs such as interest rates monitor, participate in fund manager calls, and obtain and yield curves that are observable at commonly underlying financial information on the Level 3 quoted intervals. The Foundation’s Level 2 assets investments. include government and corporate bonds, as well as commingled money market, bond, and equity funds In instances whereby inputs used to measure fair value that are not registered with the Securities and Exchange fall into different levels in the above fair value Commission and do not trade on an exchange. hierarchy, fair value measurements in their entirety are categorized based on the least observable input that is Level 3 - Inputs that are unobservable, including inputs significant to the valuation. The Foundation’s that are available in situations where there is little, if assessment of the significance of particular inputs to any, market activity for the related asset or liability. these fair value measurements requires judgment and The Foundation’s Level 3 assets include allocations to considers factors specific to each asset or liability. The commodities, hedge funds, private equity, private real Foundation’s fair value assets by level, at June 30, estate, and venture capital funds. The Foundation’s 2016 and 2015 are summarized in the following tables: Level 3 assets also include split-interest agreements

55 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Assets Measured at Fair Value on a Recurring Basis at June 30, 2016

Fair Value at Reporting Date Using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs June 30, 2016 (Level 1) (Level 2) (Level 3) Investments Fixed-income investments: Money market mutual funds $ 25,516,167 $ 25,488,677 $-27,490 $ Bonds and bond mutual funds 42,136,162 40,752,956 1,383,206 - TIPS mutual funds 15,140,564 15,140,564 - - Subtotal fixed income 82,792,893 81,382,197 1,410,696 - Public equity investments: Domestic large-cap equity 78,911,942 78,911,942 - - Domestic small-cap equity 10,230,220 10,230,220 - - REITs 6,221,617 6,221,617 - - Developed international equity 85,736,678 85,736,678 - - Emerging markets international equity 39,801,986 29,019,806 10,782,180 - Commodities 25,012,224 25,012,224 - - Subtotal public equity 245,914,667 235,132,487 10,782,180 - Alternative investments: Commodities (1) 6,233,869 - - 6,233,869 Hedge funds (2) 62,357,529 - - 62,357,529 Private equity funds (3) 23,680,333 - - 23,680,333 Private real estate funds (4) 3,518,716 - - 3,518,716 Venture capital funds (5) 2,692,759 - - 2,692,759 Subtotal alternative investments 98,483,206 - - 98,483,206 Total investments $ 427,190,766 $ 316,514,684 $ 12,192,876 $ 98,483,206

Split-interest Agreements Assets Charitable gift annuity assets Money market mutual funds $ 46,416 $ 851 $-45,565 $ Bonds and bond mutual funds 770,206 529,325 240,881 - Domestic equity 504,268 504,268 - - International equity 395,973 395,973 - - REITs 152,257 152,257 - - Total charitable gift annuity assets $ 1,869,120 $ 1,582,674 $-286,446 $ Charitable trust assets Money market mutual funds 402,842 - 402,842 - Bonds and bond mutual funds 9,059,645 9,059,645 - - Domestic equity 2,675,752 2,675,752 - - International equity 2,338,722 2,338,722 - - REITs 1,300,781 1,300,781 - - Private real estate 490,000 - - 490,000 Other (6) 599,373 - - 599,373 Total charitable trust assets $ 16,867,115 $ 15,374,900 $ 402,842 $ 1,089,373 Total split-interest agreements $ 18,736,235 $ 16,957,574 $ 689,288 $ 1,089,373

Total fair value measurements $ 445,927,001 $ 333,472,258 $ 12,882,164 $ 99,572,579

56 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Assets Measured at Fair Value on a Recurring Basis at June 30, 2015

Fair Value at Reporting Date Using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs June 30, 2015 (Level 1) (Level 2) (Level 3) Investments Fixed-income investments: Money market mutual funds $ 21,834,284 $ 21,803,580 $-30,704 $ Bonds and bond mutual funds 44,223,672 41,416,786 2,806,886 - TIPS mutual funds 14,717,852 14,717,852 - - Subtotal fixed income 80,775,808 77,938,218 2,837,590 - Public equity investments: Domestic large-cap equity 81,326,912 81,326,912 - - Domestic small-cap equity 11,110,312 11,110,312 - - REITs 5,226,169 5,226,169 - - Developed international equity 98,229,378 98,229,378 - - Emerging markets international equity 45,229,034 33,998,744 11,230,290 - Commodities 28,272,606 28,272,606 - - Subtotal public equity 269,394,411 258,164,121 11,230,290 - Alternative investments: Commodities (1) 7,037,763 - - 7,037,763 Hedge funds (2) 65,338,993 - - 65,338,993 Private equity funds (3) 20,214,090 - - 20,214,090 Private real estate funds (4) 6,905,218 - - 6,905,218 Venture capital funds (5) 2,863,282 - - 2,863,282 Subtotal alternative investments 102,359,346 - - 102,359,346 Total investments $ 452,529,565 $ 336,102,339 $ 14,067,880 $ 102,359,346

Split-interest Agreements Assets Charitable gift annuity assets Money market mutual funds $-44,113 $ $-44,113 $ Bonds and bond mutual funds 1,007,485 733,749 273,736 - Domestic equity 655,458 655,458 - - International equity 516,822 516,822 - - REITs 184,380 184,380 - - Total charitable gift annuity assets $ 2,408,258 $ 2,090,409 $-317,849 $ Charitable trust assets Money market mutual funds 608,429 - 608,429 - Bonds and bond mutual funds 9,546,930 9,546,930 - - Domestic equity 2,961,079 2,961,079 - - International equity 2,572,695 2,572,695 - - REITs 1,296,427 1,296,427 - - Private real estate 490,000 - - 490,000 Other (6) 692,348 - - 692,348 Total charitable trust assets $ 18,167,908 $ 16,377,131 $ 608,429 $ 1,182,348 Total split-interest agreements $ 20,576,166 $ 18,467,540 $ 926,278 $ 1,182,348

Total fair value measurements $ 473,105,731 $ 354,569,879 $ 14,994,158 $ 103,541,694

(1) Commodities funds investing in areas that offer strong relative performance in rising inflation environments and are broadly diversified across the commodities markets, including futures, options on futures, and forward contracts on exchange-traded agricultural goods, metals, minerals, and energy products. The fair value of this investment has been estimated using the net asset value per share of the investment.

57 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

(2) Hedge funds broadly diversified across managers, investment strategies, and investment venues. Includes both fund investments as well as fund- of-funds investments. The fair value of this investment has been estimated using the net asset value per share of the investment. (3) Private equity funds broadly diversified across managers, investment stages, geography, industry sectors, and company size. Includes individual fund investments, as well as fund-of-funds investments. The fair value of this investment has been estimated using the net asset value per share of the investment. (4) Private real estate funds broadly diversified across managers, investment strategies, geography, and industry sectors. The fair value of this investment has been estimated using the net asset value per share of the investment. (5) Venture capital funds with the objective of investing in early stage business entities and enterprises with a primary focus on medical and information technologies. The fair value of this investment has been estimated using the net asset value per share of the investment. (6) Level 1 and Level 2 assets represent the Foundation’s interest in trusts and annuities in which the Foundation is the trustee. Level 3 assets represent real estate assets held in trust, as well as the present value of the revenue expected to be received from charitable trusts where the Foundation does not serve as trustee. The Foundation estimates the fair value of these assets based upon the present value of the expected future cash flows using management’s best estimates of key assumptions including life expectancies of beneficiaries, payment periods, and a discount rate commensurate with market conditions and other risks involved. Significant changes in these key assumptions would result in a significantly lower or higher fair value measurement. Investments are reported as Level 3 assets if the valuation is based on significant unobservable inputs. Often, these assets trade infrequently, or not at all. For some Level 3 assets, both observable and unobservable inputs may be used to determine fair value. As a result, the unrealized gains and losses presented in the tables below may include changes in fair value that were attributable to both observable and unobservable inputs. The Foundation’s policy is to recognize transfers between levels of the fair value hierarchy as of the beginning of the reporting period. For the fiscal years ended June 30, 2016 and 2015, there were no transfers between levels of the fair value hierarchy. Additional information on the changes in Level 3 assets is summarized in the tables below as of June 30, 2016 and 2015:

58 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis for the Year Ended June 30, 2016

Fair Value Measurements Using Significant Unobservable Inputs (Level Alternative Investments Total Level 3 Investments Commodities Hedge Funds

Beginning balance $ 102,359,346 $ 7,037,763 $ 65,338,993 Gains (losses) included in changes in net assets: Realized gains (losses) 1,628,074 (8,333) (1,708) Unrealized gains (losses) (5,420,273) (714,840) (2,260,229) Total gains (losses) (3,792,199) (723,173) (2,261,937) Purchases and sales: Purchases 4,981,807 - - Sales (5,065,748) (80,721) (719,526) Total purchases and sales (83,941) (80,721) (719,526) Ending balance $ 98,483,206 $ 6,233,869 $ 62,357,530

Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (Continued) Alternative Investments (Continued) Private Private Venture Equity Real Estate Capital Funds Funds Funds

Beginning balance $ 20,214,090 $ 6,905,218 $ 2,863,282 Gains (losses) included in changes in net assets: Realized gains (losses) 1,177,965 460,150 - Unrealized gains (losses) 233,001 (2,404,676) (273,529) Total gains (losses) 1,410,966 (1,944,526) (273,529) Purchases and sales: Purchases 4,868,301 10,500 103,006 Sales (2,813,025) (1,452,476) - Total purchases and sales 2,055,276 (1,441,976) 103,006 Ending balance $ 23,680,332 $ 3,518,716 $ 2,692,759

Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (Continued) Split-interest Agreements Charitable Trust Assets Beginning balance $ 1,182,348 Change in value of split-interest agreements included in changes in net assets: Change in actuarial estimate (92,978) Total change in value (92,978)

Ending balance $ 1,089,370

59 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis for the Year Ended June 30, 2015

Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Alternative Investments Total Level 3 Investments Commodities Hedge Funds

Beginning balance $ 106,152,848 $ 9,211,309 $ 64,993,331 Gains (losses) included in changes in net assets: Realized gains (losses) 3,395,685 (5,956) (4,260) Unrealized gains (losses) (3,854,962) (2,092,190) 1,798,705 Total gains (losses) (459,277) (2,098,146) 1,794,445 Purchases and sales: Purchases 7,033,546 118,345 - Sales (10,367,771) (193,745) (1,448,783) Total purchases and sales (3,334,225) (75,400) (1,448,783) Ending balance $ 102,359,346 $ 7,037,763 $ 65,338,993

Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (Continued) Alternative Investments (Continued) Private Private Venture Equity Real Estate Capital Funds Funds Funds

Beginning balance $ 18,967,577 $ 8,486,977 $ 4,493,654 Gains (losses) included in changes in net assets: Realized gains (losses) 3,405,901 - - Unrealized gains (losses) (2,585,579) 737,843 (1,713,741) Total gains (losses) 820,322 737,843 (1,713,741) Purchases and sales: Purchases 6,729,776 90,533 94,892 Sales (6,303,585) (2,410,135) (11,523) Total purchases and sales 426,191 (2,319,602) 83,369 Ending balance $ 20,214,090 $ 6,905,218 $ 2,863,282

Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (Continued) Split-interest Agreements Charitable Trust Assets Beginning balance $ 733,476 Change in value of split-interest agreements included in changes in net assets: 408,277 Change in actuarial estimate 40,595 Total change in value 448,872

Ending balance $ 1,182,348

60 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Investments in Entities that Calculate Net Asset 2 of the fair value hierarchy if the investment can be Value per Share redeemed at or within 1-10 days. If the investment holdings cannot be redeemed at or within this The Foundation holds shares or interests in investment timeframe, due to redemption restrictions or other companies at year end whereby the fair value of the factors, then the investment is classified within Level 3 investment held is estimated based on the net asset of the fair value hierarchy. Although the Foundation value per share (or its equivalent) of the investment considers all available data in reporting the fair value company. of investments, the NAV, or its equivalent, is used as the primary valuation input for some Level 2 and most Certain investments measured at net asset value per Level 3 assets. share (or its equivalent) may be classified within Level

The following tables provide additional information regarding the fair value, liquidity, and unfunded commitment for investments where the NAV was used as a practical expedient.

Level 2 and Level 3 Investments Reported at Net Asset Value at June 30, 2016

Estimated Redemption Termination Redemption Notice Date Unfunded Fair Value Frequency Period (Fiscal Year) Commitment Fixed-income investments: Money market mutual funds (Level 2) $ 27,490 daily none not applicable $ - Bonds and bond mutual funds (Level 2) 1,383,206 daily 1 day not applicable - Subtotal fixed income 1,410,696 - Public equity investments: Emerging markets international equity mutual funds (Level 2) 10,782,180 monthly 30 days not applicable - Alternative investments: Commodities (Level 3) 6,233,869 monthly 10 - 30 days not applicable - Hedge funds (Level 3) 62,357,529 quarterly 60 days not applicable - Private equity funds (Level 3) 23,680,333 not liquid not liquid 2016 - 2024 27,651,697 Private real estate funds (Level 3) 3,425,911 not liquid not liquid 2016 - 2018 259,345 Venture capital funds (Level 3) 2,692,759 not liquid not liquid 2016 - 2018 65,082 Subtotal alternative investments 98,390,401 27,976,124 Total investments $ 110,583,277 $ 27,976,124

61 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Level 2 and Level 3 Investments Reported at Net Asset Value at June 30, 2015

Estimated Redemption Termination Redemption Notice Date Unfunded Fair Value Frequency Period (Fiscal Year) Commitment Fixed-income investments: Money market mutual funds (Level 2) $ 30,704 daily none not applicable $ - Bonds and bond mutual funds (Level 2) 1,063,765 daily 1 day not applicable - Subtotal fixed income 1,094,469 - Public equity investments: Emerging markets international equity mutual funds (Level 2) 11,230,290 monthly 30 days not applicable - Alternative investments: Commodities (Level 3) 7,037,763 monthly 10 - 30 days not applicable - Hedge funds (Level 3) 65,338,993 quarterly 60 days not applicable - Private equity funds (Level 3) 20,214,090 not liquid not liquid 2015 - 2022 23,255,639 Private real estate funds (Level 3) 6,819,428 not liquid not liquid 2015 - 2018 281,033 Venture capital funds (Level 3) 2,863,282 not liquid not liquid 2015 - 2015 168,088 Subtotal alternative investments 102,273,556 23,704,760 Total investments $ 114,598,315 $ 23,704,760

Donor-restricted and Board-designated and (c) accumulations to the permanent endowment Endowments made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is The Foundation’s endowment includes both donor- added to the fund. The remaining portion of the donor- restricted endowment funds and funds designated by restricted endowment fund that is not classified in the board of trustees as quasi-endowments. The permanently restricted net assets is classified as Foundation’s quasi-endowments have been created temporarily restricted net assets until those amounts are with gifts that were temporarily restricted by the donor appropriated for expenditure by the Foundation in a for the benefit of a particular college within the manner consistent with the standard of prudence university. Quasi-endowments have been included in prescribed by UPMIFA. In accordance with UPMIFA, the following schedules because they have been the Foundation considers the following factors in invested to provide income for a long, but unspecified making a determination to distribute or accumulate period in accordance with board-imposed restrictions. donor-restricted endowment funds: Net assets associated with endowment funds are classified and reported based on the existence or (1) The duration and preservation of the fund absence of donor-imposed restrictions or board- imposed restrictions. (2) The purposes of the gifting organization or individual and the donor-restricted endowment Interpretation of Relevant Law - The Foundation has fund interpreted the Uniform Prudent Management of (3) General economic conditions Institutional Funds Act (UPMIFA) as requiring the preservation of the contributed value of the original gift (4) The possible effect of inflation and deflation of donor-restricted endowment funds absent explicit (5) The expected total return from income and the donor stipulations to the contrary. As a result of this appreciation of investments interpretation, the Foundation classifies as permanently restricted net assets (a) the original value of gifts (6) Other resources of the Foundation donated to the permanent endowment, (b) the original (7) The investment policies of the Foundation value of subsequent gifts to the permanent endowment,

62 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Endowment Net Asset Composition by Type of Fund as of June 30, 2016

Temporarily Permanently Unrestricted Restricted Restricted Total

Donor-restricted endowment $ (335,966) $ 112,642,204 $ 195,404,518 $ 307,710,756 Board-designated (quasi) endowment created with donor-restricted funds - 94,776,466 - 94,776,466

Total funds $ (335,966) $ 207,418,670 $ 195,404,518 $ 402,487,222

Changes in Endowment Net Assets for the Fiscal Year Ended June 30, 2016

Temporarily Permanently Unrestricted Restricted Restricted Total

Market value - Beginning of the year $ (12,377) $ 241,237,888 $ 181,034,433 $ 422,259,944

Net realized and unrealized gains and losses and investment income (323,589) (12,730,529) (285,017) (13,339,135)

Contributions - - 14,655,102 14,655,102

Spending policy transfer - (14,808,044) - (14,808,044)

Transfers to board-designated endowments - 913,437 - 913,437

Administrative fee - (7,194,082) - (7,194,082)

Market value - End of the year $ (335,966) $ 207,418,670 $ 195,404,518 $ 402,487,222

63 Ohio University Notes to Financial Statements (Continued) June 30, 2016 and 2015

Endowment Net Asset Composition by Type of Fund as of June 30, 2015

Temporarily Permanently Unrestricted Restricted Restricted Total

Donor-restricted endowment $ (12,377) $ 147,666,731 $ 181,034,433 $ 328,688,787 Board-designated (quasi) endowment created with donor-restricted funds - 93,571,157 - 93,571,157

Total funds $ (12,377) $ 241,237,888 $ 181,034,433 $ 422,259,944

Changes in Endowment Net Assets for the Fiscal Year Ended June 30, 2015

Temporarily Permanently Unrestricted Restricted Restricted Total

Market value - Beginning of the year $ (569,243) $ 265,316,842 $ 169,394,525 $ 434,142,124

Net realized and unrealized gains and losses and investment income 556,866 (4,937,427) (1,255,507) (5,636,068)

Contributions - - 12,895,415 12,895,415

Spending policy transfer - (13,483,828) - (13,483,828)

Transfers to board-designated endowments - 803,569 - 803,569

Administrative fee - (6,461,268) - (6,461,268)

Market value - End of the year $ (12,377) $ 241,237,888 $ 181,034,433 $ 422,259,944

Funds with Deficiencies - From time to time, the fair invested in a manner that is intended to outperform, value of assets associated with individual donor- over rolling 36-month periods, a composite benchmark restricted endowment funds may fall below the of appropriately weighted indices, while maintaining contributed value that the donor or UPMIFA requires acceptable risk levels. The Foundation anticipates the the Foundation to retain as the corpus. These funds are endowment funds will provide an average rate of return known as “underwater accounts.” In accordance with of approximately 6.9 percent annually, gross of GAAP, deficiencies of this nature that are reported in investment management fees of approximately 0.6 unrestricted net assets were $335,966 and $12,377 as of percent. Actual returns in any given year may vary from June 30, 2016 and 2015, respectively. These this amount. deficiencies resulted from unfavorable market fluctuations and allowable distributions made over time. Strategies Employed for Achieving Objectives - To satisfy its long-term rate-of-return objectives, the Return Objectives and Risk Parameters - The Foundation relies on a total-return strategy in which Foundation has adopted investment and spending investment returns are achieved through both capital policies for endowment assets that attempt to provide a appreciation (realized and unrealized) and current yield predictable stream of funding to programs supported by (interest and dividends). The Foundation targets a its endowment while seeking to maintain the long-term diversified asset allocation that places a greater purchasing power of the endowment assets. Endowment emphasis on equity-based investments to achieve its assets include donor-restricted funds that are held in long-term return objectives within prudent risk perpetuity or for donor-specified periods, as well as constraints. board-designated funds. Under this policy, as approved by the Board of Trustees, the endowment assets are 64

Spending Policy - For the fiscal year ended June 30, The Foundation has a noncontrolling economic interest 2016, the Foundation’s spending policy stipulated that 6 in Ohio South East Enterprise Development Fund, Inc. percent of a three-year moving average of the market (SEED), a tax-exempt organization under Code Section value of the endowment was available to spend, with 2 501(c)(4). SEED was created in July 1994 for the percent of the amount being set aside to support the purpose of supporting the scientific and technological Foundation’s administrative expenses. The spending research, educational activities, and economic rate applied to all endowment accounts except development of Ohio University. Currently, the underwater accounts, where spending was limited to 1 Foundation is the named beneficiary of SEED’s assets percent of a three-year moving average of the market in the event that the entity is dissolved. Distributions value. In establishing this policy, the Foundation from SEED are reflected in the consolidated statements considered the long-term expected return on its of activities as gifts and contributions in the year they endowment. Accordingly, over the long term, the are received. However, SEED did not make any Foundation expects the current spending policy to allow distributions to the Foundation during 2016 or 2015. the endowment to grow at an average of 0.9 percent annually. This is consistent with the Foundation’s Split-interest Agreements objective to maintain the purchasing power of the endowment assets held in perpetuity or for a specified Charitable Gift Annuities - Under charitable gift term as well as to provide additional real growth annuity agreements, all assets are held by the through investment returns and new gifts. Foundation. Therefore, the Foundation has recorded the donated assets at fair value and the liabilities to the Property and Equipment donor or his/her beneficiaries discounted to the present value of the estimated future payments to be distributed As of June 30, 2016 and 2015, property and equipment by the Foundation to such individuals. The amount of are as follows: the contribution is the difference between the asset and liability and is recorded as contribution revenue. The 2016 2015 Foundation uses the Internal Revenue Service (IRS) Land $ 3,026,223 $ 2,488,895 discount rate, or Applicable Federal Rate, to determine Land improvements 893,723 880,910 net present value of the liability. This rate is published Building and building improvements 13,545,590 40,804,333 monthly and represents the annual rate of return that the Furnishings, fixtures, and equipment 5,039,773 6,376,639 IRS assumes the gift assets will earn during the gift Construction in progress 61,878 80,943 term. The discount rate for each charitable gift annuity Subtotal 22,567,187 50,631,720 is established at the beginning of the agreement. The discount rate applied to gift annuities held at June 30, Less accumulated depreciation and 2016 and 2015 ranged from 1.2 to 8.2 percent. amortization (10,665,749) (20,909,909)

Property and equipment - Net$ 11,901,438 $ 29,721,811 Charitable Remainder Trusts - Under charitable remainder trust agreements, the Foundation serves as the remainderman and will receive the net assets of the Total depreciation expense of $1,789,592 and trust upon death of the donor’s beneficiary. During the $1,838,981 was recorded in fiscal years 2016 and 2015, life of the trust, the donor, or the donor-designated respectively. beneficiary, will receive regular payments as established Support from Related Organizations by the trust.

During 2016 and 15, the University paid certain payroll In instances where the donor has not specifically costs amounting to $3,837,612 and $4,116,887, and reserved the right to change the remainderman, and all additional costs of $1,424,340 and $0, respectively, for assets of charitable remainder trust are maintained by a the Foundation’s Development Office, Office of Alumni third-party trustee in an irrevocable trust for the benefit Relations, and Accounting Office. The support costs of the Foundation, the Foundation will recognize, as paid by the University are reflected in the consolidated contribution revenue and as a charitable trust asset, the statements of activities as University support, with a present value of the estimated future benefits to be like amount included in expenses. received when the trust assets are distributed. The trustee disburses income earned on the assets of the The University provides office space and the use of charitable remainder trust to the donor or donor- certain common facilities and services to the Foundation designated beneficiaries. at no cost. These costs have not been recorded as University support because they are not considered to be In instances where the donor has not specifically significant to the results of activities of the Foundation. reserved the right to change the remainderman, and the Foundation serves as the trustee, the Foundation will recognize the fair market value of the assets of the trust, as well as a liability for the net present value of future 65 payments to be distributed by the Foundation to the value to the asset is recorded as an increase or decrease donor or his/her designated beneficiaries. The amount of in revenue. the contribution is the difference between the asset and liability at the inception of the trust. The Foundation Pooled Income Fund - A pooled income fund allows a uses the IRS discount rate, or Applicable Federal Rate, donor to place funds into an investment pool from to determine net present value of the liability. This rate which an income stream is provided. The income stream is published monthly and represents the annual rate of is paid to the donor and/or the donor-designated return that the IRS assumes the gift assets will earn beneficiaries, and the Foundation will receive the net during the gift term. The discount rate for each assets of the fund upon their death. charitable remainder trust is established at the beginning of the agreement. The discount rate applied to charitable Revocable Trusts - Under revocable trust agreements, remainder trusts held at June 30, 2016 and 2015 ranged the Foundation serves as the remainderman and will from 2.0 to 8.2 percent. receive the net assets of the trust upon death of the donor’s beneficiary. All assets of the trust may be Certain charitable remainder trust transactions are not maintained by a third-party trustee for the benefit of the reported on the consolidated statements of financial Foundation, or by the Foundation if named as a trustee. position or the consolidated statements of activities as, The trustee disburses income earned on the assets of the in these cases, the remainderman can be changed by the trust to the donor or donor-designated beneficiaries. donor prior to his/her death. Under revocable trust agreements, the donor maintains the ability to legally dissolve the trusts and may or may Adjustments to the charitable trust asset to reflect not reserve the right to change the remainderman. For amortization of the discount, revaluation of the present these reasons, the Foundation does not report revocable value of the estimated future payments to the donor- trust transactions on the consolidated statements of designated beneficiaries, and changes in actuarial financial position or the consolidated statements of assumptions during the term of the trust are recognized activities if the trust is held by a third-party trustee. as changes in the value of split-interest agreements. Upon the death of the donor-designated beneficiaries, Inn-Ohio of Athens, Inc. the receivable is closed, the assets received from the The Inn was purchased by the Foundation on August 30, trust are recognized at fair value, and any difference is 1986. The primary purpose for which the Foundation reported as a change in the value of split-interest invested in the Inn was to provide affordable and agreements. convenient housing, dining, and conference facilities for University employees, alumni, and guests. As a Lead Trusts - Charitable lead trusts provide an income significant portion of the Inn’s revenue is derived from stream to the Foundation for a set period of time these customers, the Foundation is committed to established by the donor. The income stream is recorded financially supporting the Inn. at the net present value of the payments. Once the set period of time ends, the Foundation will no longer The Inn’s business is subject to all of the risks inherent receive the income stream and the remaining principal is in the lodging industry. These risks include, among transferred back to the donor. If the Foundation serves other factors, varying levels of demand for rooms and as trustee, an asset and a liability will be recorded for related services, adverse effects of general and local the trust. The asset is booked at the fair market value. economic and market conditions, changes in The liability is recorded at fair market value less the net governmental regulations that influence wages or prices, present value of the income stream. If the Foundation changes in interest rates, the availability of credit, does not serve as trustee, only the asset, at the net changes in real estate taxes and other operating present value of the income stream, will be recorded for expenses, and the recurring need for renovation, the trust. The Foundation uses the IRS discount rate, or refurbishment, and improvements. Applicable Federal Rate, to determine net present value of the income stream. This rate is published monthly Operations - The Inn’s operations for the years ended and represents the annual rate of return that the IRS June 30, 2016 and 2015 are summarized below: assumes the gift assets will earn during the gift term. The discount rate for each charitable lead trust is established at the beginning of the agreement. The discount rate applied to the lead trusts held at June 30, 2016 and 2015 ranged from 1.07 to 5.16 percent.

Perpetual and Other Trusts - Perpetual trusts are those trusts that provide a perpetual income stream to the Foundation but are held by a third party. An asset and revenue are recorded for the fair market value of the instrument. Each year, the net change in fair market

2016 2015 Debt Obligations - Long-term debt of the Inn as of June 30, 2016 and June 30, 2015 consists of the Revenue $ 5,239,926 $ 5,275,949 following: Operating and general expenses 4,132,439 4,048,312 Depreciation and amortization 751,841 672,005 2016 2015 Interest expense - Net 14,726 7,469 Provision for income taxes 155,700 156,506 Term loan - Principal due through June 2021, interest at 3.31 Total expenses 5,054,706 4,884,292 percent through June 2016 and adjusted thereafter $ 1,759,900 $ 2,051,200 Net income 185,220 391,657 Realized gains on investments - 43,869 Other comprehensive income (losses) 148,955 (48,029) Less current portion of long-term debt (309,900) (291,300)

Change in net assets $ 334,175 $ 387,497 Total $ 1,450,000 $ 1,759,900

The Foundation has entered into a management In June 2006, the Inn obtained a $4,000,000 term loan, agreement with a property manager to operate the the proceeds of which were used to pay a dividend of Inn. The manager’s compensation is a base fee plus 15 $3,000,000 in June 2006 and $1,000,000 of which was percent of the hotel’s net available operating profit as placed in the bond fund to retire the 1996 Serial and defined in the management agreement. Term Project Bonds in November 2006. The term loan In fiscal years 2016 and 2015, base management fees is guaranteed by the Foundation. incurred by the Inn with respect to the Manager were $100,000 per year and incentive fees were $137,762 and A significant portion of the property and equipment is $170,964, respectively. pledged as collateral for the term loan. The interest rate on the term loan was fixed at 6.20 percent through June Property and Equipment - Property and equipment of 2011 and was adjusted to 3.31 percent as of July 1, the Inn as of June 30, 2016 and June 30, 2015 consists 2011. The interest rate will be adjusted to the index rate of the following: as defined in the agreement plus 1.40 percent in June 2016, effectively, 2.50 percent. 2016 2015 Land $ 323,978 $ 197,300 Maturities of long-term debt at June 30, 2016 are set Land improvements 893,723 880,910 forth in the following schedule: Buildings 7,416,194 7,237,852 Furnishings, fixtures, and equipment 4,645,909 4,358,956 Construction in progress 61,878 80,943 Years Ending

Total property and equipment 13,341,682 12,755,961 June 30 Amount

Less accumulated depreciation and 2017 $ 309,900 amortization (8,001,500) (7,369,634) 2018 329,600 2019 350,500 Net property and equipment$ 5,340,182 $ 5,386,327 2020 373,000 2021 396,900 Thereafter -

Total$ 1,759,900

The fair value of the debt obligations approximates the carrying value at June 30, 2016 and 2015.

Housing for Ohio, Inc.

In November 1999, the Foundation established Housing, a limited liability company and 501(c)(3) corporation, with the purpose of acquiring, developing, constructing, and operating a 182-unit student-housing rental project which contains 580 beds. The property, known as

University Courtyard Apartments (the “Project”), is execute a purchase and sale agreement. Because located in Athens, Ohio on property owned by the Housing expects the sale to be completed within one University and leased to Housing. The facility is year, the capital assets of Housing expected to be sold managed and operated by a private entity. have been classified as property held for sale on the statement of financial position. Operations - Housing’s operations for the years ended June 30, 2016 and 2015 are summarized below: Housing intends to use the proceeds from the sale to retire the outstanding bonds. Upon dissolution of 2016 2015 Housing, any remaining assets will be distributed to the Foundation. Revenue $ 3,555,528 $ 3,362,031 Debt - In September 2000, Housing offered Operating and general expenses 1,492,802 1,435,563 $31,985,000 of variable-rate, tax-exempt bonds (the Depreciation and amortization 741,173 861,596 “2000 Bonds”). The proceeds of the 2000 Bonds Interest expense and bond fees 176,740 161,820 financed the construction, installation, and equipping of Tax and insurance 201,083 174,966 the Project. The 2000 Bonds will be fully matured at Total expenses 2,611,798 2,633,945 June 2032 and bear interest at an adjustable rate as determined weekly by the remarketing agent, based on Change in net assets $ 943,730 $ 728,086 its knowledge of prevailing market conditions, except that in no event will the interest rate exceed 12 percent.

The average interest rates for the years ended June 30, Property and Equipment - Property and equipment of 2016 and 2015 were 0.13 percent and 0.04 percent, Housing as of June 30, 2016 and 2015 consists of the respectively and the actual interest rates at June 30, following: 2016 and 2015 were 0.46 percent and 0.10 percent, respectively.

2016 2015 As collateral, until all principal and interest on any of Student housing facility and improvements$ - $ 27,483,760 the 2000 Bonds have been paid, Housing has pledged, Furnishings and equipment - 1,623,819 assigned, and granted a security interest to its right, title, and interest in gross revenue of University Courtyard Total property and equipment - 29,107,579 Apartments and related assets. The Foundation has Less accumulated depreciation - 11,147,822 made no additional pledge of assets or revenue to the 2000 Bonds, which are nonrecourse to the Foundation. Net property and equipment$ - $ 17,959,757 Principal payments for the bonded debt for the years During the fiscal year, Housing committed to a plan that subsequent to June 30, 2016 are summarized as follows: will ultimately result in the sale of all of Housing’s assets and eventual dissolution of the Housing itself. In Years Ending April 2016, Housing was notified that it was the June 30 Principal successful bidder on the ground beneath the improvements already owned by Housing. That same 2017 $ 960,000 month, Housing began marketing the property, 2018 1,010,000 including the ground and improvements, for sale. 2019 1,065,000 2020 1,125,000 Before the end of the fiscal year, Housing paid a deposit 2021 1,185,000 on the ground, which is recorded as prepaid expense on Thereafter 18,030,000 the statement of financial position. The ground purchase transaction was closed in September 2016. As a result of this transaction, the ground lease will be terminated. Total$ 23,375,000

As a result of the marketing efforts noted above, Housing identified several potential buyers and entered Debt issuance costs are included in property on the into a letter of intent with one potential buyer during consolidated statements of financial position and are June 2016. Based on the purchase offers received on the amortized over the term of the 2000 Bonds. property, Housing has not recognized impairment Amortization was $26,158 during each of the years during 2016, as the offer prices have exceeded the ended June 30, 2016 and 2015. carrying value of the property. Housing is currently in negotiations with the potential buyer with the intent to

Required Supplementary Information

69 Ohio University Schedule of University’s Proportionate Share of the Net Pension Liability June 30, 2016 and 2015

STRS

2016 2015 University’s proportion of the collective STRS net pension liability:

Percentage 0.992% 0.999% Amount $ 274,039,342 $242,888,149 University's covered-employee payroll $ 87,599,050 $ 86,635,900

University’s proportional share of the collective pension liability, as a 312.83% 280.36% percentage of the University’s covered- employee payroll Plan fiduciary net position as a 72.09% 74.71% percentage of the total pension liability

OPERS

2016 2015 University’s proportion of the collective OPERS net pension liability:

Percentage 0.910% 0.878% Amount $ 158,857,405 $106,172,642

University's covered-employee payroll $ 121,248,226 $109,873,095

University’s proportional share of the collective pension liability, as a 131.02% 96.63% percentage of the University’s covered- employee payroll Plan fiduciary net position as a 81.19% 86.53% percentage of the total pension liability

70 Ohio University Schedule of University Contributions June 30, 2016 and 2015

STRS

2016 2015 Statutorily required contribution $ 14,809,723 $ 14,461,472 Contributions in relation to the actuarially determined contractually $ 14,809,723 $ 14,461,472 required contribution Contribution deficiency (excess) $-- $ Covered employee payroll $ 105,783,736 $ 103,296,229 Contributions as a percentage of 14.00% 14.00% covered employee payroll

OPERS

2016 2015 Statutorily required contribution $ 17,518,016 $ 17,091,376 Contributions in relation to the actuarially determined contractually $ 17,518,016 $ 17,091,376 required contribution Contribution deficiency (excess) $-- $ Covered employee payroll $ 124,772,192 $ 121,733,448 Contributions as a percentage of 14.04% 14.04% covered employee payroll

Notes to Required Supplementary Information June 30, 2016 and 2015

Changes of benefit terms. There were no changes in benefit terms affecting the STRS and OPERS plans for the plan years ended June 30, 2015 and December 31, 2015, respectively.

Changes of assumptions. There were no changes in assumptions or plan amendments affecting the STRS and OPERS plans for the plan years ended June 30, 2015 and December 31, 2015, respectively.

Supplementary Information

72 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards

Independent Auditor's Report

To Management and the Board of Trustees Ohio University

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Ohio University (the "University") and its discretely presented component unit, as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the University's financial statements, and have issued our report thereon dated October 6, 2016. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Ohio University's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the University's internal control. Accordingly, we do not express an opinion on the effectiveness of the University's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the University's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

73 To Management and the Board of Trustees Ohio University

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

October 6, 2016

74 Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance

Independent Auditor's Report

To the Board of Trustees Ohio University

Report on Compliance for Each Major Federal Program We have audited Ohio University's (the "University") compliance with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Compliance Supplement that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2016. Ohio University's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of Ohio University's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the "Uniform Guidance"). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Ohio University's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Ohio University's compliance.

75 To the Board of Trustees Ohio University

Opinion on Each Major Federal Program In our opinion, Ohio University complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2016. Report on Internal Control Over Compliance Management of Ohio University is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Ohio University's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the University's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

October 6, 2016

76 Ohio University Schedule of Expenditures of Federal Awards Year Ended June 30, 2016

Federal/Pass-Through Pass-Through Federal Agency/Pass-Through Grantor CFDA No. Grant Number Subrecipients Expenditures

STUDENT FINANCIAL ASSISTANCE CLUSTER DEPARTM ENT OF EDUCATION Direct Programs: Federal Supplemental Educational Opportunity Grants 84.007 P007A153342/163342/173342 $ - $ 1,065,863 Federal Work-Study Program 84.033 P033A153342 - 970,214 Federal Perkins Loans Outstanding 84.038 UNKNOWN - 11,211,093 Federal Pell Grant Program 84.063 P063P150345/160345/170345 - 36,157,967 P268K150345/160345/170345 Federal Direct Student Loan 84.268 P268K156641/166641/176641 - 214,431,442 TEACH Grant 84.379 P379T150345/160345/170345 - 1,061,297 Total Department of Education - 264,897,876

DEPARTM ENT OF HEALTH AND HUM AN SERV ICES Direct Programs: Primary Care Loans (HPSL) Outstanding 93.342 UNKNOWN - 1,877,504 Disadvantaged Student Loans Outstanding 93.342 UNKNOWN - 2,650,624 Total Department of Health and Human Services - 4,528,128 TOTAL STUDENT FINANCIAL ASSISTANCE CLUSTER - 269,426,004

RESEARCH AND DEV ELOPM ENT CLUSTER DEPARTM ENT OF AGRICULTURE Direct Programs: US Department of Agriculture 10.001 58-1230-3-500, 58-1230-4-010 - 10,150 US Department of Agriculture 10.001 58-8020-5-006 - 13,068 US Department of Agriculture 10.001 58-8040-5-006 - 38,410 US Department of Agriculture 10.XXX 15-JV-11242309-078 - 18,317 Total Department of Agriculture - 79,945

DEPARTM ENT OF DEFENSE Direct Programs: US A rmy : US Army Construction Engineering Research Laboratory 12.630 W9132T-12-2-0006 - 18,881 US Army Rdecom Acquisition Center 12.431 W911NF-11-1-0358 - 9,232 US Army Corp of Engineers 12.XXX W912DR-14-P-0053 - 42,369 US Army Corp of Engineers 12.XXX W912DR-16-2-0002 - 23,317 - 93,799 Defense Advanced Research Projects Agency Space And Naval Warfare Systems Center 12.910 N66001-16-1-4040 - 28,991 Subtotal Direct Programs - 122,790

Pass-Through Programs From: William Marsh Rice University 12.431 R17832 - 131,408 Ohio State University 12.XXX 60018316 - 2,933 Berriehill Research Corporation 12.XXX OU-S2001 - 314,914 Subtotal Pass-Through Programs - 449,255 Total Department of Defense - 572,045

DEPARTM ENT OF EDUCATION Direct Programs: US Department of Education 84.324A R324A120272 30,306 70,573 US Department of Education 84.305A R305A140356 359,331 752,886 Subtotal Direct Programs 389,637 823,459

77 Ohio University Schedule of Expenditures of Federal Awards (Continued) Year Ended June 30, 2016

Federal/Pass-Through Pass-Through Federal Agency/Pass-Through Grantor CFDA No. Grant Number Subrecipients Expenditures

RESEARCH AND DEV ELOPM ENT CLUSTER (cont.) DEPARTM ENT OF EDUCATION (cont.) Pass-Through Programs From: University of South Carolina 84.324 R324A120003 $ - $ 23,520 Ohio State University 84.350C R53291 - 21,901 Ohio Department of Education 84.395A ARRA-PO 14666 - (23) Ohio State University 84.395A ARRA-60035141-OU - 69,001 Subtotal Pass-Through Programs - 114,399 Total Department of Education 389,637 937,858

DEPARTM ENT OF ENERGY Direct Programs: US Department of Energy 81.049 DE-FG02-93ER40756 - 370,207 US Department of Energy 81.049 DE-FG02-88ER40387 - 289,371 US Department of Energy 81.049 DE-FG02-02ER46012 - 4,656 US Department of Energy 81.049 DE-FG02-06ER46317 - 165,744 US Department of Energy 81.049 DE-SC0004084 - 4,543 US Department of Energy 81.049 DE-SC0014329 - 147,642 US Department of Energy 81.089 DE-FE0026315 66,980 204,736 US Department of Energy 81.112 DE-NA0001837 - 108,456 US Department of Energy 81.112 DE-NA0002905 - 117,066 US Department of Energy 81.XXX UNKNOWN - 112,154 US Department of Energy 81.135 UT19100 - 22,737 Subtotal Direct Programs 66,980 1,547,312

Pass-Through Programs From: Research Partnership to Secure Energy For America (RPSEA) 81.XXX 11122-60 - 467,978 Argonne National Laboratory 81.XXX 4F-31323 - 9,600 Argonne National Laboratory 81.XXX 6F-31462 - 1,666 Jefferson Science Associates, LLC 81.XXX PO 16-P0303 - 38,267 Subtotal Pass-Through Programs - 517,511 Total Department of Energy 66,980 2,064,823

DEPARTM ENT OF HEALTH AND HUM AN SERV ICES Direct Programs: National Institute of Health National Institute of Health 93.121 1R15DE023668-01A1 - 188,498 National Institute of Health 93.173 R01DC010883 197,534 250,116 National Institute of Health 93.173 1R15DC014587-01 - 48,058 National Institute of Health 93.173 R03DC013388 - 58,884 National Institute of Health 93.213 R01AT006978 - 381,620 National Institute of Health 93.286 1R21EB022356-01A1 - 39,504 National Institute of Health 93.393 R01CA086928 - 14,278 National Institute of Health 93.837 1R56HL119180-01A1 23,304 295,239 National Institute of Health 93.837 1R01HL127766-01A1 38,151 73,193 National Institute of Health 93.846 1R21AR063909-01A1 - 154,750 National Institute of Health 93.846 1R21AR064430-01A1 - 122,051 National Institute of Health 93.847 1R15DK102115-01 - 95,620 National Institute of Health 93.847 7R01DK101711-02 10,051 182,694 National Institute of Health 93.847 7R01DK089182-06 17,191 103,042 National Institute of Health 93.853 1R15NS081629-01A1 - 199,415 National Institute of Health 93.855 1R15AI103887-01A1 - 92,686 National Institute of Health 93.855 1R15AI105749-01A1 32,888 76,575 National Institute of Health 93.855 1R15AI105721-01A1 - 192,149 National Institute of Health 93.859 RGM116098A - 85,330

78 Ohio University Schedule of Expenditures of Federal Awards (Continued) Year Ended June 30, 2016

Federal/Pass-Through Pass-Through Federal Agency/Pass-Through Grantor CFDA No. Grant Number Subrecipients Expenditures

RESEARCH AND DEV ELOPM ENT CLUSTER (cont.) DEPARTM ENT OF HEALTH AND HUM AN SERV ICES (cont.) National Institute of Health 93.866 1R01AG044424-01A1 $ 27,787 $ 300,912 National Institute of Health 93.879 G13LM010878 - 5,359 National Institute of Health 93.989 D43TW008261 55,491 99,873 402,397 3,059,846 Health Resources and Services Administration Health Resources And Services Administration 93.912 D06RH26831-03-00 29,737 184,888 Health Resources And Services Administration 93.912 D04RH28409-01-00 4,078 200,714 33,815 385,602 Subtotal Direct Programs 436,212 3,445,448

Pass-Through Programs From: National Rural Health Association 93.155 UA9RH19333 - 62,281 Brigham And Women's Hospital 93.837 107223 - 1,750 The Trustees of Indiana University 93.847 IN-4685559-OU - 4,703 Boston University 93.847 4500002018.00 - 4,625 New Jersey Institute of Technology 93.853 NP9961095 - 64,964 Subtotal Pass-Through Programs - 138,323 Total Department of Health and Human Services 436,212 3,583,771

DEPARTM ENT OF THE INTERIOR Pass-Through Programs From: Maryland Department of Natural Resources 15.XXX UNKNOWN - 6,609 Bow ling Green State University 15.815 10009292-OU - 14,150 Maryland Department of Natural Resources 15.634 KOOP6400413 - 8,818 Total Department of the Interior - 29,577

DEPARTM ENT OF TRANSPORTATION Direct Programs: Federal Aviation Administration Federal Aviation Administration 20.108 10-G-018 - 77,328 Federal Aviation Administration 20.108 12-G-004 - 407 Federal Aviation Administration 20.XXX DTFAWA-10-D-00020 - 144,097 Federal Aviation Administration 20.XXX DTFAWA-10-D-00020 - 401 Federal Aviation Administration 20.XXX DTFAWA-10-D-00020 - 2,129 Federal Aviation Administration 20.XXX DTFAWA-10-D-00020 - 25,551 Federal Aviation Administration 20.XXX DTFAWA-10-D-00020 - 95,102 Federal Aviation Administration 20.XXX DTFAWA-10-D-00020 - 55,246 Federal Aviation Administration 20.XXX DTFAWA-10-D-00020 - 234,641 Federal Aviation Administration 20.XXX DTFAWA-10-D-00020 - 509,080 Federal Aviation Administration 20.XXX DTFAWA-10-D-00020 - 277,495 - 1,421,477 US Department of Transportation US Department of Transportation 20.724 DTPH56-13-H-CAAP08 - 29,223 Subtotal Direct Programs - 1,450,700

Pass-Through Programs From: Tri Environmental 20.514 UNKNOWN - 29,793 Total Department of Transportation - 1,480,493

79 Ohio University Schedule of Expenditures of Federal Awards (Continued) Year Ended June 30, 2016

Federal/Pass-Through Pass-Through Federal Agency/Pass-Through Grantor CFDA No. Grant Number Subrecipients Expenditures

RESEARCH AND DEV ELOPM ENT CLUSTER (cont.) NATIONAL AERONAUTICS AND SPACE ADM INISTRATION Direct Programs: NASA Shared Services Center 43.003 NNX15AJ69G $ 25,666 $ 61,796 NASA Goddard Space Flight Center 43.001 SCEX22015D - 35,310 NASA Shared Services Center 43.007 NNX13AR39G - 21,915 NASA Langley Research Center 43.001 NNX12AP28A 109,096 156,935 NASA Shared Services Center 43.003 NNX13AM48G 31,609 195,920 NASA Shared Services Center 43.001 NNX16AB04G - 18,477 Subtotal Direct Programs 166,371 490,353

Pass-Through Programs From: Ohio Aerospace Institute 43.008 UNKNOWN - 7,000 Subtotal Pass-Through Programs - 7,000 Total National Aeronautics and Space Administration 166,371 497,353

NATIONAL SCIENCE FOUNDATION Direct Programs: National Science Foundation 47.049 PHY-1308299 - 59,579 National Science Foundation 47.076 DGE-0947813 - 261,340 National Science Foundation 47.076 DGE-1060934 - 37,711 National Science Foundation 47.075 BCS-1010118 - 9,950 National Science Foundation 47.078 ANT-1043576 - 13,728 National Science Foundation 47.074 IOS-1050154 - 5,065 National Science Foundation 47.070 CCF-1054339 - 136,252 National Science Foundation 47.049 DMR-1056493 - 40,442 National Science Foundation 47.050 OCE-1061973 - 5,123 National Science Foundation 47.074 DBI-1062327 - 5,039 National Science Foundation 47.041 CBET-1106118 - 36,751 National Science Foundation 47.049 AST-1109576 - 3,939 National Science Foundation 47.070 IIS-1117489 - 75,609 National Science Foundation 47.049 CHE-1112250 - 4,452 National Science Foundation 47.075 BSC-1127164 - 1,842 National Science Foundation 47.041 CBET-1126350 - 11,343 National Science Foundation 47.041 ECCS-1129010 - (2,002) National Science Foundation 47.078 ANT-1142104 - 24,600 National Science Foundation 47.074 IOS-1145887 - 5,570 National Science Foundation 47.049 CHE-1149367 - 146,032 National Science Foundation 47.076 DUE-1154126 - 98,093 National Science Foundation 47.074 EF-1206750 8,922 42,671 National Science Foundation 47.049 DMR-1206636 - 85,065 National Science Foundation 47.049 PHY-1229373 - 68,784 National Science Foundation 47.075 BCS-1228258 4,417 40,045 National Science Foundation 47.049 CHE-1230961 - 11,256 National Science Foundation 47.041 EEC-1242154 - 37,499 National Science Foundation 47.XXX MCB-1521664 - 11,987 National Science Foundation 47.075 BCS-125070 - 780 National Science Foundation 47.050 EAR-1305610 - 21,973 National Science Foundation 47.050 EAR-1305609 - 5,587 National Science Foundation 47.070 CNS-1318981 - 37,591 National Science Foundation 47.074 DBI-1337443 - 18,656 National Science Foundation 47.050 PLR-1341621 - 90,062 National Science Foundation 47.050 PLF-1341602 - 159,173 National Science Foundation 47.041 ECCS-1342657 - 33,705

80 Ohio University Schedule of Expenditures of Federal Awards (Continued) Year Ended June 30, 2016

Federal/Pass-Through Pass-Through Federal Agency/Pass-Through Grantor CFDA No. Grant Number Subrecipients Expenditures

RESEARCH AND DEV ELOPM ENT CLUSTER (cont.) NATIONAL SCIENCE FOUNDATION (cont.) National Science Foundation 47.050 EAR-1349825 $ - $ 62,059 National Science Foundation 47.049 DMS-1418787 - 75,958 National Science Foundation 47.070 CCF-1420718 - 34,498 National Science Foundation 47.049 PHY-1458244 - 172,627 National Science Foundation 47.076 DUE-1452606 - 12,603 National Science Foundation 47.074 DBI-1455554 - 71,437 National Science Foundation 47.074 IOS-1456810 - 15,349 National Science Foundation 47.074 IOS-1456503 - 49,737 National Science Foundation 47.049 DMR-1506836 - 22,088 National Science Foundation 47.049 DMR-1508325 - 116,552 National Science Foundation 47.049 DMR-1507670 - 127,761 National Science Foundation 47.049 CHE-1507321 - 66,296 National Science Foundation 47.070 CCF-1513606 - 40,241 National Science Foundation 47.075 SES1522924 - 34,030 National Science Foundation 47.049 PHY-1306137 - 101,388 National Science Foundation 47.049 PHY-1306376 - 170,668 National Science Foundation 47.049 DMR-1108285 - 6,302 National Science Foundation 47.074 IOS-1146789 - 55,336 National Science Foundation 47.041 IIP-1362075 - 96,731 National Science Foundation 47.041 CBET-0547165 - 588 National Science Foundation 47.049 PHY 1614479 - 2,002 Subtotal Direct Programs 13,339 2,979,543

Pass-Through Programs From: Norfolk State University 47.049 F1040050 - 16,141 Rochester Institute of Technology 47.076 PO 164785 - 745 Old Dominion University Research Foundation 47.075 16-218-100580-010 - 137,118 Subtotal Pass-Through Programs - 154,004 Total National Science Foundation 13,339 3,133,547

TOTAL RESEARCH AND DEVELOPMENT CLUSTER 1,072,539 12,379,412

CHILD NUTRITION CLUSTER DEPARTM ENT OF AGRICULTURE Pass-Through Programs From: Ohio Department of Education 10.559 UNKNOWN - 28,598

TOTAL CHILD NUTRITION CLUSTER - 28,598

ECONOMIC DEVELOPMENT CLUSTER Pass-Through Programs From: Appalachian Partnership for Economic Grow th 11.307 TECG20140295 - 1,143

TOTAL ECONOMIC DEVELOPMENT CLUSTER - 1,143

FISH AND WILDLIFE CLUSTER DEPARTM ENT OF THE INTERIOR Pass-Through Programs From: Commonw ealth of Kentucky Department of Fish And Wildlife Resources 15.605 UNKNOWN - 880

TOTAL FISH AND WILDLIFE CLUSTER - 880

81 Ohio University Schedule of Expenditures of Federal Awards (Continued) Year Ended June 30, 2016

Federal/Pass-Through Pass-Through Federal Agency/Pass-Through Grantor CFDA No. Grant Number Subrecipients Expenditures

HIGHWAY PLANNING AND CONSTRUCTION CLUSTER DEPARTM ENT OF TRANSPORTATION Pass-Through Programs From: Ohio Department of Transportation 20.205 27233 $ - $ 31,592 Ohio Department of Transportation 20.205 19137 - 28,022 Ohio Department of Transportation 20.205 27225 - 27,445 Ohio Department of Transportation 20.205 27043 398 31,443 University of Akron 20.205 OU-01957 - 9,067 Ohio Department of Transportation 20.205 27236, 27236A - 102,345 Ohio Department of Transportation 20.205 27234 16,049 33,005 University of Akron 20.205 02336-OU - 7,647 Fayette County Engineer's Office 20.205 FAY-CR4-1.60 - 10,010 Ohio Department of Transportation 20.205 27231 - 45,304 Ohio Department of Transportation 20.205 25160 11,479 29,906 Ohio Department of Transportation 20.205 25364 97,265 143,140 Ohio Department of Transportation 20.205 26651 - 20,575 Ohio Department of Transportation 20.205 26656 - 214,584 Ohio Department of Transportation 20.205 26608 12,331 65,372 Ohio Department of Transportation 20.205 26620 - 122,995 Ohio Department of Transportation 20.205 26595 23,561 57,617 Ohio Department of Transportation 20.205 26597 25,752 87,689 Ohio Department of Transportation 20.205 26830 - 42,536 Texas A&M University 20.205 26923 - 52,001 Ohio Department of Transportation 20.205 27180 19,792 77,139 Ohio Department of Transportation 20.205 27695 - 9,696 Iow a State University 20.205 26586 - 3,063

TOTAL HIGHWAY PLANNING AND CONSTRUCTION CLUSTER 206,627 1,252,193

SPECIAL EDUCATION (IDEA) CLUSTER DEPARTM ENT OF EDUCATION Pass-Through Programs From: University of Dayton Research Institute 84.027 RSC15087 - 76,606 University of Dayton Research Institute 84.027 RSC16016 - 21,080 Ohio Department of Education 84.027A PO 13944 - 13,944

TOTAL SPECIAL EDUCATION (IDEA) CLUSTER - 111,630

TRIO CLUSTER DEPA RTMENT OF EDUCA TION Direct Programs: US Department of Education 84.042A P042A100511-14 - 21,927 US Department of Education 84.042A P042A150073 - 271,622 US Department of Education 84.047A P047A121446-15/16 - 348,769

TOTAL TRIO CLUSTER - 642,318

TANF CLUSTER DEPARTM ENT OF HEALTH AND HUM AN SERV ICES Pass-Through Programs From: Battelle For Kids 93.558 JFSFTF15 - (96)

TOTAL TANF CLUSTER - (96)

82 Ohio University Schedule of Expenditures of Federal Awards (Continued) Year Ended June 30, 2016

Federal/Pass-Through Pass-Through Federal Agency/Pass-Through Grantor CFDA No. Grant Number Subrecipients Expenditures

M EDICAID CLUSTER DEPARTM ENT OF HEALTH AND HUM AN SERV ICES Pass-Through Programs From: Ohio State University 93.778 60051005 $ - $ 210,000 Ohio State University 93.778 60051005 - 342,671 Ohio State University 93.778 60051005 - 93,071 Ohio Department of Jobs and Family Services 93.778 G1415-06-0354 - 33 Ohio Department of Jobs and Family Services 93.778 G1617-06-0273 - 862 Ohio State University 93.778 60051005 - 26,344 Northeast Ohio Medical University 93.778 60051005 - 5,749

TOTAL MEDICAID CLUSTER - 678,730

OTHER PROGRAM S CORPORATION FOR NATIONAL AND COM M UNITY SERV ICE Pass-Through Programs From: Ohio Commission on Service and Volunteerism 94.006 15AFH-1502-16-OC068 - 289,553 Ohio Commission on Service and Volunteerism 94.006 12AFH-1502-15-OC068 - 6,289 Rural Action Inc 94.006 UNKNOWN - 1,100 Total Corporation for National and Community Service - 296,942

DEPARTM ENT OF AGRICULTURE Pass-Through Programs From: Ohio State University 10.500 2012-48703-20123 - 135,304 Appalachian Partnership for Economic Grow th 10.773 TECG20140295 - 1,143 Total Department of Agriculture - 136,447

DEPARTM ENT OF COM M ERCE Direct Programs: National Institute of Standards and Technology 11.609 70NANB14H052 17,117 144,730 17,117 144,730 Pass-Through Programs From: Bow ling Green State University 11.303 10008059-OU - 66,514 Purdue University 11.303 4112-66291 - 5,938 Appalachian Partnership for Economic Grow th 11.611 TECG20140295 - 3,497 Subtotal Pass-Through Programs - 75,949 Total Department of Commerce 17,117 220,679

DEPARTM ENT OF DEFENSE Direct Programs: National Security Agency 12.900 H98230-16-1-0139 - 3,564 - 3,564 Pass-Through Programs From: Ohio Development Services Agency 12.002 UNKNOWN - 308,742 Total Department of Defense - 312,306

83 Ohio University Schedule of Expenditures of Federal Awards (Continued) Year Ended June 30, 2016

Federal/Pass-Through Pass-Through Federal Agency/Pass-Through Grantor CFDA No. Grant Number Subrecipients Expenditures

OTHER PROGRAM S (cont.) DEPARTM ENT OF EDUCATION Direct Programs: US Department of Education 84.021A P021A1550027 $ - $ 44,000 Subtotal Direct Programs - 44,000

Pass-Through Programs From: Southern Local School District (Perry County) 84.010 UNKNOWN - 8,223 Southern Local School District (Perry County) 84.010 UNKNOWN - 39,288 Western Local School District 84.010 UNKNOWN - 3,064 Bellaire Local School District 84.215E UNKNOWN - 5,750 Federal Hocking Local School District 84.287 6630 - 130,833 Trimble Local School District 84.287 6934 - 186,130 Southern Local School District (Perry County) 84.287 8062 - 128,226 Southern Local School District (Perry County) 84.287 8998 - 174,656 Alexander Local School District 84.287 9027 - 181,161 Federal Hocking Local School District 84.287 9112 - 169,870 Athens City School District 84.287 6949 - 172,359 Gallia-Vinton Educational Service Center 84.366 UNKNOWN - 5,646 Gallia-Vinton Educational Service Center 84.366B UNKNOWN - 21,689 Ohio Department of Higher Education 84.367 UNKNOWN - (230) Ohio Department of Higher Education 84.367 UNKNOWN - 143,894 Ohio Department of Higher Education 84.367 15.37 - 33,564 Ohio Department of Higher Education 84.367 14-16 - 30,535 Ohio Department of Higher Education 84.367B 15-38 - 2,410 National Writing Project Corporation 84.376D UNKNOWN - (456) Miami University 84.395 ARRA-GO2121-OU - 14,063 Ohio Department of Higher Education 84.334 UNKNOWN - 8,400 Subtotal Pass-Through Programs - 1,459,075 Total Department of Education - 1,503,075

DEPARTM ENT OF ENERGY Direct Programs: US Department of Energy 81.214 DE-EM0000357 - 267,633 US Department of Energy 81.214 DE-EM0004147 - 715 Subtotal Direct Programs - 268,348

Pass-Through Programs From: Pacific Northw est National Laboratory 81.XXX 236339 and 236340 - 16,381 Subtotal Pass-Through Programs - 16,381 Total Department of Energy - 284,729

DEPARTM ENT OF HEALTH AND HUM AN SERV ICES Direct Programs: Centers for Disease Control Centers for Disease Control and Prevention 93.262 2T03OH009841-04 - 82,842 - 82,842 Health Resources and Services Administration Health Resources and Services Administration 93.243 G02HP27951 15,000 110,074 Health Resources and Services Administration 93.358 A10HP25166 - 357,136 - 467,210 Subtotal Direct Programs 15,000 550,052

84 Ohio University Schedule of Expenditures of Federal Awards (Continued) Year Ended June 30, 2016

Federal/Pass-Through Pass-Through Federal Agency/Pass-Through Grantor CFDA No. Grant Number Subrecipients Expenditures

OTHER PROGRAMS (cont.) DEPARTMENT OF HEALTH AND HUMAN SERVICES (cont.) Pass-Through Programs From: Ohio Department of Jobs and Family Services 93.086 C-1617-17-0531 $ - $ 4,066 Ohio Department of Health 93.092 DOH01-0000043298 33,415 103,999 The University of Toledo 93.107 F2016-88 - 99,478 Ohio Department of Alcohol and Drug Addiction 93.243 UNKNOWN - 38,931 Ohio Department of Health 93.243 H79SM059345 - 724 Ohio Department of Mental Health 93.243 99-60205-SSHS-P-15-1470/1547 3,686 63,454 Ohio Department of Mental Health 93.243 99-13510-SPFPFS-P-15-15151 - 403,572 Ohio Department of Mental Health 93.243 99-13510-PREV-P-16-162020 - 32,394 Fairfield County Family, Adult & Children First Council 93.276 UNKNOWN - 4,022 University of South Carolina 93.283 15-2767 2,019 311,576 Ohio Department of Health 93.283 UNKNOWN - 3,289 Ohio Department of Jobs And Family Services 93.590 G-1617-22-0501 - 4,294 Ohio Department of Jobs and Family Services 93.590 G-1617-22-0533 - 402 Ohio Department of Jobs and Family Services 93.645 G1415-06-0354 - 1,526 Ohio Department of Jobs and Family Services 93.645 G1617-06-0273 - 16,761 Ohio Department of Jobs and Family Services 93.658 G1415-06-0354 - 1,568 Ohio Department of Jobs and Family Services 93.658 G1617-06-0273 - 18,287 Ohio Department of Jobs and Family Services 93.659 G1415-06-0354 - 814 Ohio Department of Jobs and Family Services 93.659 G1617-06-0273 - 26,784 Ohio Department of Jobs and Family Services 93.667 G1617-06-0273 - 86 National AHEC Organization 93.733 UNKNOWN - 12,286 Athens City-County Health Department 93.757 UNKNOWN - 2,000 Washington County Health Department 93.757 UNKNOWN - 2,000 Trinity Hospital Twin City 93.910 UNKNOWN - 4,193 Trinity Hospital Twin City 93.912 UNKNOWN - (13) Trinity Hospital Twin City 93.912 UNKNOWN - 3,396 Ohio Department of Health 93.994 UNKNOWN - 46,283 University of South Florida 93.XXX 175797 - 505 Subtotal Pass-Through Programs 39,120 1,206,677 Total Department of Health and Human Services 54,120 1,756,729

DEPARTMENT OF JUSTICE Direct Programs: US Department of Justice 16.525 2009-WA-AX-0003 - 17,041 Subtotal Direct Programs - 17,041

Pass-Through Programs From: Ohio Attorney General's Office 16.575 UNKNOWN - 126,469 Ohio Department of Youth Services 16.816 5AS3550 - 1,805 Turning Point Applied Learning Ctr 16.817 UNKNOWN 3,965 14,857 Subtotal Pass-Through Programs 3,965 143,131 Total Department of Justice 3,965 160,172

DEPARTMENT OF LABOR Direct Programs: US Department of Labor 17.268 HG-22714-12-60-A-39 - 1,394,399

Pass-Through Programs From: Appalachian Partnership for Economic Growth 17.268 TECG20140295 - 1,143 Total Department of Labor - 1,395,542

85 Ohio University Schedule of Expenditures of Federal Awards (Continued) Year Ended June 30, 2016

Federal/Pass-Through Pass-Through Federal Agency/Pass-Through Grantor CFDA No. Grant Number Subrecipients Expenditures

OTHER PROGRAM S (cont.) STATE OCOG REV ENUE Direct Programs: US Department of State 19.401 S-ECA GD-13-CA -100(CD) $ - $ 201,330 US Department of State 19.451 S-ECAGD-14-CA-1116 - 236,851 US Department of State 19.401 S-ECAGD-16-CA-1049 - 35,641 Subtotal Direct Programs - 473,822

Pass-Through Programs From: Institute Of International Education 19.400 UNKNOWN - 140,544 Total Department of State - 614,366 DEPARTM ENT OF TRANSPORTATION Direct Programs: Federal Aviation Administration 20.106 3-39-0006-019-2014 - 19,434 Federal Aviation Administration 20.106 3-39-0006-020-2015 - 60,995 Total Department of Transportation - 80,429

DEPARTM ENT OF V ETERANS AFFAIRS Direct Programs: Veterans Affairs Medical Center 64.XXX UNKNOWN 12,690 12,690 Total Department of Veterans Affairs 12,690 12,690

ENV IRONM ENT AL PROT ECT ION AGENCY Pass-Through Programs From: Ohio Environmental Protection Agency 66.605 EPA01-000005312 - 39,829 Ohio Environmental Protection Agency 66.460 14(h)EPA-32 33,595 77,977 Total Environmental Protection Agency 33,595 117,806

NATIONAL ENDOWM ENT FOR THE ARTS Pass-Through Programs From: Ohio Humanities Council 45.163 QU16-005 - 2,919 Total National Endow ment for the Arts - 2,919

SM ALL BUSINESS ADM INISTRATION Pass-Through Programs From: Ohio Development Services Agency 59.037 OSBG-16-324 - 94,262 Ohio Development Services Agency 59.037 OSBG-15-224C - 41,412 Appalachian Partnership for Economic Grow th 59.037 UNKNOWN - 57,543 Ohio Development Services Agency 59.037 OSBG-16-324B/OSBG-16-324C - 5,346 Total Small Business Administration - 198,563

TOTAL OTHER PROGRAMS 121,487 7,093,394

GRAND TOTAL FEDERAL AWARDS $ 1,400,653 $ 291,614,206

86 Ohio University Notes to Schedule of Expenditures of Federal Awards Year Ended June 30, 2016

Note 1 - Basis of Presentation The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal grant activity of Ohio University under programs of the federal government for the year ended June 30, 2016. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the “Uniform Guidance”). Because the Schedule presents only a selected portion of the operations of Ohio University, it is not intended to and does not present the financial position, changes in net position, or cash flows of Ohio University. Note 2 - Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-21, Cost Principles for Educational Institutions, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where available. The University has elected not to use the 10-percent de minimus indirect cost rate to recover indirect costs as allowed under the Uniform Guidance. Note 3 - Noncash Assistance During the year ended June 30, 2016, Ohio University did not receive any nonmonetary assistance. Note 4 - Catalog of Federal Domestic Assistance (CFDA) Numbers All programs with identifiable CFDA numbers have been listed separately. Grant numbers have been provided for several programs for which CFDA numbers were not available. Note 5 - Adjustments and Transfers As allowable and in accordance with federal regulations issued by the U.S. Department of Education, in the year ended June 30, 2016, the University expended $129,556 of the 2014-2015 Federal Work Study (FWS) Program (84.033) award carried forward to the 2015-2016 award year. The University also carried forward $102,939 of the 2015-2016 FWS Program (84.033) to be expended in the 2016-2017 award year.

87 Ohio University Notes to Schedule of Expenditures of Federal Awards Year Ended June 30, 2016

Note 5 - Adjustments and Transfers (Continued) During the year ended June 30, 2016, the University transferred $314,533 of the 2015-2016 FWS Program (84.033) award to the Supplemental Educational Opportunity Grant (SEOG) Program (84.007). In addition, the University did not expend any of the 2014-2015 SEOG Program (84.007) award carried forward to the 2015-2016 award year. The University did not carry forward any of the 2015- 2016 SEOG Program (84.007) to be expended in the 2016-2017 award year. Note 6 - Loans Balances Loans outstanding at the beginning of the year and loans made during the year are included in the federal expenditures presented in the schedule of expenditures of federal awards. The balances of loans outstanding at June 30, 2016 consist of the following: Loan Cluster/Program Title CFDA Number Balances Federal Perkins Loans Outstanding 84.038 $ 9,618,658 Primary Care Loans (HPSL) Outstanding 93.342 1,711,401 Disadvantaged Student Loans Outstanding 93.342 2,125,048 Total $13,455,107

88 Ohio University Schedule of Findings and Questioned Costs Year Ended June 30, 2016

Section I - Summary of Auditor's Results Financial Statements Type of auditor's report issued: Unmodified Internal control over financial reporting: ! Material weakness(es) identified? Yes X No ! Significant deficiency(ies) identified that are not considered to be material weaknesses? Yes X

Noncompliance material to financial statements noted? Yes X No Federal Awards Internal control over major programs: ! Material weakness(es) identified? Yes X No ! Significant deficiency(ies) identified that are not considered to be material weaknesses? Yes X

Type of auditor's report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with Section 2 CFR 200.516 (a)? Yes X No Identification of major programs:

CFDA Numbers Name of Federal Program or Cluster 84.007, 84.033, 84.038, 84.063, 84.268, 84.379, and 93.342 Student Financial Assistance Cluster Various Research and Development Cluster 20.205 Highway Planning and Construction Cluster Dollar threshold used to distinguish between type A and type B programs: $750,000 Auditee qualified as low-risk auditee? X Yes No

Section II - Financial Statement Audit Findings None Section III - Federal Program Audit Findings None 89 Ohio University National Collegiate Athletics Association

Agreed-upon Procedures Report Related to Constitution 3.2.4.15 June 30, 2016

Ohio University National Collegiate Athletics Association Report Contents

Report Letter 1-15

Intercollegiate Athletics Program Statement of Revenue and Expenses 16

Notes to Intercollegiate Athletics Program Statement of Revenue and Expenses 17-19

Appendix A 20

Independent Accountant’s Report on the Application of Agreed-upon Procedures

Dr. Roderick J. McDavis, President Ohio University Athens, Ohio 45701

We have performed the procedures enumerated below, which were agreed to by the president of Ohio University (the “University”), solely to assist you in evaluating whether the accompanying Intercollegiate Athletics Program statement of revenue and expenses (the “Statement”) of Ohio University is in compliance with the National Collegiate Athletics Association (NCAA), Constitution 3.2.4.15 for the year ended June 30, 2016. Ohio University’s management is responsible for the statement of revenue and expenses and the Statement’s compliance with those requirements. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.

Agreed-upon Procedures Related to the Statement of Revenue and Expenses

The procedures that we performed and our results are as follows:

Internal Control Structure

A. In preparation for our procedures related to the University’s internal control structure:

1) We met with the director of intercollegiate athletics and inquired about the general control environment over intercollegiate athletic finances, the level of control consciousness in the University, the competence of personnel, and the protection of records and equipment.

2) We obtained the audited financial statements for the year ended June 30, 2016 and any additional reports regarding internal controls and any corrective action taken in response to comments concerning the internal control structure.

3) We obtained any documentation of the accounting systems and procedures unique to the Intercollegiate Athletics Department.

1 Dr. Roderick J. McDavis, President Ohio University

4) Cash disbursements and athletic employee payroll are addressed in connection with the audit of the University’s financial statements. The following control environment and accounting systems are (a) unique to the intercollegiate athletics and (b) have not been addressed in connection with the audit of the University’s financial statements. We performed the following procedure:

Procedure: We selected three games and traced ticket collections per the receipting process for such games to the reconciliation and documentation of the related cash deposit amount with the bank.

Results: We concluded that the Intercollegiate Athletics Department’s internal control structure was the same as the University’s internal control for the cash disbursement, general cash receipt, and employee pay processes. The only procedure listed that is unique to intercollegiate athletics is the ticket collection receipt process. We selected three football games during the year and agreed the gate sales for such events, as documented by the University’s ticket reconciliation procedures, to deposit slips of the related cash deposit amount with the bank. The games selected for testing were against Marshall University on September 12, 2015, against Miami University on October 10, 2015, and against Ball State University on November 17, 2015. We noted no exceptions other than an $80 variance between the seller sheet and the amount of the cash deposit for the game against Miami University.

NCAA Reporting

B. Procedure: The financial report submission to the NCAA is now due on January 17, 2017. We obtained the financial data detailing operating revenue, expenses, and capital related to the University’s intercollegiate athletics program that will be submitted to the NCAA and agreed the amounts to the Intercollegiate Athletics Program statement of revenue and expenses included in the agreed-upon procedures for the reporting period.

Results: We noted no exceptions.

C. Procedure: We agreed the sports sponsored reported in the NCAA Membership Financial Reporting System to the squad lists of the University. The NCAA Membership Financial Reporting System populates the sports from the NCAA membership database as they are reported by the University.

Results: We noted no discrepancies in the sports sponsored between the NCAA Membership Financial Reporting System and the squad lists.

2 Dr. Roderick J. McDavis, President Ohio University

D. Procedure: We obtained the University’s Sports Sponsorship and Demographics Forms Report for the reporting year. We agreed the number of contests and number of participants for each sport to supporting documents. We agreed the sports reported as countable for revenue distribution purposes to the NCAA Membership Financial Reporting System.

Results: We noted no discrepancies in the countable sports for funding purposes between the NCAA Membership Financial Reporting System and the supporting documentation.

Notes and Disclosures

E. Procedure: We obtained and described the University’s policies and procedures for acquiring, approving, depreciating, and disposing of intercollegiate athletics-related assets in Note 2. We agreed the schedule to the University’s general ledger. We obtained repayment schedules for all outstanding intercollegiate athletics debt maintained by the University during the reporting period. We recalculated annual maturities (consisting of principal and interest) provided in the schedules obtained and agreed the total annual maturities to supporting documentation and the University’s general ledger, as applicable. The repayment schedule is disclosed in Note 3.

Results: We noted no exceptions.

F. Procedure: We noted that changes in loan, endowment, or plant funds related to intercollegiate athletics were not included in the Statement.

1) We obtained and disclosed significant additions to restricted funds related to intercollegiate athletics, as well as significant changes to endowment and plant funds. Significant is defined as exceeding 10 percent of total revenue or expense in the Statement.

2) We obtained and disclosed the value of endowments at the fiscal year end that are dedicated to the sole support of athletics.

3) We obtained and disclosed the value of all pledges at the fiscal year end that support athletics.

4) We obtained and disclosed the athletics department fiscal year-end fund balance.

Results: We disclosed all items in Note 4.

Statement of Revenue and Expenses

G. Procedure: We obtained the Intercollegiate Athletics Program statement of revenue and expenses for the reporting period, prepared by management, and agreed all amounts back to the University’s general ledger. 3 Dr. Roderick J. McDavis, President Ohio University

Results: We noted no exceptions.

H. Procedure: We compared each major revenue and expense account over 10 percent of the total revenue or expenses to prior period amounts and budget estimates. We obtained and documented an understanding of any variations over the lesser of $1 million or 10 percent.

Results: See Appendix A.

I. Procedure: We performed additional procedures on the following revenue and expense categories unless the specific reporting category is less than 0.5 percent of total revenue or expenses.

Results: See procedures below.

Revenue

J. Procedure: We agreed each revenue reported in the Statement during the reporting period to supporting schedules provided by the University.

Results: The supporting schedules provided by the University agreed to the Statement without exception.

1) Ticket Sales Procedure: We agreed tickets sold during the reporting period, complimentary tickets provided during the reporting period, and unsold tickets to the related revenue reported by the University in the Statement and related attendance figures and recalculated totals.

Results: We noted no exceptions other than a $60 unexplained variance for football.

2) Student Fees Procedure: We agreed student fees reported by the University in the Statement for the reporting period to student enrollments during the same reporting period. We obtained the University’s methodology for allocating student fees to intercollegiate athletics programs and recalculated totals.

Results: We noted no exceptions.

3) Indirect Institutional Support Procedure: We agreed the indirect institutional support recorded by the University during the reporting period with expense payments, cost allocation detail, and other corroborative supporting documentation and recalculated totals.

4 Dr. Roderick J. McDavis, President Ohio University

Results: We recalculated allocations and agreed each sport’s total expenditures to the general ledger. We noted no exceptions.

4) Guarantees Procedure: We inquired of management and the University does not receive settlement reports for away games. There were only two contractual agreements pertaining to revenue derived from guaranteed contests during the reporting period. We agreed the contractual agreements to the University’s general ledger and/or the Statement. We also recalculated totals.

Results: We agreed the contractual agreements for football games against the University of Idaho on September 3, 2015 and University of Minnesota on September 26, 2015 to the general ledger and the total to the Statement. We noted no exceptions.

5) Contributions Procedure: We obtained supporting documentation for each contribution of monies, goods, or services received directly by an intercollegiate athletics program for any affiliated or outside organization, agency, or group of individuals that constitute 10 percent or more of all contributions received for intercollegiate athletics during the reporting periods. We disclosed the source and dollar value of these contributions in the report.

Results: We obtained the signed gift agreements and agreed to the bank deposit and the general ledger. We noted no exceptions. See Note 1 for contributions over 10 percent.

6) NCAA Distributions Procedure: We agreed the amounts recorded in the revenue and expense reporting to general ledger detail for NCAA distributions and other corroborative supporting documents and recalculated totals.

Results: We agreed all NCAA distributions to memos and correspondence received from the NCAA with the distributions. We also agreed each to the general ledger detail and the total to the Statement and recalculated totals. We noted no exceptions.

7) Conference Distributions Procedure: We obtained and inspected all agreements related to the University’s conference distributions and participation in revenue from tournaments during the reporting period to gain an understanding of the relevant terms and conditions. We compared the related revenue to the University’s general ledger and/or the Statement.

5 Dr. Roderick J. McDavis, President Ohio University

Results: We agreed all conference distributions to copies of checks and schedules from the conference and agreed each to the general ledger detail and the total to the Statement. The two conference distributions tested included the MAC 2015/2016 member distribution for $1,200,000 with a general ledger date of June 14, 2016, and the distribution of $11,550 with a general ledger date of October 30, 2015 for hosting the women’s volleyball championship. We noted no exceptions.

8) Program Sales, Concessions, Novelty Sales, and Parking Procedure: We agreed related revenue to the University’s general ledger detail of program sales, concessions, novelty sales, and parking as well as other corroborative supporting documents and recalculated totals.

Results: We obtained the program sales reconciliation from the women’s volleyball game versus Ball State on October 16, 2015, the AVI Food Systems Commission Reconciliation for November 2015 concessions, the fiscal year 2016 online apparel commissions report from Follett Higher Education Group, and the January 2016 Revenue Share Payment Report from Fanatics for online merchandise sales, and agreed related revenue to the general ledger detail. We noted no exceptions.

9) Royalties, Licensing, Advertisements, and Sponsorships Procedure: We obtained and inspected all agreements related to the University’s participation in revenue from royalties, advertisements, and sponsorships during the reporting period. We agreed the related revenue to the University’s general ledger and/or the Statement. We also recalculated totals.

Results: We obtained the royalty agreement with Licensing Resource Group, pouring rights agreement with Pepsi, advertising agreement with IMG, and sponsorship agreements with OhioHealth and Russell Brands. We agreed related revenue to the general ledger detail and the Statement. We noted no exceptions.

10) Sports Camp Revenue Procedure: We inquired with management and the University does not have sports camp contracts. University sports camps are conducted by the coaches. We obtained a list of all sports camps conducted during the reporting period. We selected a sports camp from softball, men’s basketball, and football. We obtained schedules of camp participants. We selected a sample of three individual camp participant cash receipts (one from each camp) from the schedule of sports-camp participants and agreed each selection to the University’s general ledger, and recalculated totals.

6 Dr. Roderick J. McDavis, President Ohio University

Results: We selected one camp participant each from the schedule of camp participants for the Softball Elite Skills Camp on June 15, 2016, the Men’s Basketball Team Camp conducted from June 24 through June 26, 2016, and the Football Youth Camp held June 1 to June 2, 2016. We agreed each camp participant’s registration receipt to the related deposit and general ledger. We noted no exceptions. The samples tested are listed below.

Participant Camp Deposit Date Registration Fee 1 Softball - Elite Skills Camp 6/16/2016 $ 65 2 Men's Basketball Team Camp 6/13/2016 215 3 Football - Youth Camp 6/3/2016 70

11) Athletics Restricted Endowment and Investment Income Procedure: We selected three endowments and obtained and inspected the related endowment agreements. We agreed the classification and use of endowment and investment income reported in the Statement during the reporting period to the uses of income defined within the related endowment agreement. We also recalculated totals.

Results: We reviewed the expenses from the selected endowments and agreed the classification and use of endowment and investment income to the guidelines in the endowment agreements. We noted no exceptions.

12) Bowl Revenue Procedure: We obtained and inspected agreements related to the University’s revenue from post-season bowl participation. We agreed the related revenue to the University’s general ledger and/or the Statement and recalculated totals.

Results: We obtained the Mid-American Conference 2015/2016 Football Bowl Stipend report. We agreed the total reported for expense reimbursements to the related deposit and general ledger. We also obtained the Event Audit Report from the ticketing system for the football bowl game and agreed to total bowl game ticket sales recorded in the general ledger. We agreed the total of bowl game expense reimbursements and ticket sales to the Statement. We noted no exceptions.

13) Other Procedure: We agreed other revenue to the University’s general ledger and/or the Statement and recalculated totals.

Results: We agreed marketing tent rental revenue in the amount of $6,030 for events held on September 11, 2015, September 18, 2015, and October 15, 2015 to deposit supporting documentation and the general ledger. We agreed total other revenue to the Statement. We noted no exceptions.

7 Dr. Roderick J. McDavis, President Ohio University

Expenses

K. Procedure: We agreed each expense reported in the Statement during the reporting period to supporting schedules provided by the University.

Results: The supporting schedules provided by the University agreed to the Statement without exception.

We performed the following procedures for the indicated expense category:

1) Athletic Student Aid Procedure: We selected a sample of 80 students from the listing of institutional student aid recipients during the reporting period (no less than 20 percent of total student athletes since the University does not use the NCAA’s Compliance Assistant software to prepare athletic aid detail). We obtained individual student- account detail for each selection and agreed total aid allocated from the related aid award letter to the student’s account and recalculated totals.

a. We performed a check of each student selected to ensure that their information was accurately entered directly into the NCAA Membership Financial Reporting System using the following criteria:

i. The equivalency value for each student-athlete in all sports, including head-count sports, need to be converted to a full-time equivalency value. The full-time equivalency value is calculated using the athletic grant amount reported on the squad list as the numerator and the full grant amount which is the total cost for tuition, fees, books, and room and board for an academic year as the denominator. If using the NCAA Compliance Assistant software, this equivalency value should already be calculated on that squad list labeled “Rev. Dist. Equivalent Award”.

ii. A student-athlete can only be included in one sport. NCAA Compliance Assistant software will place an asterisk by the student- athlete within the sport that is not countable toward grants-in-aid revenue distribution per sport hierarchy listed in the Division I manual.

iii. All equivalency calculations should be rounded to two decimal places. The NCAA Compliance Assistant software and the online summary form will automatically round to two decimal places.

iv. The full grant amount should be the full cost of tuition for an academic year, not semester. The “Period of Award” column on the NCAA Compliance Assistance squad list can identify those student-athletes receiving aid for a particular semester.

8 Dr. Roderick J. McDavis, President Ohio University

v. If a sport is discontinued and the grants are still being honored by the institution, the grants are included in the student-athlete aid for revenue distribution purposes.

vi. Student-athletes receiving athletic aid who have exhausted their athletic eligibility or are inactive due to medical reasons should be included in the student-athlete aid total and correctly noted on the squad list.

vii. Only athletic aid awarded in sports in which the NCAA conducts championship competitions, emerging sports for women, and FBS football should be included in the calculations.

b. We recalculated totals for each sport and overall.

Results: We noted no exceptions. We noted for student number 62 below, that the student quit the team prior to the disbursement of athletic aid.

The students’ accounts tested are summarized below:

Student Amount Student Amount Student Amount Student Amount Tested Disbursed Tested Disbursed Tested Disbursed Tested Disbursed

1 $ 27,177 21$ 25,003 41 24,998$ 61$ 35,271 2 35,458 22 17,945 42 26,482 62 - 3 26,494 23 34,382 43 36,509 63 35,446 4 37,180 24 18,089 44 35,446 64 20,120 5 29,394 25 26,322 45 13,206 65 15,492 6 15,946 26 26,268 46 9,000 66 19,824 7 18,167 27 15,950 47 13,241 67 23,000 8 35,446 28 26,482 48 22,476 68 10,772 9 25,106 29 32,449 49 26,383 69 35,446 10 21,184 30 15,000 50 25,890 70 26,482 11 31,304 31 26,474 51 18,805 71 26,482 12 35,446 32 24,812 52 3,558 72 25,618 13 27,396 33 9,000 53 26,284 73 9,948 14 37,180 34 25,418 54 16,750 74 3,000 15 13,300 35 5,000 55 11,600 75 26,494 16 15,300 36 35,465 56 11,836 76 11,600 17 35,446 37 26,482 57 26,460 77 12,186 18 35,458 38 13,247 58 23,200 78 32,982 19 35,327 39 10,500 59 9,500 79 17,729 20 37,192 40 23,790 60 4,006 80 15,160

9 Dr. Roderick J. McDavis, President Ohio University

2) Guarantees Procedure: We inquired of management and the University does not prepare settlement reports for home games. We obtained and inspected three contractual agreements pertaining to expenses recorded by the University from guaranteed contests during the reporting period. We agreed related amounts expensed by the University during the reporting period to the University’s general ledger and/or the Statement. We also recalculated totals.

Results: We obtained and inspected the contractual agreements for football against Marshall University on September 12, 2015, football against Southeastern Louisiana University on September 19, 2015, and men’s basketball against Tennessee State University on November 16, 2015, and contractual amounts of $50,000, $330,000, and $85,000, respectively, which agreed to expenses recorded in the University’s general ledger. We noted no exceptions.

3) Coaching Salaries, Benefits, and Bonuses Paid by the Institution and Related Entities Procedure: We obtained and inspected a listing of coaches employed by the University and related entities during the reporting period. We selected a sample of five coaches’ contracts that includes football and men’s and women’s basketball from the above listing. We agreed the financial terms and conditions of each selection to the related coaching salaries, benefits, and bonuses recorded by the University and related entities in the Statement during the reporting period. We obtained and inspected payroll summary registers for each selection. We agreed related payroll summary registers to the related coaching salaries, benefits, and bonuses paid by the University recorded by the University in the Statement during the reporting period, and recalculated totals. We also compared and agreed the totals recorded to any employment contracts executed for the sample selected.

Results: We selected five coaches’ contracts that included football, men’s basketball, women’s basketball, and softball. We agreed the financial terms and conditions of each to the related coaching salaries, benefits, and bonuses recorded by the University on the payroll detail. We agreed payroll detail totals to the Statement. We noted no exceptions.

4) Support Staff/Administrative Salaries, Benefits, and Bonuses Paid by the Institution and Related Entities Procedure: We selected a sample of three support staff/administrative personnel employed by the University and related entities during the reporting period. We obtained and inspected payroll summary registers for each selection. We agreed related payroll summary registers to the related support staff/administrative salaries, benefits, and bonuses paid by the University and related entities expense recorded by the University in the Statement during the reporting period. We also recalculated totals.

10 Dr. Roderick J. McDavis, President Ohio University

Results: We selected three support staff/administrative personnel, which included the associate athletic director for compliance, assistant athletic director for marketing and sales, and the assistant athletic director for media relations. We noted no exceptions.

5) Recruiting Procedure: We obtained the University’s recruiting expense policies. We agreed to existing institutional- and NCAA-related policies. We obtained general ledger detail and agreed to the total expenses reported.

Results: We selected one recruiting expense transaction from the general ledger detail. We agreed the $6,922 purchasing card expense for hotel expenses, posted on February 19, 2016, to the related Concur system expense report and itemized expense documentation. We agreed the general ledger total to the total expenses reported on the Statement. We noted no exceptions.

6) Team Travel Procedure: We obtained the Univeristy’s team travel policies. We agreed to existing institutional- and NCAA-related policies. We obtained general ledger detail and agreed to the total expenses reported.

Results: We selected one team travel expense transaction from the general ledger detail. We agreed the $26,692 expense, paid January 4, 2016, to the Hilton Lisle/Naperville invoice. We agreed the general ledger total to the total expenses reported on the Statement. We noted no exceptions.

7) Equipment, Uniforms, and Supplies Procedure: We obtained general ledger detail and agreed to the total expenses reported. We agreed a sample of three transactions and agreed to supporting documentation. We recalculated totals.

Results: We selected three expense transactions related to equipment, uniforms, and supplies from the general ledger detail. We agreed the selected expenses for $21,710 for football cleats and player workout footwear paid on October 19, 2015, $4,712 for men’s basketball shoes paid on February 3, 2016, and $4,758 for swim caps and suits paid on March 10, 2016, to the related invoices in the BobcatBUY purchasing system. We agreed the general ledger total to the expenses reported on the Statement. We noted no exceptions.

8) Game Expenses Procedure: We obtained general ledger detail and agreed to the total expenses reported. We agreed a sample of three transactions and agreed to supporting documentation. We recalculated totals.

11 Dr. Roderick J. McDavis, President Ohio University

Results: We selected three expense transactions related to game expenses from the general ledger detail. We agreed the purchasing card expenses for $2,542 for men’s basketball hotel rooms posted on January 8, 2016, $347 for softball hotel rooms posted on June 1, 2016, and $142 for volleyball hotel rooms posted on December 10, 2015, to the related Concur report and itemized expense documentation. We agreed the general ledger total to the total expenses reported on the Statement. We noted no exceptions.

9) Fundraising, Marketing, and Promotion Procedure: We obtained general ledger detail and agreed to the total expenses reported. We agreed a sample of three transactions and agreed to supporting documentation. We recalculated totals.

Results: We selected three expense transactions related to fundraising, marketing, and promotion expenses from the general ledger detail. We agreed the selected expenses for $6,901 for March Ohio Bobcat Club mailings paid August 12, 2015, $2,168 for a golf outing related to fundraising for wrestling paid September 4, 2015, and $13,407 for blankets given away to football season ticket holders paid on September 28, 2015 to the related invoices. We agreed the general ledger total to the total expenses reported on the Statement. We noted no exceptions.

10) Sports Camp Expenses Procedure: We obtained general ledger detail and agreed to the total expenses reported. We agreed a sample of three transactions and agreed to supporting documentation. We recalculated totals.

Results: We agreed the selected purchasing card expenses in the amount of $2,924 for drawstring bags for football camps posted May 20, 2016 and $3,725 for pizza for men’s basketball camps posted June 30, 2016 to the related Concur report and itemized expense documentation. We agreed the selected expense for $3,270 for coaching services provided for the baseball camp paid January 11, 2016 to the related invoice. We agreed the general ledger total to the total expenses reported on the Statement. We noted no exceptions.

11) Athletic Facility Debt Service, Leases, and Rental Fees Procedure: We obtained a listing of debt service schedules, lease payments, and rental fees for athletic facilities for the reporting year. We agreed the facility payments to additional supporting documentation (e.g., debt financing agreements, leases, and rental agreements). We agreed amounts recorded to amounts listed in the general ledger detail and recalculated totals.

12 Dr. Roderick J. McDavis, President Ohio University

Results: We agreed the debt service payments for the debt described in Note 3 to the Charge to Departments schedule. We tested the annual principal and interest payments made for the indoor multi-purpose facility and the track and turf field. The payments are paid by the University and are allocated to the intercollegiate athletics department. We noted no exceptions.

12) Direct Overhead and Administrative Support Procedure: We obtained general ledger detail and agreed to the total expenses reported. We agreed a sample of three transactions and agreed to supporting documentation. We recalculated totals.

Results: We selected three expense transactions related to direct overhead and administrative support from the general ledger detail. We agreed the selected expenses in the amount of $132 for cable television service paid through internal billing dated February 29, 2016, $3,006 for shelving for the men’s basketball locker room paid February 18, 2016, and $2,300 for purchase of a new Gator utility vehicle paid June 30, 2016, to the related invoices. We agreed the general ledger total to the total expenses reported on the Statement. We noted no exceptions.

13) Indirect Institutional Support Procedure: We tested this with the revenue section, Indirect Institutional Support.

14) Medical Expenses and Medical Insurance Procedure: We obtained general ledger detail and agreed to the total expenses reported. We agreed a sample of three transactions and agreed to supporting documentation. We recalculated totals.

Results: We selected three expense transactions related to medical expenses and medical insurance from the general ledger detail. We agreed the selected expenses in the amount of $7,464 for medical expenses related to a student- athlete paid July 14, 2015, $1,800 for medical coverage of home football games paid December 7, 2015, and $8,500 for the annual contract for team physician services for Ohio Athletics paid April 25, 2016, to the related invoices. We agreed the general ledger total to the total expenses reported on the Statement. We noted no exceptions.

15) Memberships and Dues Procedure: We obtained general ledger detail and agreed to the total expenses reported. We agreed a sample of three transactions and agreed to supporting documentation. We recalculated totals.

13 Dr. Roderick J. McDavis, President Ohio University

Results: We selected three expense transactions related to memberships and dues from the general ledger detail. We agreed the selected expenses in the amount of $100,000 for MAC annual memberships paid July 10, 2015, $598 for National Athletic Trainers Association membership dues paid October 7, 2015, and $3,984 for country club dues for the head basketball coach paid July 8, 2015, to the related invoices. We agreed the general ledger total to the total expenses reported on the Statement. We noted no exceptions.

16) Bowl Expenses Procedure: We obtained general ledger detail and agreed to the total expenses reported. We agreed a sample of three transactions and agreed to supporting documentation. We recalculated totals.

Results: We selected three expense transactions related to bowl expenses from the general ledger detail. We agreed the selected expenses in the amount of $3,789 for custom bowl game duffle bags paid February 9, 2016, $75,852 for bowl game lodging and meals paid December 15, 2015, and $26,130 for rings for bowl game participants paid June 30, 2016, to the related invoices. We agreed the general ledger total to the total expenses reported on the Statement. We noted no exceptions.

17) Other Operating Expenses Procedure: We agreed other expenses to the University’s general ledger, and/or the Statement, and recalculated totals.

Results: We selected one expense transaction related to other operating expenses from the general ledger detail. We agreed the $171,984 expense for OHSAA basketball games paid June 8, 2016 to the related OHSAA Basketball Event profit and loss. We agreed the general ledger total to the total expenses reported on the Statement. We noted no exceptions.

Affiliated and Outside Organizations

L. In preparation for our procedures related to the University’s affiliated and outside organizations, we:

1) Inquired of management as to whether they have identified any affiliated and outside organizations that meet any of the following criteria:

i. Booster organizations established by or on behalf of an intercollegiate athletics program

ii. Independent or affiliated foundations or other organizations that have as a principal purpose, generating or maintaining of grants-in-aid or scholarships funds, gifts, endowments or other monies, goods, or services to be used entirely or in part by the intercollegiate athletics program. 14 Dr. Roderick J. McDavis, President Ohio University

iii. Alumni organizations that have as one of its principal purposes the generating of monies, goods, or services for or on behalf of an intercollegiate athletics program and that contribute monies, goods, or services directly to an intercollegiate athletics program, booster group, or independent or affiliated foundation as previously noted.

Result: We inquired of management as to whether it had identified any affiliated or outside organizations that meet the above criteria. Management indicated that there were no affiliated or outside organizations; therefore, no further procedures were performed.

We were not engaged to and did not conduct an examination, the objective of which would be the expression of an opinion on the accompanying Intercollegiate Athletics Program statement of revenue and expenses. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

This report is intended solely for the information and use of Ohio University’s management and the National Collegiate Athletics Association and is not intended to be and should not be used by anyone other than these specified parties.

December 7, 2016

15 Ohio University National Collegiate Athletics Association Report Intercollegiate Athletics Program Statement of Revenue and Expenses For the Year Ended June 30, 2016

Women's Nonprogram Men's Football Men's Basketball Basketball Other Sports Specific Total Operating Revenue Ticket sales $ 746,196 $ 407,776 $ 11,843 $ 29,755 $ 120,785 $ 1,316,355 Student fees 6,048,534 1,448,548 1,106,246 6,385,595 2,770,257 17,759,180 Guarantees 925,000 - - - - 925,000 Contributions 19,780 26,633 45,075 139,842 3,100,292 3,331,622 Media rights 75,426 75,425 - - - 150,851 NCAA distributions 388,352 309,144 82,525 709,140 - 1,489,161 Conference distributions - - - 11,550 1,050,000 1,061,550 Program, novelty, parking, and concession sales 62,348 22,253 6,859 12,343 71,749 175,552 Royalties, licensing, advertisements, and sponsorships - - - - 1,536,599 1,536,599 Sports camp revenue 38,085 136,154 13,077 208,755 - 396,071 Athletics restricted endowment and investments income 9,365 10,469 - 40,035 103,214 163,083 Other operating revenue 7,228 26,725 - 16,285 454,522 504,760 Bowl revenue 568,645 - - - - 568,645 Indirect institutional support 727,320 249,166 145,651 664,669 717,497 2,504,303 Total operating revenue 9,616,279 2,712,293 1,411,276 8,217,969 9,924,915 31,882,732

Operating Expenditures Athletic student aid 3,265,838 522,196 559,682 3,958,800 108,105 8,414,621 Guarantees 380,000 409,385 49,000 - - 838,385 Coaching salaries, benefits, and bonuses paid by the University and related entities 1,866,866 1,004,652 565,801 1,858,899 - 5,296,218 Support staff/administrative compensation, benefits, and bonuses paid by the University and related entities 244,003 59,130 59,451 115,672 2,611,348 3,089,604 Recruiting 234,837 71,863 57,605 130,121 - 494,426 Team travel 776,938 348,181 188,072 810,771 - 2,123,962 Sports equipment, uniforms, and supplies 255,798 52,186 31,455 254,157 122,918 716,514 Game expenses 90,222 100,112 61,397 91,639 - 343,370 Fundraising, marketing, and promotion 207,863 51,385 42,626 33,378 916,852 1,252,104 Sports camp expenses 26,192 148,199 11,518 83,633 - 269,542 Athletic facilities debt service, leases, and rental fees - - - - 347,652 347,652 Direct overhead and administrative expenses 137,317 33,738 13,710 86,363 2,979,833 3,250,961 Medical expenses and insurance 3,829 - 30 60 577,326 581,245 Memberships and dues 130,830 11,138 1,337 19,356 143,208 305,869 Other operating expenses 130,631 39,820 25,449 164,970 419,795 780,665 Bowl expenses 559,427 - - - - 559,427 Indirect institutional support 727,320 249,166 145,651 664,669 717,497 2,504,303 Total operating expenditures 9,037,911 3,101,151 1,812,784 8,272,488 8,944,534 31,168,868

Excess of Revenue Over (Under) Expenditures $ 578,368 $ (388,858) $ (401,508) $ (54,519) $ 980,381 $ 713,864

See Notes to Intercollegiate Athletics Program Statement of Revenue and Expenses. 16 Ohio University National Collegiate Athletics Association Report Notes to Intercollegiate Athletics Program Statement of Revenue and Expenses For the Year Ended June 30, 2016

Note 1 - Contributions

Individual contributions of monies, goods, or services received directly by the University’s intercollegiate athletics program from any affiliated or outside organization, agency, or individuals (e.g., contributions by corporate sponsors) that constitute 10 percent or more of all contributions received for intercollegiate athletics during the year ended June 30, 2016 are as follows:

Source of Funds, Goods, and Services Value

An individual $ 900,000 A private foundation 800,000 Total $ 1,700,000

Note 2 - Intercollegiate Athletics-related Assets

Property and equipment are recorded at cost or, if donated, the fair value at the time of donation. Expense for maintenance and repairs is charged to current expense as incurred. Depreciation is computed using the straight-line method. No depreciation is recorded on land. Expenses for major renewals and betterments that extend the useful lives of the assets are capitalized. Estimated service lives range from 5-40 years depending on class.

The current year capitalized additions and deletions to facilities during the year ended June 30, 2016 are as follows:

Additions Deletions

CIP $ 2,086,456 $ 38,726 Infrastructure 80,329 - Buildings 2,065,817 - Total athletics facilities $ 4,232,602 $ 38,726 Other institutional facilities $ 84,755,481 $ 9,616,490

17 Ohio University National Collegiate Athletics Association Report Notes to Intercollegiate Athletics Program Statement of Revenue and Expenses For the Year Ended June 30, 2016

Note 2 - Intercollegiate Athletics-related Assets (Continued)

The total estimated book values of property, plant, and equipment, net of depreciation, of the University as of the year ended June 30, 2016 are as follows:

Estimated Book Value Athletics-related property, plant, and equipment balance $ 28,627,875 University's total property, plant, and equipment balance 967,952,454 Note 3 - Intercollegiate Athletics-related Debt

The annual debt service and debt outstanding for the University as of the year ended June 30, 2016 is as follows:

Annual Debt Debt Service Outstanding

Athletics-related facilities $ 358,627 $ 5,497,772 University's total 43,194,977 526,213,829

The repayment schedule for all outstanding intercollegiate athletics debt maintained by the University during the year ended June 30, 2016 is as follows:

Total Years Ending Intercollegiate June 30 Athletics Debt 2017 $ 358,627 2018 358,020 2019 357,914 2020 357,603 2021 357,652 2022-2044 3,707,956

Total$ 5,497,772

18 Ohio University National Collegiate Athletics Association Report Notes to Intercollegiate Athletics Program Statement of Revenue and Expenses For the Year Ended June 30, 2016

Note 4 - Restricted Endowment and Plant Funds

At June 30, 2016, the University had $5,272,483 of endowments and $3,358,266 in pledges receivable dedicated to the sole support of athletics not reported in the Statement. The athletics department’s operating fund balance is $485,269 at June 30, 2016.

19 Ohio University National Collegiate Athletics Association Report Appendix A

Fiscal Year 2016 Fiscal Year Total 2015 Total $ Change % Change Explanation of Variance

Operating Revenue:

A majority of the variance is a result of new NCAA legislation, adopted by the conference and all school presidents within the MAC, that redefines an athletics Grant-In-Aid to include the cost of attendance ($780,000). This legislation is effective for FY2016 and will be included in the base operating budget annually. Other budget support for annual scholarship increases equated to an additional $369,000 compared to FY2015. Other smaller variances include increased support for raise pool and healthcare costs increases ($225,000) compared to FY2015 plus additional support ($88,000) for post-season tournaments for both men Student fees $ 17,759,180 $ 16,354,881 $ 1,404,299 8.6% (CBI) and women's basketball (WNIT) during FY2016. Operating Expenditures:

Direct overhead and This variance is the result of increased spending for construction administrative expenses $ 3,250,961 $ 1,600,890 $ 1,650,071 103.1% of Walter Fieldhouse, an indoor practice facility.

20 Thispageintentionallyleftblank. OHIO UNIVERSITY

ATHENS COUNTY

CLERK’S CERTIFICATION This is a true and correct copy of the report which is required to be filed in the Office of the Auditor of State pursuant to Section 117.26, Revised Code, and which is filed in Columbus, Ohio.

CLERK OF THE BUREAU

CERTIFIED JANUARY 10, 2017

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APPENDIX C

BOOK-ENTRY SYSTEM; DTC

The information set forth in the following numbered paragraphs is based on information provided by The Depository Trust Company in its "Sample Offering Document Language Describing Book-Entry- Only Issuance," Schedule A to Blanket Issuer Letter of Representations (labeled BLOR 06-2013). As such, the University believes it to be reliable, but take no responsibility for the accuracy or completeness of that information. It has been adapted to the Series 2017A Bonds (the "Bonds") by substituting "Bonds" for "Securities," "University" for "Issuer" and "Trustee" for "registrar". See also the additional information following those numbered paragraphs.

1. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered obligations 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 Bond certificate will be issued for each Bond, in the aggregate principal amount of such issue, and will be deposited with DTC.

2. 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 Bond 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 .

3. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each 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 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 Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

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4. To facilitate subsequent transfers, all 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 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 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

5. 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. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Trustee and request that copies of notices be provided directly to them.

6. Redemption notices shall be sent to DTC. If less than all of 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.

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the University 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Redemption proceeds, distributions, and dividend payments on the 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 University or his agent, on 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 University or his agent, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the University or his agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

9. (Not applicable to the Bonds.)

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

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11. The University may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor Securities Depository). In that event, Bond certificates will be printed and delivered to DTC.

12. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the University believes to be reliable, but the University takes no responsibility for the accuracy thereof.

Direct Participants and Indirect Participants may impose service charges on Beneficial Owners in certain cases. Purchasers of book-entry interests should discuss that possibility with their brokers.

The University and the Trustee have no role in the purchases, transfers or sales of book-entry interests. The rights of Beneficial Owners to transfer or pledge their interests, and the manner of transferring or pledging those interests, may be subject to applicable state law. Beneficial Owners may want to discuss with their legal advisors the manner of transferring or pledging their book-entry interests.

The University and the Trustee have no responsibility or liability for any aspects of the records or notices relating to, or payments made on account of, beneficial ownership, or for maintaining, supervising or reviewing any records relating to that ownership.

The University and the Trustee cannot and do not give any assurances that DTC, Direct Participants, Indirect Participants or others will distribute to the Beneficial Owners payments of debt charges on the Bonds made to DTC as the registered owner, or redemption, if any, or other notices, or that they will do so on a timely basis, or that DTC, Direct Participants or Indirect Participants will serve or act in a manner described in this Official Statement.

For all purposes (except the Continuing Disclosure Certificate under which others as well as DTC may be considered an owner or holder of the Bonds, see APPENDIX E – FORM OF CONTINUING DISCLOSURE CERTIFICATE), DTC will be and will be considered by the University and the Trustee to be the owner or holder of the Bonds.

Beneficial Owners will not receive or have the right to receive physical delivery of Bonds, and, except to the extent they may have rights as Beneficial Owners or holders under the Continuing Disclosure Agreement will not be or be considered by the University and the Trustee to be, and will not have any rights as, owners or holders of Bonds under the Bond Proceedings.

Reference herein to "DTC" includes when applicable any successor securities depository and the nominee of the depository.

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APPENDIX D

FORM OF OPINION OF BOND COUNSEL

The form of the legal approving opinion of Dinsmore & Shohl LLP, Bond Counsel, is set forth below. The actual opinion will be delivered on the date of delivery of the bonds referred to therein and may vary from the form set forth to reflect circumstances both factual and legal at the time of such delivery. Recirculation of the Official Statement shall create no implication that Dinsmore & Shohl LLP has reviewed any of the matters set forth in such opinion subsequent to the date of such opinion.

[Closing Date], 2017

We have examined the certified transcript of proceedings (the "Transcript") relative to the issue of $______General Receipts Bonds, Series 2017A (the "Bonds") by The Ohio University (the "University"). The Bonds are authorized by a resolution adopted by the board of trustees of the University (the "Board") on December 8, 2000 (the "General Bond Resolution") and a resolution adopted by the Board on August 25, 2016 (the "Series 2017 Resolution" together with the General Bond Resolution, the "Bond Legislation"). The Transcript includes confirmed or executed counterparts of the Trust Agreement dated as of May 1, 2001, as supplemented, including by a Fourteenth Supplemental Trust Agreement dated as of March 1, 2017, each between the University and U.S. Bank National Association, Cleveland, Ohio, as trustee (the "Trustee") (such Trust Agreement and supplements thereto are collectively referred to as the "Trust Agreement"), the Bond Legislation and other documents executed and delivered in connection with the issuance of the Bonds. We have also examined an executed and authenticated Bond of the first maturity.

The Bonds are issued under and pursuant to Chapter 3345 of the Ohio Revised Code (the "Act"), the Bond Legislation and the Trust Agreement for the purpose of financing and refinancing certain capital facilities and to pay costs of issuance.

Based upon the examination referred to above, we are of the opinion, as of the date hereof, that:

1. The Bonds constitute valid and binding special obligations of the University in accordance with the terms and provisions thereof. The principal and interest and any premium payable on the Bonds and on any other outstanding "Obligations" of the University heretofore and hereafter issued on a parity therewith pursuant to the Trust Agreement (collectively with the Bonds, the "Obligations") are payable equally and ratably from and secured by a pledge of and lien on the moneys and investments in the Debt Service Account in the Debt Service Fund, as established by and as provided in the Trust Agreement, and the gross amount of "General Receipts" of the University, as defined in and subject to the provisions of the Trust Agreement. Neither the State of Ohio nor the University or its Board of Trustees shall be obligated to pay the principal of or interest on the Bonds from any other funds or source, nor shall the Bonds be a claim upon or lien against any property of the State of Ohio or any other property of or under the control of the University, and the Bonds, as to both principal and interest, are not debts, bonded indebtedness or general obligations of the State of Ohio or the University, and the full faith and credit thereof are not pledged thereto and the holders of the Bonds shall have no right to have any excises or taxes levied by the General Assembly of the State of Ohio for the payment of principal or interest.

As provided in the Trust Agreement, additional Obligations of the University may hereafter be authorized and issued on a basis of parity with the Bonds.

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2. The Trust Agreement constitutes a valid and binding special obligation of the University enforceable in accordance with the terms and provisions thereof, assuming due authorization, execution and delivery of the Trust Agreement by the Trustee.

3. The interest on the Bonds is excludible from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, portions of the interest on the Bonds earned by certain corporations may be subject to a corporate alternative minimum tax. The opinion set forth in the preceding sentence is subject to the condition that the University complies with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes.

4. Pursuant to Section 3345.12(M) of the Act, the Bonds, the transfer thereof, and the income therefrom, including any profit made on the sale thereof, are free from all Ohio state and local taxation, except the estate tax, the domestic insurance company tax, the dealers in intangibles tax, the tax levied on the basis of the total equity capital of financial institutions, and the net worth base of the corporate franchise tax. We express no opinion regarding other state tax consequences arising with respect to the Bonds.

We express no other opinion as to the federal or state tax consequences of purchasing, holding or disposing of the Bonds.

This opinion is based upon laws, regulations, rulings and decisions in effect on the date hereof. In giving this opinion, we have relied upon covenants and certifications of facts, estimates and expectations made by officials of the University, the Trustee and others contained in the Transcript, which we have not independently verified. It is to be understood that the enforceability of the Bonds and the Trust Agreement may be subject to bankruptcy, insolvency, reorganization, moratorium and other laws in effect from time to time affecting creditors' rights, and to the exercise of judicial discretion.

Very truly yours,

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APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE

THIS CONTINUING DISCLOSURE CERTIFICATE (the "Certificate") is executed and delivered March 1, 2017 by The Ohio University (the "Issuer") in connection with the issuance of $148,295,000* The Ohio University (A State University of Ohio) General Receipts Bonds, Series 2017A (the "Bonds"). The Issuer certifies, covenants and agrees as follows:

1. Purpose of Continuing Disclosure Certificate.

This Certificate is being given, signed and delivered for the benefit of the Bondholders (defined herein) and Beneficial Owners (defined herein) of the Bonds and in order to assist the Participating Underwriter of the Bonds in complying with the Rule (defined herein).

2. Definitions.

Certain capitalized terms are defined in the introduction of this Certificate. In addition, the following capitalized terms shall have the following meanings when used in this Certificate:

"Annual Financial Information" shall mean a copy of the annual audited financial statements of the Issuer. Those financial statements shall be prepared in accordance with generally accepted accounting principles (GAAP), provided, however, that the Issuer may change the accounting principles used for preparation of such financial information so long as the Issuer includes a statement to the effect that different accounting principles are being used, stating the reason for such change and how to compare the financial information provided by the differing financial accounting principles. Any or all of the items listed above may be set forth in other documents, including Offering Documents of debt issues of the Issuer or related public entities, which have been transmitted to the MSRB, or may be included by specific reference to documents available on the MSRB's Internet Website.

"Beneficial Owner" shall mean any person which has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including personal holding Bonds through nominees, depositories or other intermediaries).

"Bondholders" shall mean any holder of the Bonds and any Beneficial Owner thereof.

"EMMA" means the Electronic Municipal Market Access System of the MSRB or any successor system or process of disclosure.

"Event" shall mean any of the following events with respect to the Bonds:

(i) Principal and interest payment delinquencies;

(ii) Non-payment related defaults, if material;

(iii) Unscheduled draws on debt service reserves reflecting financial difficulties;

(iv) Unscheduled draws on credit enhancements reflecting financial difficulties;

* Preliminary; subject to change.

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(v) Substitution of credit or liquidity providers, or their failure to perform;

(vi) 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-exempt status of the security;

(vii) Modifications to rights of security holders, if material;

(viii) Bond calls, if material, and tender offers (except for mandatory scheduled redemptions not otherwise contingent upon the occurrence of an event);

(ix) Defeasances;

(x) Release, substitution or sale of property securing repayment of the securities, if material;

(xi) Rating changes;

(xii) Bankruptcy, insolvency, receivership or similar event of the obligated person (Note: For the purposes of this event, the event is considered to occur when any of the following occur: The appointment of a receiver, fiscal agent or similar officer for an obligated person 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 obligated person, 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 obligated person);

(xiii) The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, 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; and

(xiv) Appointment of a successor or additional trustee or the change of name of a trustee, if material.

The SEC requires the listing of (i) through (xiv) although some of such events may not be applicable to the Bonds.

"MSRB" shall mean the Municipal Securities Rulemaking Board.

"Offering Document" shall mean Official Statement, dated February __, 2017.

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"Operating Data" shall mean an update of the operating data contained in the section of the Offering Document captioned SECURITY FOR AND SOURCES OF PAYMENT OF THE BONDS – Pledge of General Receipts - General Receipts (table) and - Annual Debt Service Charges and OUTSTANDING GENERAL RECEIPTS BONDS, and within Appendix A to the Offering Document under the following headings captioned "Enrollment," "Fees and Charges (chart for Ohio University tuition, room and board)," "State Appropriations," "Student Financial Aid," "Financial Operations" and "Capital Programs (but excluding the last paragraph)".

"Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with the offering of the Bonds.

"Rule" means SEC Rule 15c2-12, as amended from time to time "SEC" shall mean the Securities and Exchange Commission.

"State" shall mean the State of Ohio.

3. Disclosure of Information.

(A) Information to be Provided and Filing Date. Except to the extent this Certificate is modified or otherwise altered in accordance with Section 4 hereof, the Issuer shall make, or cause to made, public through the MSRB (EMMA system) the information set forth in subsections (1), (2) and (3) below: (1) Annual Financial Information and Operating Data. Annual Financial Information and Operating Data at least annually not later than 180 days after the end of each fiscal year beginning with fiscal year ending June 30, 2017 and continuing with each fiscal year thereafter. The Annual Financial Information and Operating Data may be submitted as a single submission or as separate submissions comprising a package, and may cross-reference other information; provided that the Annual Financial Information may be submitted separately if the audited financial statements of the Issuer are not available by the filing date set forth above, in which case those audited financial statements of the Issuer will be submitted when and if available.

(2) Events Notices. Notice of the occurrence of an Event, in a timely manner, not in excess of ten (10) business days after the occurrence of the Event.

(3) Failure to Provide Annual Financial Information or Operating Data. Notice, in a timely manner, of the failure of Issuer to provide the Annual Financial Information or Operating Data by the date required herein.

(B) Filing of Information. Annual Financial Information, Operating Data and notice of all Event occurrences shall be filed with the MSRB (EMMA), in an electronic format as prescribed by the MSRB, accompanied by identifying information as prescribed by the MSRB.

To the extent the Issuer is obligated to file any Annual Financial Information or Operating Data with the MSRB pursuant to this Certificate, such Annual Financial Information or Operating Data may be set forth in the document or set of documents transmitted to the MSRB, or may be included by specific reference to documents transmitted to the MSRB or SEC.

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4. Amendment or Modification.

The University reserves the right to amend this Certificate, and noncompliance with any provision of this Certificate may be waived, as may be necessary or appropriate to (a) achieve its compliance with any applicable federal securities law or rule, (b) cure any ambiguity, inconsistency or formal defect or omission, and (c) address any change in circumstances arising from a change in legal requirements, change in law or change in the identity, nature or status of the University or type of business conducted by the University. Any such amendment or waiver shall not be effective unless the Certificate (as amended or taking into account such waiver) would have materially complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any applicable amendments to or official interpretations of the Rule, as well as any change in circumstances, and until the University shall have received either (i) a written opinion of bond counsel or other qualified independent special counsel selected by the University that the amendment or waiver would not materially impair the interests of Holders or Beneficial Owners, or (ii) the written consent to the amendment or waiver of the Holders of at least a majority of the principal amount of the Bonds then outstanding.

5. Miscellaneous.

(A) Termination. The Issuer's obligations under this Certificate shall terminate when all of the Bonds are or are deemed to be no longer outstanding by reason of redemption or legal defeasance or at maturity. (B) Additional Information. Nothing in this Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Certificate or any other means of communication, or including any other information in any Annual Financial Statement or notice of occurrence of an Event, in addition to that which is required by this Certificate. If the Issuer chooses to include any information in any Annual Financial Statement, Operating Data or notice of occurrence of an Event in addition to that which is specifically required by this Certificate, the Issuer shall have no obligation under this Certificate to update such information or include it in any future Annual Financial Statement, Operating Data or notice of occurrence of an Event. (C) Defaults: Remedies. In the event of a failure of the Issuer to comply with any provision of this Certificate, any Bondholder may take such action as may be necessary and appropriate, including seeking an action in mandamus or specific performance to cause the Issuer to comply with its obligations under this Certificate. A default under this Certificate shall not constitute a default on the Bonds or any trust agreement pursuant to which they are issued, and the sole remedy available in any proceeding to enforce this Certificate shall be an action to compel specific performance. (D) Beneficiaries. This Certificate shall inure solely to the benefit of the Issuer, the Participating Underwriter and Bondholders, or beneficial owners thereof, and shall create no rights in any other person or entity.

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6. Notices. Any notices or communications to the Issuer may be given as follows: To the Issuer: The Ohio University 205 Cutler Hall Athens, Ohio 45701 Attention: Vice President for Finance and Administration and Treasurer Telephone/Fax: 740-593-1892 / 740-593-0762

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IN WITNESS WHEREOF, the Issuer has caused its duly authorized officer to execute this Certificate as of the day and year first above written.

THE OHIO UNIVERSITY, Issuer

By: Name: Title:

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THE OHIO UNIVERSITY (A State University of Ohio) • General Receipts Bonds, Series 2017A