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University of Colorado

Annual Financial Report

June 30, 2021 and 2020

TABLE OF CONTENTS

CONTENT

S PAGE

Abbreviations and Acronyms ................................................................................................................................ 1

Board of Regents Photo .......................................................................................................................................... 3

From the President ................................................................................................................................................. 4

Independent Auditors’ Report .............................................................................................................................. 5

Management’s Discussion and Analysis (unaudited) .......................................................................................... 9

Basic Financial Statements

Business-Type Activities – Statements of Net Position ............................................................................. 24

Discretely Presented Component Units – Statements of Net Position ....................................................... 26

Business-Type Activities – Statements of Revenues, Expenses, and Changes in Net Position ................. 27

Discretely Presented Component Units – Statements of Revenues, Expenses, and Changes

in Net Position ......................................................................................................................................... 29

Business-Type Activities – Statements of Cash Flows .............................................................................. 30

Fiduciary Activities – Statements of Fiduciary Net Position ..................................................................... 32

Fiduciary Activities – Statements of Changes in Fiduciary Net Position ................................................... 33

Notes to Financial Statements

Note 1 – Basis of Presentation and Summary of Significant Accounting Policies ................................... 34

Note 2 – Cash and Cash Equivalents ........................................................................................................ 45

Note 3 – Investments ................................................................................................................................ 46

Note 4 – Accounts and Loans Receivable ................................................................................................ 52

Note 5 – Capital Assets ............................................................................................................................ 54

Note 6 – Accrued Expenses, Compensated Absences, and Unpaid Claims Liability............................... 55

Note 7 – Unearned Revenue ..................................................................................................................... 56

Note 8 – Bonds, Capital Leases, and Notes Payable ................................................................................ 57

Note

9 – Other Postemployme

nt Benefits ................................................................................................ 64

Note 10 – Retirement Plans and Insurance Programs ................................................................................ 77

Note 11 – Other Liabilities ......................................................................................................................... 91

Note 12 – Net Position ............................................................................................................................... 93

Note 13 – Spending Limitations ................................................................................................................. 94

Note 14 – Scholarship Allowances ............................................................................................................. 95

Note 15 – Health Services Revenue and Expense ...................................................................................... 95

Note 16 – Blended and Fiduciary Component Unit Information ............................................................... 95

Note 17 – Discretely Presented Component Units ..................................................................................... 98

Note 18 – Related Organizations and Jointly Governed Organizations ..................................................... 99

Note 19 – Commitments and Contingencies .............................................................................................. 100

Note 20 – Subsequent Events ..................................................................................................................... 101

Required Supplementary Information (Unaudited)

Schedule of Changes in University OPEB’s Total OPEB Liability and Related Ratios ............................ 104

Schedule of University’s Proportionate Share of PERA OPEB Liability .................................................. 104

Schedule of University’s Contributions to PERA OPEB Plan ................................................................... 104

Schedule of University’s Proportionate Share of PERA Pension Liability ................................................ 105

TABLE OF CONTENTS

Schedule of University’s Contributions to PERA Pension Plan ................................................................. 105

Schedule of Changes in Alternate Medicare Payment’s Total Pension Liability and

Related Ratios ........................................................................................................................................ 105

Notes to Required Supplementary Information (Unaudited) ............................................................................. 106

Principal Administrative Officers, and Principal Financial Officers and Staff ................................................ 111

ABBREVIATIONS AND ACRONYMS

Avenue 18

Avenue, LLC

457 PERA Deferred Compensation Plan

AAP Automatic Adjustment Provision

AED Amortization Equalization Disbursement

AHEC Auraria Higher Education Center

AHSB Anschutz Health Science Building

AI Annual Increase

AIR Annual Increase Reserve

Altitude West Altitude West, LLC

AMP Alternate Medicare Payment

CARES Coronavirus Aid, Relief, and Economic Security

Children’s Colorado Children’s Hospital Colorado

CMS Centers for Medicare and Medicaid Services

COF College Opportunity Fund

C.R.S. Colorado Revised Statutes

CU Anschutz University of Colorado Anschutz Medical Campus

CU Boulder University of Colorado Boulder

CU Denver University of Colorado Denver

CU Denver | Anschutz University of Colorado Denver | Anschutz Medical Campus

CU Foundation University of Colorado Foundation

CU Medicine University of Colorado Medicine

CUBEC University of Colorado Boulder Enterprise Corporation

CUPCO University of Colorado Property Corporation, Inc.

CVA Campus Village Apartments, LLC

DPCU Discretely Presented Component Units

ERIP Early Retirement Incentive Program

FASB Financial Accounting Standards Board

FEMA Federal Emergency Management Agency

FNP Fiduciary Net Position

Fund CU Healthcare Innovation Fund, L.P.

GAAP Generally Accepted Accounting Principles

GASB Governmental Accounting Standards Board

HB House Bill

HCPF Colorado Department of Health Care Policy and Financing

HCTF Health Care Trust Fund

HEERF Higher Education Emergency Relief Fund

HHS Department of Health and Human Services

IRC Internal Revenue Code

IRS Internal Revenue Service

MD&A Management’s Discussion and Analysis

NACUBO National Association of College and University Business Officers

NASA National Aeronautics and Space Administration

NAV Net Asset Value

NIST National Institute of Standards and Technology

OPEB Other Postemployment Benefits

ORP Optional Retirement Plan

PDPA Public Deposit Protection Act

PERA Colorado Public Employees’ Retirement Association

Regents Board of Regents

ABBREVIATIONS AND ACRONYMS

RSI Required Supplementary Information

S&P Standard and Poor’s

SAED Supplemental Amortization Equalization Disbursement

SB Senate Bill

SDTF State Division Trust Fund

SEC Securities an

d Exchange Commission

SOM School of Me

dicine

State State of Colorado

Statement No. 68 Accounting & Financial Reporting for Pensions (as amended)

Statement No. 75 Accounting & Financial Reporting for Postemployment Benefits Other

than Pensions

Statement No. 84 Fiduciary Activities

Statement No. 87 Leases

TABOR Taxpayer’s Bill of Rights

Trust University of Colorado Health and Welfare Trust

UCCS University of Colorado Colorado Springs

UCHealth University of Colorado Hospital

ULEHI University License Equity Holding, Inc.

University University of Colorado

US Bank US Bank National Association

VEBA Voluntary Employees’ Beneficiary Association

VRDBs Variable Rate Demand Bonds

The University of Colorado, Board of Regents, September 2021

Standing left to right:

Ilana Spiegel, 6th Congressional District, Term 2021-27; Glen Gallegos, 3rd Congressional District, Term

2019-25; Chance Hill, 5th Congressional District, Term 2019-25; Nolbert Chavez, 7th Congressional

District, Term 2021-27; Callie Rennison, 2nd Congressional District, Term 2021-2027.

Seated left to right:

Lesley Smith, At Large, Term 2019-25; Jack Kroll, Chair, 1st Congressional District, Term 2017-23; Sue

Sharkey, Vice Chair, 4th Congressional District, Term 2017-23; Heidi Ganahl, At Large, Term 2017-23.

FROM THE PRESIDENT

Our name says it all. The University of Colorado is Colorado’s

university. As the state’s flagship university system, CU plays

an important role in Colorado’s continued success. We’re a

world-class public research university that contributes to the

nation and the world, but we have a significant impact right here

at home.

We’re Colorado’s third largest employer. With our affiliates,

CU generates an economic impact of $12 billion annually for

the state. We provide leading edge health care for hundreds of

thousands of Coloradans every year. We graduate thousands of

students from across the state who fill critical jobs and

contribute to communities in Colorado and beyond.

Just as we’re dedicated to serving our students and Colorado by

providing an affordable, accessible education, we’re committed

to doing all we can to ensure our fiscal health. And our efforts

are, quite literally, paying off as this report shows.

Despite a slight dip in total operating revenues and an increase of roughly 0.5% in operating expenses in

Fiscal Year 2021 due to the global pandemic and other factors, CU’s net position remains strong. CU faculty

secured $1.45 billion in sponsored research funding and gifts in FY 2021 – up from $1.41 billion in FY

2020 – a remarkable feat in an economic downturn, and the fifth consecutive year CU’s annual sponsored

research funding and gifts have topped $1 billion.

For the total picture of CU’s financial health, I encourage you to review this publication. Accessibility,

affordability and efficiency remain top priorities as we work to meet the needs of our students and the state.

This is how we will ensure our future as a university so we can better the future for generations to come.

Sincerely,

Todd Saliman

President

Independent Auditor’s Report

The Members of the Legislative Audit Committee

University of Colorado Board of Regents Audit Committee

Report on the Financial Statements

We have audited the accompanying financial statements of the business-type activities, the aggregate

discretely presented component units, and the fiduciary component unit of the University of Colorado

(the University), a higher education institution of the State of Colorado, as of and for the years ended

June 30, 2021 and 2020, and the related notes to the financial statements, which collectively comprise the

University’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in

accordance with accounting principles generally accepted in the United States of America; this includes the

design, implementation and maintenance of internal control relevant to the preparation and fair presentation

of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audits. We did not

audit the financial statements of the University of Colorado Medicine (CU Medicine), Altitude West, LLC,

and the University License Equity Holding Inc., all blended component units of the University, which

represents approximately 12 percent, 25 percent, and 31 percent and 11 percent, 29 percent and 28 percent

for the years ended June 30, 2021 and 2020, respectively, of the total assets, net position and operating

revenues of the business-type activities of the University. In addition, we did not audit the financial

statements of the University of Colorado Foundation (CU Foundation), which represents 100 percent, 100

percent, and 100 percent and 99 percent, 100 percent and 100 percent for the years ended June 30, 2021

and 2020, respectively, of the assets, net position, and revenues of the discretely presented component units

of the University. Those statements were audited by other auditors, whose report has been furnished to us,

and our opinions, insofar as it relates to the amounts included for CU Medicine, Altitude West, LLC and

the University License Equity Holding Inc. and the CU Foundation, are based solely on the report of the

other auditors. We conducted our audit in accordance with auditing standards generally accepted in the

United States of America (GAAS). Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free from material misstatement.

The Members of the Legislative Audit Committee

University of Colorado Board of Regents Audit Committee

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 University’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 University’s

internal control. Accordingly, we express no such opinion. An audit also includes evaluating the

appropriateness of accounting policies used and the reasonableness of significant accounting estimates

made by management, as well as evaluating the overall presentation of the financial statements.

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

audit opinions.

Opinions

In our opinion, based on our audits and the report of other auditors, the financial statements referred to

above present fairly, in all material respects, the respective financial position of the business-type activities,

and the aggregate discretely presented component units and the fiduciary component unit of the University

of Colorado, as of June 30, 2021 and 2020, and the respective changes in financial position and, where

applicable, 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, the financial statements of the University, an institution of higher education of the

State of Colorado, are intended to present the financial position, the changes in financial position and, where

applicable, cash flows of the business-type activities aggregate discretely presented component units, and

fiduciary component unit of only the University. They do not purport to, and do not, present fairly the

financial position of the State of Colorado as of June 30, 2021 and 2020 and the changes in its financial

position, or where applicable its cash flows for the year then ended in conformity with accounting principles

generally accepted in the United States of America. Our opinions are not modified with respect to this

matter.

As discussed in Note 1 to the financial statements, in 2021, the University adopted new accounting

guidance, Governmental Accounting Standards Board Statement No. 84, Fiduciary Activities, and

paragraphs 4 and 5 of Governmental Accounting Standards Board Statement No. 97, Certain Component

Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred

Compensation Plans – an amendment of GASB Statements No. 14 and No. 84, and a supersession of GASB

Statement No. 32. Our opinions are not modified with respect to these matters.

The Members of the Legislative Audit Committee

University of Colorado Board of Regents Audit Committee

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s

discussion and analysis, and the pension and other postemployment benefit information as listed in the table

of contents 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, who

considers it to be an essential part of financial reporting for placing the basic financial statements in an

appropriate operational, economic or historical context. We have applied certain limited procedures to the

required supplementary information in accordance with auditing standards generally accepted in the United

States of America, which consisted of inquiries of management about the methods of preparing the

information and comparing the information for consistency with management’s responses to our inquiries,

the basic financial statements and other knowledge we obtained during our 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.

Denver, Colorado

December 2, 2021

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ENTIONALLY

University of Colorado

Management’s Discussion and Analysis

June 30, 2021 and 2020 (Unaudited)

Management is pleased to present this financial discussion and analysis of the University of Colorado

(the University). It is intended to make the University’s financial statements easier to understand and

communicate our financial situation in an open, accountable, and transparent manner. It provides an

analysis of the University’s net position and results of operations for the years ended June 30, 2021 and

2020 (Fiscal Year 2021 and 2020, respectively), with comparative information for the year ended June 30,

2019 (Fiscal Year 2019). University management is responsible for the completeness and fairness of this

discussion and analysis and the financial statements.

UNDERSTANDING THE FINANCIAL STATEMENTS

Statements of Net Position present the assets, deferred outflows of resources, liabilities, deferred inflows

of resources, and net position of the University at a point in time (June 30, 2021 and 2020). Their purpose

is to present a financial snapshot of the University. They aid readers in determining the assets available to

continue the University’s operations; how much the University owes to employees, vendors, and lenders,

and a picture of net position.

Statements of Revenues, Expenses, and Changes in Net Position present the total revenues and expenses

of the University for operating, nonoperating, and other undertakings during the fiscal years ended June 30,

2021 and 2020. Their purpose is to assess the University’s operating and nonoperating activities.

Statements of Cash Flows present cash receipts and payments of the University during the fiscal years

ended June 30, 2021 and 2020. Their purpose is to present the sources of cash coming into the University,

how that cash was expended, and the change in the cash balance during the year.

Notes to the Financial Statements present additional information to support the financial statements. Their

purpose is to clarify and expand on the information in the financial statements.

Required Supplementary Information (RSI) presents additional information that differs from the basic

financial statements in that the auditor applies certain limited procedures in reviewing the information. In

this report, RSI includes schedules of the University’s proportionate share of the Colorado Public

Employees’ Retirement Association (PERA) pension liability and other postemployment benefits (OPEB)

liability, contributions to the PERA pension and OPEB plans, the changes in the Alternate Medicare

Payment (AMP) liability and the OPEB liability and related ratios, and this management’s discussion and

analysis (MD&A).

Nonfinancial indicators are also available to assess the overall state of the University. Examples of

nonfinancial indicators include trend and quality of applicants, freshman class size, student retention,

building condition, and campus safety. Information about nonfinancial indicators is not included in this

analysis but may be obtained from the University’s Budget and Finance Office (see

www.cu.edu/budgetpolicy/accountability-data-center).

FINANCIAL HIGHLIGHTS

Selected financial highlights for the fiscal year ended June 30, 2021 include:

 University assets total $8,826,519,000, deferred outflows of resources (reflecting losses on bond

refundings, certain changes in the pension and OPEB payments, and other items) total

$386,671,000, liabilities total $4,882,047,000 and deferred inflows of resources total $496,832,000

(related to the pension and OPEB payments, and other items) resulting in net position of

University of Colorado

Management’s Discussion and Analysis

June 30, 2021 and 2020 (Unaudited)

$3,834,311,000. Of this amount, $2,091,051,000 is net investment in capital assets, $48,566,000

is restricted for nonexpendable purposes, meaning only the earnings on the related investments may

be used for purposes dictated by the resource provider, and $746,079,000 is restricted for purposes

for which the donor, grantor, or other external party intended. The remaining unrestricted balance

is $948,615,000.

 The decrease in the University’s net pension liability of $84,444,000 for Fiscal Year 2021 is a result

of the changes in underlying actuarial assumptions made by PERA, along with legislative changes

enacted in July 2018. See Note 10 for more information. The increase in the University’s net other

postemployment benefit (OPEB) liability of $220,929,000 for Fiscal Year 2021 is primarily due to

a change in the discount rate used to calculate the balance.

 In total, operating revenues decreased approximately 2.4 percent in Fiscal Year 2021 while

operating expenses increased approximately 0.5 percent. For comparative purposes, operating

revenues increased 3.5 percent in Fiscal Year 2020 while operating expenses increased 1.8 percent.

The changes in operating expenses are primarily due to changes in PERA and OPEB funding and

assumptions and additional expenses related to COVID-19.

 Effective July 1, 2019, the University of Colorado Health and Welfare Trust (the Trust) is presented

as a fiduciary component unit in the University’s financial statements. The Trust administers and

manages certain health and welfare benefits for participating employees and retirees solely for the

benefit of its two remaining members, the University and CU Medicine, and thus met the criteria

for component unit status. In accordance with generally accepted accounting principles (GAAP),

Fiscal Year 2020 is reported on a comparative basis. MD&A for the Trust can be found in its

separately issued financial statements.

STATEMENT OF NET POSITION

Figure 1 illustrates the University’s summary of assets, deferred outflows of resources, liabilities, deferred

inflows of resources, and net position. The mix of assets, liabilities, and net position has remained

consistent with the exception of the PERA pension and OPEB liabilities and related deferred outflows and

inflows of resources experiencing changes from year to year. The deferred outflows of resources of

$386,671,000 in Fiscal Year 2021, $181,008,000 in Fiscal Year 2020, and $309,204,000 in Fiscal Year

2019 represent the deferred loss on bond refundings and items related to the pension and OPEB liabilities.

The pension and OPEB liabilities and the related deferred balances fluctuated due to changes in funding,

actuarial assumptions, and experience. Analysis of the University’s capital assets and related debt is

included in the section Capital Asset and Debt Management, whereas this section provides analysis of the

University’s noncapital assets and other liabilities.

University of Colorado

Management’s Discussion and Analysis

June 30, 2021 and 2020 (Unaudited)

(in thousands)

2021 2020 2019

Assets

Current ass ets $ 3,028,234 2,675,365 926,738

Noncurrent, noncapital assets 1,810,020 1,210,179 2,658,857

Net capital as s ets 3,988,265 3,883,572 3,723,629

Total As s ets

8,826,519 7,769,116 7,309,224

Deferred Outflows

Loss on bond refundings 43,744 44,993 49,806

Other postemployment benefits-related 187,712 47,615 48,961

Alternate medicare plan-related 33,834 15,662 13,154

PERA pension-related 120,946 71,947 196,246

Other 435 791 1,037

Total Deferred Outflows 386,671 181,008 309,204

Total Assets and Deferred Outflows 9,213,190 7,950,124 7,618,428

Liabilities

Current liabilities 542,545 684,492 759,596

Noncurrent liabilities 4,339,502 3,882,836 4,013,445

Total Liabilities

4,882,047 4,567,328 4,773,041

Deferred Inflows

Other postemployment benefits-related 229,151 271,011 101,300

Alternate medicare plan-related 6,626 7,779 5,176

PERA pension-related 259,005 438,004 657,754

Other 2,050 1,684 1,748

Total Deferred Inflows 496,832 718,478 765,978

Total Liabilities and Deferred Inflows 5,378,879 5,285,806 5,539,019

Net Position

Net investment in capital assets 2,091,051 2,188,403 2,087,469

Restricted for nonexpendable purposes 48,566 48,653 48,633

Restricted for expendable purposes 746,079 625,750 604,806

Unrestricted 948,615 (198,488) (661,499)

Total

Net Position

3,834,311 2,664,318 2,079,409

Total Liabilities, Deferred Inflows and Net Position

$ 9,213,190 7,950,124 7,618,428

Figure 1. Summary of Assets, Deferred Outflows, Liabilities, Deferred Inflows and Net Position

ASSETS

From Fiscal Year 2020 to 2021, the increases in current assets and

noncurrent assets were primarily due to

increases in the investment balance. Investments increased due to positive market performance, the

temporary investment of unspent bond proceeds for capital construction projects at CU Boulder, and

increases at CU Anschutz related to the funding of the Health Sciences Building construction project,

increased reserves, increased academic support from the University of Colorado Hospital (UCHealth), and

increased royalties from the Shingrix vaccine. From Fiscal Year 2019 to 2020, the increases in current

assets and noncurrent assets were primarily due to increases in accounts and loans receivable and increases

in investments from $127,738,000 of Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

funding received from the Governor’s Office on May 21, 2020, and an increase in capital assets due to

ongoing construction.

University of Colorado

Management’s Discussion and Analysis

June 30, 2021 and 2020 (Unaudited)

The University’s investments were $3,899,474,000 and $3,118,998,000 at June 30, 2021 and 2020,

respectively, representing an increase of $780,476,000. The University’s investments were $2,862,269,000

at June 30, 2019, representing an increase of $256,729,000 at June 30, 2020. The increases in investments

for both years was primarily due to fair value increases and the issuance of new bonds offset by bond

proceeds being liquidated and used for projects in addition to the CARES Act funding previously discussed.

Net accounts and loans receivable increased $43,085,000 and $5,376,000 in Fiscal Years 2021 and 2020,

respectively. In Fiscal Year 2021, the increase was primarily due to growth in federal government and

other accounts receivable, as well as the University of Colorado Medicine’s (CU Medicine) growth in

patient billing due to reduced COVID restrictions. In Fiscal Year 2020, the increase was primarily due to

growth in federal government and other accounts receivable, including invoiced items owed to the

University of Colorado Colorado Springs (UCCS) from City of Champions project, a cooperative

agreement between UCCS and the Colorado Springs Urban Renewal Authority. Federal government

receivables increased in both years due to normal fluctuations in the timing and receipt of payments. In

Fiscal Year 2020, patient receivables at CU Medicine decreased as a result of the COVID-19 outbreak and

subsequent government mandate to suspend elective procedures during the last quarter of the fiscal year.

LIABILITIES

The University’s non-debt-related liabilities were $2,856,526,000, $2,725,917,000, and $3,003,079,000, at

June 30, 2021, 2020, and 2019, respectively. These liabilities are comprised of amounts categorized in

Figure 2.

2021 2020 2019

Accounts payable $ 126,162 112,648 121,192

Accrued expenses 114,999 82,388 128,833

Compens ated absences 320,814 292,458 257,876

Unearned revenue 162,829 274,218 181,236

Other postemployment benefits 972,432 751,503 893,196

Alternate medicare payment 119,804 90,199 83,212

Net pens ion liability 955,089 1,039,533 1,244,558

Risk financing 32,638 30,568 32,850

Construction contract retainage 8,401 11,202 13,652

Funds held for others 17,496 18,571 20,980

Federal Perkins loan 13,051 15,883 19,519

Early retirement incentive program 7,462 2,393 2,544

As s et retirement obligation 1,373 1,312 1,296

Mis cellaneous liabilities 3,976 3,041 2,135

Total Non-debt-related Liabilities $ 2,856,526 2,725,917 3,003,079

Figure 2. Composition of Non-debt-related Liabilities

(in thousands)

The four largest categories of non-debt-r

elated liabilities are OPEB liabilities, the net pension liability,

compensated absences, and unearned revenue.

The University is required to account for and report on OPEB (Note 9). Such benefits include health

insurance benefits for University retirees and their dependents. The University has chosen to fund this

liability on a pay-as-you-go basis; therefore, there are no assets held in trust to pay future benefits which

have been earned by employees. Statement No. 75, Accounting & Financial Reporting for Postemployment

University of Colorado

Management’s Discussion and Analysis

June 30, 2021 and 2020 (Unaudited)

Benefits Other than Pensions (Statement No. 75), was effective for Fiscal Year 2018 and required the full

recognition of the liability to employees for OPEB. In addition, University employees in PERA can elect

to participate in the PERACare program for other postretirement benefits so the University is required to

record its proportionate share of PERA’s net OPEB liability. As noted in Figure 2, the liability required to

be reported in the financial statements totaled $972,432,000 and $751,503,000 in Fiscal Year 2021 and

2020, respectively, $941,595,000 and $712,892,000, respectively, from the University’s OPEB plan and

$30,837,000 and $38,611,000, respectively, from PERA’s OPEB plan. The increase in the University

OPEB liability is primarily due to actuarial assumption changes regarding the interest rate and mortality

tables.

As discussed in Note 10, the University participates in the statewide PERA cost-sharing defined benefit

pension plan. Statement No. 68 Accounting and Financial Reporting for Pensions (Statement No. 68)

requires the University to record its “proportionate share” of PERA’s net pension liability. The University

has no legal requirement to pay this liability in the event of PERA’s insolvency nor does it have the ability

to determine the employer or employee annual contributions. The liability cannot be prepaid. Per PERA’s

Fiscal Year 2020 Annual Report, PERA’s net pension liability for the state division in which the University

participates was $9,484,793,000. The University’s Fiscal Year 2021 proportionate share of the liability

based on calendar 2020 contributions was $955,089,000. While the change in the net pension liability

impacted total liabilities, unrestricted net position, and pension expense, the associated cash flow out of the

University remained fixed by the contribution levels set in State statute (see Figure 6). For PERA’s 2019

Annual Report, the net pension liability was $9,703,804,000 and the University’s Fiscal Year 2020

proportionate share of the liability was $1,039,533,000. The majority of the $84,444,000 and $205,025,000

decrease in Fiscal Year 2021 and Fiscal Year 2020, respectively, can be attributed to changes in actuarial

assumptions and ongoing adjustments from the enactment of Senate Bill (SB) 18-200 in Fiscal Year 2019,

the provisions of which are outlined in Note 10.

Compensated absences estimate the amount payable to employees in the future for their vested rights under

the University’s various leave programs. This estimate is based on personnel policies that define the amount

of vacation and sick leave to which each employee may be entitled (Note 1). Compensated absences

typically increase year-over-year as employees accrue additional vacation days and salaries change, in

addition to less vacation being used due to COVID-19.

Unearned revenue represents amounts paid by students, auxiliary enterprise customers, grantors, and

contractors for which the University has not met all of its requirements for revenue recognition (Note 7).

These amounts will be recognized as revenue in future periods after all conditions have been satisfied. The

unearned revenue balance fluctuates from year to year depending on factors such as the timing of the first

day of classes and the rate of spending on grants and contracts for which payment has been received in

advance. In Fiscal Year 2020, the increase in the unearned revenue balance was primarily related to CARES

Act funding that was received in Fiscal Year 2020 but was spent and earned in Fiscal Year 2021.

NET POSITION

The University’s net position may have restrictions imposed by external parties, such as donors, or include

items that, by their nature are invested in capital assets (property, plant, and equipment) and are therefore

not available for expenditure or debt repayment. To help understand these restrictions, the University’s net

position is shown in four categories, as displayed in Figure 1.

A portion of net position is restricted for either expendable or nonexpendable purposes. This portion is

then more specifically delineated by programmatic restrictions. The programmatic category of the

University of Colorado

Management’s Discussion and Analysis

June 30, 2021 and 2020 (Unaudited)

restriction is shown on the statement of net position. The majority of the endowment assets benefiting the

University are held by the University of Colorado Foundation (CU Foundation), which is a discretely

presented component unit (Note 17) and not included in the above amounts. An expendable restriction

allows the University to spend the full amount, but only for the purposes identified by the entity providing

the money. Unrestricted net position, as defined by GAAP, is available for spending for any lawful purpose

under the full discretion of management. However, the University has placed internal limitations on future

use by designating unrestricted net position for certain purposes in keeping with management’s plans to

manage resources (Note 12).

In Fiscal Year 2021, total restricted for nonexpendable net position decreased by $87,000 due to transfers

of existing permanent endowments to the CU Foundation. In Fiscal Year 2020, total restricted for

nonexpendable net position increased by $20,000 due to additions to existing permanent endowments.

In Fiscal Year 2021, unrestricted net position was positive. Unrestricted net position has been growing

each year, due in part to the decreases in the PERA pension liabilities discussed earlier and return on

investments. In Fiscal Year 2020, the University’s unrestricted net position was negative due to the PERA

pension and OPEB liabilities. This means the University’s total liabilities and deferred inflows of resources

were greater than its assets and deferred outflows of resources.

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION

Figure 3 illustrates the University’s summary of revenues, expenses, and changes in net position. A key

component of this summary is the differentiation of operating and nonoperating activities. Operating

revenues are received for providing goods and services to the various customers and constituencies of the

University. Operating expenses are paid to acquire or produce goods and services provided in return for

operating revenues and to carry out the mission of the University. Nonoperating revenues/expenses include

items determined not to fall in the operating category.

2021 2020 2019

Operating revenues $ 4,139,499 4,239,623 4,097,809

Operating expens es 4,225,464 4,203,349 4,127,398

Operating Income (Loss) (85,965) 36,274 (29,589)

Nonoperating revenues, net of nonoperating expenses 1,206,382 475,124 411,085

Income Before Other Revenues 1,120,417 511,398 381,496

Other revenues 49,576 73,511 46,072

Change in Net Position 1,169,993 584,909 427,568

Net Position, beginning of year 2,664,318 2,079,409 1,651,841

Net Position, End of Year

$ 3,834,311 2,664,318 2,079,409

Figure 3. S ummary of Revenues , Expenses , and Changes in Net Position

(in thousands)

REVENUES

Figure 4 provides an illustration of operating and nonoperating revenues by major sources excluding

capital-related revenues. These sources include both State-appropriated and non-appropriated funds

(Note 13). Appropriated funds are those controlled by legislation through the general or special

appropriation process and are designated for specific purposes. For the last three fiscal years, appropriated

funds primarily included student tuition and fees, State of Colorado (State) stipends, fee-for-service contract

revenues, and tobacco litigation settlement monies. Student tuition and fees are included only as an

University of Colorado

Management’s Discussion and Analysis

June 30, 2021 and 2020 (Unaudited)

informational item in the State’s budget as the revenue is not received from the State, but rather from outside

entities. The College Opportunity Fund (COF) provides stipends to qualified undergraduate students; the

receiving students then use the stipends to pay a portion of their tuition. In November 1992, Colorado

voters passed Section 20, Article X of the Colorado Constitution, commonly known as the Taxpayer’s Bill

of Rights (TABOR). TABOR contains revenue, spending, tax, and debt limitations that apply to all the

local governments and the State, including the University. In Fiscal Year 2005, the Colorado State

Legislature determined in Section 23-5-101.7 of the Colorado Revised Statutes that an institution of higher

education may be designated as an “enterprise” for the purposes of TABOR so long as the institution’s

governing board retains authority to issue revenue bonds on its behalf and the institution receives less than

10 percent of its total annual revenue in grants as defined by TABOR. Further, so long as it is so designated

as an enterprise, the institution shall not be subject to any provisions of TABOR. In July 2005, the

University’s Board of Regents (the Regents) designated the University as a TABOR enterprise pursuant to

the statute. During the Fiscal Years ended June 30, 2021, 2020 and 2019, the University believes it has met

all requirements of TABOR enterprise status (Note 13). The amount of State grants received by the

University was 1.05 percent, 1.32 percent, and 1.06 percent of total annual revenues during the Fiscal Years

ended June 30, 2021, 2020 and 2019, respectively. The ability of the Regents to increase tuition rates is

limited by the State, although the University’s operations no longer impact the State’s TABOR spending

limits due to the University’s enterprise status.

(in thousands)

2021 2020 2019

Operating Revenues

Student tuition and fees , net $ 1,066,344 1,146,847 1,096,060

Fee-for-service contracts 66,396 160,466 143,443

Grants and contracts 1,095,802 1,045,269 1,046,672

Sales and s ervices of educational departments 233,037 245,067 244,912

Auxiliary enterprises , net 179,667 276,945 299,259

Health services 1,309,227 1,185,649 1,118,365

Other operating 189,026 179,380 149,098

Total Operating Revenues 4,139,499 4,239,623 4,097,809

Nonoperating Revenues

Federal Pell Grant $ 54,470 57,627 58,681

State appropriations 17,113 17,915 15,950

State support for PERA pension - 8,258 8,585

COVID Aid 248,174 29,419 -

Gifts 251,109 211,207 206,733

Investment income, net 692,400 174,833 163,344

Other nonoperating, net 6,933 38,024 32,324

Total Nonoperating Revenues 1,270,199 537,283 485,617

Total Noncapital Revenues $ 5,409,698 4,776,906 4,583,426

Figure 4. Operating and Nonoperating Revenues (Excluding Capital)

University of Colorado

Management’s Discussion and Analysis

June 30, 2021 and 2020 (Unaudited)

$200

$400

$600

$800

$1,000

$1,200

$1,400

Revenue

OperatingRevenues

(inmillions)

2021

2020

2019

The University experienced decreases in most operating revenue sources in Fiscal Year 2021 and increases

in most operating revenue sources in Fiscal Year 2020. The decrease in student tuition and fee revenue for

Fiscal Year 2021 is due to an overall decrease in Fall and Spring enrollments as a result of the COVID-19

pandemic. Additionally, CU Boulder used CARES Act funding to offset tuition fees for students attending

classes remotely, and CU Denver partially waived student fees due to the impact of COVID-19. The

decrease in fee revenue is offset by COVID Aid in nonoperating revenues. The increase in tuition and fee

revenue for Fiscal Year 2020 reflects a combination of changing enrollment and rate increases for

nonresidents. In Fiscal Year 2021, enrollment decreased by 0.76 percent. In Fiscal Year 2020, enrollment

increased by 0.57 percent. In Fiscal Years 2021 and 2020, there were no increases in tuition rates for

resident undergraduates. In accordance with the resident tuition guarantee at CU Boulder, each incoming

freshman undergraduate resident student with in-state classification will have no increase in tuition for their

next three years.

In Fiscal Years 2021, 2020, and 2019, the University applied $34,762,000, $83,808,000, and $75,140,000,

respectively, of COF stipends against student tuition bills (these amounts are included in tuition revenues),

with a per credit hour stipend rate of $40, $94, and $85, respectively. Fee-for-service revenue from the

State decreased $94,108,000 between Fiscal Year 2021 and 2020, and increased $17,023,000 between

Fiscal Year 2020 and 2019, due to the State budget.

Consistent with the University’s goal to increase its focus and national role as a comprehensive research

institution, one of the three largest sources of revenue for the University continues to be grants and contracts

University of Colorado

Management’s Discussion and Analysis

June 30, 2021 and 2020 (Unaudited)

revenue, which includes funding from federal, state, and local governments, and private sources. Grants

and contracts revenue from the federal government represents 78 percent, 77 percent, and 75 percent of

total grants and contract revenue for Fiscal Year 2021, 2020, and 2019, respectively. Each grant or contract

is restricted in use to the purpose given and limited to the cost principles specified by each sponsor. The

increase in Fiscal Year 2021 was due to increased spending on several sponsored project awards from

federal sponsors such as the National Aeronautics and Space Administration (NASA), National Institute of

Standards and Technology (NIST) and the Department of Health and Human Services (HHS), as well as

additional awards from state and private sponsors. The decrease in Fiscal Year 2020 was due to reductions

in private grants and contracts. These grants also provide necessary funding for the administrative functions

and facilities that support the grants through the facilities and administrative reimbursement. In Fiscal

Years 2021, 2020, and 2019, the University received $234,983,000, $217,289,000, and $213,299,000,

respectively, of such administrative and facility overhead cost reimbursements. The University pledges

portions of this reimbursement revenue and other auxiliary revenues to satisfy its bond obligations, which

are commonly referred to as pledged revenues, thus creating a reliance on continued federal research

funding.

The decrease in auxiliary enterprise revenues in Fiscal Year 2021 is the result of the ongoing impacts of the

pandemic. The decrease in Fiscal Year 2020 is due to refunds made at each campus for services such as

Housing and Dining, Athletics, Bookstore, and Parking due to COVID-19.

The majority of health services revenue includes medical practice plan revenues earned through CU

Medicine (Notes 1 and 16), which has experienced growth in operating revenue of 10.4 percent and 6.0

percent in Fiscal Year 2021 and Fiscal Year 2020, respectively. In Fiscal Year 2021, net patient services

revenue increased 11.5 percent due to recovery from the prior year impacts of the COVID-19 outbreak. In

Fiscal Year 2020, net patient services revenue decreased 2.4 percent as a result of the COVID-19 outbreak

and the subsequent government mandate to suspend elective services during the last quarter of the fiscal

year. Contract income, primarily from CU Medicine’s affiliate hospitals, increased 9.5 percent in Fiscal

Year 2021 and 27.9 percent in Fiscal Year 2020. In Fiscal Year 2020, the increase in contract income offset

the decrease in patient services revenue, driving the overall increase in operating revenue.

As a result of the COVID-19 pandemic, the University received funding under the CARES Act and other

federal sources in Fiscal Year 2021 and Fiscal Year 2020. The amount recorded as revenue reflects the

portion of the funds received which had been expended through June 30, 2021 and June 30, 2020. As of

June 30, 2021 and June 30, 2020, the University expended $121,540 and $6,577,000 under the Coronavirus

Relief Fund, $71,339 and $17,812,000 under the Higher Education Emergency Relief Fund (HEERF), and

$55,295,000 and $5,030,000 under the Provider Relief Fund, respectively.

Gifts increased $39,902,000 and $4,474,000 in Fiscal Year 2021 and Fiscal Year 2020, respectively, mainly

due to a distribution of funds from the CU Foundation to support campus needs with student financial and

mental health and Diversity, Equity, and Inclusion efforts. Additionally, there were increased gifts to CU

Boulder for the Leeds School of Business expansion and a gift-in-kind of the Trimble Technology Lab at

CU Denver.

Investment income net of investment expense was $692,400,000 in Fiscal Year 2021, $174,833,000 in

Fiscal Year 2020, and $163,344,000 in Fiscal Year 2019. Investment income is subject to inherent

variability due to the requirement to record the majority of investments at fair value. In Fiscal Year 2021,

the University’s unrealized gains on investments (the difference between the investment’s fair value and

cost basis) increased by $544,284,000. In Fiscal Year 2020, the University’s unrealized gains on

investments increased by $52,712,000.

University of Colorado

Management’s Discussion and Analysis

June 30, 2021 and 2020 (Unaudited)

In addition to operating and nonoperating revenues, the University had capital revenues in the amounts

depicted in Figure 5.

Figure 5. Capital Revenues

(in thousands)

2021 2020 2019

Capital s tudent fee, net $ 12,936 16,147 16,086

Capital appropriations 31,845 31,130 15,818

Capital grants and gifts 4,882 26,214 14,154

Loss on dispos al of capital as s ets (2,708) (1,839) (3,377)

Total Capital Revenues $ 46,955 71,652 42,681

The capital student fee is used to fund construction or renovation projects on student facility buildings at

CU Boulder, to fund the Student Wellness Center at CU Denver, and to fund t

he Recreation and Wellness

Center, the Family Development Center, and the University Center at UCCS.

The University received capital appropriations from the State of $31,845,000 in Fiscal Year 2021, compared

to $31,130,000 in Fiscal Year 2020 and $15,818,000 in Fiscal Year 2019. These monies are used for various

controlled maintenance and other capital construction activity and fluctuate year to year based on the State

budget. The increase in Fiscal Year 2021 and Fiscal Year 2020 is primarily due to capital expansion funding

appropriated to CU Anschutz for its Health Sciences Building.

Capital grants and gifts decreased $21,332,000 in Fiscal Year 2021 and increased $12,060,000 in Fiscal

Year 2020 primarily due to a $20,000,000 one-time gift made in Fiscal Year 2020 for the new Health

Sciences Building and renovations of the Fitzsimons Building at CU Anschutz. In Fiscal Year 2020, the

increase was partially offset with a decrease in capital projects and gifts-in-kind at CU Boulder.

EXPENSES

The programmatic uses of resources are displayed in Figure 7 and include PERA pension expense. Figure

6 demonstrates the impact of SB 18-200 and other factors to the University’s Fiscal Year 2021, 2020, and

2019 financial statements. Pension expense decreased by $21,975,000, $152,027,000, and $571,259,000

in Fiscal Year 2021, Fiscal Year 2020, and Fiscal Year 2019, respectively. These changes (and

corresponding change in net pension liability) should be compared to the required cash contributions for

each of the Fiscal Years 2021, 2020, and 2019, of $63,808,000, $65,557,000, and $63,850,000, respectively.

Figure 6. PERA Pension Expense Compared to Required Contributions

(in thousands)

2021 2020 2019

Pension expense (per financial statements) $ (248,634) (226,659) (74,632)

Expense decrease from prior year (21,975) (152,027) (571,259)

Required contributions 63,808 65,557 63,85

Including the impact of PERA’s actuarial valuation changes, as refl

ected in the audited financial statements

and in Figure 7 below, results in total operating expenses increased 0.5 percent for the fiscal year ended

June 30, 2021, increased 1.8 percent for the fiscal year ended June 30, 2020, and decreased 7.3 percent for

the fiscal year ended June 30, 2019, in part due to PERA’s actuarial valuation changes. Excluding the

impact of these changes, operating expenses would have increased 0.9 percent, 5.4 percent, and 7.9 percent

for the same time period.

University of Colorado

Management’s Discussion and Analysis

June 30, 2021 and 2020 (Unaudited)

The magnitude of the overall increase in operating expense was lower in Fiscal Year 2021 due to the

COVID-19 pandemic, which caused decreases in several operating expense categories. The decreases in

instruction expense and academic, institutional, and plant support expense are due to furloughs, hiring

freezes, lack of merit raises, and travel freezes across all campuses as a result of COVID-19. These

decreases were offset by increases in other categories, which demonstrates that the University’s focus is

basically unchanged over the past three fiscal years. The increase in research expenditures is mainly due

to sponsored research expenditures, focused in the College of Engineering at CU Boulder and HHS at CU

Anschutz. The increase in public service expense is mainly due to growth in cell-based therapies and

protein biologics of the Gates Biomanufacturing Facility at CU Anschutz. The increase in student aid is

primarily due to the student portion of CARES Act expenditures, an increase in student emergency aid

grants, and an offset to scholarship allowances.

2021 2020 2019

Ins truction $ 1,076,987 1,106,172 1,098,320

Research 711,251 682,789 672,006

Public s ervice 143,692 138,901 157,077

Academic, institutional, and plant support 549,198 575,395 596,601

Student aid and other services 166,766 155,361 146,162

Total Education and General 2,647,894 2,658,618 2,670,166

Depreciation 232,428 221,096 215,348

Auxiliary enterprises 179,585 228,565 240,062

Health s ervices 1,165,557 1,095,070 1,001,822

Total Operating Expenses $ 4,225,464 4,203,349 4,127,398

Figure 7. Expense Program Categories

(in thousands)

$200

$400

$600

$800

$1,000

$1,200

$1,400

E xpenses

Oper atin gExpenses

(inmillions)

2021

2020

2019

University of Colorado

Management’s Discussion and Analysis

June 30, 2021 and 2020 (Unaudited)

The amounts shown for student aid do not reflect the actual resources dedicated to student aid. The majority

of the University’s student aid resources are netted against tuition, fee, and auxiliary revenue as a

scholarship allowance (Note 14). The University’s scholarship allowance was $278,123,000,

$261,869,000, and $239,358,000 in Fiscal Years 2021, 2020, and 2019, respectively.

The decrease in auxiliary enterprise expense in Fiscal Year 2021 was mainly due to decreased activity at

each campus for services such as Housing and Dining, Athletics, Bookstore, and Parking due to COVID-

19. The decrease in auxiliary enterprise expense in Fiscal Year 2020 was mainly due to the athletics legal

settlement paid out in Fiscal Year 2019 at CU Boulder, as well as reduced benefits rates for coaches, athletic

directors, and police officers at CU Boulder during Fiscal Year 2020.

Increases in expenses related to health services, which are primarily related to CU Medicine, are consistent

with the associated increases in health services revenue discussed earlier in this section.

The University, like many public higher education entities, reports its operating expenses by functional

classification on the Statement of Revenues, Expenses, and Changes in Net Position. As defined by the

National Association of College and University Business Officers (NACUBO), a functional expense

classification is a method of grouping expenses according to the purpose for which the costs are incurred.

The classifications tell why an expense was incurred rather than what was purchased. Reporting expenses

by functional classification helps donors, granting agencies, creditors, and other readers of the financial

statements to understand the various mission-related activities of the institution and their relative

importance.

A different method of reporting operating expenses is by natural classification. Per NACUBO, a natural

expense classification is a method of grouping expenses according to the type of costs that are incurred.

The classifications tell what was purchased rather than why an expense was incurred.

Figure 8 below provides detail on the University’s expenses by natural classification to provide users

additional insight into how the University expends its resources. As is common in higher education, the

largest portion of expenses relate to salaries and benefits. The information below also highlights the impact

of PERA pension changes on total operating expenses.

2021

2020 2019

Salaries $ 2,471,391 2,425,445 2,295,863

Benefits (non-pension) 783,427 757,581 683,660

Pension expense* (248,634) (226,659) (74,632)

Depreciation/amortization 232,911 221,376 215,624

IT licenses/software/equipment 128,531 111,959 96,129

Plant operation/repairs 34,288 37,291 31,998

Scholarships/fellowships 71,285 62,057 38,265

Research 140,591 129,028 139,699

Supplies 504,972 545,329 530,584

Travel 7,250 39,302 54,746

Utilities 61,317 60,560 60,527

Other 38,135 40,080 54,935

Total Operating Expenses $ 4,225,464 4,203,349 4,127,398

* This does not include AM P.

Figure 8. Natural Classification of Operating Expenses

(in thousands)

University of Colorado

Management’s Discussion and Analysis

June 30, 2021 and 2020 (Unaudited)

CAPITAL ASSETS AND DEBT MANAGEMENT

The University had $6,958,540,000, $6,638,664,000, and $6,296,102,000 of plant, property, and equipment

at June 30, 2021, 20120, and 2019, respectively, offset by accumulated depreciation of $2,970,275,000,

$2,755,092,000, $2,572,473,000, respectively. The major categories of plant, property, and equipment at

June 30, 2021, 2020, and 2019 are displayed in Figure 9. Related depreciation charges of $232,428,000,

$221,096,000, and $215,348,000 were recognized in the Fiscal Years 2021, 2020, and 2019, respectively.

Detailed financial activity related to the changes in capital assets is presented in Note 5. Figure 10 details

the University’s current construction commitments.

2021

2020 2019

Land $ 101,768 102,448 102,609

Construction in progress 514,042 567,044 425,336

Buildings and improvements 5,090,066 4,771,321 4,612,943

Equipment 673,888 637,513 613,172

Software and other intangibles 100,061 98,451 98,710

Library and other collections 478,715 461,887 443,332

Total Capital Assets (gross) $ 6,958,540 6,638,664 6,296,102

Figure 9. Capital Ass et Categories (before depreciation)

(in thousands)

Cam

us/Pro

ect Descri

tion Financin

Sources Value*

HVAC upgrades and controls, Electrical Engineering Center State Senate Bill 19-267 COP Funding $ 6,612

Aerospace Engineering Sciences Building Campus cash resources and debt 82,546

Engineering Center Phase I-A (290) Campus cash resources 28,462

19th Street bridge and trail Campus cash & Federal Emergency Management

Agency (FEMA)

6,285

1135 Broadway Renovation Campus cash resources 6,000

Ramaley Biology addition Campus cash resources and debt 21,851

Engineering Center Aerospace Wing and North Tower Campus cash resources and debt 30,874

Hellems & Rippon Renovation Campus cash resources and State Funding 35,207

Fleming Tower renovation and system upgrades Campus cash resources and debt 13,719

City Heights Residence Hall Debt 78,505

Research 2 Basement build-out Campus cash resources and debt 11,151

Anschutz Health Sciences Building shell space Campus cash resources and debt 27,996

Anschutz Health Sciences Building State, campus cash resources, gift, and debt 242,062

Hybl Sports Medicine and Performance Center Bond proceeds 2,440

* Value represents budgeted costs for project in thousands

Figure 10. Current Construction Projects as of June 30, 2021

(in thousands)

CU Denver | Ans chutz:

UCCS :

CU Boulder:

During Fiscal Year 2021, the University also issued $437,000,000 face value in revenue bonds with

proceeds used to refund portions of prior obligations, and to pay certain costs related to the issuance of the

Series 2020A-1, 2020A-2, 2020B-1, 2020B-2, 2021A, and 2021B Taxable and Tax-exempt Bonds.

University of Colorado

Management’s Discussion and Analysis

June 30, 2021 and 2020 (Unaudited)

During Fiscal Year 2020, the University issued $544,285,000 face value in revenue bonds with proceeds

used to refund portions of prior obligations, and to pay certain costs related to the issuance of the Series

2019A, 2019A-2, 2019B and 2019C Taxable and Tax-exempt Bonds.

During Fiscal Year 2019, the University issued $112,375,000 face value in revenue bonds, of which

$48,015,000 were direct placement bonds, with proceeds used to refund portions of prior obligations, and

to pay certain costs related to the issuance of the Series 2008 Bonds.

At June 30, 2021, 2020, and 2019, the University had debt (or similar long-term obligations) of

$2,025,521,000, $1,791,411,000, $1,634,462,000, respectively, in the categories illustrated in Figure 11.

More detailed information about the University’s debt is included in Note 8.

2021 2020 2019

Revenue bonds $ 2,004,561 1,769,286 1,610,739

Capital leas es 11,202 11,980 13,207

Notes payable 9,758 10,145 10,516

Total Long-term Debt $ 2,025,521 1,791,411 1,634,462

Figure 11. Debt Categories

(in thousands)

The Regents have adopted a debt management policy that includes limitations on the use of external debt.

The University Treasurer will report to the Regents, prior to the issuance of new debt, the effect that the

new debt will have on the University’s debt capacity ratio to ensure the 7 percent debt ratio limit currently

established by the Regents is not exceeded. The ratio is calculated as maximum annual debt service as a

percentage of the University’s unrestricted current fund expenditures plus mandatory transfers. State statute

sets the maximum for this ratio at 10 percent in Colorado Revised Statutes (C.R.S.) 23-20-129.5. A

component of this policy is debt capacity, which is the calculated ratio of the University’s debt service

requirement as compared to certain unrestricted revenues. The University maintained its debt capacity

limits in all three fiscal years ended June 30, 2021, 2020, and 2019.

During Fiscal Year 2018 the Regents authorized a commercial paper program for approved capital

construction projects with a maximum outstanding amount of $200,000,000. This short-term financing had

a fixed maturity of less than 270 days from issuance and was used to fund various remodeling projects at

CU Boulder and CU Anschutz. In Fiscal Year 2020, the University issued the twelfth through thirty-third

tranches and retired the first through thirty-second tranches of commercial paper with permanent financing.

On July 1, 2020, the outstanding balance of $50,000,000 was retired with variable rate demand bonds

(VRDBs) Series 2020B-1. The average interest rate of borrowing from inception of the program through

its end was 1.44 percent.

The University minimizes financing costs by monitoring current market conditions and by maintaining a

bond rating of Aa1 and AA+ and commercial paper ratings of P-1 and F1+ (Moody’s and Fitch,

respectively).

ECONOMIC FACTORS THAT WILL AFFECT THE FUTURE

Economic factors, particularly those related to COVID-19 since the start of the pandemic, resulted in budget

challenges at the University in Fiscal Year 2020, Fiscal Year 2021, and Fiscal Year 2022. In Fiscal Year

2022, the State was able to restore the one-time Fiscal Year 2021 State funding cuts of 58 percent and

increase public funding for higher education above the Fiscal Year 2020 level by $81,800,000, or a 9.6

percent increase for all public institutions of higher education in Colorado. This resulted in a $19,100,000

University of Colorado

Management’s Discussion and Analysis

June 30, 2021 and 2020 (Unaudited)

or 7.9 percent State funding increase for the University over Fiscal Year 2020 funding levels. In Fall 2021,

the University implemented mandatory vaccination requirements for students, faculty, and staff and is

continuing to follow health related guidelines to return to a more in-person learning experience on campus.

Overall, estimated University enrollment is projected to increase slightly over the prior year based on

preliminary Fall 2021 census estimates, with on-average growth in non-resident student and graduate

student populations.

Overall, total budgeted revenues for the University have increased for Fiscal Year 2022 compared to the

prior year. Education and General Fund budgeted revenue increased $236,474,000, or 16.4 percent,

compared to the June 2020 approved budget for Fiscal Year 2021. Auxiliary and self-funded activities

budgeted revenue increased $297,657,000, or 15.9 percent, and restricted fund budgeted revenue increased

$287,703,000, or 27 percent. The University’s overall revenue budget for Fiscal Year 2022 increased 18.7

percent over the prior year. Tuition rates increased in Fiscal Year 2022, but undergraduate students will

not see an effective increase on their student bills, as the University is buying this increase down on a one-

year basis.

The University has used and will continue to use federal relief funding (CARES Act Coronavirus Relief

Funds, HEERF I, HEERF II, and HEERF III) in Fiscal Year 2020, Fiscal Year 2021, and Fiscal Year 2022

for allowable and pandemic-related expenses. Additionally, the University completely repealed furloughs

effective Fiscal Year 2022 and is transitioning to a calendar year compensation cycle effective January

2022 for non-classified staff and faculty (at three of the four campuses), which better aligns with known

enrollment and available revenues at these campuses. These efforts allow for compensation decisions—

which ultimately increase expenses—to be more informed by real-time revenues in the same year.

University of Colorado

Business-Type Activities

Statements of Net Position

June 30, 2021 and 2020 (In Thousands)

See accompanying notes to basic financial statements 24

2021 2020

Assets

Current Assets

Cash and cash equivalents (Note 2) $ 351,247 221,669

Investments (Note 3) 2,165,456 1,989,147

Accounts and loans receivable, net (Note 4) 482,172 434,319

Inventories 20,359 20,788

Other ass ets 9,000 9,442

Total Current Assets 3,028,234 2,675,365

Noncurrent Assets

Investments (Note 3) 1,734,018 1,129,851

Accounts and loans receivable, net (Note 4) 70,007 74,775

Other ass ets 5,995 5,553

Capital as s ets, net (Note 5) 3,988,265 3,883,572

Total Noncurrent Assets 5,798,285 5,093,751

Total Assets $ 8,826,519 7,769,116

Deferred Outflows

Loss on bond refundings $ 43,744 44,993

Other postemployment benefits-related (Note 9) 187,712 47,615

Alternate medicare payment-related (Note 10) 33,834 15,662

PERA pension-related (Note 10) 120,946 71,947

Other 435 791

Total Deferred Outflows 386,671 181,008

Total Assets and Deferred Outflows $ 9,213,190 7,950,124

Liabilities

Current Liabilities

Accounts payable $ 126,162 112,648

Accrued expens es (Note 6) 114,999 82,388

Compens ated absences (Note 6) 19,775 17,869

Unearned revenue (Note 7) 157,050 268,502

Commercial paper (Note 8) - 50,000

Bonds, capital leases, and notes payable (Note 8) 63,635 92,400

Other postemployment benefits (Note 9) 14,753 16,447

Other liabilities (Note 11) 46,171 44,238

Total Current Liabilities $ 542,545 684,492

Noncurrent Liabilities

Compens ated absences (Note 6) $ 301,039 274,589

Unearned revenue (Note 7) 5,779 5,716

Bonds, capital leases , and notes payable (Note 8) 1,961,886 1,699,011

Other postemployment benefits (Note 9) 957,679 735,056

lternat

e medicare payment (Note 10) 119,804 90,199

Net pension liability (Note 10) 955,089 1,039,533

Other liabilities (Note 11) 38,226 38,732

Total Noncurrent Liabilities 4,339,502 3,882,836

Total Liabilities $ 4,882,047 4,567,328

University of Colorado

Business-Type Activities

Statements of Net Position

June 30, 2021 and 2020 (In Thousands)

See accompanying notes to basic financial statements 25

2021 2020

Deferred Inflows

Other postemployment benefits -related (Note 9) $ 229,151 271,011

Alternate medicare payment-related (Note 10) 6,626 7,779

PERA pension-related (Note 10) 259,005 438,004

Other 2,050 1,684

Total Deferred Inflows 496,832 718,478

Total Liabilities and Deferred Inflows $ 5,378,879 5,285,806

Net Position

Net investment in capital as s ets $ 2,091,051 2,188,403

Restricted for nonexpendable purposes (endowments)

Research 21,708 21,708

Academic support 14,404 14,130

Scholarships and fellowships 11,096 11,224

Capital and other 1,358 1,591

Total restricted for nonexpendable purposes (Note 12) 48,566 48,653

Restricted for expendable purposes

Ins truction 191,609 168,865

Research 60,283 47,209

Academic support 55,499 40,252

Student loans and services 25,679 19,120

Scholarships and fellowships 61,778 46,142

Auxiliary enterprises 220,535 209,704

Capital 37,366 31,836

Other 93,330 62,622

Total restricted for expendable purpos es 746,079 625,750

Unrestricted (Note 12) 948,615 (198,488)

Total Net Position $ 3,834,311 2,664,318

University of Colorado

Discretely Presented Component Units

Statements of Net Position

June 30, 2021 and 2020 (In Thousands)

See accompanying notes to basic financial statements 26

Foundation

CUBEC Total

Foundation

CUBEC TOTAL

Ass ets

Current assets

Cash and cash equivalents

40,785 503 41,288 44,845 - 44,845

Contributions receivable, net 31,514 - 31,514 26,725 - 26,725

Other current assets 177 - 177 406 - 406

Total current assets 72,476 503 72,979 71,976 - 71,976

Noncurrent ass ets

Inves tments (Note 3) 2,848,78

9,50

2,858,28

2,091,071 10,000 2,101,071

Contributions receivable, net 108,767 - 108,767 96,975 - 96,975

Capital as sets, net 1,252 - 1,252 1,332 - 1,332

Assets held under split-interest agreements (Note 3) 45,089 - 45,089 37,653 - 37,653

Beneficial interest in charitable trus ts held by others 15,458 - 15,458 13,388 - 13,388

Total noncurrent as s ets 3,019,352 9,500 3,028,852 2,240,419 10,000 2,250,419

Total Assets

3,091,828 10,003 3,101,831 2,312,395 10,000 2,322,395

Liabilities

Current liabilities

Accounts payable and accrued liabilities

981 - 981 432 - 432

Payable to the University (Note 4) 12,708 - 12,708 14,214 - 14,214

Liabilities under split-interest agreements 2,853 - 2,853 2,484 - 2,484

Custodial funds 19,738 - 19,738 18,466 - 18,466

Total current liabilities 36,280 - 36,280 35,596 - 35,596

Noncurrent liabilities

Payable to the University (Notes 4, 17) - 10,000 10,000 - 10,000 10,000

Funds held in trust for others 3,337 - 3,337 2,391 - 2,391

Liabilities under split-interest agreements 21,928 - 21,928 19,240 - 19,240

Custodial funds 605,172 - 605,172 445,383 - 445,383

Total noncurrent liabilities 630,437 10,000 640,437 467,014 10,000 477,014

Total Liabilities

666,717 10,000 676,717 502,610 10,000 512,610

Net Position

Net investment in capital ass ets

1,252 - 1,252 1,332 - 1,332

Restricted for nonexpendable purpos es 1,303,836 - 1,303,836 919,651 - 919,651

Restricted for expendable purpos es 1,010,346 - 1,010,346 826,235 - 826,235

Unres tricted 109,677 3 109,680 62,567 - 62,567

Total Net Position

2,425,111 3 2,425,114 1,809,785 - 1,809,785

2021 2020

University of Colorado

Business-Type Activities

Statements of Revenues, Expenses, and Changes in Net Position

June 30, 2021 and 2020 (In Thousands)

See accompanying notes to basic financial statements 27

2021 2020

Operating Revenues

Student tuition (net of scholars hip allowances of $244,520 in

2021 and $230,013 in 2020; net of bad debt of $2,679 in 2021

and $2,921 in 2020; pledged revenues of $981,877 in 2021

and $1,050,646 in 2020) (Note 8, 13 and 14) $ 981,877 1,050,646

Student fees (net of s cholars hip allowances of $23,012 in 2021

and $21,926 in 2020; net of bad debt of $167 in 2021 and $131

in 2020; pledged revenues of $3,957 in 2021 and $3,093 in

2020) (Note 8, 13 and 14) 84,467 96,201

Fee-for-service contracts (Note 13) 66,396 160,466

Federal grants and contracts (pledged revenues of $207,199 in

2021 and $192,795 in 2020) (Note 8) 859,909 800,141

State and local grants and contracts (pledged revenues of $17,552

in 2021 and $17,791 in 2020) (Note 8) 80,955 79,082

Nongovernmental grants and contracts (net of bad debt of $0 in

2021 and $258 in 2020) 154,938 166,046

Sales and services of educational departments (net of bad debt of

$331 in 2021 and $176 in 2020) 233,037 245,067

Auxiliary enterpris es (net of s cholars hip allowances of $6,694 in

2021 and $5,669 in 2020; net of bad debt of $1,145 in 2021 and

$1,649 in 2020; pledged revenues of $4,366 in 2021 and

$24,213 in 2020) (Note 8 and 14) 179,667 276,945

Health s ervices (net of contractual adjustments of $1,563,601 in

2021 and $1,385,758 in 2020; net of bad debt of $27,413 in

2021 and $37,849 in 2020; pledged revenues of $19,638 in

2021 and $36,596 in 2020) (Note 8 and 15) 1,309,227 1,185,649

Other operating revenues (net of bad debt of $1,072 in 2021 and

$1,809 in 2020; pledged revenues of $1,890 in 2021 and $3,588

in 2020) (Note 8)

189,026 179,380

Total Operatin

Revenues

$ 4,139,499 4,239,623

Operating Expenses

Education and general

Ins truction $ 1,076,987 1,106,172

Research 711,251 682,789

Public service 143,692 138,901

Academic support 178,191 202,196

Student s ervices 119,496 127,549

Institutional support 241,802 249,213

Operation and maintenance of plant 129,205 123,986

Student aid 47,270 27,812

Total education and general expenses

2,647,894 2,658,618

Depreciation (Note 5) 232,428 221,096

Auxiliary enterpris es 179,585 228,565

Health s ervices (Note 15) 1,165,557 1,095,070

Total Operating Expenses

4,225,464 4,203,349

Operatin

Income (Loss)

$(85,965) 36,274

University of Colorado

Business-Type Activities

Statements of Revenues, Expenses, and Changes in Net Position

June 30, 2021 and 2020 (In Thousands)

See accompanying notes to basic financial statements 28

2021 2020

Nonoperating Revenues (Expenses)

Federal Pell Grant $ 54,470 57,627

State appropriations (Note 13) 17,113 17,915

State support for PERA pension (Note 10 and 13) - 8,258

COVID Aid 248,174 29,419

Gifts 251,109 211,207

Investment income (net of investment expenses of $15,506 in 2021

and $9,377 in 2020) 692,400 174,833

Loss on disposal of capital assets (Note 5) (2,708) (1,839)

Interest expense on capital asset-related debt (including

amortization of deferred los s of $35,243 in 2021 and $17,763 in

2020) (Note 5) (58,819) (57,331)

Bond issuance costs (2,290) (2,989)

Other nonoperating revenues (pledged revenues of $35 in 2021

and $380 in 2020) (Note 8) 6,933 38,024

Total Nonoperating Revenues (Expenses)

1,206,382 475,124

Income Before Other Revenues

$ 1,120,417 511,398

Other Revenues

Capital student fee (net of scholarship allowance of $3,897 in

2021 and $4,261 in 2020; pledged revenue of $12,936 in 2021

and $16,147 in 2020) (Note 8 and Note 14) $ 12,936 16,147

Capital appropriations (Note 13) 31,845 31,130

Capital grants and gifts 4,882 26,214

Additions to (transfers of) permanent endowments (87) 20

Total Other Revenues

49,576 73,511

Change in net position 1,169,993 584,909

Net Position, beginning of year 2,664,318 2,079,409

Net Position, End of Year $ 3,834,311 2,664,318

University of Colorado

Discretely Presented Component Units

Statements of Revenues, Expenses, and Changes in Net Position

June 30, 2021 and 2020 (In Thousands)

See accompanying notes to basic financial statements 29

2020

Foundation

CUBEC Total

Foundation

Operating revenues

Contributions

263,072 - 263,072 195,308

Other revenue 5,565 - 5,565 5,064

Total operating revenues 268,637 - 268,637 200,372

Operating expenses

Institutional support

Gifts and income distributed to University (Note 17) 182,281 - 182,281 184,507

Administrative 4,822 - 4,822 5,059

Advancement support to the University 29,501 - 29,501 24,409

Depreciation and amortization 80 - 80 95

Total operating expenses 216,684 - 216,684 214,070

Operating Income (Loss)

51,953 - 51,953 (13,698)

Nonoperating revenues (expenses)

Investment income 563,373 3 563,376 67,702

Increase in Net Position 615,326 3 615,329 54,004

Net Position, beginning of year 1,809,785 - 1,809,785 1,755,781

Net Position, End of Year

2,425,111 3 2,425,114 1,809,785

2021

University of Colorado

Business-Type Activities

Statements of Cash Flows

June 30, 2021 and 2020 (In Thousands)

See accompanying notes to basic financial statements 30

2021 2020

Cas h Flows from Operating Activities

Tuition and fees $ 1,135,626 1,298,298

Grants and contracts 947,706 1,194,818

Sales and services of educational departments 233,037 245,067

Auxiliary enterprise charges 182,957 261,300

Health s ervices 1,272,536 1,181,246

Other receipts 217,648 188,605

Payments to employees and benefits (3,506,318) (3,540,459)

Payments to suppliers (628,833) (680,590)

Payments for scholarships and fellowships (47,270) (27,812)

Total Cash Flows Provided by (Used for) Operating Activities (192,911) 120,473

Cas h Flows from Noncapital Financing Activities

Federal Pell Grant 54,470 57,627

State appropriations 17,113 17,915

COVID Aid 248,174 29,419

Gifts and grants for other than capital purposes 251,109 211,207

Endowment additions (transfers) (87) 20

Direct lending receipts 359,906 383,040

Direct lending disbursements (360,000) (383,047)

Other student loan receipts 3,962 4,186

Other student loan disbursements (2,582) (1,838)

Other loan receipts 2,543 1,186

Other loan dis bursements (1,616) (11,563)

Other agency transactions (980) (2,402)

Total Cash Flows Provided by Noncapital Financing Activities 572,012 305,750

Cash Flows from Capital and Related Financing Activities

State capital appropriations 31,845 31,130

Capital student fees 12,936 16,147

Proceeds from capital debt and commercial paper 206,953 465,295

Bond issuance costs paid (2,290) (2,989)

Principal paid on capital debt, leases, notes and commercial paper (7,752) (357,990)

Interest paid on capital debt, leases and notes (75,281) (89,727)

Proceeds from sale of capital assets 9,722 41,225

Purchases and construction of capital assets (338,087) (409,292)

Total Cash Flows Used for Capital and Related Financing Activities (161,954) (306,201)

Cash Flows from Investing Activities

Proceeds from sales and maturities of investments 6,627,949 8,917,414

Purchas e of inves tments (6,864,142) (9,121,430)

Investment earnings 148,624 126,005

Total Cash Flows Used for Investing Activities (87,569) (78,011)

Net Increas e in Cash and Cash Equivalents

129,578 42,011

Cash and cash equivalents, beginning of year 221,669 179,658

Cash and Cash Equivalents, End of Year $ 351,247 221,669

University of Colorado

Business-Type Activities

Statements of Cash Flows

June 30, 2021 and 2020 (In Thousands)

See accompanying notes to basic financial statements 31

2021 2020

$ (85,965) 36,274

232,428 221,096

6,933 38,024

State support for PERA pension - 8,258

Receivables (45,533) (1,296)

Inventories 429 2,162

Other assets 12,004

PERA pension-related deferred outflows (48,999) 124,299

AMP-related deferred outflows (18,172) (2,508)

OPEB-related deferred outflows (140,097) 1,346

Other deferred outflows 356 246

Accounts payable 6,592 1,593

Accrued expenses 32,771 (46,274)

Compens ated abs ences 28,356 34,582

Unearned revenue (111,389) 92,982

Other postemployment benefits 220,929 (141,693)

Alternate medicare plan 29,605 6,987

Net pens ion liability (84,444) (205,025)

Other liabilities 5,300 (5,148)

PERA pension-related deferred inflows (178,999) (219,750)

AMP-related deferred inflows (1,153) 2,603

OPEB-related deferred inflows (41,860) 169,711

$ (192,911) 120,473

$34,489 23,046

2,460 1,184

Purchases of capital assets in accounts payable 34,208 13,185

544,284 52,712

Proceeds from refunding bonds deposited with escrow agent 235,405 452,149

17,551 37,041

(35,243) (4,813)

Change in unrealized gains on inves tments

Amortization of premiums and discounts

Amortization of deferred loss

Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used for) Operating Activities:

Operating income (los s)

Adjustments to reconcile operating income (loss) to net cash provided by operating activities

Depreciation expense

Items classified as nonoperating revenues

Changes in assets, deferred outflows, liabilities, and deferred inflows

Net Cash Provided by (Us ed for) Operating Activities

Noncash Investing, Capital and Financing Transactions

Donations of noncash items

Lease-financed acquisitions

University of Colorado

Fiduciary Activities

Statements of Fiduciary Net Position

June 30, 2021 and 2020 (In Thousands)

2021 2020

Ass ets

Current Assets

Cash, noninterest bearing (see Note 2)

1 1

Restricted cash - Flexible spending accounts (see Note 2) 1,161 1,197

Cas h equivalents (see Note 3) 25,925 45,696

Total cash and cash equivalents

27,087 46,894

Receivables:

Premiums, net 75 36,067

Pharmacy rebates 6,517 14,940

Other rebates and refunds 51 714

Premium assessment due from member 984 11,466

Interest receivable 42 29

Total receivables

7,669 63,216

Prepaid expenses 228 272

Total current assets

34,984 110,382

Noncurrent Assets

Inves tments - mutual funds (see Note 3) 32,491 13,215

Total Ass ets

67,475 123,597

Liabilities

Incurred claims (see Note 6)

30,455 59,191

Accrued liabilities 911 903

Accounts payable 3,189 3,774

Flexible spending accounts payable 827 787

Total Liabilities

35,382 64,655

Net Pos ition

Restricted for healthcare payments

32,093 58,942

Total Net Position

32,093 58,942

University of Colorado

Fiduciary Activities

Statements of Changes in Fiduciary Net Position

June 30, 2021 and 2020 (In Thousands)

2021 2020

Addi ti ons

Premiums

284,639 560,468

Miscellaneous - 52

Investment income 297 1,194

Total additions

284,936 561,715

Deletions

Incurred claims (see Note 6) 287,912 507,033

Claims process ing 19,473 26,978

Administrative 2,837 3,014

W ellnes s initiatives 1,563 1,690

Total deletions

311,785 538,715

Net increase (decrease) in fiduciary net position (26,849) 23,000

Net Position

Net Position, beginning of year 58,942 35,942

Net Position, End of Year $ 32,093 58,942

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES

GOVERNANCE

The University of Colorado (the University) is a comprehensive degree-granting research university in the State of

Colorado (the State). It is governed by a nine-member Board of Regents (the Regents) elected by popular vote in the

State’s general elections. Serving staggered six-year terms, one member is elected from each of the State’s seven

congressional districts with two Regents elected from the State at large. The University comprises the system office

and the following three accredited campuses, each with its unique mission as detailed below:

● University of Colorado Boulder (CU Boulder)

Established in 1861, CU Boulder is a comprehensive graduate research university (with selective admission

standards) offering a comprehensive array of undergraduate, master’s, and doctoral degree programs.

● University of Colorado Denver | Anschutz Medical Campus (CU Denver | Anschutz)

Originally operated as two separate campuses, the Health Sciences Center and the Denver campus were

established in 1883 and 1974, respectively. In 2004, the two campuses were institutionally merged into the

University of Colorado Denver. The consolidated institution is an urban comprehensive research university

offering a full range of undergraduate, graduate, and professional degree programs in life sciences, professional

programs, and liberal arts. The campuses are currently referred to collectively as CU Denver | Anschutz and

separately as the University of Colorado Denver (CU Denver) and the University of Colorado Anschutz Medical

Campus (CU Anschutz).

● University of Colorado Colorado Springs (UCCS)

Established as a separate campus in 1965, UCCS is a comprehensive graduate research university (with selective

admission standards) offering a comprehensive array of undergraduate, master’s, and doctoral degree programs.

To accomplish its mission, the University has over 8,700 instructional faculty serving over 66,000 students through

493 degree programs in 26 schools and colleges.

BASIS OF PRESENTATION AND FINANCIAL REPORTING ENTITY

Blended Component Units

The University’s financial reporting entity includes the operations of the University and all related entities for which

the University is financially accountable. Financial accountability may stem from the University’s ability to appoint

a majority of the governing board of the related organization, its ability to impose its will on the related organization,

its ability to access assets, or its responsibility for debts of the related organization. Blended component units

generally include those entities (1) that provide services entirely to the University, (2) in which there is a financial

benefit or burden relationship, or (3) in which management of the University has operational responsibility. The

University has the following blended component units:

● University of Colorado Medicine (CU Medicine)

University Physicians, Inc. d/b/a CU Medicine, is a Colorado non-profit corporation under Section 501(c)(3) of

the Internal Revenue Code (IRC), organized to perform the billing, collection, and disbursement functions for

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

professional services rendered for CU Anschutz as authorized in Section 23-20-114 of the C.R.S. CU Medicine

is the School of Medicine’s (SOM) faculty practice plan with approximately 3,800 member providers. CU

Medicine does not employ physicians or practice medicine directly; it provides the business and administrative

support for the clinical faculty employed by the SOM. The members’ primary sites of practice are the University

of Colorado Hospital Authority (UCHealth) and Children’s Hospital Colorado (Children’s Colorado), but

members also provide limited clinical services at multiple hospital and clinic sites throughout the region,

including other UCHealth locations, the National Jewish Medical and Research Center, the Veterans

Administration Medical Center, and Denver Health and Hospital Authority. The majority of patients cared for

reside within the Denver metropolitan area.

The University appoints a majority of CU Medicine’s governing body, and is able to impose its will. Additionally,

CU Medicine exclusively benefits the University by providing the services described above.

CU Medicine began participating in a federally funded program available to physicians employed by state-owned

medical schools in Fiscal Year 2018. In July 2017, the Centers for Medicare and Medicaid Services (CMS)

approved a proposed state Medicaid plan amendment filed by the Colorado Department of Health Care Policy &

Financing (HCPF) on behalf of CU Medicine and the SOM. Under the terms of the approved program, CU

Medicine received $84,536,000 and $77,998,000 in supplemental payments during Fiscal Years 2021 and 2020,

respectively. The supplemental funding is used to maintain and increase patient access to CU Medicine’s services

and for other programs defined in collaboration with HCPF, and is included in health services revenue in the

University’s financial statements.

Detailed financial information may be obtained directly from CU Medicine at P.O. Box 110247, Aurora, Colorado

80042-0247.

● University of Colorado Property Corporation, Inc. (CUPCO)

Incorporated in 2015 with operations starting in Fiscal Year 2017, CUPCO receives, holds, invests, and

administers real and personal property for the benefit of the University. CUPCO carries out its real estate

investing activities through direct ownership, management, and operation of certain real estate assets. CUPCO

is a non-profit entity under IRC Section 501(c)(3). The University appoints CUPCO’s governing body, is able

to impose its will on the organization, and the organization provides services entirely to the University. CUPCO

does not issue standalone financial statements.

● 18

Avenue, LLC (18

Avenue)

18th Avenue, LLC (18th Avenue), a Colorado limited liability company, was formed under State laws on

April 26, 2006. The University is the sole member. 18th Avenue is organized, operated, and dedicated

exclusively to promote the general welfare, development, growth, and well-being of the University, and

specifically for the primary purpose of acquiring, owning, operating, and maintaining real property consisting of

an office building in Denver, Colorado.

18th Avenue provides services exclusively to the University, owns real property, including the office building

and related improvements, located at 1800 Grant Street (which houses the CU System offices), along with the

existing loan encumbering the property. 18

Avenue does not issue standalone financial statements.

● University License Equity Holding, Inc. (ULEHI)

Originally established in 1992, with a significant reorganization in 2001, ULEHI assists faculty entrepreneurs at

the University in building successful companies from research discoveries made at the University. ULEHI holds

and manages various interests in entrepreneurial ventures relating to intellectual properties transferred to it by the

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

University pursuant to a Transfer Agreement dated April 30, 2002. ULEHI is a non-profit entity under IRC

Section 501(c)(3). The University appoints a voting majority of ULEHI’s governing body, is able to impose its

will on the organization, and the organization provides services entirely to the University.

Detailed financial information may be obtained directly from ULEHI at 13001 E. 17

Place, Suite W5130,

Aurora, Colorado 80045.

● Altitude West, LLC (Altitude West)

Altitude West was formed November 9, 2018, by the Regents with the authorization of the Division of Insurance

of the Department of Regulatory Agencies of the State. It was formed to operate as a captive insurance company

for the benefit of the University. Altitude West provides workers’ compensation insurance for the University’s

self-insured retention layer of $1,500,000 per claim. The University is the sole member of Altitude West and

appoints its board members. The University is financially accountable for Altitude West. Additionally, Altitude

West provides benefits solely to the University.

Detailed financial information may be obtained directly from Altitude West at 1800 Grant Street, Suite 700,

Denver, Colorado 80203.

Fiduciary Component Unit

● University of Colorado Health and Welfare Trust (the Trust)

The University of Colorado Health and Welfare Trust (the Trust) was established June 28, 2010 to administer

and manage certain health and welfare benefits for participating employees and retirees. The University of

Colorado (the University) and CU Medicine were the Members of the Trust at June 30, 2021. UCHealth was a

member of the Trust until June 30, 2020. It is intended that the Trust shall qualify as a “voluntary employees’

beneficiary association” (VEBA) under IRC Section 501(c)(9). The Trust is self-insured and is financed through

premiums collected from the employer members and their participants. Participant eligibility is determined

pursuant to the terms of each Component Plan. The Trust’s Board is controlled by the University, the University

is able to impose its will on the organization, and the organization provides services entirely to the University

and to CU Medicine. Effective July 1, 2019, the Trust is presented as a fiduciary component unit in the

University’s financial statements.

Detailed financial information may be obtained directly from the Trust at 1800 Grant Street, Suite 620, Denver,

Colorado 80203.

Discretely Presented Component Units

The University’s financial statements include two supporting organizations as discretely presented component units

(DPCU) of the University. The majority of the resources, or income thereon that the supporting organization holds

and invests, are restricted to the activities of the University by the donors.

Because these restricted resources held by the supporting organization can only be used by, or for the benefit of, the

University, the following supporting organizations are considered DPCU of the University (see Note 17 for additional

information):

● University of Colorado Foundation (CU Foundation)

Established in 1967, the CU Foundation solicits, receives, holds, invests, and transfers funds for the benefit of

the University. The CU Foundation, a nonprofit entity under IRC Section 501(c)(3), has a 15-member board of

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

directors, of which a member of the Regents, the president of the University, and another University designee

serve as ex-officio non-voting members. The board of directors elects its own members, other than those serving

as ex-officio non-voting members. The CU Foundation, as a not-for-profit entity, follows Financial Accounting

Standards Board (FASB) guidance in the preparation of its financial statements, which are then modified to match

the University’s financial reporting format.

Under an agreement between the CU Foundation and the University, the CU Foundation provides certain

development and investment services to the University in exchange for a fee.

Detailed financial information may be obtained directly from the CU Foundation at 1800 Grant Street, Suite 725,

Denver, Colorado 80203.

● University of Colorado Boulder Enterprise Corporation (CUBEC)

Established in January 2019, CUBEC is organized and operated exclusively for the benefit of the University of

Colorado, with a focus on the Boulder campus. CUBEC supports and strengthens the instructional, research and

service programs of the University, including entrepreneurial programs; supports and promotes the development

and utilization of the intellectual capital of the University faculty and students; develops new financial resources,

funding sources, and funding strategies to support and enhance the University’s facilities and programs; provides

new opportunities for individuals and organizations that want to collaborate with the University through

partnerships, joint ventures, and other such strategies that are otherwise unavailable to the University.

Under an agreement between the CUBEC and the University, CUBEC provides certain services to the University

in exchange for consideration appropriate for the service(s) provided.

CUBEC, as a not-for-profit entity under IRC Section 501(c)(3), follows FASB guidance in the preparation of its

financial statements, which are then modified to match the University’s financial reporting format. CUBEC does

not issue standalone financial statements.

Joint Ventures and Related Organizations

The University has associations with the following organizations for which it is not financially accountable nor has

primary access to the resources. Accordingly, these organizations have not been included in the University’s financial

statements. Information regarding the nature of the relationships is included in Note 18.

 University of Colorado Hospital (UCHealth)

 Auraria Higher Education Center (AHEC)

Relationship to State of Colorado

Article VIII, Section 5 of the Colorado Constitution declares the University to be a State institution. The Regents of

the University are elected by popular vote of the citizens of the State. Therefore, the Board of the University is

entirely different from the governing board of the State. The Regents are charged constitutionally with the general

supervision of the University and the exclusive control and direction of all funds of and appropriations to the

University unless otherwise provided by law. Management of the University is completely separate and distinct from

management of the State. The services provided by the University benefit the citizens of the State, rather than serving

the State government. The services include provisions of undergraduate and graduate education to the citizens of the

State, and conducting extensive amounts of federally and other funded research. Additionally, the University offers

more than 200 public outreach programs serving Coloradans and their communities. All outstanding debt of the

University is expected to be repaid entirely with resources generated by the University. No State funds are used to

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

repay any debt issued by the University. The State’s Annual Report can be obtained from the State Department of

Personnel and Administration, Denver, Colorado.

TAX-EXEMPT STATUS

The income generated by the University, as an instrumentality of the State, is generally excluded from federal income

taxes under IRC Section 115(1). The University also has a determination letter from the Internal Revenue Service

stating it is exempt under Section 501(a) of the IRC as an organization described in Section 501(c)(3). Income

generated from activities unrelated to the University’s exempt purpose is subject to tax under IRC Section

511(a)(2)(B). There was no tax liability related to income generated from activities unrelated to the University’s

exempt purpose as of June 30, 2021 and 2020.

The Trust is operating under the provisions of the Employee Retirement Income Security Act of 1974, as amended

(ERISA). The VEBA Trust was established pursuant to Section 501 (c)(9) of the IRC of 1986, as amended, and

accordingly, the VEBA Trust’s net investment income is exempt from income taxes. The Trust obtained an

exemption letter from the Internal Revenue Service (IRS) on August 29, 2011, in which the IRS stated that the VEBA

Trust was in compliance with applicable requirements of the IRC and Trust management believes that the VEBA

Trust continues to qualify and to operate in accordance with applicable provisions of the IRC.

BASIS OF ACCOUNTING

For financial reporting purposes, the University is considered a special-purpose government engaged in business-type

activities. Additionally, the Trust is reported as a fiduciary component unit. Accordingly, the University’s financial

statements have been prepared using the economic resources measurement focus and the accrual basis of accounting.

Under the accrual basis of accounting, revenues are recognized when earned, and expenses are recorded when an

obligation is incurred.

The University applies all applicable Governmental Accounting Standards Board (GASB) pronouncements.

ACCOUNTING POLICIES

Cash and Cash Equivalents are defined for the purposes of reporting cash flows as cash on hand and deposit accounts.

Investments in mutual funds and money market funds and securities are presented as investments. CU Medicine, the

Trust, and the CU Foundation consider money market funds and securities with a maturity, when acquired, of three

months or less to be cash equivalents.

Investments are reported in the financial statements at fair value, which is determined primarily based on quoted

market prices or net asset value as of June 30, 2021 and 2020. Contract value is used for the guaranteed investment

agreement and amortized costs (which approximate fair value) are used for money market investments. These money

market accounts are held with Securities and Exchange Commission (SEC) registered investment companies under

Rule 2a7 of the Investment Company Act of 1940.

The classification of investments as current or noncurrent is based on the underlying nature and restricted use of the

asset. Current investments are those without restrictions imposed by third parties that can be used to pay current

obligations of the University. Noncurrent investments include investments with a maturity in excess of one year,

restricted investments (which includes unspent bond proceeds), and those investments designated to be used for long-

term obligations.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

The University’s investment policies permit investments in fixed income, equity securities, and alternative strategies.

These policies are implemented using individual securities, mutual funds, commingled funds, and alternative

investments for the endowments. All of the University’s alternative investments are held at the CU Foundation and

follow its valuation methods.

Investments of the CU Foundation include those held as agency funds for the University. The CU Foundation records

investment purchases and contributions at the fair values of the investment received at the date of contribution.

Investments in equity securities with readily determinable fair values and all investments in debt securities are stated

at their fair values. The fair values of alternative investments not publicly traded on national security exchanges

represent the CU Foundation’s pro-rata interest in the net assets of each investment and are based on financial

information determined and reported by investment managers, subject to review, evaluation, and adjustment by the

management of the CU Foundation. Because of inherent uncertainties in the valuation of alternative investments,

those estimated fair values may differ significantly from the values that would have been used had a ready market for

the investments existed. Included in the investments portfolio are real estate and note receivable assets. These assets

are stated at cost and present value, respectively.

Endowments and similar gift instruments owned by the University and the CU Foundation are primarily recorded as

investments in the accompanying financial statements. Endowment funds are subject to the restrictions of donor gift

instruments requiring the principal to be invested in perpetuity. Life income funds are used to account for cash or

other property contributed to the University subject to the requirement that the University or CU Foundation

periodically pay the income earned on such assets to a designated beneficiary. The assets of life income funds become

the property of the University or the CU Foundation upon the death of the designated beneficiary. Annuity funds are

used to account for property contributed to the University or the CU Foundation in exchange for a promise to pay a

fixed amount to the donor for a specified period of time. Gifts-in-kind are recorded at the fair market value as of the

date of donation.

Accounts, Contributions, and Loans Receivable are recorded net of estimated uncollectible amounts, approximating

anticipated losses.

Contributions receivable for the CU Foundation are unconditional promises to give that are recorded at their estimated

net realizable value, discounted using risk-free interest rates effective at the date of the promise to give, if expected

to be collected within one year and at the present value of their expected future cash flows if expected to be collected

in more than one year. Subsequent to the initial recording of the contribution receivable, the CU Foundation uses the

allowance method to record amounts estimated to be uncollectible. The allowance is based on the historical

collectability of contributions promised to the CU Foundation and on management’s analysis of specific promises

outstanding.

For all other receivables, individual accounts are written off against the allowance when collection of the account

appears doubtful. Bad debts substantially consist of write-offs for uncollectible balances on self-pay patients and

contributions receivable.

Pharmacy rebates are received by the Trust from its prescription drug programs. Pharmacy rebates are recognized

in the period corresponding to the period that the participant fills the prescription. Rebates are recorded as a reduction

of incurred claims in the statement of revenues, expenses, and changes in net position. In fiscal year 2021 and 2020,

there were rebates received from two programs.

Inventories are primarily accounted for using the consumption method and are stated at the lower of cost or market.

Cost is determined using either first-in, first-out, average cost, or retail method.

Other Assets consists of prepaid expenses, and travel advances.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Capital Assets are stated at cost at the date of acquisition or at acquisition value at the date of donation. For

equipment, the capitalization policy includes all items with a value of $5,000 or more, and an estimated useful life of

greater than one year.

Intangibles and renovations to buildings and other improvements that significantly increase the value or extend the

useful life of the structure are capitalized. For intangibles and renovations and improvements, the capitalization

policy includes items with a value of $75,000 or more. Routine repairs and maintenance are charged to operating

expense. Major outlays for capital assets and improvements are capitalized as construction in progress throughout

the building project. Software, both externally purchased and internally developed, with a value of $5,000 or more

is capitalized.

All collections, such as works of art and historical artifacts, have been capitalized at cost at the date of acquisition or

acquisition value at the date of donation. The nature of certain collections is such that the value and usefulness of the

collections does not decrease over time. These collections have not been depreciated in the accompanying financial

statements.

Assets under capital leases are recorded at the present value of future minimum lease payments and are amortized

using the straight-line method over the shorter of the lease term or the estimated useful life. Such amortization is

included as depreciation expense in the accompanying financial statements.

Depreciation is computed using the straight-line method and monthly convention over the estimated useful lives of

the assets as displayed in Table 1.1.

Asset Class Years

Land Improvements 10 – 40

Buildings 12 – 50 *

Improvements other than buildings 10 – 40

Equipment 2 – 20

Software 3 – 10

Library and other collections 6 – 15

Intangibles Varies

Infras tructure 10 – 40

Table 1.1. Asset Useful Lives

* Certain buildings are componentized and the components may

have useful lives similar to improvements or equipment.

Compensated Absences and related personnel expenses are recognized based on estimated balances due to employees

upon termination or retirement. The limitations on such payments are defined by the rules associated with the

personnel systems at the University. Employees accrue and vest in vacation and sick leave earnings based on their

hire date and length of service. Professional exempt and 12-month faculty employees accrue sick leave with pay at

the rate of 10 hours per month with a maximum accrual of 960 hours while classified employees earn 6.67 hours per

month with a maximum accrual of 360 hours for employees hired after June 30, 1988. Employees hired before

June 30, 1988, can accrue up to 360 hours in excess of amount of sick leave earned as of June 30, 1988. Employees

earn and accrue vacation leave per the rates in Table 1.2. Vacation accruals are paid in full upon separation, whereas

only a portion of sick leave is paid upon specific types of separation, such as retirement.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Days Earned Maximum

Type of Employee Per Month* Accrual

Classified employees hired on or after January 1, 1968 1-1.75 days 24 – 42 days

Professional exempt and 12-month faculty employees 1.83 days 44 days**

* Rates are for full-time employees; part-time employees earn at pro-rata based on

percentage of appointment.

Table 1.2. Compensated Absence Accrual Rates for Vacation

** Vacation accrual in excess of 44 days is deducted to meet the 44 day limit. For Fiscal

Year 2020-21, at the discretion of the president for system administration employees, or the

chancellor for employees of the relevant campus, which discretion may be delegated,

employees who have been unable to take vacation due to the COVID-19 public health

emergency may accrue and carry more than forty-four (44) days of vacation leave as of July

1, 2020 through July 1, 2021. This was repealed without further action as of July 1, 2021.

The liability for compensated absences is expected to be funded by various sources of revenue that are available in

future years when the liability is paid.

Unearned Revenue consists of amounts received for the provision of education, research, auxiliary goods and

services, and royalties that have not yet been earned.

Bonds, Leases, and Notes Payable are debt incurred usually for the acquisition of buildings, equipment, or capital

construction and are addressed in Note 8.

Capital leases consist of various lease-purchase contracts and other lease agreements. Such contracts provide that

any commitments beyond the current year are contingent upon funds being appropriated for such purposes by the

Regents. It is reasonably assured that such leases will be renewed in the normal course of business and, therefore,

are treated as non-cancelable for financial reporting purposes.

Split-interest Agreements are beneficial interests in various agreements which include gift annuities, charitable

remainder annuity trusts and unitrusts, and a pooled income fund. The CU Foundation typically serves as trustee,

although certain trusts are administered by outside trustees.

For trusts administered by the CU Foundation, specified earnings are typically paid to a named beneficiary. After

termination of the trusts, the assets revert to the CU Foundation to create an endowment to support University

activities or to be temporarily restricted for other purposes at the University. Assets received under such agreements

are typically marketable equity and fixed-income securities, are recorded at their fair value, and are included in

investments in the accompanying financial statements. The estimated net present value of the obligation to named

beneficiaries is recorded as a liability under split-interest agreements. A risk-free rate, using U.S. Treasury bonds at

the date of the gift, is used in conjunction with actuarially determined life expectancies to calculate present values.

The fair value of assets received in excess of the obligation is recognized as contribution revenue at the date of the

gift. Changes in the value of the investments are combined with the changes in the estimated liability and are recorded

in the accompanying financial statements.

In cases where a split-interest agreement is administered by an outside trustee, the CU Foundation records the

estimated fair value of future cash flows from the trust as a contribution receivable from charitable remainder trusts

at the point at which the CU Foundation becomes aware of its interest in the trust. Under certain circumstances, the

CU Foundation accepts and manages trust funds for which the University or the CU Foundation has beneficial interest

but is not the sole beneficiary of the trust. Funds received for which the University or the CU Foundation is not the

ultimate beneficiary are included as other liabilities in the accompanying financial statements and are not included in

contributions revenue.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Custodial Funds consist of funds held by the CU Foundation for endowments legally owned by other entities,

including the University.

Other postemployment benefits (OPEB) consist of post-retirement healthcare and life insurance benefits for retired

employees. Substantially all University employees may become eligible for those benefits if they reach normal

retirement age while working for the University. The University participates in both a single-employer plan as well

as a cost-sharing plan. The University’s contributions to the single-employer plan are made on a pay-as-you-go basis

and are set by statute for the cost-sharing plan. The University’s liability is measured as the portion of the present

value of projected benefit payments to be provided to active and inactive employees that is attributable to those

employees’ past period of service, less the amount of the plan’s fiduciary net position, if any, based on actuarial

valuations. See Note 9 for more information on both plans. The University uses historical annual payments for OPEB

to estimate the current portion of the balance.

Alternate Medicare Payment is described in Note 10.

Other Liabilities are addressed in Note 11 and consist of risk financing, construction contract retainage, funds held

for others, the Federal share of Perkins Loans, the asset retirement obligation, the early retirement incentive plan, and

miscellaneous.

Certain loans to students are administered by the University with funding primarily supported by the federal

government. The University’s statement of net position includes both the loans receivable and the related federal

refundable loan liability representing federal capital contributions owed upon termination of the program.

Deferred Outflows of Resources and Deferred Inflows of Resources. Deferred outflows of resources represent

consumption of net position that is applicable to a future period. Deferred inflows of resources represent acquisition

of net position that is applicable to a future period.

For the University, losses related to debt defeasance are included in deferred outflows of resources. The deferred

amount will be amortized over the remaining life of the debt refunded. Changes in net pension liability not included

in pension expense, and changes in OPEB liability not included in OPEB expense, are reported as deferred outflows

of resources or deferred inflows of resources. Employer contributions subsequent to the measurement date are

reported as deferred outflows of resources. Asset retirement obligations and split-interest agreements are recorded as

other deferred outflows of resources.

Net Pension Liability is the liability of the University, the employer, to employees for the Colorado Public

Employees’ Retirement Association (PERA) defined-benefit pension plan, which is measured as the portion of the

present value of projected benefit payments to be provided through the pension plan to current active and inactive

employees that is attributed to those employees’ past periods of service (total pension liability), less the amount of

the pension plan’s fiduciary net position. See Note 10 for more information.

Net Position is classified in the accompanying financial statements as follows:

Net investment in capital assets represents the total investment in capital assets, net of outstanding debt

obligations related to those capital assets. To the extent debt has been incurred but not yet expended for

capital assets, such amounts are not included as a component of net investment in capital assets.

Restricted for nonexpendable purposes consists of endowments and similar instruments in which donors

or other outside sources have stipulated, as a condition of the gift instrument, that the principal is to be

maintained inviolate and in perpetuity, and invested for the purpose of producing present and future

income, which may either be expended or added to principal.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Restricted for expendable purposes represents net resources in which the University is legally or

contractually obligated to spend resources in accordance with restrictions imposed by external third

parties.

Unrestricted net position represents net resources derived from student tuition and fees, fee-for-service

contracts, and sales and services of educational departments. These resources are used for transactions

relating to the educational and general operations of the University and may be used at the discretion of

the Regents to meet current expenses for any purpose. These resources also include those from auxiliary

enterprises, which are substantially self-supporting activities that provide services for students, faculty,

and staff.

Fiduciary net position represents the Trust’s net position, which is classified as restricted and is

expendable in accordance with the requirements stated in the Trust Agreement.

Internal Transactions occur between University operating units, including its formal self-funded internal service

units and blended component units. Examples of self-funded operating units are telecommunications, cogeneration,

and storerooms. Transactions include the recognition of revenues, expenses, receivables, and payables in the

appropriate accounts of the operating units. To accommodate external financial reporting, the internal revenues and

receivables are netted against expenses and payables, respectively, and are eliminated at year-end

Classification of Revenues and Expenses in the accompanying financial statements has been made according to the

following criteria:

Operating revenues are derived from activities associated with providing goods and services for

instruction, research, public service, health services, or related support to entities separate from the

University and that are exchange transactions. Examples include student tuition and fees, fee-for-service

contracts, sales and services of auxiliary enterprises, healthcare and patient services, grants, and contracts.

Tuition and fee revenue for sessions that are conducted over two fiscal years are allocated on a pro-rata

basis. Operating revenues of the CU Foundation also include contributions, which are derived from their

fundraising mission.

Other operating revenues include rental income, charges for services, transcript and diploma fees, other

miscellaneous fees, and miscellaneous revenues from CU Medicine.

Operating expenses are paid to acquire or produce goods and services provided in return for operating

revenues and to carry out the mission of the University.

Nonoperating revenues and expenses include all revenues and related expenses that do not meet the definition

of operating revenues, capital revenues, or endowment additions. They are primarily derived from activities

that are non-exchange transactions (e.g., gifts, including those from the CU Foundation), from activities

defined as such by the GASB cash flow standards (e.g., investment income), and also the Federal Pell Grant

and insurance recoveries. Nonoperating revenues also includes COVID Aid including recognizable lost

revenue. CU Boulder received $79,666,000 and $67,005,000 in COVID Aid during Fiscal Years 2021 and

2020, respectively, which was primarily spent on student aid and lost revenue. As of June 30, 2021, CU

Boulder had $26,599,000 left to spend. UCCS received $55,573,000 and $7,926,000 in COVID Aid during

Fiscal Years 2021 and 2020, respectively, which was primarily spent on student aid and lost revenue. As of

June 30, 2021, UCCS had $11,735,000 left to spend. CU Denver | Anschutz received $55,640,5000 and

$74,256,000 in COVID Aid during Fiscal Years 2021 and 2020, respectively, which was primarily spent on

remote instruction; student services related to enrollment, retention and credential completion; student

financial aid; and lost revenue. As of June 30, 2021, CU Denver | Anschutz had $24,707,000 left to spend.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Scholarship Allowances are the difference between the stated charge for the goods and services provided by the

University and the amount that is paid by the students or by other third parties making payments on the students’

behalf. Tuition and fee revenue and certain other auxiliary enterprise revenues are reported net of scholarship

allowance in the accompanying financial statements. Certain grants from external governmental and private programs

are recorded as either operating or nonoperating revenues in the accompanying financial statements. To the extent

that such grant revenues are used to satisfy tuition and fees and other student charges, the University records

scholarship allowances. The student aid line under operating expenses represents the amount of financial aid

disbursed to students net of the aid applied to the student’s account to pay for tuition and fees. See Note 14 for more

information.

Health Services Revenue is recognized by CU Medicine as a result of providing care to patients covered under various

third parties such as Medicare and Medicaid, private insurance companies, and managed care programs, primarily

from fixed-rate agreements. The federal and state governments annually update fixed-rate agreements for Medicare

and Medicaid, respectively. In addition to the standard Medicaid program, CU Medicine provides substantial care to

Medicaid patients under the Colorado Access program. Contractual arrangements with insurance companies and

managed care plans are negotiated periodically for future years.

Health services revenue is reported at the estimated net realizable amounts due from third-party payers and others for

services rendered. Net patient services revenue includes care provided to patients who meet certain criteria under CU

Medicine’s medically indigent care policy as reimbursed with funds provided by the State processed by UCHealth,

and co-payments made by care recipients. In accordance with CU Medicine’s mission and philosophy, CU Medicine

members annually provide substantial levels of charity care to patients who meet certain defined criteria. Charity

care relates to services rendered for which no payment is expected. See Note 15 for more information.

Donor Restricted Endowment disbursements of the net appreciation (realized and unrealized) of investments of

endowment gifts are permitted by State law, except where a donor has specified otherwise. The amount of earnings

and net appreciation available for spending by the University and the CU Foundation is based on a spending rate set

by the CU Foundation board on an annual basis. For the years ended June 30, 2021 and 2020, the authorized spending

rate was equal to 4 percent of the endowment’s trailing 36-month average fair market value as of December 31 for

the year preceding the distribution.

Earnings in excess of the amount authorized for spending are available in future years and are included in the value

of the related investment. Earnings authorized to be spent are recognized in the University’s financial statements as

investment or gift revenue for University or CU Foundation-owned endowments, respectively. As of June 30, 2021

and 2020, there was $18,796,000 and $18,057,000, respectively, in net appreciation of investments available for

authorization for expenditure as reported in restricted expendable net position.

Application of Restricted and Unrestricted Resources is made on a case-by-case basis by management depending

on overall program resources.

Use of Estimates is made in order to prepare financial statements in conformity with accounting principles generally

accepted in the United States of America. Management is required to make estimates and assumptions that affect the

reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial

statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ

significantly from those estimates.

ADOPTION OF NEW AND FUTURE ACCOUNTING STANDARDS

Effective July 1, 2020, the University adopted the provisions of Statement No. 84 Fiduciary Activities (Statement

No. 84). Statement No. 84 establishes criteria for identifying fiduciary activities. The focus on the criteria generally

is on (1) whether a government is controlling the assets of the fiduciary activity and (2) the beneficiaries with whom

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

a fiduciary activity exists. Due to the change in the employers of the Trust, as of July 1, 2020, the Trust is reported

as a fiduciary component unit of the University under the provisions of Statement No. 84. The University had no

other activities that met the requirements of Statement No. 84. As of July 1, 2020, the Trust is reported as a fiduciary

component unit of the University under the provisions of Statement No. 84.

The University is required to adopt the provisions of Statement No. 87 Leases (Statement No. 87) beginning in Fiscal

Year 2022. The impact of adoption will be retroactive to July 1, 2020 (Fiscal Year 2021). The objective of Statement

No. 87 is to better meet the information needs of financial statement users by improving accounting and financial

reporting for leases by governments. This Statement requires recognition of certain lease assets and liabilities for

leases that previously were classified as operating leases and recognized as inflows of resources or outflows of

resources based on the payment provisions of the contract. It establishes a single model for lease accounting based

on the foundational principle that leases are financings of the right to use an underlying asset. Under this Statement,

a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to

recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of

information about governments’ leasing activities. The impact of the adoption of Statement No. 87 has not yet been

determined.

REVISIONS

Certain immaterial revisions have been made to the 2020 financial statements. To agree with the Foundation’s issued

Fiscal Year 2020 report, the Statement of Net Position for Discretely Presented Component Units and Note 17 were

updated; $12,762,000 of net position was reclassed from restricted for expendable purposes to restricted for

nonexpendable purposes, and $99,000 was reclassed from administrative expense to distributions to the University.

On CU Medicine’s summary financial statements, $2,000,000 of current liabilities was reclassed to payable to

University in 2020. The amortization of deferred loss disclosed parenthetically on the University’s statement of

changes in revenues, expenses, and net position was updated from $9,119,000 to $17,763,000 in 2020. Donations of

noncash items disclosed in the Noncash Investing, Capital, and Financing Transactions section of the University’s

Statement of Cash Flows was updated from $441,000 to $23,046,000 to reflect all non-cash donations rather than just

those that were capitalized. In Table 3.3, $16,926,000 of bond mutual funds were moved from rated to unrated in

2020. In Note 8, the disclosure for the amount of in-substance defeased debt was updated from $914,805,000 to

$702,490,000; the amount of debt defeased was updated from $445,320,000 to $222,660,000; and the amount of

escrow agent payments was updated from $20,690,000 to $10,345,000. These revisions do not have a significant

impact on the financial statements.

NOTE 2 – CASH AND CASH EQUIVALENTS

The University’s cash and cash equivalents are detailed in Table 2, Cash and Cash Equivalents.

2021 2020

Cash on hand (petty cas h and change funds) $ 326 320

Depos its with U.S. financial ins titutions 350,903 221,314

Deposits with foreign financial institutions 18 35

Total Cash and Cash Equivalents – University $ 351,247 221,669

Table 2. Cash and Cas h Equivale nts

(in thousands)

Custodial credit risk for deposits is the risk that in the event of a bank failure, the University’s deposits may not be

returned to it. To manage custodial credit risk, deposits with U.S. and foreign financial institutions are made in

accordance with University and State policy, including the Public Deposit Protection Act (PDPA). PDPA requires

all eligible depositories holding public deposits to pledge designated eligible collateral having market value equal to

at least 102 percent of the deposits exceeding those amounts insured by federal depository insurance. Deposits

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

collateralized under the PDPA are considered to be collateralized with securities held by the pledging institution in

the University’s name.

The Trust’s cash and restricted cash consist of amounts held in three noninterest bearing demand deposit accounts at

Wells Fargo Bank, N.A. The Federal Deposit Insurance Corporation’s limit of $250,000 applies to the Trust’s

balances held at this bank. The Trust does not have a formal policy for custodial credit risk.

NOTE 3 – INVESTMENTS

The University’s investments generally include direct obligations of the U.S. government and its agencies, money

market funds, municipal and corporate bonds, asset-backed securities, mutual funds, collective investment trust funds,

repurchase agreements, corporate equities and alternative non-equity securities. CU Foundation investments are

similar to the University’s but also include alternative non-equity securities in hedge funds and commodities.

Endowments are pooled to the extent possible under gift agreements. The CU Foundation manages a portion of these

endowments for the University in accordance with its investment policy.

To the extent permitted, and excluding the University’s blended entities, the University pools cash balances for

investment purposes. An investment policy statement approved by the Regents directs the Treasurer of the University

to meet the following investment objectives:

 liquidity for daily operations,

 protection of the nominal value of assets, and

 generation of distributable earnings at a level commensurate with the time horizon of the investments.

For financial statement purposes, investment income (loss) is reported on a total return basis and is allocated among

operational units based on average daily balances, using amortized costs. Average daily balances, based on amortized

costs, approximated $2,185,342,000 and $2,039,449,000 for the years ended June 30, 2021 and 2020, respectively.

The total return on this pool (excluding blended component units) was 24.44 percent and 6.22 percent for the years

ended June 30, 2021 and 2020, respectively.

The Trust’s financial assets are authorized for investment primarily in cash equivalents and fixed-income securities

using internal resources as well as external managers and commingled and mutual funds, where appropriate, in

accordance with the Trust Investment Policy as adopted by the Trust Committee.

FAIR VALUE MEASUREMENTS

The University categorizes its fair value measurements within the fair value hierarchy established by GAAP. Fair

value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly

transaction. In determining this amount, three valuation techniques are available:

 Market approach – This technique uses prices generated for identical or similar assets or liabilities. The

most common example is an investment in public security traded in an active exchange such as the New York

Stock Exchange.

 Cost approach – The cost approach determines the amount required to replace the current asset and may be

ideal for valuing donations of capital assets or historical treasures.

 Income approach – This technique converts future amounts (such as cash flows) into a current discounted

amount.

Each of these valuation techniques requires inputs to calculate a fair value. Observable inputs should be maximized

in fair value measures, and unobservable inputs should be minimized.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

GAAP establishes a hierarchy of inputs to the valuation techniques above. This hierarchy has three levels:

● Level 1 – Quoted prices in active markets for identical assets or liabilities. Example: ownership in shares of a

mutual fund company that is publicly traded.

● Level 2 – Quoted market prices for similar assets or liabilities, quoted prices for identical or similar assets or

liabilities in markets that are not active, or other-than-quoted prices that are not observable. Example: ownership

of a corporate bond that trades on an exchange that is not active.

● Level 3 – Unobservable inputs. Example: ownership in a private hedge fund that does not trade on a public

exchange.

The University owns an interest in one collective investment trust fund at June 30, 2021 and 2

020. This trust fund

owns investment assets, but the University owns an interest in the private trust itself rather than an interest in each

underlying asset. Therefore, the

unit of account is the University’s ownership interest in the trust, rather than a

percentage in individual assets held by the trust. The assets could be sold at an amount different than the Net Asset

Value (NAV) per share (or its equivalent) due to the liquidation policy in the trust’s agreements with the investors.

Redemption frequencies for these funds range from one to seven days and there were no unfunded commitments as

of June 30, 2021 and 2020.

The fair value measurements as of June 30, 2021 and 2020 for the University are included in Table 3.1.

Level 1 Level 2 Level 3 2021 Total

$ 148

372 218

998 - 367

370

- 456

436 181 456

617

364 - - 5

364

Collateralized mortgage obligations

072 101

734 - 103

806

110 33

377 - 33

487

511

974 - - 1

511

974

- - 619

228 619

228

- 172

375 1

204 173

579

Real estate

896 - - 896

668

788 982

920 620

613 3

272

321

Measured at NAV:

Equity trust

169

604

Measured at amortized cost:

Money market funds

338

945

Measured at cost:

Private equity securities

283

Measured at contract value:

Guaranteed investment agreement

115

Repurchase agreements

206

3,899,474$

$ 25

925

- -

925

Mutual funds

491

- -

491

Total Investments – Trust 32,491$ - - 58,416

Money market fund

Total Investments – Universit

Table 3.1. Inve stments - Unive rsity and Trust (

in thousands

)

U.S. government securities

Corporate bonds

Corporate equities

Municipal bonds

Mutual funds

Held at CU Foundation

Investment T

Asset-backed securities

Alternative non-equity securities:

Investments not requiring fair value:

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Level 1 Level 2 Level 3 2020 Total

$ 67,095 223,960 - 291,055

10 474,032 - 474,042

5,241 - - 5,241

Collateralized mortgage obligations 1,419 130,537 - 131,956

110 44,904 - 45,014

1,026,548 17 - 1,026,565

Certificates of deposit 527 - - 527

- - 459,572 459,572

698 163,906 1,571 166,175

Real estate 723 - - 723

1,102,371 1,037,356 461,143 2,600,870

Measured at NAV:

Equity trust 157,064

Measured at amortized cost:

Money market funds 271,803

Measured at cost:

Private equity securities 2,675

Measured at contract value:

Guaranteed investment agreement 73,195

Repurchase agreements 13,391

3,118,998$

$ 45,696

- -

45,696

Mutual funds 13,215

- -

13,215

Total Inves tments – Trus t 58,911$ - - 58,911

Inves tment Type

Held at CU Foundation

Table

(

cont

nue d

)

Investments - Un

vers

(

n t

ousan

)

Asset-backed securities

U.S. government securities

Corporate bonds

Corporate equities

Municipal bonds

Mutual funds

Money market fund

Total Investments – University

Alternative non-equity securities:

Investments not requiring fair value:

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Details of investments by type for the CU Foundation are included in Table 3.2 (reflecting prior year category changes

made in the current year).

Table 3.2. Investments - CU Foundation (

in thousands

)

Investment Type 2021 2020

Cash and cash equivalents $ 19,534 80,321

Mutual funds:

Domestic equities 116,472 17,836

International equities 254,539 154,087

Fixed income 2,213 2,103

Equity securities 228,599 283,859

Fixed-income securities 198,439 146,307

Alternative non-equity securities:

Real estate 64,071 60,790

Private equity 434,038 323,445

Commingled equity funds 817,137 503,393

Absolute return funds 350,760 304,803

Venture capital 337,586 197,432

Commodities 24,455 15,798

Other 943 897

Total Investments – CU Foundation $ 2,848,786 2,091,071

CUSTODIAL CREDIT RISK

Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty, the University will

not be able to recover the value of its investments or collateral securities that are in the possession of an outside party.

Therefore, exposure arises if the securities are uninsured, not registered in the University’s name, and are held by

either the counterparty to the investment purchase or the counterparty’s trust department or agent but not in the

University’s name.

Open-ended mutual funds and certain other investments are not subject to custodial risk because ownership of the

investment is not evidenced by a security. At June 30, 2021 and 2020, the $3,588,000 and $1,809,000, respectively,

of private equity securities held by ULEHI are exposed to custodial credit risk. None of the University’s other

investments are subject to custodial risk.

At June 30, 2021 and 2020, the Trust’s cash equivalents consist of shares of a 2a-7-money market fund held in the

Wells Fargo Government Money Market Fund (ticker symbol GVIXX), which has a credit rating of Aaam and a

weighted average maturity of approximately 32 days. Cash equivalents are reported at amortized cost, which

approximates fair value. The Wells Fargo Government Money Market Fund is an open-ended mutual fund and is,

therefore, not exposed to custodial credit risk.

At June 30, 2021 and 2020, the Trust’s investments consist of the Vanguard Admiral Fund (ticker symbol VFSUX)

which invests in short term bonds and is an unrated mutual fund with an average duration of 2.7 years for the

underlying investments. Custodial credit risk for investments is the risk that, in the event of the failure of the

counterparty, the Trust will not be able to recover the value of its investments or collateral securities that are in the

possession of an outside party. The Trust has no formal policy for custodial credit risk. At June 30, 2021 and 2020,

the Trust did not identify any investments subject to custodial credit risk.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

CREDIT QUALITY RISK

Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Credit

quality risk only applies to debt investments. This risk is assessed by national rating agencies, which assign a credit

quality rating for many investments. The University’s investment policies for the Treasury pool do not permit

investments in debt securities that are below investment grade at the time the security is purchased. University policy

allows no more than 20 percent of investments to be rated below Baa (Moody’s) or BBB (Standard & Poor’s (S&P)

and Fitch) at the time of purchase. There are several other investment policies tailored to non-pooled investments.

Those policies do not restrict investments to a particular credit quality standard. Credit quality ratings are not required

for obligations of the U.S. government or obligations explicitly guaranteed by the U.S. government. The CU

Foundation does not have a policy concerning credit quality risk. A summary of the University’s debt investments

and credit quality risk as of June 30, 2021 and 2020 is shown in Table 3.3. Table 3.3 is a subset of Table 3.1 and

reflects the Moody’s ratings unless S&P is lower. It does not include $2,202,003,000 of non-debt securities and

$387,171,000 of debt investments that are backed by the full faith and credit of the U.S. government as of June 30,

2021, and does not include $1,551,793,000 of non-debt securities and $308,222,000 of debt investments that are

backed by the full faith and credit of the U.S. government as of June 30, 2020.

The Trust has no formal policy for credit risk. At June 30, 2021 and 2020, the Trust believes the credit risk is minimal.

Table 3.3. Debt Investments and Credit Quality Risk - University (

in thousands

)

Unrated Rated Unrated Rated

% of Rated % of Rated

Fair Fair Value by Fair Fair Value by

Inves tment Type Value Value Credit Rating Value Value Credit Rating

U.S. government securities $ 42,042 41,963

93% Aaa/Aa/A

7% Baa/Ba/B

$ 49,517 65,271 100% Aaa/Aa/A

Bond mutual funds 76,419 - - 64,683 - -

Certificates of deposit - - - 527 - -

Corporate bonds 192 456,425 65% Aaa/Aa/A

35% Baa/Ba/B

1,568 472,474 55% Aaa/Aa/A

45% Baa/Ba/B

Money market mutual funds - 372,873 100% Aaa - 307,168 100% Aaa

Municipal bonds 106 33,381 18% Aaa

80% Aa/A

2% Baa/Ba/B

5,654 39,360 24% Aaa

74% Aa/A

2% Baa/Ba/B

Repurchase agreements 67,205 - - 13,391 - -

Guaranteed investment agreement 46,115 - - 73,195 - -

As s et-backed s ecurities 20,502 153,077 84% Aaa

13% Aa/A

3% Baa/Ba/B

1% Caa/Ca/D

27,024 139,151 82% Aaa

14% Aa/A

3% Baa/Ba/B

1% Caa/Ca/D

Total Debt Investments $ 252,581 1,057,719 $ 235,559 1,023,424

20202021

INTEREST RATE RISK

Interest rate risk is the risk that changes in the market rate of interest will adversely affect the value of an investment.

Interest rate risk only applies to debt investments. The University manages interest rate risk using weighted average

maturity. Weighted average maturity is a measure of the time to maturity in years that has been weighted to reflect

the dollar size of the individual investment within an investment type. The University’s investment policy mitigates

interest rate risk through the use of maturity limits for each of the investment segment pools.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

A summary of the fair value of the University’s debt investments and interest rate risk as of June 30, 2021 and 2020

is shown in Table 3.4. Table 3.4 is a subset of Table 3.1 and does not include $2,574,876,000 and $1,858,960,000 of

non-debt securities as of June 30, 2021 and 2020, respectively. The main difference in the amount of non-debt

securities excluded in Table 3.3 and Table 3.4 is that money market mutual funds are included in Table 3.3 as they

have credit risk, but they are excluded from Table 3.4 as they do not have interest rate risk. Also, U.S. government

securities are not subject to credit risks but are subject to interest rate risks and are included here but not in the credit

quality risk section.

The Trust has no formal policy for interest rate risk. At June 30, 2021 and 2020, the Trust believes the interest rate

risk is minimal.

Table 3.4. Debt Investments and Interest Rate Risk

(in thousands and years)

Investment Type 2021 2020

University

Amount

Weighted

Average

Maturity Amount

Weighted

Average

Maturity

U.S. government securities $ 367,370 13.89 $ 291,055 11.19

Bond mutual funds 76,419 0.99 64,683 1.16

Certificates of deposit - - 527 0.18

Corporate bonds 456,617 9.38 474,042 7.35

Municipal bonds 33,487 10.00 45,014 10.69

Repurchase agreements 67,205 0.67 13,391 0.04

Guaranteed investment agreement 46,115 1.37 73,195 2.29

Fixed rate asset-backed securities 129,418 18.80 128,491 18.32

Variable rate asset-backed securities 44,161 18.98 37,684 13.97

Collateralized mortgage obligations 103,806 21.65 131,956 16.20

Total Debt Inves tments

–

University $ 1,324,598 $ 1,260,038

The University has investments in asset-backed securities, which consist mainly of mortgages, home equity loans,

student loans, automobile loans, equipment trusts, and credit card receivables. These securities are based on cash

flows from principal and interest payments on the underlying securities. An asset-backed security has repayments

that are expected to significantly vary with interest rate changes. The variance may present itself in terms of variable

repayment amounts and uncertain early or extended repayments.

CONCENTRATION OF CREDIT RISK

Concentration of credit risk is the risk of loss attributed to magnitude of an entity’s investment in a single issuer other

than the federal government. The University’s policy is that exposure of the portfolio to any one issuer, other than

securities of the U.S. government or agencies, or government-sponsored corporations, shall not exceed 10 percent of

the market value of the fixed income portfolio. The University had no investments exceeding 5 percent in any one

issuer and is therefore not subject to concentration of credit risk. At June 30, 2021 and 2020, the Trust’s investments

consist of a single short-term duration bond fund.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

SPLIT-INTEREST AGREEMENTS

Assets held by the CU Foundation under split-interest agreements are included in investments and consisted of the

following as of June 30, 2021 and 2020, as shown in Table 3.5.

Type 2021 2020

As sets held in charitable remainder trusts $ 40,470 33,503

As sets held in charitable lead trusts 2,888 2,421

As sets held in life interest in real estate 1,565 1,565

Assets held in pooled income funds 166 164

Total Investments Held under Split-interest Agreements $ 45,089 37,653

Table 3.5. CU Foundation Inve stme nts Held unde r Split-inte re s t

Agreements

(in thousands)

NOTE 4 – ACCOUNTS AND LOANS RECEIVABLE

Table 4.1 segregates receivables as of June 30, 2021 and 2020, by type.

Type of Receivable

Gros s

Receivables Allowance

Net

Receivables

Net Current

Portion

University

Student accounts $ 79,038 25,647 53,391 53,391

Federal government 124,192 - 124,192 120,940

Other governments 32,621 - 32,621 32,621

Private sponsors 27,873 - 27,873 27,873

Patient accounts 232,883 25,002 207,881 207,881

DPCU 12,708 - 12,708 12,708

Interest 3,039 - 3,039 3,039

Direct financing lease 14,898 - 14,898 692

Tax revenue from City of Champions 12,771 - 12,771 -

PAC-12 distribution 1,818 - 1,818 1,818

Other 18,749 478 18,271 18,271

Total accounts receivable 560,590 51,127 509,463 479,234

Loans 34,513 1,797 32,716 2,938

Loans to DPCU 10,000 - 10,000 -

Total loans 44,513 1,797 42,716 2,938

Total Receivable – University $ 605,103 52,924 552,179 482,172

Table 4.1. Accounts and Loans Receivable

(in thousands)

2021

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Type of Receivable

Gros s

Receivables Allowance

Net

Receivables

Net Current

Portion

University

Student accounts $ 84,638 24,355 60,283 60,283

Federal government 88,784 - 88,784 85,650

Other governments 35,509 - 35,509 31,577

Private sponsors 23,595 - 23,595 23,595

Patient accounts 194,366 23,176 171,190 171,190

DPCU 14,214 - 14,214 14,214

Interest 3,698 - 3,698 3,698

Direct financing lease 15,610 - 15,610 713

Tax revenue from City of Champions 12,771 - 12,771 -

PAC-12 distribution 4,025 - 4,025 4,025

Other 35,643 1,251 34,392 36,520

Total accounts receivable 512,853 48,782 464,071 431,465

Loans 37,069 2,046 35,023 2,854

Loans to DPCU 10,000 - 10,000 -

Total loans 47,069 2,046 45,023 2,854

Total Receivable – University $ 559,922 50,828 509,094 434,319

2020

Table 4.1. (continued) Accounts and Loans Re ce ivable

(in thousands)

CONCENTRATION OF CREDIT RISK – PATIENT ACCOUNTS

CU Medicine grants credit without collateral to its patients. The mix of gross receivables from patients and third-

party payers as of June 30, 2021 and 2020 is detailed in Table 4.2.

Table 4.2. CU Medicine Concentration of Cre dit Risk

Category 2021 2020

Managed care 49.9 % 50.8 %

Medicare 12.6 % 12.1 %

Medicaid 15.8 % 13.4 %

Other third-party payers 7.6 % 8.4 %

Self-pay 14.1 % 15.3 %

Total 100.0 % 100.0 %

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

NOTE 5 – CAPITAL ASSETS

Table 5 presents changes in capital assets and accumulated depreciation by major asset category for the years ended

June 30, 2021 and 2020.

The University had insurance recoveries of $3,356,000 and $779,000 in the years ended June 30, 2021 and 2020,

respectively, which are included in nonoperating revenues.

Table 5. Capital Assets

(in thousands)

Category 2020 Additions

Retirements/

Adjustments Transfers 2021

Nondepreciable capital assets

Land $ 102,448 - (680) - 101,768

Construction in progress 567,044 278,015 (8,865) (322,152) 514,042

Collections 20,278 351 - - 20,629

Total nondepreciable capital 689,770 278,366 (9,545) (322,152) 636,439

Depreciable capital assets

Buildings 4,442,075 211 (1,012) 311,822 4,753,096

Improvements other than 329,246

1,617 (521) 6,628

336,970

Equipment 637,513 49,418 (16,745) 3,702 673,888

Software 96,541

1,618 (8)

- 98,151

Other intangibles 1,910 - - - 1,910

Library and other collections 441,609 18,321 (1,844) - 458,086

Total depreciable capital as s ets 5,948,894 71,185 (20,130) 322,152 6,322,101

Less accumulated depreciation

Buildings 1,696,893 149,979 (477) - 1,846,395

Improvements other than 161,480 12,944 (418) - 174,006

Equipment 472,011 46,581 (14,192) - 504,400

Software 91,377 2,794 (6) - 94,165

Other intangibles 630 76 - - 706

Library and other collections 332,701 20,054 (2,152) - 350,603

Total accumulated depreciation 2,755,092 232,428 (17,245) - 2,970,275

Net depreciable capital as s ets 3,193,802 (161,243) (2,885) 322,152 3,351,826

Total Net Capital Assets $ 3,883,572 117,123 (12,430) - 3,988,265

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Table 5. (continued) Capital Assets

(in thousands)

Category 2019 Additions

Retirements/

Adjustments Transfers 2020

Nondepreciable capital assets

Land $ 102,609 9,730 (9,891) - 102,448

Construction in progress 425,336 329,228 (11,878) (175,642) 567,044

Collections 19,628 650 - - 20,278

Total nondepreciable capital 547,573 339,608 (21,769) (175,642) 689,770

Depreciable capital assets

Buildings 4,300,614 19,430 (35,490) 157,521 4,442,075

Improvements other than 312,329 661 - 16,256 329,246

Equipment 613,172 45,691 (23,215) 1,865 637,513

Software 96,800 550 (809) 96,541

Other intangibles 1,910 - - - 1,910

Library and other collections 423,704 18,162 (257) 441,609

Total depreciable capital as s ets 5,748,529 84,494 (59,771) 175,642 5,948,894

Less accumulated depreciation

Buildings 1,572,167 140,788 (16,062) - 1,696,893

Improvements other than 148,793 12,687 - - 161,480

Equipment 448,456 44,909 (21,354) - 472,011

Software 88,675 3,506 (804) - 91,377

Other intangibles 554 76 - - 630

Library and other collections 313,828 19,130 (257) - 332,701

Total accumulated depreciation 2,572,473 221,096 (38,477) - 2,755,092

Net depreciable capital as s ets 3,176,056 (136,602) (21,294) 175,642 3,193,802

Total Net Capital Assets $ 3,723,629 203,006 (43,063)

3,883,572

NOTE 6 – ACCRUED EXPENSES, COMPENSATED ABSENCES, AND UNPAID CLAIMS

LIABILITY

Table 6.1 details the accrued expenses as of June 30, 2021 and 2020 by type.

Type 2021 2020

Accrued s alaries and benefits $ 109,804 77,397

Accrued interes t payable 3,503 3,662

Other accrued expenses 1,692 1,329

Total Accrued Expenses $ 114,999 82,388

Table 6.1 Accrued Ex

enses

(

in thousands

)

Table 6.2 presents changes in compensated absences for the years ended June 30, 2021 and 2020.

Table 6.2 Compensated Absences (

in thousands)

2021 2020

Beginning of year $ 292,458 257,876

Additions 229,624 226,382

Reductions (201,268) (191,800)

End of year $ 320,814 292,458

Current compensated absences 19,775 17,869

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

UNPAID CLAIMS LIABILITY

The Trust establishes a liability based on the ultimate estimated cost of settling claims that have been reported but not

settled, and of claims that have been incurred but not yet paid. This liability is based on the estimated ultimate cost

of settling the claims, including the effects of inflation and other societal and economic factors and is reviewed by

the Trust’s independent consulting actuary. This includes a liability for claim processing expenses associated with

paying claims, which have been incurred, but not yet paid.

Unpaid claims are not discounted. Payments of claims under the Trust are made according to a schedule of benefits,

upon submission of a proof of claim by an independent claims processor.

The Trust is fully self-insured and is subject to increased claims expense due to higher than anticipated utilization or

a higher than anticipated number of catastrophic claims. Table 6.3 represents changes in the unpaid claims liability

during the years ended June 30, 2021 and 2020.

Table 6.3 Unpaid Claims Liability (

in thousands)

2021 2020

Claims payable, beginning of year $ 59,191 57,029

Provision for claims expenses

Provision for covered events of the current year 292,861 514,204

Decreas e in provisions for covered events of prior years (4,949) (7,171)

Total provision for claims expens es 287,912 507,033

Payments

Claims expenses attributable to covered events of the

current year 262,926 456,724

Claims expenses attributable to covered events of

prior years 53,722 48,147

Total payments 316,648 504,871

Claims payable, end of year

$ 30,455 59,191

NOTE 7 – UNEARNED REVENUE

As of June 30, 2021 and 2020, the types and amounts of unearned revenue are shown in Table 7.

Type Total Current Total Current

Tuition and fees $ 40,850 40,850 44,322 44,322

Auxiliary enterprises 22,708 22,147 19,418 19,395

Grants and contracts 82,569 82,569 193,864 193,864

Miscellaneous 16,702 11,484 16,614 10,921

Total Unearned Revenue $ 162,829 157,050 274,218 268,502

2021 2020

Table 7. Une arne d Reve nue

(in thousands)

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

NOTE 8 – BONDS, CAPITAL LEASES, AND NOTES PAYABLE

As of June 30, 2021 and 2020, the categories of long-term obligations are summarized in Table 8.1.

Table 8.1. Bonds, Capital Le as e s, and Note s Payable

(in thousands)

Type Interest Rates

Final

Maturity 2021 2020

Enter

rise s

stem revenue bonds

(

includin

remiu

of $105,757 in 2021 and $117,950 in 2020

)

1.50% - 5.00% 6/1/51 $ 2,000,584 1,764,145

CU Medicine fixed-rate bonds -

rivate

lacement 1.00% 11/1/24 3,977 5,141

Total revenue bonds

004

561 1

769

286

ital leases 0.0-4.58% Various 11,202 11,98

Notes

able 4.15% 6/1/33 9,758 10,145

Total Bonds, Capital Leases, and Notes Payable $ 2,025,521 1,791,411

Table 8.2 presents changes in bonds and capital leases for the years ended June 30, 2021 and 2020.

Table 8.2. Changes in Bonds, Capital Leases, and Notes Payable

(in thousands)

Type

Balance

2020 Additions Retirements

Balance

2021

Current

Portion

University

Revenue bonds $ 1,646,195 437,000

(

188,368

)

1,894,827 48,032

Plus unamortized

remiums 117,950 5,358

(

17,551

)

105,757 11,378

Revenue bonds from

rivate

lacement 5,141 -

(

1,164

)

3,977 1,164

Net revenue bonds 1,769,286 442,358

(

207,083

)

2,004,561 60,574

ital leases 11,980 2,460

(

3,238

)

11,202 2,657

Notes

able 10,145 -

(

387

)

9,758 404

Total Bonds, Capital Leases, and Notes Payable $ 1,791,411 444,818 (210,708) 2,025,521 63,635

Type

Balance

2019 Additions Retirements

Balance

2020

Current

Portion

University

Revenue bonds $ 1,423,960 544,285

(

322,050

)

1,646,195 74,135

Plus unamortized

remiums 132,459 22,532

(

37,041

)

117,950 14,212

Revenue bonds from

rivate

lacement 54,320 -

(

49,179

)

5,141 1,164

Net revenue bonds 1,610,739 566,817

(

408,270

)

1,769,286 89,511

ital leases 13,207 1,184

(

2,411

)

11,980 2,502

Notes

able 10,516 -

(

371

)

10,145 387

Total Bonds, Capital Leases, and Notes Payable $ 1,634,462 568,001 (411,052) 1,791,411 92,400

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

REVENUE BONDS

A general description of each revenue bond issue, original issuance amount, and the amount outstanding as of

June 30, 2021 and 2020 is detailed in Table 8.3.

Table 8.3. Revenue Bonds De tail

(in thousands)

Issuance Description

Original

Issuance

Amount

Outstandi ng

Balance

2021

Outstandi ng

Balance

2020

Enterprise system revenue bonds:

Refunding Seri es 2007A -

Used to refund all of the revenue bond Refunding Series 1999A and

Certificates of Participation Series 2003A and 2003B and a portion of

revenue bond Refunding Series 1995A, Refunding and Improvement Series

2001B, Series 2002A, and 2002B

$ 184,180 27,725 27,725

Series 2009C -

Used to refund Enterprise System Refund Series 1997, Enterprise System

Revenue Refund Bonds Series 2001A for years 2012 through 2026, and

Enterprise System Revenue Bonds Series 2002A for years 2014 through

24,510 310 615

Series 2011A -

Used to fund capital improvements at CU Boulder and UCCS 203,425 - 5,770

Series 2011B -

Used to partially refund Enterprise System Revenue Bonds Series 2002B,

2003A, 2004, and 2005A

52,600 10,075 21,235

Series 2012A-1 -

Used to partially refund Enterprise System Revenue Bonds Series 2003A,

2004, 2005A, 2005B, 2006A, and 2007B

121,850 5,635 33,560

Series 2012A-2 -

Used to partially refund Enterprise System Revenue Bonds Series 2004,

2005A, and 2005B

53,000 1,985 2,910

Series 2012A-3 -

Used to partially refund Enterprise System Revenue Bonds Series 2005A,

2005B, 2006A, and 2007B

47,165 55 7,890

Series 2012B -

Used to fund capital improvements at CU Boulder, CU Denver and UCCS 95,705 10,510 14,000

Series 2013A -

Used to fund capital improvements at CU Boulder, CU Anschutz and UCCS 142,460 3,650 8,510

Series 2013B -

Used to fund capital improvements at CU Anschutz 11,245 825 2,020

Series 2014A -

Used to fund capital improvements at CU Boulder 203,485 15,330 27,010

Series 2014B-1 -

Used to partially refund Enterprise System Revenue Bonds Series 2005B,

2006B, 2007A and 2009

100,440 45,684 92,380

Series 2015A -

Used to partially refund Enterprise System Revenue Bonds Series 2006A,

2007B, and 2009

102,450 47,548 66,725

Series 2015B -

Used to partially refund Enterprise System Revenue Bonds Series 2005A 3,925 1,310 1,440

Series 2015C -

Used to partially refund Enterprise System Revenue Bonds Series 2007A 71,325 47,295 52,355

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Table 8.3. (continued) Revenue Bonds Detail

(in thousands)

Issuance Description

Original

Issuance

Amount

Outstandi ng

Balance

2021

Outstanding

Balance

2020

Series 2016A -

Used to fund ca

ital im

rovements at CU Denver and UCCS

430 6

535 10

935

Series 2016B-1 -

Used to

artiall

refund Enter

rise S

stem Revenue Bonds Series 2011A 156

810 152

560 153

630

Series 2017A-1 -

Used to partially refund Enterprise System Revenue Bonds Series 2007A and

2012B

66,930 40,365 51,485

Series 2017A-2 -

Used to partially refund Enterprise System Revenue Bonds Series 2012B,

2013A and 2014A and to establish escrow accounts for the cross-over

refunding of Series 2009B, 2010A and 2010C

471,390 450,945 464,335

Series 2018B -

Used to fund capital improvements for four UCCS projects including the

Hybl Sports Medicine Facility

64,360 62,130 63,275

Series 2019A -

Used to partially refund Enterprise System Revenue Bonds Series 2010B,

Series 2011A, Series 2012 A-1, A-2, A-3, and Series 2013B on a taxable

147,980 142,405 144,925

Series 2019A2 -

Used to partially refund Enterprise System Revenue Bonds Series 2009C,

Series 2010B, Series 2011A, Series 2012 A-1, A-3, Series 2014B-1, Series

2015A, Series 2015B, and Series 2016A on a taxable basis.

101,885 92,265 99,525

Series 2019B -

Used to fund capital improvement projects at CU Denver (CVA

improvements) and CU Anschutz (Campus Utility Project). Additionally

used to refund the 2018A bank direct purchase variable rate note for CVA at

CU Denver and to refund Commercial Pa

er for CU Boulder

(

Flemin

79,795 78,060 79,315

Series 2019C -

Used to fund the Lynx Crossing housing project (FYSH originally) at CU

Denver as well as refunding outstanding Commercial Paper for two CU

Boulder projects: Williams Village East and Aerospace

214,625 214,625 214,625

Series 2020A1

Variable Rate Demand Bonds (VRDBs) used to fund a capital improvement

project at CU Anschutz

100,000 100,000 -

Series 2020A2

VRDBs used to fund three capital improvement projects at CU Anschutz and

one CU Boulder project

75,000 75,000 -

Series 2020B1

VRDBs used to fund three capital improvement projects at CU Anschutz and

one CU Boulder project

50,000 50,000 -

Series 2020B2

Used to partially refund Enterprise System Revenue Bonds Series 2007A,

2011A, 2011B, 2012A-1, 2012A-3, 2012B, 2013A, 2014A, 2014B1,

2015A, 2015B, 2015C, 2016A, 2016B1, 2017A1, 2017A2, 2019A, 2019A2,

2019B, and 2019C on a taxable basis.

140,885 140,885 -

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Table 8.3. (continued) Revenue Bonds Detail

(in thousands)

Issuance Description

Original

Issuance

Amount

Outstandi ng

Balance

2021

Outstanding

Balance

2020

Series 2021A

Used to fund capital improvements for one CU Boulder project in the North

Wing of Engineering Facility

$ 26,595 26,595 -

Series 2021B

Used to partially refund Enterprise System Revenue Bonds Series 2011B,

2012A1, 2012A2, 2012A3, 2013B, and 2014A1 on a taxable basis

44,520 44,520 -

Total enterprise system revenue bonds - outstanding principal 3,189,970 1,894,827 1,646,195

Series 2014 - CU Medicine Private Placement Fixed Rate Bonds

Used to fund capital improvements 11,695 3,977 5,141

Total Other Long Term Obligations 11,695 3,977 5,141

Total Outstanding Revenue Bond Principal 1,898,804

1,651,336

Plus premium

105,757 117,950

Total Revenue Bonds 2,004,561$ 1,769,286$

The University’s revenue bonds are payable semiannually, have serial and term maturities, and contain optional

redemption pr

ovisions. The optional redemption provisions allow the University to redeem, at various dates, portions

of the outstanding revenue bonds at prices varying from 100 to 101 percent of the principal amount of the revenue

bonds redeemed.

The Enterprise System Revenue Bonds are secured by a pledge of all net revenues of auxiliary services, student fees,

other self-funded services, research services, and certain other operating and nonoperating revenues, 100 percent of

the University’s tuition, 100 percent of the University’s capital student fees, and 100 percent of the University’s

indirect cost recoveries. All University revenue bonds are special limited obligations of the Regents and are payable

solely from the pledged revenues or the net income of the facilities as defined in the bond resolution. The revenue

bonds are not secured by any encumbrance, mortgage, or other pledge of property, except pledged revenues, and do

not constitute general obligations of the Regents.

The University’s bonds are payable through June 1, 2051. During the years ended June 30, 2021 and 2020, the total

principal and interest paid on the University’s bonds net of Federal subsidy on the Build America Bonds, excluding

refundings, was $79,549,000 and $135,285,000, respectively, which is 6.4 percent and 10.1 percent of the total net

pledged revenues of $1,249,450,000 and $1,345,249,000, respectively. Net pledged revenues are 34 percent and 36

percent of the total specific revenue streams, respectively.

On July 1, 2020, the University issued Series 2020A-1 Tax-exempt Enterprise Revenue VRDBs (Green Bonds) for

$100,000,000 to fund continued construction on the Anschutz Health Science Building (AHSB), Series 2020A-2 Tax-

exempt Enterprise Revenue (VRDBs) for $75,000,000 to fund continued construction on the Imig music building on

the Boulder campus and to fund construction on Anschutz Research Basement Build-out projects and AHSB, and

Series 2020B-1 Tax-exempt Enterprise Revenue and Refunding (VRDBs) for $50,000,000 to refund the existing

Commercial Paper debt outstanding. Initial interest rates are reset weekly (2020A-1) and daily (2020A-2 and

2020A-3). The first interest payment was due August 3, 2020. Interest rate will not exceed 12 percent per annum.

The bonds are subject to optional and mandatory sinking fund redemptions. Final maturity is June 1, 2050. In the

event that remarketing proceeds are insufficient, a separate Standby Bond Purchase Agreement supports the payment

of principal and interest.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

On July 10, 2020, the University issued Series 2020B-2 Taxable Enterprise Refunding Revenue Bonds for

$140,885,000 for refunding projects consisting of three components. The first is a taxable advance refunding for

savings of a portions of the Series 2014B-1, Series 2015A, and Series 2016A of $49,800,000. The second was to

restructure debt to provide budget relief in fiscal years 2021 and 2022 by defeasing $60,300,000 of principal and

associated interest of $3,900,000 due on June 1, 2021 and 2022. The third component entails paying a portion of

interest of $26,500,000 due on December 1, 2020 and June 1, 2021. The refundings provide budget relief of

$57,100,000 and $30,700,000 for Fiscal Year 2021 and Fiscal Year 2022 respectively. The refundings resulted in an

economic gain of $134,000 and an accounting loss of $31,225,000, which is deferred and amortized over the life of

the new bonds. The debt service cash flow decreased by $56,049,000. Interest rates range from 0.53 percent to 2.81

percent for the 2020B-2 Series. The first interest payment was due December 1, 2020. The final maturity of the

2020B-2 Bonds is June 1, 2048.

On April 13, 2021, the University issued Series 2021A Tax-exempt Enterprise Revenue Bonds (Green Bonds) for

$26,595,000 to fund capital improvements in the North Wing of the Engineering Facility at CU Boulder and Series

2021B Taxable Enterprise Refunding Revenue Bonds for $44,520,000 to advance refund portions of the Series

2011B, 2012A1, 2012A2, 2012A3, 2013B, and 2014A1 bonds. The refunding resulted in an economic gain of

$1,507,000 and an accounting loss of $2,779,000, which is deferred and amortized over the life of the new bonds.

The debt service cash flow decreased by $1,560,000. Interest rates on the 2021A Series range from 4 percent to 5

percent, and final maturity is June 1, 2051. Interest rates on the 2021B Series range from 0.22 percent to 1.63 percent,

and final maturity is June 1, 2028.

The University’s revenue bonds contain provisions to establish and maintain reasonable fees, rates, and other charges

to ensure gross revenues are sufficient for debt service coverage. The University is also required to comply with

various other covenants while the bonds are outstanding. These covenants, among other things, restrict the disposition

of certain assets, require the Regents to maintain adequate insurance, and require the Regents to continue to operate

the underlying programs. Management believes the University has met all debt service coverage ratios and has

complied with all bond covenants.

In December 2002, CU Medicine entered into a loan agreement with the Fitzsimons Redevelopment Authority to

issue variable-rate bonds, Series 2002, in the amount of $20,500,000. Proceeds from the sale of these bonds were

used to fund the development, construction, and equipping of CU Medicine’s administrative office building. In

October 2014, CU Medicine refinanced its variable-rate debt with a fixed-rate bank direct purchase obligation. The

direct borrowing, funded by US Bank National Association (US Bank), included a $3,500,000 reduction in principal

to a net amount outstanding at the time of the refinance of $11,695,000. The obligation is amortizable over 10 years

and initially carried a fixed rate of 2.3 percent. In March 2021, CU Medicine amended its Fitzsimons Redevelopment

Authority Revenue Bond, reducing the interest rate to 1.00 percent, as calculated by US Bank. The US Bank financing

is subject to the same financial covenants as those included in the original variable-rate obligation, the most significant

of which are the maintenance of 60 days’ cash on hand (defined as unrestricted cash plus readily marketable securities)

and a debt service coverage ratio of 1.25. CU Medicine management believes it is in compliance with its debt service

requirements and financial covenants.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Future minimum payments for revenue bonds are detailed in Table 8.4.

Table 8.4. Re ve nue Bonds Future Minimum Payments

(in thousands)

Principal Interest Total Principal Interest Total

$ 48,032 57,035 105,067 1,164 33 1,197

80,935 55,590 136,525 1,164 22 1,186

78,810 53,763 132,573 1,164 10 1,174

295,355 47,782 343,137 485 1 486

83,795 43,585 127,380 - - -

2027 - 2031 360,895 173,206 534,101 - - -

2032 - 2036 315,810 108,315 424,125 - - -

2037 - 2041 215,875 58,398 274,273 - - -

2042 - 2046 156,355 21,394 177,749 - - -

2047 - 2051 258,965 2,479 261,444 - - -

$ 1,894,827 621,547 2,516,374 3,977 66 4,043 Total

Direct BorrowingsNon-Direct Borrowings

2026

Ye ar s Endi ng

2022

2023

2024

2025

EXTINGUISHMENT OF DEBT

Previous revenue bond issues considered to be extinguished through in-substance defeasance under GAAP are not

included in the accompanying financial statements. The amount of debt in this category, covered by assets placed in

trust to be used solely for future payments, amounted to approximately $652,405,000 and $702,490,000 as of

June 30, 2021 and 2020, respectively. During the year ended June 30, 2021, debt in the amount of $143,465,000 was

defeased and escrow agent payments were $193,550,000. During the year ended June 30, 2020, debt in the amount

of $222,660,000 was defeased and escrow agent payments were $10,345,000.

CAPITAL LEASES

The University’s capital leases are primarily for equipment. The University also has a capital lease with a related

party. During the year ended June 30, 2009, CU Denver entered into a $10,272,000 site lease agreement with AHEC

associated with the build-out of educational space for CU Denver. As of June 30, 2021 and 2020, the University paid

base annual rent to AHEC of approximately $835,000 and $837,000, respectively.

As of June 30, 2021 and 2020, the University had an outstanding liability for all its capital leases approximating

$11,202,000 and $11,980,000

, respectively, with underlying gross capitalized asset cost approximating $25,881,000

and $25,109,000, respectively, with accumulated amortization of $14,896,000 and $12,485,000 respectively,

resulting in underlying net capitalized assets of $10,985,000 and $12,624,000, respectively.

Future minimum payments for all the University’s capital lease obligations are detailed in Table 8.5.

Years Ending June 30 Principal Interest Total

2022 $ 2,657 473 3,130

2023 2,638 383 3,021

2024 1,496 292 1,788

2025 1,293 199 1,492

2026 2,707 228 2,935

2027 – 2031 411 12 423

Total $ 11,202 1,587 12,789

Table 8.5. Capital Leases

(in thousands)

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

NOTES PAYABLE

Avenue has a 20-year mortgage on the property at 1800 Grant Street. The original amount borrowed was

$12,450,000 at an interest rate of 4.15 percent with monthly principal and interest payments of approximately

$67,000. There is a balloon payment of $3,678,000 due on June 1, 2033.

Future minimum payments for the University’s note payable are detailed in Table 8.6.

Table 8.6. Notes Payable Future Minimum Payments

(in thousands)

Years Ending June 30 Principal Interest Total

2022 $ 404 397 801

2023 421 380 801

2024 439 362 801

2025 457 344 801

2026 476 325 801

2027 – 2031 2,702 1,303 4,005

2032 – 2036 4,859 354 5,213

Total $ 9,758 3,465 13,223

COMMERCIAL PAPER

On April 6, 2018, the Regents authorized a commercial paper program for approved capital construction projects with

a maximum outstanding amount of $200,000,000. Each commercial paper note has a fixed maturity date of between

1 and 270 days from issuance and is either taken out at maturity by another commercial paper issuance, retired by

permanent financing authorized by the Regents for that purpose, or retired by the University. On July 1, 2020, the

outstanding balance of $50,000,000 was retired with VRDB Series 2020-B1.

Table 8.7. Commercial Paper

(in thousands)

2021 2020

Beginning of year $ 50,000 135,500

Additions - 350,627

Retirements (50,000) (436,127)

End of year $ - 50,000

STATE OF COLORADO CERTIFICATES OF PARTICIPATION

The State periodically issues certificates of participation to provide support for various capital construction and

controlled maintenance projects throughout the State, including at the University. Annual debt service or lease

payments are made by the State and are subject to annual appropriations by the Legislature. As a result, this liability

is recognized by the State and not included in the University’s financial statements. The certificates are secured by

the buildings or equipment acquired with the proceeds and any unexpended lease proceeds. The underlying

capitalized assets are contributed to the University from the State and are reflected in the University’s financial

statements. Campuses may capitalize certain controlled maintenance projects that extend an existing asset’s useful

life or add to the economic value of the underlying asset.

On December 14, 2005, the State, acting by and through the Regents, issued Certificates of Participation (COP),

Series 2005B, with a par value of $192,625,000 and a premium of $7,568,000. The certificates had interest rates

ranging from 3.75 to 5.25 percent and matured in November 2030. The proceeds were used to construct seven

academic buildings on the CU Anschutz Medical Campus. In 2009, 2012, and 2013, the State issued additional COP

to advance refund $18,525,000, $57,595,000, and $71,275,000, respectively, of the principal of the 2005B Certificates

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

of Participation. As of June 30, 2021, the University had underlying gross capitalized assets at CU Anschutz costing

approximately $188,801,000, with accumulated amortization of $65,140,000 resulting in an underlying net

capitalized asset of $123,661,000.

On October 23, 2008, the State issued State of Colorado Higher Education Capital Construction Lease Purchase

Financing Program Certificates of Participation, Series 2008, with a par value of $230,845,000, at a net premium of

$181,000. The certificates have interest rates ranging from 3.0 to 5.5 percent and mature in November 2027. The

proceeds were used to fund various capital projects for the benefit of certain State-supported institutions of higher

education in Colorado, including UCCS and CU Boulder. As of June 30, 2021, the University had underlying gross

capitalized assets at UCCS costing approximately $17,735,000 with accumulated amortization of $9,681,000

resulting in an underlying net capitalized asset of $8,054,000. As of June 30, 2021, the University had underlying

gross capitalized assets at CU Boulder costing approximately $796,000, with accumulated amortization of $328,000

resulting in an underlying net capitalized asset of $468,000.

On September 26, 2018, the State issued State of Colorado Rural Colorado Certificates of Participation, Series 2018A,

with a par value of $500,000,000 and a premium of $47,369,000 and a discount of $526,000. The certificates have

interest rates ranging from 1.84 percent to 5.00 percent and mature in December 2037. Of the proceeds, $120,000,000

was designated for controlled maintenance projects, $19,976,000 of which are at the University. There are projects

at all the campuses and include upgrading HVAC, fire sprinklers, electrical services, roof replacement, and elevator

repairs. As of June 30, 2021, the University had underlying gross capitalized assets at CU Anschutz costing

approximately $4,172,000, with accumulated amortization of $51,000 resulting in an underlying net capitalized asset

of $4,121,000.

On June 2, 2020, the State issued State of Colorado Rural Colorado Certificates of Participation, Series 2020A, with

a par value of $500,000,000 and a premium of $111,009,000. The certificates have interest rates ranging from 3.00

percent to 5.00 percent and mature in June 2040. The proceeds were used to fund various controlled maintenance

projects for the benefit of certain State-supported institutions of higher education in Colorado, of which $6,614,000

are at the University. These projects include fire alarms and classroom security at CU Boulder, and roof repair at

UCCS.

On February 17, 2021, the State issued State of Colorado Higher Education Lease Purchase Financing Program

Certificates of Participation, Series 2020, with a par value of $64,250,000 and a premium of $16,800,000. The

certificates have interest rates ranging from 4.00 percent to 5.00 percent and mature in September 2041. The proceeds

were used to fund various capital projects for the benefit of certain State-supported institutions of higher education in

Colorado, including CU Anschutz. Of the proceeds, $21,859,000 was designated for the Anschutz Health Sciences

Building to cover a portion of the $242,000,000 construction budget, which is expected to be substantially complete

in late October 2021.

NOTE 9 – OTHER POSTEMPLOYMENT BENEFITS (OPEB)

The University participates in two types of OPEB plans – a single-employer plan administered by the University –

the University OPEB Plan (University OPEB) and a cost-sharing plan administered by the Colorado Public

Employees’ Retirement Association (PERA) – the Health Care Trust Fund (HCTF).

UNIVERSITY OPEB

The University OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB,

OPEB expense, and additions to/deductions from the OPEB liability have been determined using the economic

resources measurement focus and the accrual basis of accounting.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Plan description. University OPEB provides OPEB for University employees who participate in either the

University of Colorado Optional Retirement Plan (ORP) or the University of Colorado PERA Retirement Plans.

University OPEB is a single-employer, defined benefit, OPEB plan administered by the University, and established

by the Regents (Regent Policy 11.F Benefits) who have the authority to amend plan provisions. No assets are

accumulated in a trust that meets the criteria established in GAAP, as the University funds University OPEB on a

pay-as-you-go basis. No stand-alone financial report is issued, and University OPEB is not included in the report of

a public employee retirement system.

Benefits. The University subsidizes a portion of healthcare and life insurance premiums for retirees on a pay-as-you-

go basis. All employees in a benefit-eligible position at 50 percent or greater appointment immediately preceding

retirement are eligible to participate based on age and years of service. Spouses/partners, surviving spouses/partners,

and dependents are eligible for benefits. The University specifies the maximum amount that it will contribute towards

retiree healthcare benefits at the beginning of each coverage period. The retiree is required to make up the difference

between the total cost and the amount contributed by the University. Benefits are not dependent on salary. For non-

Medicare retirees, the subsidy for medical plans ranges from $610 per month to $1,736 per month depending on the

number of individuals covered. For Medicare retirees, the subsidy ranges from $716 per month to $1,030 per month

depending on the number of individuals covered. For dental plans, the subsidy ranges from $0 per month to $58 per

month. The amount of life insurance offered is the lesser of 25 percent of the employee’s pre-retirement benefit or

$3,000. It is assumed for purposes of this report that everyone is eligible for the maximum life insurance benefit of

$3,000.

For ORP retirees, normal retirement benefits are available at age 55 with 20 years of service. Early retirement benefits

begin at age 55 with 15 years of service. For PERA retirees, normal retirement benefits begin at 20 years of service

and the individual must meet requirements as defined by PERA. The individual must retire with PERA concurrent

with or prior to retirement from the University. Early retirement is available with fewer than 20 years of service.

Healthcare benefits for PERA retirees cease at age 65. Following the death of an active employee, the surviving

spouse receives 100 percent of the University contribution for a period of two years. After two years, the surviving

spouse receives the portion of the University contribution that the employee earned immediately prior to death.

The percentage of the University contribution the retiree receives is based on the retiree’s years of service at retirement

divided by the required number of years of service. Enrollment in University OPEB is voluntary. University and

participant payments for healthcare benefits are paid to the Trust (see Note 16) which is responsible for administration

of healthcare benefits. The University contributed $14,407,000 and $16,062,000 for the fiscal years ended June 30,

2021 and 2020, respectively.

Employees Covered by Benefit Terms. The actuarial valuation was based on census data as of March 1, 2019.

Table 9.1 presents a summary of the employees covered by the benefit terms used in the valuation.

ORP PERA ORP PERA

Active employees 13,619 5,085 14,973 5,533

Retirees and beneficiaries 1,380 646 1,910 3,060

Total 14,999 5,731 16,883 8,593

Table 9.1. Employe es Cove re d by University OPEB's Be ne fit Te rms

Life Ins uranceHeal thcare

Total OPEB Liability. The University OPEB’s total OPEB liability at June 30,

2021 of $941,595,000 was measured

as of June 30, 2020, and was determined by an actuarial valuation as of that date. The University OPEB’s total OPEB

liability at June 30, 2020 of $712,892,000 was measured as of June 30, 2019 and was determined by an actuarial

valuation as of that date.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Actuarial Assumptions and Other inputs. The University OPEB’s total OPEB liability in the June 30, 2020

actuarial valuation was determined using the actuarial assumptions and other inputs in Table 9.2, applied to all periods

included in the measurement, unless otherwise specified.

Table 9.2. Universit

OPEB’s Actuarial Assum

tions and Other In

uts

Entry ag e

PERA’s 12/31/2020 assumption for the State Division (Non-Troopers)

2.2% at 06/30/2020 measurement date

3.5% at 06/30/2019 measurement date

Healthcare Cost Trend Rates:

Non-Medicare Medicare

Year Medical Rx Contributions Medical Rx Contributions

2019-2020 6.0% 9.0% 6.7% 4.9% 9.0% 7.6%

2020-2021 5.8% 8.5% 6.4% 4.9% 8.5% 7.3%

2021-2022 5.6% 8.0% 6.2% 4.8% 8.0% 7.0%

2022-2023 5.4% 7.5% 5.9% 4.8% 7.5% 6.7%

2023-2024 5.3% 7.0% 5.7% 4.7% 7.0% 6.3%

2023-2025 5.1% 6.5% 5.5% 4.7% 6.5% 6.0%

2025-2026 5.0% 6.0% 5.2% 4.6% 6.0% 5.6%

2026-2027 4.8% 5.5% 5.0% 4.6% 5.5% 5.2%

2027-2028 4.7% 5.0% 4.7% 4.5% 5.0% 4.9%

2028-2029+ 4.5% 4.5% 4.5% 4.5% 4.5% 4.5%

Dental trend rate 4.50% in all years.

Administrative expenses trend rate is 3.00% in all years.

Retirees’ Share of Benefit Related Costs :

Retiree Only Retiree+Spouse/Partner

$109.00 $296.50

$50.50 $184.50

$0.00 $15.00

$41.31 $207.30

$0.00 $16.50

$17.00 $51.50

$46.50 $82.50

Actuarial cos t method

Plan

Kaiser Medical

Discount rate

Salary increases

Choice Dental

Premier Dental

Medicare Primary Medical

Es s ential Dental

Exclusive Medical

High Deductible Medical

The discount rate was based upon the Bond Buyer General Obligation 2

0-Bond Municipal Bond Index.

Mortality rates were based upon the PUB-2010 Amounts-Weighted Teachers Classification Table for Employees

with generated projection using Scale MP-2020.

With the exception of the mortality assumption, the demographic assumptions are based upon Colorado PERA’s

“Experience Study for the Four Year Period Ending December 31, 2015” for the State Division (Non-Troopers).

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Changes in the Total OPEB Liability. Table 9.3 details the changes in the University’s total OPEB plan liability

during Fiscal Years 2021 and 2020.

2021 2020

University OPEB's total OPEB liability, beginning of year

$ 712,892 843,959

Changes recognized for the fiscal year:

Service cost 49,138 53,400

Interest on total OPEB liaibility 26,392 34,254

Differences between expected and actual experience 287 (206,938)

Changes of assumptions 168,948 3,678

Benefit payments (16,062) (15,461)

Net changes 228,703 (131,067)

University OPEB's total OPEB liability, end of year

941,595 712,892

Current portion University OPEB's total OPEB liability 14,753 16,447

Fis cal Year Ending June 30

Table 9.3. Reconciliation of University OPEB's Total OPEB Liability

(in thousands)

Changes of assumptions and other inputs reflect:

 Discount rate changed from 3.50 percent to 2.20 percent.

 Mortality table was updated from PUB-2010 “Teachers” table with generational projection using Scale PM-

2019 to the PUB-2010 “Teachers” table with generational projection using Scale MP-2020.

Sensitivity of the total OPEB liability to changes in the discount rate. Table 9.4 presents the total OPEB liability

of University OPEB, as well as what University OPEB’s total OPEB liability would be if it were calculated using a

discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current discount rate for the fiscal

years ended June 30, 2021 and 2020.

1% Decrease Discount Rate 1% Increase

Fiscal Year ending June 30 1.20% 2.20% 3.20%

2021 1,122,721 941,595 799,768

1% Decrease Discount Rate 1% Increase

2.50% 3.50% 4.50%

2020 839,627 712,892 612,579

Table 9.4. Sensitivity of University OPEB's Total OPEB Liability to

Changes in the Discount Rate

(in thousands)

Sensitivity of the total OPEB liability to changes in the healthcare cost trend rates. Table 9.5 presents the total

OPEB liability of University OPEB, as well as what University OPEB’s total OPEB liability would be if it were

calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point higher than the

current healthcare cost trend rates for the fiscal years ended June 30, 2021 and 2020.

Healthcare Cost

Fiscal Year ending June 30 1% Decrease Trend Rate 1% Increase

2021 770,782 941,595 1,169,982

2020 597,522 712,892 863,922

Table 9.5. Sensitivit

of Universit

OPEB's Total OPEB Liabilit

Chan

es in the Trend Rate

(

in thousands

)

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB. The

University recognized $56,849,000 and $46,995,000 in OPEB expense for the University OPEB Plan in Fiscal Year

2021 and 2020. There are no assets accumulating in trust for the University OPEB plan. Table 9.6 illustrates the

deferred outflows and inflows of resources from various sources as of June 30, 2021 and 2020.

Deferred

Outflows of

Resources

Deferred

Inflows of

Resources

Deferred

Outflows of

Resources

Deferred

Inflows of

Resources

Differences between expected and actual experience $ 250 193,066 - 232,733

Changes in ass umptions 171,257 21,322 29,529 27,593

Benefit payments subsequent to the measurement date 14,407 - 16,062 -

Total $ 185,914 214,388 45,591 260,326

Table 9.6. University OPEB's Deferred Outflows of Resources and Deferred Inflows

of Resources

(in thousands)

20202021

The $14,407,000 reported as deferred outflows of resources as of June 30, 2021, resulting from benefit payments

subsequent to the measurement date, will be recognized as a reduction to the University’s OPEB liability in the year

ending June 30, 2022.

Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be

recognized in OPEB expense as shown in Table 9.7.

Years ending June 30:

2022 $ (18,681)

2023 (18,681)

2024 (18,681)

2025 (7,813)

2026 (2,846)

2027-2028 23,821

Total $ (42,881)

Table 9.7. Future Amortization of Universit

OPEB's

Deferred Outflows of Resources and Deferred

Inflows of Resources

(in thousands)

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Table 9.8 lists the amortization bases included in the University’s OPEB deferred outflows and inflows of resources

as of June 30, 2021 and 2020.

Date Annual

Es tablis hed Type of Bas e Original Remaining Original Remaining Amortization

July 1, 2017

Differences between expected

and actual experience

7.4 3.4 $ (87,654) (40,274) (11,845)

July 1, 2017 Changes in as sumptions 7.4 3.4 (46,406) (21,322) (6,271)

July 1, 2018

Differences between expected

and actual experience

7.5 4.5 (1,728) (1,038) (230)

July 1, 2018 Changes in as sumptions 7.5 4.5 35,919 21,552 4,789

July 1, 2019

Differences between expected

and actual experience

7.5 5.5 (209,938) (151,754) (27,592)

July 1, 2019 Changes in as sumptions 7.5 5.5 3,678 2,698 490

July 1, 2020

Differences between expected

and actual experience

7.7 6.7 287 250 37

July 1, 2020 Changes in as sumptions 7.7 6.7 168,948 147,007 21,941

Total (42,881)$ (18,681)

Period Balance

Table 9.8. Amortization of University OPEB's Deferred Outflows of Resources and Deferred

Inflows of Resources

(in thousands)

PERA HEALTH CARE TRUST FUND

As noted earlier, the University participates in the HCTF, a cost-sharing multiple-employer defined benefit OPEB

fund administered by PERA. The net OPEB liability, deferred outflows of resources and deferred inflows of resources

related to OPEB, OPEB expense, information about the fiduciary net position (FNP) and additions to/deductions from

the FNP of the HCTF have been determined using the economic resources measurement focus and the accrual basis

of accounting. For this purpose, benefits paid on behalf of health care participants are recognized when due and/or

payable in accordance with the benefit terms. Investments are reported at fair value.

Plan description. The HCTF is established under C.R.S. § 24-51-12, as amended. Colorado State law provisions

may be amended from time to time by the Colorado General Assembly. C.R.S. § 24-51-12, as amended, sets forth a

framework that grants authority to the PERA Board to contract, self-insure, and authorize disbursements necessary

in order to carry out the purposes of the PERACare program, including the administration of the premium subsidies.

State law provisions may be amended from time to time by the Colorado General Assembly. PERA issues a publicly

available annual report that can be obtained at www.copera.org/investments/pera-financial-reports.

Benefits provided. The HCTF provides a health care premium subsidy to eligible participating PERA benefit

recipients and retirees who choose to enroll in one of the PERA health care plans, however, the subsidy is not available

if only enrolled in the dental and/or vision plan(s). The health care premium subsidy is based upon the benefit

structure under which the member retires and the member’s years of service credit. The basis for the amount of the

premium subsidy funded by each trust fund is the percentage of the member contribution account balance from each

division as it relates to the total member contribution account balance from which the retirement benefit is paid.

C.R.S. § 24-51-1202 et seq. specifies the eligibility for enrollment in the health care plans offered by PERA and the

amount of the premium subsidy. The law governing a benefit recipient’s eligibility for the subsidy and the amount

of the subsidy differs slightly depending under which benefit structure the benefits are calculated. All benefit

recipients under the PERA benefit structure are eligible for a premium subsidy, if enrolled in a health care plan under

PERACare.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Enrollment in the PERACare is voluntary and is available to benefit recipients and their eligible dependents, certain

surviving spouses, and divorced spouses and guardians, among others. Eligible benefit recipients may enroll into the

program upon retirement, upon the occurrence of certain life events, or on an annual basis during an open enrollment

period.

PERA Benefit Structure. The maximum service-based premium subsidy is $230 per month for benefit recipients

who are under 65 years of age and who are not entitled to Medicare; the maximum service-based subsidy is $115 per

month for benefit recipients who are 65 years of age or older or who are under 65 years of age and entitled to Medicare.

The basis for the maximum service-based subsidy, in each case, is for benefit recipients with retirement benefits based

on 20 or more years of service credit. There is a 5 percent reduction in the subsidy for each year of service less than

20. The benefit recipient pays the remaining portion of the premium to the extent the subsidy does not cover the

entire amount.

For benefit recipients who have not participated in Social Security and who are not otherwise eligible for premium-

free Medicare Part A for hospital-related services, C.R.S. § 24-51-1206(4) provides an additional subsidy. According

to the statute, PERA cannot charge premiums to benefit recipients without Medicare Part A that are greater than

premiums charged to benefit recipients with Part A for the same plan option, coverage level, and service credit.

Currently, for each individual PERACare enrollee, the total premium for Medicare coverage is determined assuming

plan participants have both Medicare Part A and Part B and the difference in premium cost is paid by the HCTF on

behalf of benefit recipients not covered by Medicare Part A.

Contributions. Pursuant to C.R.S. § 24-51-208(1)(f), as amended, certain contributions are apportioned to the

HCTF. PERA-affiliated employers of the State, School, Local Government, and Judicial Divisions are required to

contribute at a rate of 1.02 percent of PERA-includable salary into the HCTF.

Employer contributions are recognized by the HCTF in the period in which the compensation becomes payable to the

member and the University is statutorily committed to pay the contributions. Employer contributions recognized by

the HCTF from the University were $2,972,000 and $3,164,000 for the years ended June 30, 2021 and 2020,

respectively. As of June 30, 2021 and 2020, the University recorded an accounts payable to PERA of $82,000 and

$1,000, respectively, which was paid during the subsequent month.

OPEB Liability. At June 30, 2021 and 2020, the University reported a liability of $30,837,000 and $38,611,000,

respectively, for its proportionate share of the net OPEB liability. The net OPEB liability for the HCTF for Fiscal

Year 2021 was measured as of December 31, 2020, and the total OPEB liability used to calculate the net OPEB

liability was determined by an actuarial valuation as of December 31, 2019. Standard update procedures were used

to roll-forward the total OPEB liability to December 31, 2020. The net OPEB liability for the HCTF for Fiscal Year

2020 was measured as of December 31, 2019, and the total OPEB liability used to calculate the net OPEB liability

was determined by an actuarial valuation as of December 31, 2018 rolled forward to the measurement date. The

University’s proportion of the net OPEB liability was based on the University’s contributions to the HCTF for the

calendar years 2020 and 2019 relative to the total contributions of participating employers to the HCTF.

At December 31, 2020, the University’s proportion was 3.25 percent, which was a decrease from 3.44 percent as of

December 31, 2019. For the year ended June 30, 2021 and 2020, the University recognized OPEB expense (credit)

of $(497,000) and $1,594,000

, respectively. Table 9.9 details the sources of the University’s deferred outflows of

resources and deferred inflows of resources related to PERA’s OPEB plan.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Deferred

Outflows of

Resources

Deferred

Inflows of

Res ources

Deferred

Outflows of

Res ources

Deferred

Infl ows of

Res ources

Difference between expected and actual experience $ 82 6,779 128 6,488

Changes of assumptions or other inputs 230 1,891 320 -

Net difference between projected and actual earnings

on OPEB plan investments

- 1,260 - 644

Changes in proportionate share - 4,810 - 3,533

Difference between contributions recognized and

proportionate share of contributions

- 23 - 20

Contributions subsequent to the measurement date 1,486 - 1,576 -

Total $ 1,798 14,763 2,024 10,685

20202021

Table 9.9. PERA's OPEB De fe rred Outflows of Resource s and De ferred Inflows of

Resources

(in thousands)

The $1,486,000 reported as deferred outflows of resources related to OPEB, resulting from contributions subsequent

to the measurement date, will be recognized as a reduction of the net OPEB liability in the year ending June 30, 2022.

Other amounts reported as deferred outflows of resources and deferred inflows of resources related to PERA’s OPEB

that will be recognized in OPEB expense are summarized in Table 9.10.

Years ending June 30:

2022 $ (3,499)

2023 (3,296)

2024 (3,392)

2025 (2,985)

2026 (1,202)

2027 (77)

Total $ (14,451)

Table 9.10. Future Amortization of PERA's

OPEB De fe rred Outflows of Re source s and

Deferred Inflows of Resources

(in thousands)

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Actuarial assumptions. PERA’s total OPEB liability in the December 31, 2019 and 2018 actuarial valuations was

determined using the actuarial cost method, actuarial assumptions and other inputs detailed in Table 9.11.

Table 9.11. PERA OPEB

Actuarial Assumptions

December 31, 2019 December 31, 2018

Actuarial cost method Entry age Entry age

Price inflation 2.40 percent 2.40 percent

Real wage growth 1.10 percent 1.10 percent

Wage inflation 3.50 percent 3.50 percent

Salary increases, including wage inflation 3.50 percent in aggregate 3.50 percent in aggregate

Long-term investment rate of return, net of OPEB plan

investment expenses, including price inflation 7.25 percent 7.25 percent

Discount rate 7.25 percent 7.25 percent

Health care cost trend rates:

Service-based premium subsidy 0.00 percent 0.00 percent

PERACare Medicare plans 8.10 percent in 2020, gradually

decreas ing to 4.50 percent in 2029

5.60 percent in 2019, gradually

decreasing to 4.50 percent in 2029

Medicare Part A premiums

3.50 percent in 2020, gradually

increas ing to 4.50 percent in 2029

3.50 percent in 2019, gradually

increas ing to 4.50 percent in 2029

In determining the additional liability for PERACare enrollees who are age 65 or older and who are not eligible for

premium–free Medicare Part A, the monthly costs/premiums are assumed for the PERA Benefit Structure as detailed

in Table 9.12.

Medicare Plan

Monthl y

Cost

Monthl y

Premium

Monthl y Cos t

Adjusted to Age 65

Medicare Advantage / Self-Insured Prescription $ 588 227 550

Kaiser Permanente Medicare Advantage HMO $ 621 232 586

Table 9.12. Initial Costs for Members without Medicare Part A

The 2020 and 2019 Medicare Part A premium is $458 and $437 per month, respectively.

All costs are subject to the health care cost trend rates, as discussed below.

Health care cost trend rates reflect the change in per capita health costs over time due to factors such as medical

inflation, utilization, plan design, and technology improvements. For the PERA benefit structure, health care cost

trend rates are needed to project the future costs associated with providing benefits to those PERACare enrollees not

eligible for premium-free Medicare Part A.

Health care cost trend rates for the PERA benefit structure are based on published annual health care inflation surveys

in conjunction with actual plan experience (if credible), building block models and heuristics developed by health

plan actuaries and administrators, and projected trends for the Federal Hospital Insurance Trust Fund (Medicare Part

A premiums) provided by the Centers for Medicare & Medicaid Services. Effective December 31, 2019, the health

care cost trend rates for Medicare Part A premiums were revised to reflect the current expectation of future increases

in rates of inflation applicable to Medicare Part A premiums.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

The PERA benefit structure health care cost trend rates that were used to measure the total OPEB liability are

summarized in Table 9.13.

Ye ar

PERACare

Medicare Plans

Medicare Part A

Premiums

2020 8.10% 3.50%

2021 6.40% 3.75%

2022 6.00% 3.75%

2023 5.70% 3.75%

2024 5.50% 4.00%

2025 5.30% 4.00%

2026 5.10% 4.00%

2027 4.90% 4.25%

2028 4.70% 4.25%

2029+ 4.50% 4.50%

Table 9.13. PERA's OPEB Health Care Cost Trend Rates

Mortality assumptions for the determination of the total pension liability for each of the Division Trust Funds as

shown below are applied, as applicable, in the determination of the total OPEB liability for the HCTF. Affiliated

employers of the State, School, Local Government, and Judicial Divisions participate in the HCTF.

Healthy mortality assumptions for active members were based on the RP-2014 White Collar Employee Mortality

Table, a table specifically developed for actively working people. To allow for an appropriate margin of improved

mortality prospectively, the mortality rates incorporate a 70 percent factor applied to male rates and a 55 percent

factor applied to female rates.

Post-retirement non-disabled mortality assumptions for the State and Local Government Divisions were based on the

RP-2014 Healthy Annuitant Mortality Table, adjusted as follows:

 Males: Mortality improvement projected to 2018 using the MP-2015 projection scale, a 73 percent factor

applied to rates for ages less than 80, a 108 percent factor applied to rates for ages 80 and above, and further

adjustments for credibility.

 Females: Mortality improvement projected to 2020 using the MP-2015 projection scale, a 78 percent factor

applied to rates for ages less than 80, a 109 percent factor applied to rates for ages 80 and above, and further

adjustments for credibility.

The mortality assumption for disabled retirees was based on 90 percent of the RP-2014 Disabled Retiree Mortality

Table.

The actuarial assumptions used in the December 31, 2019, valuation were based on the results of the 2016 experience

analysis for the period January 1, 2012, through December 31, 2015, as well as the October 28, 2016, actuarial

assumptions workshop and were adopted by PERA’s Board during the November 18, 2016, Board meeting.

Based on the 2020 experience analysis, dated October 28, 2020, and November 4, 2020, for the period of January 1,

2016, through December 31, 2019, revised economic and demographic assumptions were adopted by PERA’s Board

on November 20, 2020, and were effective as of December 31, 2020. The following assumptions were reflected in

the roll forward calculation of the total OPEB liability from December 31, 2019, to December 31, 2020:

 Actuarial cost method was entry age

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

 Price inflation of 2.3 percent

 Real wage growth of 0.70 percent

 Wage inflation of 3.00 percent

 Salary increases, including wage inflation, of 3.30–10.90 percent

The long-term rate of return, net of OPEB plan investment expenses, including price inflation and discount rate

assumptions were 7.25 percent.

Rates of termination/withdrawal, retirement, and disability were revised to more closely reflect actual experience.

Mortality assumptions used in the roll forward calculations for the determination of the total pension liability for each

of the Division Trust Funds as shown below were applied, as applicable, in the roll forward calculation for the HCTF,

using a headcount-weighted basis.

Pre-retirement mortality assumptions for the State and Local Government Divisions (Members other than State

Troopers) were based upon the PubG-2010 Employee Table with generational projection using scale MP-2019.

Post-retirement non-disabled mortality assumptions for the State and Local Government Divisions (Members other

than State Troopers) were based upon the PubG-2010 Healthy Retiree Table, adjusted as follows:

 Males: 94 percent of the rates prior to age 80 and 90 percent of the rates for ages 80 and older, with

generational projection using scale MP-2019.

 Females: 87 percent of the rates prior to age 80 and 107 percent of the rates for ages 80 and older, with

generational projection using scale MP-2019.

Post-retirement non-disabled beneficiary mortality assumptions were based upon the Pub-2010 Contingent Survivor

Table, adjusted as follows:

 Males: 97 percent of the rates for all ages, with generational projection using scale MP-2019.

 Females: 105 percent of the rates for all ages, with generational projection using scale MP-2019.

Disabled mortality assumptions for Members other than State Troopers were based upon the PubNS-2010 Disabled

Retiree Table using 99 percent of the rates for all ages with generational projection using scale MP-2019.

The mortality tables described above are generational mortality tables on a head-count weighted basis.

The following health care costs assumptions were updated and used in the roll forward calculation for the HCTF:

 Initial per capita health care costs for those PERACare enrollees under the PERA benefit structure who are

expected to attain age 65 and older ages and are not eligible for premium-free Medicare Part A benefits were

updated to reflect the change in costs for the 2020 plan year.

 The health care cost trend rates for Medicare Part A premiums were revised to reflect the then-current

expectation of future increases in rates of inflation applicable to Medicare Part A premiums.

Actuarial assumptions pertaining to per capita health care costs and their related trend rates are analyzed and updated

annually by the Board’s actuary, as discussed above.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

The long-term expected return on plan assets is reviewed as part of regular experience studies prepared every four to

five years for PERA. Recently this assumption has been reviewed more frequently. The most recent analyses were

outlined in the Experience Study report dated October 28, 2020. As a result of the November 20, 2020, PERA Board

meeting, the following economic assumptions were changed, effective December 31, 2020:

 Price inflation assumption decreased from 2.40 percent per year to 2.30 percent per year.

 Real rate of investment return assumption increased from 4.85 percent per year, net of investment expenses

to 4.95 percent per year, net of investment expenses.

 Wage inflation assumption decreased from 3.50 percent per year to 3.00 percent per year.

Several factors are considered in evaluating the long-term rate of return assumption, including long-term historical

data, estimates inherent in current market data, and a log-normal distribution analysis in which best-estimate ranges

of expected future real rates of return (expected return, net of investment expense and inflation) were developed for

each major asset class. These ranges were combined to produce the long-term expected rate of return by weighting

the expected future real rates of return by the target asset allocation percentages and then adding expected inflation.

The PERA Board first adopted the 7.25 percent long-term expected rate of return as of November 18, 2016.

Following an asset/liability study, the Board reaffirmed the assumed rate of return at the Board’s November 15, 2019,

meeting, to be effective January 1, 2020. As of the most recent reaffirmation of the long-term rate of return, the target

asset allocation and best estimates of geometric real rates of return for each major asset class are summarized in Table

9.14.

Asset Class

Targ et

Allocation

30 Year Expected

Geometric Real

Rate of Return

Global Equity 54.00% 5.60%

Fixed Income 23.00% 1.30%

Private Equity 8.50% 7.10%

Real Estate 8.50% 4.40%

Alternatives * 6.00% 4.70%

Total 100.00%

Table 9.14. Tar

et Allocation and Ex

ected Rate of Retur

In setting the long-term expected rate of return, projections employed to model future returns provide a range of

expected long-term returns that, including expected inflation, ultimately support a long-term expected rate of return

assumption of 7.25 percent for Fiscal Year 2021 and 2020.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Table 9.15 presents the net OPEB liability using the current health care cost trend rates applicable to the PERA benefit

structure, as well as if it were calculated using health care cost trend rates that are one percentage point lower or one

percentage point higher than the current rates.

Table 9.15. Sensitivity of the University's Proportionate Share of PERA's Net

OPEB Liability to Changes in the Health Care Cost Trend Rates

(in thousands)

Fiscal Year Ended June 30, 2021

1% Decrease

in Trend Rates

Current

Trend Rates

1% Increase in

Trend Rates

Initial PERACare Medicare trend rate 7.10% 8.10% 9.10%

Ultimate PERACare Medicare trend rate 3.50% 4.50% 5.50%

Initial Medicare Part A trend rate 2.50% 3.50% 4.50%

Ultimate Medicare Part A trend rate 3.50% 4.50% 5.50%

Net OPEB Liability at June 30, 2021 30,040 30,837 31,765

Fiscal Year Ended June 30, 2020

1% Decrease

in Trend Rates

Current

Trend Rates

1% Increase in

Trend Rates

Initial PERACare Medicare trend rate 4.60% 5.60% 6.60%

Ultimate PERACare Medicare trend rate 3.50% 4.50% 5.50%

Initial Medicare Part A trend rate 2.50% 3.50% 4.50%

Ultimate Medicare Part A trend rate 3.50% 4.50% 5.50%

Net OPEB Liability at June 30, 2020 $ 37,694 38,611 39,671

Discount rate. The discount rate used to measure the total OPEB liability was 7.25 percent. The projection of cash

flows used to determine the discount rate applied the actuarial cost method and assumptions shown above. In addition,

the following methods and assumptions were used in the projection of cash flows:

 Updated health care cost trend rates for Medicare Part A premiums as of the December 31, 2020,

measurement date.

 Total covered payroll for the initial projection year consists of the covered payroll of the active membership

present on the valuation date and the covered payroll of future plan members assumed to be hired during the

year. In subsequent projection years, total covered payroll was assumed to increase annually at a rate of 3.00

percent.

 Employer contributions were assumed to be made at rates equal to the fixed statutory rates specified in law

and effective as of the measurement date.

 Employer contributions and the amount of total service costs for future plan members were based upon a

process used by the plan to estimate future actuarially determined contributions assuming an analogous future

plan member growth rate.

 Estimated transfers of dollars into the HCTF representing a portion of purchase service agreements intended

to cover the costs associated with OPEB benefits.

 Benefit payments and contributions were assumed to be made at the middle of the year.

Based on the above assumptions and methods, the projection test indicates the HCTF’s FNP was projected to make

all projected future benefit payments of current members. Therefore, the long-term expected rate of return of 7.25

percent on OPEB plan investments was applied to all periods of projected benefit payments to determine the total

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

OPEB liability. The discount rate determination does not use the municipal bond index rate, and therefore, the

discount rate is 7.25 percent.

Table 9.16 presents the proportionate share of the net OPEB liability calculated using the discount rate of 7.25 percent,

as well as what the proportionate share of the net OPEB liability would be if it were calculated using a discount rate

that is 1-percentage-point lower (6.25 percent) or 1-percentage-point higher (8.25 percent) than the current rate.

Table 9.16. Sensitivity of the University's Proportionate Share of PERA's Net

OPEB Liability to Changes in the Discount Rate

(in thousands)

1% Decrease

6.25%

Current Rate

7.25%

1% Increase

8.25%

Net OPEB Liability at 6/30/2021 $ 35,324 30,837 27,003

Net OPEB Liability at 6/30/2020 $ 43,658 38,611 34,296

OPEB plan fiduciary net position. Detailed information about the HCTF’s FNP is available in PERA’s annual

report which can be obtained at www.copera.org/investments/pera-financial-reports.

NOTE 10 – RETIREMENT PLANS AND INSURANCE PROGRAMS

Employees of the University eligible for retirement benefits participate in one of four retirement plans. Eligible

student employees participate in a student retirement plan that is funded solely by contributions from the student

employees. The University and PERA also offer other voluntary retirement plans. The University offers the Alternate

Medicare Payment whose benefits are not restricted to healthcare expenses. The student retirement plan is a defined

contribution plan administered by a consortium of higher educational institutions in the State. All other eligible

employees of the University participate in one of the three additional plans, PERA plan, the University’s optional

retirement plan, and CU Medicine’s retirement plan.

PERA DEFINED BENEFIT PENSION PLAN

Significant Accounting Policies. The University participates in the State Division Trust Fund (SDTF), a cost-sharing

multiple-employer defined benefit pension plan administered by PERA. The net pension liability, deferred outflows

of resources and deferred inflows of resources related to pensions, pension expense, information about the fiduciary

net position (FNP) and additions to/deductions from the FNP of the SDTF have been determined using the economic

resources measurement focus and the accrual basis of accounting. For this purpose, benefit payments (including

refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms.

Investments are reported at fair value.

The Colorado General Assembly passed significant pension reform through Senate Bill (SB) 18-200: Concerning

Modifications to the Public Employees’ Retirement Association Hybrid Defined Benefit Plan Necessary to Eliminate

with a High Probability the Unfunded Liability of the Plan Within the Next Thirty Years. The bill was signed into

law by Governor Hickenlooper on June 4, 2018. SB 18-200 made changes to certain benefit provisions. Most of

these changes were in effect as of June 30, 2021.

Plan description. Eligible employees of the University are provided with pensions through the SDTF. Plan benefits

are specified in Title 24, Article 51 of the C.R.S., administrative rules set forth at 8 C.C.R. 1502-1, and applicable

provisions of the federal IRC. State law provisions may be amended from time to time by the Colorado General

Assembly. PERA issues a publicly available comprehensive annual financial report that can be obtained at

www.copera.org/investments/pera-financial-reports.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

The University of Colorado has both classified and non-classified employees. All classified employees participate in

PERA. Prior to legislation passed during the 2006 session, higher education employees had the option to participate

in social security, PERA’s defined benefit plan, or the institution’s optional retirement plan. Currently, the

University’s employees, except classified employees, are required to participate in their institution’s optional plan, if

available, and social security unless they are active or inactive members of PERA with at least one year of service

credit. In that case, they may elect either PERA or their institution’s optional plan.

Benefits provided as of December 31, 2020. PERA provides retirement, disability, and survivor benefits.

Retirement benefits are determined by the amount of service credit earned and/or purchased, highest average salary,

the benefit structure(s) under which the member retires, the benefit option selected at retirement, and age at retirement.

Retirement eligibility is specified in tables set forth at C.R.S. § 24-51-602, 604, 1713, and 1714.

The lifetime retirement benefit for all eligible retiring employees under the PERA benefit structure is the greater of

the:

 Highest average salary multiplied by 2.5 percent and then multiplied by years of service credit.

 The value of the retiring employee’s member contribution account plus a 100 percent match on eligible

amounts as of the retirement date. This amount is then annuitized into a monthly benefit based on life

expectancy and other actuarial factors.

In all cases the service retirement benefit is limited to 100 percent of highest average salary and also cannot exceed

the maximum benefit allowed by the federal IRC.

Members may elect to withdraw their member contribution accounts upon termination of employment with all PERA

employers; waiving rights to any lifetime retirement benefits earned. If eligible, the member may receive a match of

either 50 percent or 100 percent on eligible amounts depending on when contributions were remitted to PERA, the

date employment was terminated, whether 5 years of service credit has been obtained and the benefit structure under

which contributions were made.

As of December 31, 2020, benefit recipients who elect to receive a lifetime retirement benefit are generally eligible

to receive post-retirement cost-of-living adjustments in certain years, referred to as annual increases (AI) in the

C.R.S., once certain criteria are met. Pursuant to SB 18-200, there are no AI for 2018 and 2019 for all benefit

recipients. Thereafter, benefit recipients under the PERA benefit structure who began eligible employment before

January 1, 2007 will receive an annual increase of 1.25 percent, unless adjusted by the automatic adjustment provision

(AAP) pursuant C.R.S. § 24-51-413. Eligible benefit recipients under the PERA benefit structure who began

membership after January 1, 2007 will receive the lesser of an annual increase of 1.25 percent or the average of the

Consumer Price Index for Urban Wage Earners and Clerical Workers for the prior calendar year, not to exceed 10

percent of PERA’s Annual Increase Reserve (AIR) for the SDTF. The AAP may raise or lower the aforementioned

AI by up to 0.25 percent based on the parameters specified in C.R.S. § 24-51-413.

Disability benefits are available for eligible employees once they reach five years of earned service credit and are

determined to meet the definition of disability. The disability benefit amount is based on the lifetime retirement

benefit formula(s) shown above considering a minimum 20 years of service credit, if deemed disabled.

Survivor benefits are determined by several factors, which include the amount of earned service credit, highest

average salary of the deceased, the benefit structure(s) under which service credit was obtained, and the qualified

survivor(s) who will receive the benefits.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Contributions provisions as of June 30, 2021. Eligible employees of the University and the State are required to

contribute to the SDTF at a rate set by Colorado statute. The contribution requirements for the SDTF are established

under C.R.S. § 24-51-401, et seq. and § 24-51-413. From January 1, 2020 through June 30, 2020, eligible employees

are required to contribute 8.75 percent of their PERA-includable salary; 10.00 percent from July 1, 2020 through

June 30, 2021. Table 10.1 summarizes the employer contribution requirements for all employees.

1-1-20 to

06-30-20

7-1-20 to

12-31-20

1-1-21 to

06-30-21

Employer Contribution Rate* 10.40% 10.90% 10.90%

Amount of Employer Contribution Apportioned to the Health Care

Trust Fund as specified in C.R.S. § 24-51-208(1)(f) -1.02%

-1.02% -1.02%

Amount Apportioned to the SDTF 9.38% 9.88% 9.88%

Amortization Equalization Disbursement (AED) as specified in

C.R.S. § 24-51-411 5.00% 5.00% 5.00%

Supplemental Amortization Equalization Disbursement (SAED)

as s pecified in C.R.S. § 24-51-411 5.00% 5.00% 5.00%

Defined Contribution Supplement as specified in C.R.S. § 24-51-411 n/a n/a 0.05%

Total Employer Contribution Rate to the SDTF 19.38% 19.88% 19.93%

Table 10.1. Employer Contribution Requirements

*Rates are expressed as a percentage of salary as defined in C.R.S. §24-51-101(42).

As specified in C.R.S. § 24-51-414 the State is required to contribute

$225,000,000 (actual dollars) each year to PERA

starting on July 1, 2018. A portion of the direct distribution payment is allocated to the SDTF based on the

proportionate amount of annual payroll of the SDTF to the total annual payroll of the SDTF, School Division Trust

Fund, Judicial Division Trust Fund, and Denver Public Schools Division Trust Fund. As a result of SB 18-200, the

State contributed to PERA $8,258,000, on behalf of the University on July 1, 2019 and July 1, 2018. These

contributions were considered employer contributions for Statement No. 68 reporting purposes. House Bill (HB) 10-

1379 suspended the $225,000,000 direct distribution payable on July 1, 2020 for the State’s 2020-21 fiscal year. A

full copy of these bills can be found online at www.leg.colorado.gov.

Employer contributions are recognized by the SDTF in the period in which the compensation becomes payable to the

member and the University is statutorily committed to pay the contributions to the SDTF. Total contributions

recognized by SDTF for the University were $63,808,000 and $73,815,000, for the years ended June 30, 2021 and

2020, respectively, which includes $0 and $8,585,000 support from the State under SB 18-200 for the years ended

June 30, 2021 and 2020, respectively. As of June 30, 2021 and 2020, the University recorded an accounts payable to

PERA of $7,941,000 and $60,000, respectively, which was paid during the subsequent month.

Pension Liability. The net pension liability for the SDTF for Fiscal Year 2021 was measured as of December 31,

2020, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation

as of December 31, 2019. Standard update procedures were used to roll forward the total pension liability to

December 31, 2020. The University’s proportion of the net pension liability was based on the University’s

contributions to the SDTF for the calendar year 2020 relative to the total contributions of participating employers and

the State as a nonemployer contributing entity to participating employers of the SDTF that are outside of the State’s

financial reporting entity. Due to the aforementioned suspension of the July 1, 2020 direct distribution payment, the

nonemployer contributing entity’s proportion is zero percent for Fiscal Year 2021. Pursuant to C.R.S. § 24-51-414,

the direct distribution payment from the State is to recommence annually starting on July 1, 2021.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

The net pension liability for the SDTF for Fiscal Year 2020 was measured as of December 31, 2019, and the total

pension liability used to calculate the net pension liability was determined by an actuarial valuation as of

December 31, 2018. Standard update procedures were used to roll forward the total pension liability to

December 31, 2019. The University’s proportion of the net pension liability was based on the University’s

contributions to the SDTF for the calendar year 2019 relative to the total contributions of participating employers and

the State as a nonemployer contributing entity to participating employers of the SDTF that are outside of the State’s

financial reporting entity.

At June 30, 2021 and 2020, the University reported a liability of $955,089,000 and $1,039,533,000, respectively, for

its proportionate share of the net pension liability. At December 31, 2020, the University’s proportion was 10.07

percent, which decreased from 10.71 percent at December 31, 2019.

For the years ended June 30, 2021 and 2020, the University recognized pension expense (credit) of $(248,634,000)

and $(226,659,000), respectively, and revenue of $0 and $8,258,000, respectively, for support from the State as an

employer contribution

. Table 10.2 details the sources of the University’s deferred outflows of resources and deferred

inflows of resources related to pensions at June 30, 2021 and 2020.

Deferred

Outflows of

Resources

Deferred

Inflows of

Res ources

Deferred

Outflows of

Resources

Deferred

Infl ows of

Resources

Difference between expected and actual experience $ 23,603 - 38,839 -

Changes of assumptions or other inputs 64,852 - - 298,161

Net difference between projected and actual earnings

on pension plan investments

- 195,481 - 111,997

Changes in proportionate share - 62,866 - 27,047

Changes in proportionate share of contributions - 658 - 799

Contributions subsequent to the measurement date 32,491 - 33,108 -

Total $ 120,946 259,005 71,947 438,004

Table 10.2. Deferred Inflows of Resources and Deferred Outflows of Resources Related

to Pension

(in thousands)

2021 2020

The $32,491,000 reported as a deferred outflow of resources related to pensions as of June 30, 2021, resulting from

contributions subsequent to the measurement date, will be recognized as a reduction of net pension liability in Fiscal

Year 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to

pensions was recognized in pension expense as detailed in Table 10.3.

2022 $ (48,322)

2023 (24,867)

2024 (67,824)

2025 (29,537)

Total $ (170,550)

Table 10.3. Future Amortization of De fe rre d

Outflows of Resources and Deferred Inflows of

Resources (

in thousands

)

Years ending June 30:

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Actuarial assumptions. The total pension liability in the December 31, 2020 and 2019 actuarial valuations was

determined using the actuarial cost method, actuarial assumptions and other inputs detailed in Table 10.4.

Table 10.4. Actuarial Assum

tions December 31

2019

Actuarial cost method Entry age

Price inflation 2.40 percent

Real wage growth 1.10 percent

Wage inflation 3.50 percent

Salary increases, including wage inflation 3.50 - 9.17 percent

Long-term investment rate of return, net of pension plan

investment expenses, including price inflation 7.25 percent

Discount rate 7.25 percent

Post-retirement benefit increases:

PERA benefit structure hired prior to 1/1/07;

and DPS benefit structure (compounded annually) 1.25 percent

PERA benefit structure hired after 12/31/06* Financed by the AIR

* Post-retirement benefit increases are provided by the AIR, accounted separately within each Division Trust

Fund, and subject to moneys being available; therefore, liabilities related to increases for members of these

benefit tiers can never exceed available assets.

Healthy mortality assumptions for active members reflect the RP-2014 White Collar Employee Mortality Table, a

table specifically developed for actively working people. To allow for an appropriate margin of improved mortality

prospectively, the mortality rates incorporate a 70 percent factor applied to male rates and a 55 percent factor applied

to female rates.

Post-retirement non-disabled mortality assumptions were based on the RP-2014 Healthy Annuitant Mortality Table,

adjusted as follows:

 Males: Mortality improvement projected to 2018 using the MP-2015 projection scale, a 73 percent factor

applied to rates for ages less than 80, a 108 percent factor applied to rates for ages 80 and above, and further

adjustments for credibility.

 Females: Mortality improvement projected to 2020 using the MP-2015 projection scale, a 78 percent factor

applied to rates for ages less than 80, a 109 percent factor applied to rates for ages 80 and above, and further

adjustments for credibility.

The mortality assumption for disabled retirees was based on 90 percent of the RP-2014 Disabled Retiree Mortality

Table.

The actuarial assumptions used in the December 31, 2019 valuations were based on the results of the 2016 experience

analysis for the periods January 1, 2012 through December 31, 2015 as well as the October 28, 2016 actuarial

assumptions workshop and were adopted by the PERA Board during the November 18, 2016 Board meeting.

Based on the 2020 experience analysis, dated October 28, 2020, for the period January 1, 2016, through

December 31, 2019, revised economic and demographic assumptions were adopted by PERA’s Board on

November 20, 2020, and were effective as of December 31, 2020. The assumptions shown in Table 10.5 were

reflected in the roll forward calculation of the total pension liability from December 31, 2019, to December 31, 2020.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Table 10.5. Actuarial Assum

tions December 31

2020

Actuarial cost method Entry age

Price inflation 2.30 percent

Real wage growth 0.70 percent

Wage inflation 3.00 percent

Salary increases, including wage inflation 3.30 - 10.90 percent

Long-term investment rate of return, net of pension plan 7.25 percent

Discount rate 7.25 percent

Post-retirement benefit increases:

PERA benefit structure hired prior to 1/1/07;

and DPS benefit structure (compounded annually) 1.25 percent

PERA benefit structure hired after 12/31/06* Financed by the AIR

* Post-retirement benefit increases are provided by the AIR, accounted separately within each Division Trust

Fund, and subject to moneys being available; therefore, liabilities related to increases for members of these

benefit tiers can never exceed available assets.

Salary scale assumptions were revised to align with revised economic assumptions and to more closely reflect actual

experience.

Rates of termination/withdrawal, retirement, and disability were revised to more closely refl

ect actual experience.

Pre-retirement mortality assumptions for Members other than State Troopers were based upon the PubG-2010

Employee Table with generational projection using scale MP-2019.

Post-retirement non-disabled mortality assumptions for Members other than State Troopers were based upon the

PubG-2010 Healthy Retiree Table, adjusted as follows:

 Males: 94 percent of the rates prior to age 80 and 90 percent of the rates for ages 80 and older, with

generational projection using scale MP-2019.

 Females: 87 percent of the rates prior to age 80 and 107 percent of the rates for ages 80 and older, with

generational projection using scale MP-2019.

Post-retirement non-disabled beneficiary mortality assumptions were based upon the Pub-2010 Contingent Survivor

Table, adjusted as follows:

 Males: 97 percent of the rates for all ages, with generational projection using scale MP-2019.

 Females: 105 percent of the rates for all ages, with generational projection using scale MP-2019.

Disabled mortality assumptions for Members other than State Troopers were based upon the PubNS-2010 Disabled

Retiree Table using 99 percent of the rates for all ages with generational projection using scale MP-2019.

The mortality tables described above are generational mortality tables on a benefit-weighted basis.

The long-term expected return on plan assets is reviewed as part of regular experience studies prepared every four to

five years for PERA. Recently, this assumption has been reviewed more frequently. The most recent analyses were

outlined in the Experience Study report dated October 28, 2020. As a result of the November 20, 2020 PERA Board

meeting, the following economic assumptions were changed, effective December 31, 2020:

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

 Price inflation assumption decreased from 2.40 percent per year to 2.30 percent per year.

 Real rate of investment return assumption increased from 4.85 percent per year, net of investment expenses

to 4.95 percent per year, net of investment expenses.

 Wage inflation assumption decreased from 3.50 percent per year to 3.00 percent per year.

Several factors are considered in evaluating the long-term rate of return assumption, including long-term historical

data, estimates inherent in current market data, and a log-normal distribution analysis in which best-estimate ranges

of expected future real rates of return (expected return, net of investment expense and inflation) were developed for

each major asset class. These ranges were combined to produce the long-term expected rate of return by weighting

the expected future real rates of return by the target asset allocation percentage and then adding expected inflation.

The PERA Board first adopted the 7.25 percent long-term expected rate of return as of November 18, 2016. Following

an asset/liability study, the Board reaffirmed the assumed rate of return at the Board’s November 15, 2019, meeting,

to be effective January 1, 2020. As of the most recent affirmation of the long-term rate of return, the target asset

allocation and best estimates of geometric real rates of return for each major asset class are summarized in Table 10.6.

Asset Class

Target

Allocation

30 Year Expected

Geometric Real

Rate of Return

Global Equity 54.00% 5.60%

Fixed Income 23.00% 1.30%

Private Equity 8.50% 7.10%

Real Estate 8.50% 4.40%

Alternatives * 6.00% 4.70%

Total 100.00%

Table 10.6. Tar

et Allocation and Ex

ected Rate of Retur

* The Opportunity Fund's name changed to Alternatives, effective January 1, 2020.

In setting the longer term expected rate of return, pr

ojections employed to model future returns provide a range of

expected long-term returns that, including expected inflation, ultimately support a long-term expected rate of return

assumption of 7.25 percent.

Discount rate. The discount rate used to measure the total pension liability at December 31, 2020 and 2019 was 7.25

percent. The projection of cash flows used to determine the discount rate applied the actuarial cost method and

assumptions shown above. In addition, the following methods and assumptions were used in the projection of cash

flows:

 Total covered payroll for the initial projection year consists of the covered payroll of the active membership

present on the valuation date and the covered payroll of future plan members assumed to be hired during the

year. In subsequent projection years, total covered payroll was assumed to increase annually at a rate of 3.00

percent.

 Employee contributions were assumed to be made at the member contribution rates in effect for each year,

including scheduled increases in SB 18-200. Employee contributions for future plan members were used to

reduce the estimated amount of total service costs for future plan members.

 Employer contributions were assumed to be made at rates equal to the fixed statutory rates specified in law

for each year, including the scheduled increase in SB 18-200. Employer contributions also include current

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

and estimated future Amortization Equalization Distribution (AED) and Supplemental Amortization

Equalization Distribution (SAED), until the actuarial value funding ratio reaches 103 percent, at which point,

the AED and SAED will each drop 0.50 percent every year until they are zero. Additionally, estimated

employer contributions included reductions for the funding of the AIR and retiree health care benefits. For

future plan members, employer contributions were further reduced by the estimated amount of total service

costs for future plan members not financed by their member contributions.

 As specified in law, the State will provide an annual direct distribution of $225,000,000, commencing

July 1, 2018, that is proportioned between the State, School, Judicial, and DPS Division Trust Funds

based upon the covered payroll of each Division. The annual direct distribution ceases when all Division

Trust Funds are fully funded. HB 20-1379 suspended the $225,000,000 direct distribution payable on

July 1, 2020, for the State’s 2020-21 fiscal year.

 Employer contributions and the amount of total service costs for future plan members were based upon a

process used by the plan to estimate future actuarially determined contributions assuming an analogous future

plan member growth rate.

 The AIR balance was excluded from the initial FNP, as, per statute, AIR amounts cannot be used to pay

benefits until transferred to either the retirement benefits reserve or the survivor benefits reserve, as

appropriate. AIR transfers to the FNP and the subsequent AIR benefit payments were estimated and included

in the projections.

 Benefit payments and contributions were assumed to be made at the middle of the year.

Based on the above assumptions and methods, the SDTF’s FNP was projected to be available to make all projected

future benefit payments of current members. Therefore, the long-term expected rate of return of 7.25 percent on

pension plan investments was applied to all periods of projected benefit payments to determine the total pension

liability. The discount determination does not use the municipal bond index rate, and therefore, the discount rate is

7.25 percent. There was no change in the discount rate from the prior measurement date.

Table 10.7 presents the proportionate share of the net pension liability calculated using the discount rate of 7.25

percent for Fiscal Years 2021 and 2020, as well as what the proportionate share of the net pension liability would be

if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than those

rates.

Table 10.7. Sensitivit

of the Universit

's Proportionate Share of the Ne

Pension Liability to Changes in the Discount Rate

(in thousands)

Proportionate s hare of the

net pension liability

1% Decrease

6.25%

Current Rate

7.25%

1% Increase

8.25%

2021 $ 1,263,611 955,089 696,042

2020 $ 1,337,327 1,039,533 787,526

Detailed information about the SDTF’s FNP is available in PERA’s Annual Report which can be obtained at

www.copera.org/investments/pera-financial-reports.

ALTERNATE MEDICARE PAYMENT

Plan description. The University offers an Alternate Medicare Payment (AMP) to retirees of the University of

Colorado Optional Retirement Plan (ORP) participating in Medicare as an alternative to healthcare coverage provided

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

under the University OPEB Plan (University OPEB). The AMP is a single-employer, defined benefit, pension plan

established by the University who also administers and has the authority to amend benefits (e.g., ad hoc

postemployment benefit changes). No assets are accumulated in a trust as the University funds the AMP on a pay-

as-you-go basis. No stand-alone financial report is issued, and the AMP is not included in the report of a public

employee retirement system.

Benefits. A participant must be in a benefits-eligible position at 50 percent or greater appointment immediately

preceding retirement and have met the required number of service years. Only ORP retirees participating in Medicare

are eligible to receive AMP benefits. The AMP is available to the employee and eligible spouse/same gender

domestic partner. AMP benefits are not provided for dependent children. The AMP is non-contributory for the retiree

and provides a monthly, non-salary dependent, cash payment to offset healthcare-related costs. As the monthly cash

payments are not restricted as to use, they are considered a pension benefit rather than OPEB. Since the AMP’s

inception, monthly cash payments have been $154 for a retiree, $262 for a retiree plus spouse/same gender domestic

partner, and $108 for a surviving spouse.

Employees Covered by Benefit Terms. The actuarial valuation was based on census data as of March 1, 2019.

Table 10.8 is a summary of the employees covered by the benefit terms used in the valuation.

Active employees 13,619

Retirees and beneficiaries currently receiving benefit payments 685

Retirees and beneficiaries entitled to but not yet receiving benefit payments 214

Total 14,518

Table 10.8. Employees Covered by AMP's Benefit Terms

Total Pension Liability. The AMP’s total pension liability at June 30, 2021 of $119,804,000 was measured as of

June 30, 2020, and was determined by an actuarial valuation as of that date. The AMP’s total pension liability at

June 30, 2020 of $90,199,000 was measured as of June 30, 2019, and was determined by an actuarial valuation as of

that date. The University contributed $1,819,000 and $1,828,000 for the years ended June 30, 2021 and 2020,

respectively.

Actuarial Assumptions and Other inputs. The AMP’s total pension liability in the June 30, 2020 actuarial valuation

was determined using the actuarial assumptions and other inputs in Table 10.9, applied to all periods included in the

measurement, unless otherwise specified.

Table 10.9. AMP’s Actuarial Assum

tions and Other In

uts

2020 2019

Actuarial cost method Entry age Entry age

Inflation rate 2.50% 2.40%

Salary increas es

PERA’s 12/31/2020 assumption for the State

Division (Non-Troopers)

PERA’s 12/31/2019 assumption for the State

Division (Non-Troopers)

Discount rate 2.20% 3.50%

Benefit cos t trend rate 2.50% 2.50%

Measurement Date of June 30

The discount rate was based on the Bond Buyer General Obligation 20-Bond Municipal Bond Index.

Mortality rates were based upon the PUB-2010 Amounts-Weighted Teachers Classification Table for Employees

with generational projection using Scale MP-2020.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

With the exception of the mortality assumption, the demographic assumptions are based upon Colorado PERA’s

“Experience Study for the Four Year Period Ending December 31, 2015” for the State Division (Non-Troopers).

Changes in the Total Pension Liability. Table 10.10 details the changes in the AMP’s total pension liability during

Fiscal Years 2021 and 2020.

Table 10.10. Reconciliation of AMP's Total Pension Liability (

in thousands

)

2021 2020

Total pension liability, beginning of year

$90,199 83,212

Changes recognized for the fiscal year:

Service cost 4,854 4,360

Interes t on total AMP liability 3,295 3,339

Differences between expected and actual experience (124) (3,865)

Changes of assumption 23,408 4,845

Estimated benefit payments (1,828) (1,692)

Net changes 29,605 6,987

Total pension liability, end of year

$119,804 90,199

Fiscal Year Ending June 30

Changes of assumptions and other inputs reflect:

 Discount rate changed from 3.50 percent to 2.20 percent.

 Mortality table was updated from PUB-2010 “Teachers” table with generational projection using Scale MP-

2019 to PUB-2010 “Teachers” table with generational projection using Scale MP-2020.

Sensitivity of the total pension liability to changes in the discount rate. Table 10.11 presents the total pension

liability of the AMP, as well as what the AMP’s total pension liability would be if it were calculated using a discount

rate that is 1-percentage-point lower or 1-percentage-point higher than the current discount rate.

1% Decrease Current Rate 1% Increase

Fiscal Year Ended June 30 1.20% 2.20% 3.20%

2021 $ 145,137 119,804 100,082

1% Decrease Current Rate 1% Increase

2.50% 3.50% 4.50%

2020 $ 107,998 90,199 76,242

Table 10.11. Sensitivity of AMP's Total Pension Liability to Changes

in the Discount Rate

(in thousands)

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension.

The University recognized $12,099,000 and $8,910,000 of pension expense for the AMP in Fiscal Year 2021 and

2020, respectively. Table 10.12 presents the AMP’s deferred outflows of resources and deferred inflows of resources

related to pension from the following sources as of June 30, 2021 and 2020.

Deferred

Outflows of

Res ources

Deferred

Inflows of

Resources

Deferred

Outflows of

Resources

Deferred

Inflows of

Resources

Changes of assumptions $ 32,015 1,684 13,834 2,058

Differences between expected and actual experience - 4,942 - 5,721

Benefit payments subsequent to the measurement date 1,819 - 1,828 -

Total $ 33,834 6,626 15,662 7,779

20202021

Table 10.12. AMP Deferred Outflows of Resources and Deferred Inflows of Resources

(in thousands)

The $1,819,000 reported as deferred outflows of resources as of June 30, 2021, resulting from benefit payments

subsequent to the measurement date, will be recognized as a reduction to the AMP’s total pension liability in the year

ending June 30, 2022.

Amounts reported as deferred outflows of resources and deferred inflows of resources related to pension will be

recognized in pension expense as summarized in Table 10.13

Years ending June 30:

2022 $ 3,950

2023 3,950

2024 3,950

2025 3,310

2026 3,050

2027-2029 7,179

Total $ 25,389

Table 10.13. Future Amortization of AMP's

Deferred Outflows of Re source s and De fe rred

Inflows of Resources

(in thousands)

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Table 10.14 lists the amortization bases included in the AMP’s deferred outflows and inflows of resources as of

June 30, 2021 and 2020.

Date Annual

Established Type of Base Original Remaining Original Remaining Amortization

July 1, 2016 Differences between

expected and actual

experience

8.5 3.5 $ (101) (41) (12)

July 1, 2016 Changes in assumptions 8.5 3.5 10,999 4,529 1,294

July 1, 2017 Differences between

expected and actual

experience

8.5 4.5 (3,377) (1,789) (397)

July 1, 2017 Changes in assumptions 8.5 4.5 (3,180) (1,684) (374)

July 1, 2018 Differences between

expected and actual

experience

8.3 5.3 (109) (70) (13)

July 1, 2018 Changes in as s umptions 8.3 5.3 4,940 3,155 595

July 1, 2019 Differences between

expected and actual

experience

8.3 6.3 (3,865) (2,933) (466)

July 1, 2019 Changes in as s umptions 8.3 6.3 4,845 3,677 584

July 1, 2020 Differences between

expected and actual

experience

8.5 7.5 (124) (109) (15)

July 1, 2020 Changes in assumptions 8.5 7.5 23,408 20,654 2,754

Total changes $ 25,389 3,950

Period Balance

Table 10.14. Amortization of AMP Deferred Outflows of Resources and Deferred

Inflows of Resources

(in thousands)

PERA DEFINED CONTRIBUTION PLANS

Voluntary Investment Program

Plan description. Employees of the University that are also members of the SDTF may voluntarily contribute to the

Voluntary Investment Program, an IRC Section 401(k) defined contribution plan administered by PERA. Title 24,

Article 51, Part 14 of the C.R.S., as amended, assigns the authority to establish the Plan provisions to the PERA Board

of Trustees. PERA issues a publicly available comprehensive annual financial report for the Program. That report

can be obtained at www.copera.org/investments/pera-financial-reports.

Funding Policy. The Voluntary Investment Program is funded by voluntary member contributions up to the

maximum limits set by the Internal Revenue Service, as established under Title 24, Article 51, Section 1402 of the

C.R.S., as amended. The employees’ contributions to this 401(k) plan approximated $4,744,000 and $4,800,000 for

the years ended June 30, 2021 and 2020, respectively. Employees are immediately vested in their own contributions,

and investment earnings.

Defined Contribution Retirement Plan (PERA DC Plan)

Plan description. Employees of the State that were hired on or after January 1, 2006 and employees of certain

community colleges that were hired on or after January 1, 2008 which were eligible to participate in the SDTF, a

cost-sharing multiple-employer defined benefit pension plan, have the option to participate in the SDTF or the

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Defined Contribution Retirement Plan (PERA DC Plan). Pursuant to C.R.S. § 23-51-151(4), the PERA DC Plan

eligibility was extended to certain new classified employees at State Colleges and Universities beginning on

January 1, 2019. The PERA DC Plan is an IRC Section 401(a) governmental profit-sharing defined contribution

plan. Title 24, Article 51, Part 15 of the C.R.S., as amended, assigns the authority to establish Plan provisions to the

PERA Board of Trustees. The DC Plan is also included in PERA’s Annual Report as referred to above.

Funding Policy. All participating employees in the PERA DC Plan and the University are required to contribute a

percentage of the participating employees’ PERA-includable salary to the PERA DC Plan. The employee

contribution rates for the period January 1, 2020 through June 30, 2021 are summarized in Table 10.15.

1-1-20 to

06-30-20

7-1-20 to

12-31-20

1-1-21 to

06-30-21

Employee Contribution Rates 8.75% 10.00% 10.00%

Employer Contribution Rates 10.15% 10.15% 10.15%

Table 10.15. PERA DC Plan Employee and Employer

Contribution Rate s

Additionally the employers are required to contribute AED and SAED to the SDTF as shown in Table 10.16.

1-1-20 to

06-30-20

7-1-20 to

12-31-20

1-1-21 to

06-30-21

Amortization Equalization Disbursement (AED) as specified in C.R.S. §

24-51-411* 5.00% 5.00% 5.00%

Supplemental Amortization Equalization Disbursement (SAED) as specified

in C.R.S. § 24-51-411* 5.00% 5.00% 5.00%

Automatic Adjustment Provision (AAP), as specified in C.R.S. § 24-51-413* n/a 0.50% 0.50%

Defined Contribution statutory contribution as specified in C.R.S. § 24-51-1505* 0.25% 0.25% 0.25%

Defined Contribution Supplement as specified in C.R.S. § 24-51-415 n/a n/a 0.05%

Total employer contribution rate to the SDTF 10.25%

10.75% 10.80%

* Rates are expressed as a percentage of salary as defined in C.R.S. § 24-51-101(42).

Table 10.16. PERA DC Plan AED and SAED Contribution Rates

Contribution requirements are established under Title 24, Article 51, Section 1505 of the C.R.S., as amended.

Participating employees of the PERA DC Plan are immediately vested in their own contributions and investment

earnings and are immediately 50 percent vested in the amount of employer contributions made on their behalf. For

each full year of participation, vesting of employer contributions increases by 10 percent. Forfeitures are used to pay

expenses of the PERA DC Plan in accordance with PERA Rule 16.80 as adopted by the PERA Board of Trustees in

accordance with Title 24, Article 51, Section 204 of the C.R.S. As a result, forfeitures do not reduce pension expense.

The University’s participating employees’ contributions to this DC plan approximated $21,000 and $17,000 for the

years ended June 30, 2021 and 2020, respectively, and employer contributions were $22,000 and $20,000,

respectively. Less than 10 employees of the University opted to participate in this plan during the years ended

June 30, 2021 and 2020.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

PERA DEFERRED COMPENSATION PLAN

The PERA Deferred Compensation Plan (457) was established July 1, 2009, as a continuation of the State’s deferred

compensation plan, which was established for State and local government employees in 1981. At July 1, 2009, the

State’s administrative functions for the 457 plan were transferred to PERA, where all costs of administration and

funding are borne by the plan participants. In calendar years 2020 and 2019, participants were allowed to make

contributions of up to 100 percent of their annual gross salary (reduced by their mandatory percent PERA

contribution) to a maximum of $19,500 and $19,000, respectively. Participants who are age 50 and older, and

contributing the maximum amount allowable, were allowed to make an additional $6,500 contribution in 2020, and

$6,000 in 2019 for total contributions of $26,000 and $25,000, respectively. Participants are also eligible for the

special 457 plan catch-up beginning the last three years immediately preceding the participant’s normal retirement

age. Contributions and earnings made by CU employees are tax deferred, although the 457 plan does permit a Roth

option. At December 31, 2020 and 2019, the 457 plan had 19,438 and 18,919 participants, respectively. The

University employees’ contributions to the 457 plan approximated $21,563,000 and $20,140,000 for the years ended

June 30, 2021 and 2020, respectively.

UNIVERSITY OPTIONAL RETIREMENT PLAN

Under the University’s optional retirement plan (ORP), a 401(a) plan, certain members of the University are required

to participate in a defined contribution retirement plan administered by the University for the benefit of full-time

faculty and exempt staff members. The State constitution assigns the authority to establish and amend plan provisions

to the Regents. The contribution requirements of plan members and the University are established and may be

amended by the Regents. Generally, employees are eligible for participation in the ORP upon hire and are vested

immediately upon participation.

For the years ended June 30, 2021 and 2020, the University’s contribution to the defined contribution retirement plan

was equal to 10 percent of covered payroll, and the employee contribution was equal to 5 percent of covered payroll.

The University’s contribution under the ORP approximated $170,044,000 and $166,936,000 during the years ended

June 30, 2021 and 2020, respectively. The employees’ contribution under the ORP approximated $84,775,000 and

$83,214,000 during the years ended June 30, 2021 and 2020, respectively.

Participants in the University’s ORP choose to invest all contributions with one or more of three designated vendors.

In addition, participants in the University’s ORP are covered under federal Social Security. Federal Social Security

regulations require both the employer and employee to contribute a percentage of covered payroll to Social Security.

UNIVERSITY VOLUNTARY RETIREMENT SAVINGS PLAN

The University provides a voluntary retirement savings plan to most employees referred to as a 403(b) plan.

Employee salary deferrals into the 403(b) plan are made before income tax is paid and allowed to grow tax-deferred

until the money is taxed as income when withdrawn from the plan. The plan is administered by the University. For

calendar year 2021 and 2020, the plan had a contribution limit of $19,500, and allowed catch-up contributions of

$6,500. As of January 1, 2020 contributions could be made on a before-tax or after-tax basis. The employees’

contributions to this 403(b) plan approximated $60,569,000 and $53,875,000 for the years ended 2021 and 2020,

respectively. Of the total contributed for the years ended June 30, 2021 and 2020, respectively, approximately

$51,717,000 and $50,720,000 was before-tax and $8,852,000 and $3,155,000 was after-tax. The University does not

contribute to this plan.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

CU MEDICINE RETIREMENT PLAN

CU Medicine sponsors a defined contribution retirement plan for its permanent employees that is administered by the

Teachers Insurance Annuities Association’s College Retirement Equities Fund. The board of directors for CU

Medicine has the authority to amend plan provisions. Employees are eligible for participation in the plan after

completing one year of service. On behalf of eligible employees, CU Medicine contributed an amount equal to

7 percent of eligible employees’ salaries for the years ended June 30, 2019 through May 31, 2020. Between June 1,

2020 and September 30, 2020, in response to estimated declining revenue associated with the coronavirus pandemic,

CU Medicine reduced the contribution to 2 percent of eligible employee’s salary. Effective October 1, 2020, CU

Medicine restored the contribution equal to 7 percent of eligible employees’ salaries through the year ended June 30,

2021. Contributions to the plan approximated $1,800,000 and $1,836,000, for the years ended June 30, 2021 and

2020, respectively.

HEALTH INSURANCE PROGRAMS

The University’s contributions to its various health insurance programs approximated $241,725,000 and

$246,657,000 during the years ended June 30, 2021 and 2020, respectively. See Note 1 and 16 for discussion of the

Trust.

NOTE 11 – OTHER LIABILITIES

Table 11.1 details other liabilities as of June 30, 2021 and 2020.

Type Total

Current

Portion Total

Current

Portion

Risk financing $ 32,638 14,226 30,568 12,204

Construction contract retainage 8,401 8,401 11,202 10,366

Depos its 17,496 17,496 18,571 18,571

Federal Perkins loan 13,051 2,151 15,883 548

Early retirement incentive program 7,462 1,101 2,393 852

Asset retirement obligation 1,373 - 1,312 -

Miscellaneous 3,976 2,796 3,041 1,697

Total Other Liabilities $ 84,397 46,171 82,970 44,238

2021 2020

Table 11.1. Other Liabilities

(in thousands)

RISK FINANCING-RELATED LIABILITIES

The University is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors

and omissions; medical malpractice; employee occupational injuries; graduate medical students’ health; and natural

disasters. The University finances these risks through various self-insurance programs, including through Altitude

West for workers’ compensation. The University finances the cost and risks associated with employee health benefit

programs through the Trust. Under the terms of the Trust, the University is self-insured for medical claims.

The University utilizes a protected self-insurance program for its property, liability, and workers’ compensation risks.

The University has established a separate self-insurance program for the purpose of providing professional liability

coverage for CU Denver | Anschutz and UCHealth. A separate self-insurance program has also been established to

provide health insurance for graduate medical students and eligible dependents at CU Anschutz.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

All self-insurance programs assume losses up to certain limits and purchase a defined amount of excess insurance for

losses over those limits. These limits range from $325,000 to $1,500,000 per occurrence.

Reserves for unpaid claims under these programs are actuarially reviewed and evaluated for adequacy each year. The

Property, General Liability, and Workers’ Compensation reserve of $18,711,000 and the Graduate Medical Student

Health Benefits reserve of $1,676,000 are reported on an undiscounted basis, and the CU Denver | Anschutz

Professional Liability reserve of $12,251,000 is reported at a discount basis using 2.14 percent. Over the past three

years, the Property, General Liability, and Workers’ Compensation reserve has incurred four claims for which the

amount of settlement exceeded insurance coverage. As of June 30, 2021, $1,700,000 had been collected from carriers

for these claims. Over the past three years, the Graduate Medical Student Health Benefits reserve and the CU

Denver | Anschutz Professional Liability reserve have collected $5,804,000 from the stop-loss insurance carrier for

settlements in excess of the individual stop-loss coverage. There were no significant reductions or changes in

insurance coverage from the prior year.

The amount recorded as risk financing-related liabilities represents reserves based upon the annual actuarial valuation

and includes reserves for incurred but not reported claims. Such liabilities depend on many factors, including claims

history, inflation, damage awards, investment return, and changes in legal doctrine. Accordingly, computation of the

claims liabilities requires an annual estimation process. Claims liabilities are reevaluated on a periodic basis and take

into consideration recently settled claims, frequency of claims, and other relevant factors.

Changes in the balances of risk financing-related liabilities for the years ended June 30, 2021 and 2020 are presented

in Table 11.2.

Property, General

Liability, and

Workers’

Compensation

Profes s ional

Liability

Graduate Medi c al

Student Health

Benefits Total

Balance as of June 30, 2019 $ 19,308 10,710 2,832 32,850

Fis cal Year 2020:

Claims and changes in estimates 5,900 943 10,469 17,312

Claim payments (7,586) (1,208) (10,800) (19,594)

Balance as of June 30, 2020 $ 17,622 10,445 2,501 30,568

Fis cal Year 2021:

Claims and changes in estimates 7,530 3,636 13,294 24,460

Claim payments (6,441) (1,830) (14,119) (22,390)

Balance as of June 30, 2021 $ 18,711 12,251 1,676 32,638

Table 11.2. Risk Financin

-related Liabilities

(

in thousands

)

DIRECT LENDING

The University participates in two stud

ent lending programs operated by the federal government, Direct Student Loan

and the State School as Lender. These programs enable eligible students or parents to obtain a loan to pay for the

student’s cost of attendance directly through the University rather than through a private lender. The University is

responsible for handling the complete loan process, including funds management as well as promissory note

functions.

For the Direct Lending program, the University is not responsible for collection of these loans or for defaults by

borrowers; therefore, these loans are not recognized as receivables in the accompanying financial statements. Direct

lending activity during the years ended June 30, 2021 and 2020 was $360,000,000 and $383,047,000, respectively.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

FEDERAL PERKINS LOANS

The Federal Perkins Loan program, which provided low-interest loans to college students with exceptional financial

need, expired on September 30, 2017. Beginning with the 2019-2020 Award Year and for all subsequent award years,

the United States Department of Education (ED) requires a capital distribution from the University’s Perkins Fund

on an annual basis for institutions that continue participating in the Perkins Loan Program. Institutions, such as the

University, must return to ED the federal share of the institution’s Perkins Fund. In Fiscal Years 2021 and 2020, the

University returned $2,657,000 and $1,753,000, respectively, to ED.

EARLY RETIREMENT INCENTIVE PROGRAM

The University provides an early retirement incentive program (ERIP) to tenured professors who are at least 55 years

of age and whose age and years of service total at least 70. These professors must also be participants in the

University’s ORP. The ERIP provides eligible participants with an incentive equal to twice the professor’s base

salary and supplemental pay. In return, the participants will retire and relinquish tenure immediately. There were 58

and 19 participants as of June 30, 2021 and 2020, respectively. Benefits under the ERIP are payable over a five-year

period. Participation in this program does not impact the Optional Retirement Plan or OPEB. The liability as of

June 30, 2021 and 2020 was $7,462,000 and $2,393,000, respectively, measured at a discounted present value using

a rate of 5 percent. Table 11.3 presents changes in the ERIP for the years ended June 30, 2021 and 2020.

2021 2020

Beginning of year $ 2,393 2,544

Additions 5,919 1,445

Reductions (850) (1,596)

End of year $ 7,462 2,393

Current ERIP 1,101 852

Table 11.3. Early Retirement Incentive Program

(

in thousands)

NOTE 12 - NET POSITION

Unrestricted net position is one component of the University’s financial statements, which represents the net position

held by the collective units of the University as of June 30. Balances fluctuate throughout the year and are reported

as of a point-in-time. The University designates unrestricted net position by their intended purpose. Unobligated

funds are generally available for campus use or support of schools, colleges, departments, or units. These funds are

generated by nonrecurring revenue surpluses, such as departmental share unspent indirect cost recoveries, or year-

end balances resulting from lower than expected spending levels, such as vacancy savings from an unfilled position.

Campus leadership holds these funds in general categories based on internal policy or intended use. Their designation

may change in accordance with directives from leadership, including Regent directives. Obligated Funds are

unrestricted net position that are obligated to specific projects or are held for contractual payments, such as faculty

start-up.

University policy requires each campus provide the Regents prior to December 31 a detailed report on designated net

position. This report enhances clarity and frequency of internal communications and provides context for Regent

decisions on key budget items. These reports are available on the Regents’ website.

Table 12 presents changes in the University’s nonexpendable net position for the years ended June 30, 2021 and 2020.

In Fiscal Year 2021, the University received additions and adjustments to endowments of $46,000 and transferred

$133,000 of endowments to the Foundation for an overall decrease to restricted for nonexpendable net position. In

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Fiscal Year 2020, the University received $20,000 in additional endowments that increased restricted for

nonexpendable net position.

2021 2020

Beginning of year $ 48,653 48,633

Additions/adjustments 46 20

Reductions (133) -

End of year $ 48,566 48,653

Table 12. Re stricte d None xpendable Ne t

Pos ition (

in thousands)

NOTE 13 – SPENDING LIMITATIONS

In November 1992, the Colorado voters passed Section 20, Article X of the Colorado Constitution, commonly known

as the Taxpayer’s Bill of Rights (TABOR). TABOR contains revenue, spending, tax, and debt limitations that apply

to all local governments and the State, including the University. During the year ended June 30, 2005, the Colorado

State Legislature determined in C.R.S. § 23-5-101.7 that an institution of higher education may be designated as an

enterprise for the purposes of TABOR so long as the institution’s governing board retains authority to issue revenue

bonds on its behalf and the institution receives less than 10 percent of its total annual revenues in grants as defined

by TABOR. Further, so long as it is so designated as an enterprise, the institution shall not be subject to any of the

provisions of TABOR.

In July 2005, the Regents designated the University as a TABOR enterprise pursuant to the statute. During the years

ended June 30, 2021 and 2020, the University believes it has met all requirements of TABOR enterprise status.

Specifically, the Regents retain the authority to issue revenue bonds and the amount of State support received by the

University was 1.05 percent and 1.32 percent during the years ended June 30, 2021 and 2020, respectively, as shown

in Table 13.

Table 13. TABOR Enter

rise State Su

ort Calculation

(

in thousands

)

2021 2020

Local government grants $ 433 108

Tobacco litigation settlement & Marijuana appropriations 17,113 17,915

Capital appropriations 31,845 31,130

State COP annual debt service payments for CU Boulder 1,099 814

State COP annual debt service payments for UCCS 1,754 1,579

State COP annual debt service payments for CU Anschutz 8,145 7,781

State Support for PERA pension - 8,258

Total State Support

$ 60,389 67,585

Total TABOR enterprise revenues

$ 5,764,803 5,127,948

Ratio of State support to total revenues 1.05% 1.32%

A portion of the University is subject to revenue and expense limitations imposed by the Colorado State Legislature

through the annual appropriation process. For the years ended June 30, 2021 and 2020, the University’s appropriated

funds included $34,762,000 and $83,808,000, respectively, received for students that qualified for stipends from the

College Opportunity Fund (COF) and $66,396,000 and $160,466,000, respectively, as fee-for-service contract

revenue, as well as certain cash funds as specified in the State’s annual appropriations bill.

Appropriated cash funds include the student-paid portion of tuition, mandatory student fees, and certain other revenue

sources, which are recognized in various revenue lines, as appropriate, in the accompanying financial statements. For

the years ended June 30, 2021 and 2020, expenses were within the appropriated spending authority.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Non-appropriated funds include certain grants and contracts, gifts, indirect cost recoveries, certain auxiliary revenues,

in addition to certain other revenue sources. All other revenues and expenses reported by the University represent

non-appropriated funds and are excluded from the annual appropriations bill.

NOTE 14 – SCHOLARSHIP ALLOWANCES

During the years ended June 30, 2021 and 2020, scholarship allowances were provided by the following funding

sources in amounts detailed in Table 14.

For ye ars ended June 30

Funding Source Description

Tuition

and

Fees

Auxiliary

Enterprise

Revenues Total

Tuition

and

Fees

Auxiliary

Enterprise

Revenues Total

University general res ources $ 106,574 2,996 109,570 110,720 2,875 113,595

University auxiliary res ources 12,898 324 13,222 11,985 487 12,472

Colorado Commission on Higher

Education financial aid program 40,796 764 41,560 37,027 467 37,494

Federal programs, including

Federal Pell grants 78,000 1,826 79,826 72,163 1,312 73,475

Other State of Colorado programs 1,068 33 1,101 179 8 187

Private programs 1,153 32 1,185 296 1 297

Gift fund 30,940 719 31,659 23,830 519 24,349

Total Scholarship Allowances $ 271,429 6,694 278,123 256,200 5,669 261,869

20202021

Table 14. Scholarshi

Allowances

(in thousands)

NOTE 15 – HEALTH SERVICES REVENUE AND EXPENSE

Health services revenue of $1,309,227,000 and $1,185,649,000 is comprised of $1,306,921,000 and $1,183,489,000

at CU Anschutz and $2,306,000 and $2,160,000 at UCCS for the years ended June 30, 2021 and 2020 respectively.

Health services revenue is recorded net of contractual adjustments approximating $1,563,601,000 and $1,385,758,000

and net of bad debt expense on uncollectible patient account receivables approximating $26,763,000 and $37,260,000

from CU Medicine, $54,000 and $0 from various departments at CU Anschutz, and $15,000 and $764,000 from

UCCS for the years ended June 30, 2021 and 2020, respectively. For the year ended June 30, 2020, there were bad

debt recoveries of $175,000 at CU Anschutz. Charity care provided during the years ended June 30, 2021 and 2020,

based on estimated service costs of providing charity care, totaled approximately $4,820,000 and $5,791,000,

respectively.

NOTE 16 – BLENDED AND FIDUCIARY COMPONENT UNIT INFORMATION

The University has five blended component units: CU Medicine, CUPCO, 18

Avenue, ULEHI, Altitude West, and

one fiduciary component unit: the Trust. Table 16 presents summary financial information for the University’s

business-type blended component units as of and for the years ended June 30, 2021 and 2020.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Table 16. Summary Financial Information for Blende d Compone nt Units

(in thousands

)

As of and for the year ended June 30, 2021 CU Medicine CUPCO 18th Avenue ULEHI Altitude West Total

Condensed Statements of Net Position

Assets

Current assets $ 563,742 1,695 1,196 1,591 17,815 586,039

Capital assets, net 32,938 - 10,550 - - 43,488

Other as s ets 436,231 - - 5,283 302 441,816

Total Assets $ 1,032,911 1,695 11,746 6,874 18,117 1,071,343

Liabilities

Current liabilities $ 79,872 - 981 - 8,073 88,926

Payable to the Univers ity 6,972 - - - - 6,972

Noncurrent liabilities 3,550 - 9,354 - - 12,904

Total Liabilities $ 90,394 - 10,335 - 8,073 108,802

Net Position

Net investment in capital assets $ 28,648 - 793 - - 29,441

Restricted for expendable purposes - - - - 302 302

Unrestricted 913,869 1,695 618 6,874 9,742 932,798

Total Net Position $ 942,517 1,695 1,411 6,874 10,044 962,541

Condensed Statements of Revenues, Expenses, and Changes in Net Position

Operating revenues (expenses)

Patient service revenues $ 825,542 - - - - 825,542

Contract income 454,862 - -

- 454,862

Other operating revenues 3,401 - 2,397 4,516 5,648 15,962

Operating expenses (1,143,221) (109) (1,242) (1,497) (3,113) (1,149,182)

Depreciation and amortization (4,601) - (520) - - (5,121)

Operating income 135,983 (109) 635 3,019 2,535 142,063

Nonoperating revenues (expenses )

Investment income 11,283 - - - 1,464 12,747

Other nonoperating revenues 55,081 1,069 - - - 56,150

Contributions to affiliated organizations (26,001) - - - - (26,001)

Other nonoperating expenses (102) - (414) - - (516)

Total nonoperating revenues (expenses)

40,261 1,069 (414) - 1,464 42,380

Change in Net Position 176,244 960 221 3,019 3,999 184,443

Net Position, beginning of year 766,273 735 1,190 3,855 6,045

778,098

Net Position, end of year $ 942,517 1,695 1,411 6,874 10,044 962,541

Condensed Statements of Cash Flows

Net cash flows provided by (us ed for)

Operating activities $ 136,820 (115) 1,214 (788) 3,448 140,579

Non-capital financing activities 29,286 - -

- - 29,286

Capital and related financing activities (5,355) 1,750 (801) - - (4,406)

Investing activities (32,911) - - 1,031 (5,782) (37,662)

Net Increase in Cash and Cash Equivalents 127,840 1,635 413 243 (2,334) 127,797

Cash and cash equivalents, beginning of year 220,527 60 698 1,348 7,026 229,659

Cash and Cash Equivalents, End of Year $ 348,367 1,695 1,111 1,591 4,692 357,456

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

Table 16. (continue d) Summary Financial Information for Ble nde d Compone nt Units

(in thousands)

As of and for the year ended June 30, 2020 CU Medicine CUPCO 18th Avenue ULEHI Altitude West Total

Condensed Statements of Net Position

Ass ets

Current ass ets $ 397,694 59 777 1,348 13,054 412,932

Capital assets, net 34,005 681 11,071 - - 45,757

Other as s ets 393,568 - - 2,507 311 396,386

Total Assets $ 825,267 740 11,848 3,855 13,365 855,075

Liabilities

Current liabilities $ 48,435 5 900 - 7,320 56,660

Payable to the University 6,124 - - - - 6,124

Noncurrent liabilities 4,435 - 9,758 - - 14,193

Total Liabilities $ 58,994 5 10,658 - 7,320 76,977

Net Position

Net inves tment in capital as s ets $ 28,219 681 926 - - 29,826

Restricted for expendable purposes - - - - 311 311

Unrestricted 738,054 54 264 3,855 5,734 747,961

Total Net Position $ 766,273 735 1,190 3,855 6,045 778,098

Condensed Statements of Revenues , Expenses , and Changes in Net Pos ition

Operating revenues (expenses)

Patient service revenues $ 740,760 - - - - 740,760

Contract income 415,578 - - -

415,578

Other operating revenues 3,442 2,932 2,578 922 6,280 16,154

Operating expenses (1,082,109) (1,494) (1,310) (2,072) (4,262) (1,091,247)

Depreciation and amortization (4,545) (1,042) (518) - - (6,105)

Operating income 73,126 396 750 (1,150) 2,018 75,140

Nonoperating revenues (expenses)

Investment income 27,806 - - - 481 28,287

Other nonoperating revenues 5,085 - - - - 5,085

Contributions to affiliated organizations (18,280) - - - - (18,280)

Other nonoperating expenses (184) (637) (429) - - (1,250)

Total nonoperating revenues (expenses)

14,427 (637) (429) - 481 13,842

Change in Net Position before special item 87,553 (241) 321 (1,150) 2,499 88,982

Special item

11,773

- - -

11,773

Change in Net Position after special item 87,553 11,532 321 (1,150) 2,499 100,755

Net Position, beginning of year 678,720 (10,797) 869 5,005 3,546

677,343

et Pos i

tion, end of year $ 766,273 735 1,190 3,855 6,045 778,098

Condensed Statements of Cas h Flows

Net cash flows provided by (used for)

Operating activities $ 75,768 (102) 1,270 (1,127) 4,130 79,939

Non-capital financing activities (13,254) (3,578) (877) - - (17,709)

Capital and related financing activities (4,436) - - - - (4,436)

Investing activities (13,161) - - 232 61 (12,868)

Net Increase in Cash and Cash Equivalents 44,917 (3,680) 393 (895) 4,191 44,926

Cash and cash equivalents, beginning of year 175,610 3,740 305 2,243 2,835 184,733

Cash and Cash Equivalents, End of Year $ 220,527 60 698 1,348 7,026 229,659

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

CU Medicine is a blended component unit of the University. The University paid CU Medicine rental amounts of

$3,370,000 and $2,883,000 during the years ended June 30, 2021 and 2020, respectively. As CU Medicine is a

blended component unit, these amounts are eliminated.

In February 2020, CU Medicine committed to invest $1,000,000 as a limited partner in the CU Healthcare Innovation

Fund, L.P. (the Fund). The partnership is a strategic health care fund affiliated with CU Anschutz. Other limited

partners include ULEHI, UCHealth and Children’s Colorado. The Fund invests in ventures across the health care

spectrum and its close affiliation with the campus provides access to unique opportunities. As of June 30, 2021 and

2020, CU Medicine had invested $293,000 and $193,000, respectively. CU Medicine accounts for its participation

on the cost basis. ULEHI has initially committed to provide up to $10,000,00 to the Fund as a limited partner and

non-managing member of the General Partner. As of June 30, 2021, ULEHI’s investment was valued at $3,588,000

based upon the NAV of its ownership interest in partners’ capital of the Fund.

During the year ended June 30, 2021, total distributions by ULEHI to the University were $1,431,222 related to

investments by ULEHI.

On August 30, 2019, CUPCO’s board of directors approved the transfer of Campus Village Apartments, LLC (CVA)

to CU Denver and on September 12, 2019, the University approved the transfer. CVA, a Delaware limited liability

company, was formed under the laws of the State of Delaware on May 25, 2005. CUPCO was the sole member.

CVA is organized, operated, and dedicated exclusively to the charitable purposes of promoting the general welfare,

development, growth, and well-being of the University, and specifically for the primary purpose of acquiring,

constructing, improving, equipping, and operating a student housing facility located in Denver, Colorado, as well as

improvements and amenities related to this facility. During Fiscal Year 2020, buildings and equipment with a book

value of $30,581,000 and related debt of $48,015,000 was transferred to CU Denver. The impacts of this transfer

were eliminated in the combined financial statements.

The Trust paid medical claims on behalf of the University of $291,750,000 and $242,159,000 during the years ended

June 30, 2021 and 2020, respectively. The University’s payments to the Trust were $241,725,000 and $246,657,000

for the years ended June 30, 2021 and 2020, respectively, and the employees’ payments were $32,938,000 and

$32,170,000, respectively. As of June 30, 2021 and 2020, the University had no accounts receivable owed from the

Trust and no accounts payable due to the Trust.

NOTE 17 – DISCRETELY PRESENTED COMPONENT UNITS

The University has two discretely presented component units: CU Foundation and CUBEC.

UNIVERSITY OF COLORADO FOUNDATION

Distributions made by the CU Foundation to the University were approximately $182,281,000 and $184,507,000

during the years ended June 30, 2021 and 2020, respectively. This amount has been recorded as University grant or

gift revenue and the CU Foundation operating expense in the accompanying financial statements and does not include

undistributed income on University endowments.

Since July 1, 2007, the University has contracted with the CU Foundation to manage a portion of its investments. As

of June 30, 2021 and 2020, respectively, $350,042,000 and $253,039,000 of non-endowed investments, less

University accrued expenses, are being managed by the CU Foundation.

The University is the ultimate beneficiary of substantially all restricted and trust funds held by the CU Foundation

and is income beneficiary of a significant portion of endowment funds held by the CU Foundation. In addition, the

University contracts with the CU Foundation to manage its endowments. The University has endowments and other

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

assets held by the CU Foundation approximating $269,186,000 and $206,533,000 as of June 30, 2021 and 2020,

respectively.

The CU Foundation collected a 1.5 percent annual advancement support fee of $5,500,000 for the year ended

June 30, 2021, and a 1.5 percent annual advancement support fee of $4,700,000 for the year ended June 30, 2020.

The CU Foundation paid the University $29,501,000 and $24,409,000 to help cover development costs for the years

ended June 30, 2021 and 2020, respectively, which is reported as other operating revenue.

As of June 30, 2021 and 2020, the University recorded an accounts receivable from the CU Foundation of $12,708,000

and $14,214,000, respectively.

UNIVERSITY OF COLORADO BOULDER ENTERPRISE CORPORATION

In June 2020, CU Boulder loaned CUBEC $10,000,000 for an equity investment in CU Hotel, LLC, a joint venture

with HRV Hotel Partners to construct and operate a conference center and hotel. The loan is conditioned upon

subsequent equity investment. Initially there are interest-only loan payments with an open-ended term. CUBEC

had no other significant activity for the years ended June 30, 2021 and 2020.

NOTE 18 – RELATED ORGANIZATIONS AND JOINTLY GOVERNED ORGANIZATIONS

UNIVERSITY OF COLORADO HOSPITAL (UCHealth)

In accordance with 1991 State legislation, UCHealth was established as a separate and distinct entity. Requests for

additional information should be addressed to UCHealth, Chief Financial Officer, Mail Stop F-417, P.O. Box 6510,

Aurora, Colorado 80045.

CU Denver | Anschutz and CU Medicine have several types of financial transactions with UCHealth. On an annual

basis, CU Denver | Anschutz or CU Medicine and UCHealth enter into agreements specifying the fees to be charged

for services and the allocation of expenses between the two organizations. In certain circumstances, CU Denver |

Anschutz may bear the entire cost of certain services in exchange for educational or other services provided by

UCHealth. In some instances, the fee charged by CU Denver | Anschutz, CU Medicine, or UCHealth is a set amount

for specific services to be provided. In other circumstances, the fee charged is based upon the amount or type of

services requested by either CU Denver | Anschutz or UCHealth.

Examples of services provided by CU Denver | Anschutz to UCHealth include telecommunications services, rental

of office space, and resident doctors. Examples of services provided by UCHealth to CU Denver | Anschutz are

patient services for sponsored research projects. In general, amounts receivable from, or payable to, UCHealth are

settled within the following calendar quarter.

Total payments issued by UCHealth to CU Denver | Anschutz approximated $65,227,000 and $57,427,000 for years

ended June 30, 2021 and 2020, respectively. Total payments issued by CU Denver | Anschutz to UCHealth for the

years ended June 30, 2021 and 2020 approximated $12,502,000 and $13,113,000, respectively.

For the years ended June 30, 2021 and 2020, UCHealth distributed approximately $22,242,000 and $25,652,000,

respectively, reported as gift revenue by the University.

During the years ended June 30, 2021 and 2020, CU Medicine recognized approximately $260,158,000 and

$229,880,000, respectively, in contract income from the UCHealth system for SOM services, including faculty,

department, programmatic support, medical direction, on-call coverage, clinical lab and other related facility

functions, and clinical services. Receivables from related parties include approximately $8,738,000 and $11,776,000

of net payments due from the UCHealth system at June 30, 2021 and 2020, respectively.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

100

As of June 30, 2021 and 2020, the University recorded an accounts receivable from UCHealth of $3,848,000 and

$4,334,000, respectively, for various services provided. As of June 30, 2021 and 2020, the University had $208,000

and $118,000 accounts payable owed to UCHealth, respectively. Generally, amounts due are paid during the current

or subsequent month.

AURARIA HIGHER EDUCATION CENTER

AHEC, established by legislation in 1974, is jointly governed and utilized by CU Denver, the Community College of

Denver, and Metropolitan State University of Denver. The institutions share the costs of operating common

educational, library, and other auxiliary facilities. Costs of the common facilities are shared in accordance with an

operating agreement between AHEC and the respective institutions. During the years ended June 30, 2021 and 2020,

the University incurred expenses related to the common facilities approximating $11,850,000 and $11,389,000,

respectively, for payments to AHEC. CU Denver also collected AHEC mandatory student fees of $2,570,000 and

$5,585,000 from CU Denver students during the years ended June 30, 2021 and 2020, respectively.

As of June 30, 2021 and 2020, the University recorded an accounts payable to AHEC of $978,000 and $470,000,

respectively, for services rendered but not yet paid, and for fees collected for the spring end of term but not yet paid.

As of June 30, 2021 and 2020, the University had $39,000 and $384,000 accounts receivable due from AHEC.

In addition, the University leases space from AHEC. As of June 30, 2021 and 2020, the University has future

operating lease payment obligations to AHEC of $2,941,144 and $3,601,785. For related party lease transactions,

see Note 8.

Detailed financial information may be obtained directly from AHEC at 1201 5th Street Suite 370, Denver, Colorado

80217.

NOTE 19 – COMMITMENTS AND CONTINGENCIES

The University leases various buildings and equipment under operating lease rental agreements. Operating leases do

not give rise to property rights or meet other capital lease criteria and, therefore, the related assets and liabilities are

not recorded in the accompanying financial statements. For the years ended June 30, 2021 and 2020, total rental

expense under these agreements approximated $24,140,000 and $20,954,000 for the University, respectively. Future

minimum payments for these operating leases are shown in Table 19.

Years Ending June 30 Minimum Lease

2022 $ 19,640

2023 14,624

2024 12,821

2025 11,762

2026 10,956

2027 – 2031 40,389

2032 – 2036 5,120

Total $ 115,312

Table 19. Operating Leases Minimum Lease

Obligations

(in thousands)

Contracts have been entered into for the purpose of planning, acquiring, constructing, and equipping certain building

additions and other projects with outstanding amounts totaling approximately $405,841,000 and $338,369,000 as of

June 30, 2021 and 2020, respectively. These additions will be funded or financed by donor contributions,

appropriations from the State, issuance of revenue bonds, and other financings. As of June 30, 2021 and 2020, the

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

101

amount of capital construction appropriations authorized from the State for these projects approximated $30,176,000

and $36,605,000, respectively.

Substantial amounts are received and expended by the University under federal and state grants and contracts, and

are subject to audit by cognizant governmental agencies. This funding relates to research, student aid, and other

programs. University management believes that any liabilities arising from such audits will not have a material effect

on the University’s financial position or operations.

CU Medicine, as a member of the healthcare industry, is subject to numerous laws and regulations of federal, state,

and local governments. These laws and regulations include, but are not necessarily limited to, matters such as

licensure, accreditation, and government healthcare program participation requirements, reimbursement for patient

services, and Medicare and Medicaid fraud and abuse. Government activity has continued to increase with respect

to investigations and allegations concerning possible violations of fraud and abuse statutes and regulations by

healthcare providers. Violations of these laws and regulations could result in expulsion from government healthcare

programs, together with the imposition of significant fines and penalties, as well as significant repayments for patient

services previously billed. CU Medicine management believes that CU Medicine is in substantial compliance with

fraud and abuse statutes as well as other applicable government laws and regulations. While no material regulatory

inquiries have been made, compliance with such laws and regulations can be subject to future government review

and interpretation as well as regulatory actions unknown or unasserted at this time.

The University is a defendant in a number of legal actions. While the final outcome of many of these legal actions

cannot be determined at this time, management is of the opinion that the ultimate liability not covered by insurance,

if any, for these legal actions will not have a material effect on the University’s financial position or operations.

NOTE 20 – SUBSEQUENT EVENTS

LINE OF CREDIT

On July 1, 2021 the University entered into a $100,000,000 operating line of credit with PNC Bank (Credit

Agreement), pursuant to the 26th Supplemental Bond Resolution adopted by the Regents on June 17, 2021. Under

the Credit Agreement with PNC Bank, the University may borrow up to $100,000,000 for any lawful purpose of the

University including to pay operating expenses and costs of capital projects. The primary purpose of entering into

this agreement is to provide an additional source of liquidity to the University and to allow it to more efficiently invest

monies in the pooled funds of the University. As of the date the financial statements were issued, there have been no

drawings under the Credit Agreement and there are no current plans to do so. If monies are borrowed under the

agreement, the University would pay variable rate of interest at 1 month LIBOR plus 50 basis points. The agreement

is a three-year agreement that expires on June 30, 2024, and any amounts drawn under the agreement must be repaid

within the three-year term. The University also makes a fixed annual payment to PNC Bank for any unused portion

of the agreement.

BOND ISSUANCES

On October 7, 2021, the Board issued a total of $227,605,000 C-2 Bonds comprised of the following bonds as Parity

Obligations under the Master Resolution which were purchased by Wells Fargo Municipal Capital Strategies, LLC.:

(a) The Regents of the University of Colorado, University Enterprise Refunding Revenue Bonds, Taxable

Convertible to Tax-Exempt Series 2021C-2A, in the aggregate principal amount of $41,660,000.

(b) The Regents of the University of Colorado, University Enterprise Refunding Revenue Bonds, Taxable

Convertible to Tax-Exempt Series 2021C-2B, in the aggregate principal amount of $62,100,000.

University of Colorado

Notes to Financial Statements

June 30, 2021 and 2020

102

Convertible to Tax-Exempt Series 2021C-2C, in the aggregate principal amount of $123,845,000.

These bonds refund and defease portions of the previously issued Series 2015A, Series 2016B-1 and Series 2017A-2

(Refunded Bonds). The proceeds, along with funds contributed by the University are being held by Zions Bank as

Escrow Agent to pay all interest and principal to the respective call dates of the Refunded Bonds. The issuance of

the refunding bonds and the defeasance of the Refunded Bonds will result in significant cash flow and present value

savings to the University.

On November 2, 2021 the University sold $202,460,000 of University Enterprise Revenue Bonds Series 2021 C-3

and C-4, scheduled to close on November 16, 2021. Proceeds from the issue, plus original issue premium paid by

investors, will be used to immediately retire $225 million Series 2020 A-1, A-2 and B-1 variable rate demand bonds

and pay costs of issuance related to the C-3 and C-4 bonds. The Series C-3 and C-4 bonds have coupon interest rates

of between 2 percent and 5 percent. The $125 million of Series C-3 bonds are being issued in term rates mode (Put

Bonds) maturing on October 15, 2025 and October 15, 2026 in the amounts of $65 million and $60 million,

respectively. The $77.46 million of Series C-4 bonds are issued as fixed-rate bonds, maturing serially from June 1,

2022 through June 1, 2051.

On November 18, 2021, the University issued $69,575,000 of taxable advance refunding bonds, University Enterprise

Revenue Refunding Bonds, Series 2021 C-1. The newly issued bonds are fixed rate bonds with interest rates of 0.323

percent to 2.979 percent and mature in various amounts on June 1 from 2022 to 2049. The Series 2021 C-1 Bonds

advance refunded portions of Series 2012 A-2, 2012 B, 2018 B and 2019 B. The transaction will result in significant

cash flow and present value saving on debt service for the University.

CU SOUTH DENVER

On October 13, 2021, the Board of Regents approved entering into an agreement for the sale of property located in

Lone Tree, Colorado, and known as CU South Denver, for $10,000,000. The agreement provides the buyer of the

property an inspection period that expires December 8, 2021. If following the inspection period, the buyer elects to

move forward with the purchase, the sale is expected to be completed no later than December 15, 2021. The net book

value of the land, building, and improvements was $36,198,000 as of June 30, 2021.

103

Required Supplementary Information

University of Colorado

Required Supplementary Information

June 30, 2021 and 2020 (In Thousands) (Unaudited)

104

University OPEB Plan June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018

Service cost $ 49,138 53,400 49,754 53,099

Interest cost 26,392 34,254 28,404 24,648

Differences between exp ected and actual experience 287 (206,938) (1,728) (87,654)

Changes of assumptions 168,948 3,678 35,919 (46,406)

Benefit payments (16,062) (15,461) (15,163) (17,211)

Net change in Total OPEB liability 228,703 (131,067) 97,186 (73,524)

Total OPEB liability (beginning) 712,892 843,959 746,773 820,297

Total OPEB liability (ending) $ 941,595 712,892 843,959 746,773

Covered-employee payroll $ 2,053,724 1,719,840 1,663,010 1,475,177

Total OPEB liability as a percentage of payroll 45.85% 41.45% 50.75% 50.62%

Fiscal Year Ending

SCHEDULE OF CHANGES IN UNIVERSITY OPEB'S TOTAL OPEB LIABILITY

AND RELATED RATIOS

SCHEDULE OF UNIVERSITY'S PROPORTIONATE SHARE OF PERA OPEB LIABILITY

MEASUREMENT

DATE

PROPORTION OF

COLLECTIVE NET

OPEB LIABILITY

(A)

PROPORTIONATE

SHARE OF

COLLECTIVE NET

OPEB LIABILITY

(B)

COVERED

PAYROLL

(C)

PROPORTIONATE

SHARE OF

COLLECTIVE NET

OPEB LIABILITY AS A

PERCENTAGE OF

COVERED PAYROLL

(B/C)

PLAN'S

FIDUCIARY NET

POSITION AS A

PERCENTAGE OF

TOTAL OPEB

LIABILITY

DECEMBER 31, 2020 3.2452312656% $ 30,837 300,190$ 10.27% 32.78%

DECEMBER 31, 2019 3.4351836004% $ 38,611 308,898$ 12.50% 24.49%

DECEMBER 31, 2018 3.6189452649% $ 49,237 305,926$ 16.09% 17.03%

DECEMBER 31, 2017 3.7222136080% $ 48,374 302,484$ 15.99% 17.53%

DECEMBER 31, 2016 3.8085462272%

$ 49,379

300,390$

16.44% 16.72%

SCHEDULE OF UNIVERSITY'S CONTRIBUTIONS TO PERA OPEB PLAN

FISCAL

YEAR-END

STATUTORILY

REQUIRED

CONTRIBUTION

(A)

CONTRIBUTIONS

IN RELATION TO

STATUTORILY

REQUIRED

CONTRIBUTION

(B)

CONTRIBUTION

DEFICIENCY

(EXCESS)

(A-B)

COVERED

PAYROLL

(C)

CONTRIBUTIONS

AS A PERCENTAGE

OF COVERED

PAYROLL

(B/C)

JUNE 30, 2021 2,972$ $ 2,972 -$ 291,406$ 1.02%

JUNE 30, 2020 3,164$ $ 3,164 -$ 310,204$ 1.02%

JUNE 30, 2019 3,136$ $ 3,136 -$ 307,467$ 1.02%

JUNE 30, 2018 3,345$ $ 3,345 -$ 327,981$ 1.02%

JUNE 30, 2017 3,067$ $ 3,067 -$ 300,673$ 1.02%

University of Colorado

Required Supplementary Information

June 30, 2021 and 2020 (In Thousands) (Unaudited)

105

SCHEDULE OF UNIVERSITY'S PROPORTIONATE SHARE OF PERA PENSION LIABILITY

MEASUREMENT

DATE

PROPORTION OF

COLLECTIVE NET

PENSION

LIABILITY

(A)

PROPORTIONATE

SHARE OF

COLLECTIVE NET

PENSION LIABILITY

(B)

COVERED

PAYROLL

(C)

PROPORTIONATE

SHARE OF

COLLECTIVE NPL AS

A PERCENTAGE OF

COVERED PAYROLL

(B/C)

PLAN'S

FIDUCIARY NET

POSITION AS A

PERCENTAGE OF

TOTAL PENSION

LIABILITY

DECEMBER 31, 2020 10.0696852041% $ 955,089 300,190$ 318.16% 65.34%

DECEMBER 31, 2019 10.7126353636% $ 1,039,533 308,898$ 336.53% 62.24%

DECEMBER 31, 2018 10.9376365281% $ 1,244,558 305,926$ 406.82% 55.11%

DECEMBER 31, 2017 11.0227933269% $ 2,206,541 302,484$ 729.47% 43.20%

DECEMBER 31, 2016 11.1571798445% $ 2,049,366 300,390$ 682.24% 42.59%

DECEMBER 31, 2015 11.1631105031% 1,175,591$ 296,983$ 395.84% 56.11%

DECEMBER 31, 2014 11.2723667751% 1,060,337$ 292,225$ 362.85% 59.84%

DECEMBER 31, 2013 11.3970757002% 1,015,248$ 284,977$ 356.26% 61.08%

SCHEDULE OF UNIVERSITY'S CONTRIBUTIONS TO PERA PENSION PLAN

FISCAL

YEAR-END

STATUTORILY

REQUIRED

CONTRIBUTION

(A)

CONTRIBUTIONS

IN RELATION TO

STATUTORILY

REQUIRED

CONTRIBUTION

(B)

CONTRIBUTION

DEFICIENCY

(EXCESS)

(A-B)

COVERED

PAYROLL

(C)

CONTRIBUTIONS

AS A PERCENTAGE

OF COVERED

PAYROLL

(B/C)

JUNE 30, 2021 63,808$ 63,808$ -$ 291,406$ 21.90%

JUNE 30, 2020 65,557$

$ 73,815

(8,258)$ 310,204$

23.80%

JUNE 30, 2019 63,850$

$ 72,435

(8,585)$ 307,467$

23.56%

JUNE 30, 2018 61,138$

$ 61,138

-$ 327,981$

18.64%

JUNE 30, 2017 58,698$

$ 58,698

-$ 300,673$

19.52%

JUNE 30, 2016 54,561$

$ 54,561

-$ 299,112$ 18.24%

JUNE 30, 2015 50,696$

$ 50,696

-$ 295,357$ 17.16%

JUNE 30, 2014 46,824$

$ 46,824

-$ 288,904$ 16.21%

JUNE 30, 2013 40,368$ $ 40,368 -$ 279,476$ 14.44%

JUNE 30, 2012 30,527$

$ 30,527

-$ 279,810$ 10.91%

AMP June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017

Service cost $ 4,854 4,360 3,985 4,262 3,194

Interest on total AM P pension liability 3,295 3,339 2,751 2,231 2,391

Differences between exp ected and actual exp erience (124) (3,865) (109) (3,377) (101)

Changes of assumptions 23,408 4,845 4,940 (3,180) 10,999

Benefit payments (1,828) (1,692) (1,566) (1,448) (1,349)

Net change in total p ension liability 29,605 6,987 10,001 (1,512) 15,134

Total pension liability (beginning) 90,199 83,212 73,211 74,723 59,589

Total pension liability (ending) $ 119,804 90,199 83,212 73,211 74,723

Covered-employee payroll $ 1,692,641 1,436,909 1,369,276 1,187,065 943,644

Total pension liability as a percentage of payroll 7.08% 6.28% 6.08% 6.17% 7.92%

SCHEDULE OF CHANGES IN ALTERNATE MEDICARE PAYM ENT'S TOTAL PENSION

LIABILITY AND RELATED RATIOS

Fiscal Year Ending

University of Colorado

Notes to Required Supplementary Information

June 30, 2021 and 2020 (Unaudited)

106

NOTE 1 – UNIVERSITY OPEB’S TOTAL OPEB LIABILITY

FUNDED STATUS

No assets are held in trust to pay for plan benefits.

CHANGES IN BENEFIT TERMS AND ACTUARIAL ASSUMPTIONS TO UNIVERSITY OPEB

Changes in assumptions or other inputs effective for the June 30, 2020 measurement date are as follow:

 Discount rate changed from 3.50 percent to 2.20 percent.

 Mortality table was updated from the PUB-2010 “Teachers” table with generational projection using

Scale MP-2019 to the PUB-2010 “Teachers” table with generational projection using Scale MP-

2020.

Changes in assumptions or other inputs effective for the June 30, 2019 measurement date are as follow:

 Discount rate changed from 3.85 percent to 3.50 percent.

 Mortality table was updated from the PUB-2010 “Teachers” table with generational projection using

Scale MP-2018 to the PUB-2010 “Teachers” table with generational projection using Scale MP-

2019.

 Health care trend rates were updated.

 Health care claim costs and retiree contributions were updated based upon recent experiences.

Changes in assumptions or other inputs effective for the June 30, 2018 measurement date are as follow:

 Discount rate changed from 3.60 percent to 3.85 percent.

 Mortality table was updated to reflect the Public Retirement Plans Mortality Tables Report issued by

the Society of Actuaries in January 2019. The specific assumption used the PUB-2010 Teachers

Classification Table with generational projection using Scale MP-2018. The impact of this change

was an increase in Total OPEB Liability of about 8 percent.

Changes in assumptions or other inputs effective for the June 30, 2017 measurement date are as follow:

 Discount rate changed from 2.85 percent to 3.60 percent.

 Health care trend rates were updated.

 Spouse age differential changed from zero years for males and females to spouses two years younger

for males and one year older for females.

 Spouse coverage assumption changed from 54 percent for males and 22 percent for females to 60

percent for males and 40 percent for females for PERA participants.

 The following assumptions were updated based on the December 31, 2015 Colorado PERA

assumption study:

o Mortality rates

o Withdrawal rates

o Retirement rates (apply to PERA participants only)

University of Colorado

Notes to Required Supplementary Information

June 30, 2021 and 2020 (Unaudited)

107

NOTE 2 – PERA’S NET OPEB LIABILITY

CHANGES IN BENEFIT TERMS AND ACTUARIAL ASSUMPTIONS

Changes in assumptions or other inputs effective for the December 31, 2020 mea

surement period are as

follow:

 Revised economic and demographic assumptions were adopted by PERA’s Board on November 20,

2020, and were effective as of December 31, 2020.

 Rates of termination/withdrawal, retirement, and disability were revised to more closely reflect actual

experience.

 Salary scale assumptions were revised to align with the revised economic assumptions and to more

closely reflect actual experience.

 Initial per capita health care costs for those PERACare enrollees under the PERA benefit structure

who are expected to attain age 65 and older ages and are not eligible for premium-free Medicare Part

A benefits were updated to reflect the change in costs for the 2020 plan year.

 The health care cost trend rates for Medicare Part A premiums were revised to reflect the then current

expectation of future increases in rates of inflation applicable to Medicare Part A premiums.

 Price inflation assumption decreased from 2.40 percent per year to 2.30 percent per year.

 Real rate of investment return assumption increased from 4.85 percent per year, net of investment

expenses to 4.95 percent per year, net of investment expenses.

 Wage inflation assumption decreased from 3.50 percent per year to 3.00 percent per year.

 The pre-retirement mortality assumption for the State Division (members other than State Troopers)

was changed to the PubG-2010 Employee Table with generational projection using scale MP-2019.

 The post-retirement non-disabled mortality assumption for the State Division (Members other than

State Troopers) was changed to the PubG-2010 Health Retiree Table, adjusted as follows:

 Males: 94 percent of the rates prior to age 80 and 90 percent of the rates for ages 80 and older,

with generational projection using scale MP-2019.

 Females: 87 percent of the rates prior to age 80 and 107 percent of the rates for ages 80 and older,

with generational projection using scale MP-2019.

 The mortality tables described above are generational mortality tables on a benefit-weighted basis.

There were no changes in assumptions or other inputs effective for the December 31, 2019 measurement

period for OPEB compared to the prior year.

There were no changes in assumptions or other inputs effective for the December 31, 2018 measurement

period for OPEB compared to the prior year.

There were no changes in assumptions or other inputs effective for the December 31, 2017 measurement

period for OPEB compared to the prior year.

University of Colorado

Notes to Required Supplementary Information

June 30, 2021 and 2020 (Unaudited)

108

NOTE 3 – PERA’S NET PENSION LIABILITY

CHANGES IN BENEFIT TERMS AND ACTUARIAL ASSUMPTIONS

Changes in assumptions or other inputs effective for the December 31, 2020 mea

surement period are as

follow:

 Salary scale assumptions were revised to align with revised economic assumptions and to more