THE UNIVERSITY OF TEXAS SYSTEM CONSOLIDATED

THEUNIVERSITYOFTEXASSYSTEM

CONSOLIDATEDFINANCIALSTATEMENTSFORTHE

YEARSENDEDAUGUST31,2023AND2022

ANDINDEPENDENTAUDITOR’SREPORT

TheUniversityofTexasatArlington♦TheUniversityofTexasatAustin♦TheUniversityofTexasatDallas♦TheUniversity

ofTexasatElPaso♦TheUniversityofTexasPermianBasin♦TheUniversityofTexasRioGrandeValley♦TheUniversityof

Texas at San Antonio ♦ The University of Texas at Tyler ♦ The University of Texas Southwestern Medical Center ♦ The

University of Texas Medical Branch at Galveston ♦ The University of Texas Health Science Center at Houston ♦ The

UniversityofTexasHealthScienceCenteratSan Antonio♦TheUniversityofTexasM. D.AndersonCancerCenter♦The

UniversityofTexasSystemAdministration

THEUNIVERSITYOFTEXASSYSTEM

TABLEOFCONTENTS

Page

THEUNIVERSITYOFTEXASSYSTEMBOARDOFREGENTS 1

THEUNIVERSITYOFTEXASSYSTEMEXECUTIVEADMINISTRATIVEOFFICIALS 2

INDEPENDENTAUDITOR'SREPORT 3

MANAGEMENT'SDISCUSSIONANDANALYSIS 6

CONSOLIDATEDFINANCIALSTATEMENTSFORTHEYEARSENDEDAUGUST31,2023AND2022

ConsolidatedStatementsofNetPosition–BusinessTypeActivities

ConsolidatedStatementsofRevenues,ExpensesandChangesinNetPosition–BusinessTypeActivities

ConsolidatedStatementsofCashFlows–BusinessTypeActivities

ConsolidatedStatementsofFiduciaryNetPosition

ConsolidatedStatementsofChangesinFiduciaryNetPosition

NotestotheConsolidatedFinancialStatements

REQUIREDSUPPLEMENTARYINFORMATION 143

THEUNIVERSITYOFTEXASSYSTEM

BOARDOFREGENTS

AsofAugust31,2023

Officers

KevinP.Eltife,Chairman

JanieceLongoria,ViceChairman

JamesC.“Rad”Weaver,ViceChairman

FrancieA.Frederick,GeneralCounseltotheBoardofRegents

Members

TermsscheduledtoexpireFebruary1,2025*

ChristinaMeltonCrain Dallas

JodieLeeJiles Houston

KelcyL.Warren Dallas

TermsscheduledtoexpireFebruary1,2027*

KevinP.Eltife Tyler

NolanPerez Houston

StuartW.Stedman Houston

TermsscheduledtoexpireFebruary1,2029*

JanieceLongoria Houston

JamesC.“Rad”Weaver SanAntonio

RobertP.Gauntt Austin

TermscheduledtoexpireMay31,2024*

JohnMichaelAustin(StudentRegent) SanAntonio

*EachRegent’stermexpireswhenasuccessorhasbeenappointed,qualified,andtakentheoathofoffice.The

StudentRegentservesaone-yearterm.

THEUNIVERSITYOFTEXASSYSTEM

EXECUTIVEADMINISTRATIVEOFFICIALS

AsofAugust31,2023

JamesB.Milliken,Chancellor

JonathanC.Pruitt,ExecutiveViceChancellorforBusinessAffairs

ArchieL.Holmes,Jr.,ExecutiveViceChancellorforAcademicAffairs

JohnM.Zerwas,ExecutiveViceChancellorforHealthAffairs

DavidL.Lakey,ViceChancellorforHealthAffairsandChiefMedicalOfficer

StaceyNapier,ViceChancellorforGovernmentalRelations

RandaS.Safady,ViceChancellorforExternalRelations,Communications,andAdvancementServices

DanielH.Sharphorn,ViceChancellorandGeneralCounsel

RichHall,President,ChiefExecutiveOfficer,andChiefInvestmentOfficer–UTIMCO





THEUNIVERSITYOFTEXASSYSTEM

MANAGEMENT’SDISCUSSIONANDANALYSIS

FortheYearEndedAugust31,2023

INTRODUCTION

The University of Texas System (the System) was

established by the Texas Constitution of 1876. In 1881,

Austin was designated the site of the main academic

campus and Galveston as the location of the medical

branch.TheUniversityofTexasatAustinopenedin1883,

and eight years later, the John Sealy Hospital in

Galveston established a program for university-trained

medical professionals. In addition to the original

academic campus of The University of Texas at Austin,

the System now includes seven additional academic

institutions:

• TheUniversityofTexasatArlington

• TheUniversityofTexasatDallas

• TheUniversityofTexasatElPaso

• TheUniversityofTexasPermianBasin

• TheUniversityofTexasRioGrandeValley

• TheUniversityofTexasatSanAntonio

• StephenF.AustinStateUniversity(9/1/23)

• TheUniversityofTexasatTyler

Health institutions for medical education and research

have expanded beyond The University of Texas Medical

BranchatGalvestontoinclude:

• TheUniversityof Texas M. D. Anderson Cancer

Center

• The University of Texas Southwestern Medical

Center

• TheUniversityofTexasHealthScienceCenterat

Houston

• TheUniversityofTexasHealthScienceCenterat

SanAntonio

TheSystem’sthirteeninstitutionsare,collectively,oneof

thenation’slargesteducationalenterprises.Theyprovide

instruction and learning opportunities to approximately

255,000 undergraduate, graduate, and professional

school students from a wide range of social, ethnic,

cultural, and economic backgrounds. The System is

governedbyanine-memberBoardofRegentsappointed

by the Governor of Texas and confirmed by the Texas

Senate. In addition, the Governor appoints a Student

Regentforaone-yearterm.

OVERVIEWOFTHEFINANCIALSTATEMENTS

ANDFINANCIALANALYSIS

The objective of Management’s Discussion and Analysis

(MD&A) is to provide an overview of the financial

positionand activitiesof the Systemfor theyearended

August31,2023,withselectedcomparativeinformation

for the years ended August 31, 2022 and 2021. The

completesetoffinancialstatementsincludes:

Management’s

Discussion&Analysis

PrimaryFinancialStatements–

ProprietaryandFiduciaryFunds

Statementsof

NetPosition

Statementsof

Revenues,Expenses&

ChangesinNetPosition

Statementsof

CashFlows

StatementsofFiduciary

NetPosition

StatementsofChangesin

Fiduciary

NetPosition

NotestotheFinancialStatements

RequiredSupplementaryInformation

PensionPlansand

OtherPostemploymentBenefits

The System’s financial statements were prepared in

accordancewithaccountingprinciplesgenerallyaccepted

in the United States of America as prescribed by the

Governmental Accounting Standards Board (GASB). The

System’s financial records are reported as a business-

typeactivityintheStateofTexas’AnnualComprehensive

FinancialReportandtheSystem’scustodialfundfinancial

records are reported as fiduciary funds in the State of

Texas’ Annual Comprehensive Financial Report. For

purposesofthe MD&A,referencestotheSysteminthe

discussion of financial results relate to the System's

business-typeactivity.

FINANCIALHIGHLIGHTS

TheSystemcontinuestomaintainandprotectitsstrong

financialcondition,withnetpositionof$70.7billionasof

August 31, 2023. Revenues totaled $31.4 billion and

expenses totaled $27.1 billion in 2023. Net patient care

revenues and sponsored program revenues were the

largest contributors to the revenues of the System in

2023. Net investment income and the change in fair

value of investments often drive the year to year

fluctuationinSystemrevenues,asthosevaluesvaryfrom

year to year based on market conditions and other

factors. Compensation and benefits, including the

Teacher Retirement System of Texas pension and other

postemployment benefits (OPEB) continue to be the

largestexpenseoftheSystem.TheSystemiscommitted

torecruitingandretainingoutstandingfacultyandstaff,

andthecompensationpackageisonewaytosuccessfully

compete with peer institutions and nonacademic

employers.

TheStatementofNetPosition

The statement of net position presents the assets,

deferred outflows, liabilities, deferred inflows, and net

positionoftheSystemasoftheendoftheyear.Thisisa

pointintimefinancialpresentationofthefinancialstatus

asofAugust31,2023,withcomparativeinformationfor

the previous years. Net position is the residual value of

theSystem’s assetsanddeferred outflowsofresources,

after liabilities and deferred inflows of resources are

deducted. Changes in net position are one indicator of

the improvement or decline of the System’s financial

strength. A summarized comparison of the System’s

statement of net position as of August 31, 2023, 2022

and2021follows:

CondensedStatementsofNetPosition

($inmillions)

2023 2022 2021

Assets

Currentassets $ 13,443.4  11,471.7  10,538.3

Noncurrentinvestments  78,468.0  74,289.5  74,707.9

Capital/intangibleassets,net  19,541.1  19,063.6  18,569.2

Othernoncurrentassets  1,546.5  1,858.0  1,153.5

Totalassets  112,999.0  106,682.8  104,968.9

Totaldeferredoutflows  6,088.9  5,546.1  4,644.2

Totalassetsanddeferred

outflows $119,087.9  112,228.9  109,613.1

Liabilities

Currentliabilities $ 13,149.2  11,153.4  10,897.4

Noncurrentliabilities  26,001.1  29,572.3  29,013.8

Totalliabilities  39,150.3  40,725.7  39,911.2

Totaldeferredinflows  9,273.7  4,814.1  2,829.5

Totalliabilitiesanddeferred

inflows $ 48,424.0  45,539.8  42,740.7

NetPosition

Netinvestmentincapitalassets $ 6,963.7  6,571.0  6,383.5

Restricted  59,514.7  57,175.1  57,151.7

Unrestricted  4,185.5  2,943.2  3,337.2

Netposition $ 70,663.9  66,689.3  66,872.4

AssetsandDeferredOutflows

The chart below depicts the makeup of the System’s

assetsanddeferredoutflowsasofAugust31,2023.

AssetsandDeferredOutflows

NoncurrentInvestments67%

CapitalAssets16%

CurrentAssets11%

DeferredOutflows5%

OtherNoncurrentAssets1%

Assets and deferred outflows increased $6.9 billion, or

6.1%,to$119.1billionin2023primarilyduetoincreases

incurrentassetsanddeferredoutflows.

CurrentAssets

Currentassetsarecomprisedofassetsthatareavailable

or can be made readily available to meet the cost of

operations or to pay current liabilities including cash,

temporary investments and receivables. These assets

increased $1,971.7 million in 2023 largely due to

increases in cash and equivalents and balances in State

appropriations,offsetbyadecreaseinsecuritieslending

collateral.

Cash and cash equivalents increased due to increased

collectionsonpatientchargesandtuitionandfeesasthe

populationbegantoreverttopre-pandemiclevelsalong

with higher liquidity levels being maintained due to the

fluctuating market. Securities lending collateral

decreased due to less securities on loan at the end of

2023comparedto2022.Thebalanceinsecuritieslending

collateral, which is exactly offset by the balance in

securities lending obligations in current liabilities,

fluctuates from year to year as the System manages

securitylendingtransactionstomaximizeearnings.

NoncurrentInvestments

Noncurrent investments are comprised of permanent

endowments,fundsfunctioningasendowments,annuity

and life income funds, and other investments including

investment derivative instruments. These assets

increased $4,178.5 million in 2023 largely due to

investmentandmineralincomeearnedandincreasesin

thefairvalueofPermanentUniversityFund(PUF)lands.

Theseincreaseswerepartiallyoffsetbynetdecreasesin

thefairvalueofinvestments.

ThePermanentUniversityFund(PUF),whichincludesthe

fairvalueofthePUFinvestmentfundandthefairvalue

ofPUFlands,increased$1.5billionin2023primarilydue

to significant investment income partially offset by net

decreases in fair value of investments. The increases in

the PUF investments in 2023 can be broken down as

follows:(1)$1.8billionPUFlandsmineralincomeearned

that was added to the endowment in accordance with

requirements of the Texas Constitution; (2) $2.3 billion

decrease in the fair value of the PUF lands due to an

increase in the forecasted price of oil and gas; (3) $1.4

billioninvestmentincomeearnedinthePUFinvestment

fund. These increases were partially offset by a $123

millionincreaseinthefairvalueofthePUFinvestments.

CapitalandIntangibleAssets

Acritical factorin sustainingthe qualityof theSystem’s

academic and research programs and residential life is

the development and maintenance of its capital assets.

Capital additions totaled $2.4 billion in 2023, of which

$1.1billionconsistedofnewprojectsunderconstruction.

Capital additions were comprised of replacement,

renovation,andnewconstructionofacademic,research

and healthcare facilities, as well as significant

investmentsinequipmentandsoftware.Thetablebelow

depicts the System’s capital improvement program for

thenextsixyears.

CapitalImprovementProgram

2024-2029

Institution: ($inbillions)

UTArlington $ 0.4

UTAustin  1.5

UTDallas  0.5

UTElPaso  0.2

UTPermianBasin  0.1

UTRioGrandeValley  0.2

UTSanAntonio  0.2

UTTyler  0.1

StephenF.AustinStateUniversity  0.1

UTSouthwesternMedicalCenter  0.4

UTMBGalveston  0.3

UTHSCHouston  0.3

UTHSCSanAntonio  0.8

UTHSC-Tyler  0.3

UTMDAndersonCancerCenter  3.1

Total $ 8.6

DeferredOutflows

Totaldeferredoutflowsincreased$542.8millionin2023

primarilyduetodifferencebetweenprojectedandactual

investmentearningsandchangesinassumptionsrelated

toTRS.

LiabilitiesandDeferredInflows

The chart below depicts the makeup of the System’s

liabilitiesanddeferredinflowsasofAugust31,2023.

LiabilitiesandDeferredInflows

OPEBLiability17%

Debt-RelatedLiabilities27%

OtherCurrentLiabilities17%

DeferredInflows19%

PensionLiabilities14%

OtherNoncurr.Liabilities6%

Liabilitiesand deferredinflows increased$2.9 billion,or

6.3%,to$48.4 billionin 2023primarilydue toincreases

in the pension liabilities and deferred inflows of

resources and partially offset by decreases in the OPEB

liability.

Debt-RelatedLiabilities

Debt-related liabilities consist of both the current and

noncurrent portions of short-term debt, or commercial

paper,aswellasleases,notes,loans,andbondspayable.

The $626.6 million increase in debt-related liabilities in

2023wasprimarilydrivenbyanincreaseinleases,notes

andloanspartiallyoffsetbyadecreaseinbondspayable

and commercial paper. Bonds payable relate to the

financing of the System’s capital needs. Commercial

paper notes are issued periodically to provide interim

financing for capital improvements and to finance the

acquisition of capital equipment. The System typically

refundsaportionoftheseoutstandingnotesthroughthe

issuance of long-term debt to provide permanent

financing for projects. The table below depicts the

change in the System’s debt-related liabilities over the

pastthreeyears:

Current&NoncurrentDebt

2023 2022 2021

($inmillions)

BondsPayable $ 9,836.4  9,408.6  9,686.8

CommercialPaper  2,341.1  1,788.8  1,891.1

Leases,Notes&Loans  1,172.1  1,525.6  925.0

TotalDebt-RelatedLiabilities $ 13,349.6  12,723.0  12,502.9

OPEBLiabilities

The State provides certain health and life insurance

benefits for retired employees which are guaranteed in

accordance with State statutes. Other postemployment

benefitsareprovidedtotheSystem’sretireesunderthe

U. T. System Employee Group Insurance Program. The

EmployeeGroupInsuranceProgramisasingle-employer

defined benefit OPEB plan; however, because State

statute requires funding for the plan from State

appropriations,theState’s governmental fund reports a

proportionate share of the OPEB liability. The System

reported a total OPEB liability of $8.1 billion in 2023

compared to $14.7 billion in 2022. $6.6 billion of the

decrease in 2023 was related to benefit changes (and

resulting actuarial assumption changes made) to the

OPEB Plan that reduced the Total OPEB Liability (TOL)

quitesignificantly.Inaddition,thediscountraterequired

by GASB 75 increased from the prior year which also

reduced the TOL.  In combination, these two factors

reducedthetotalOPEBPlan’sTOLbyapproximately50%.

This TOL reduction also had large impacts on the OPEB

ExpenseandDeferredInflowsandOutflows.

PensionLiabilities

The System participates in a cost-sharing multiple-

employer defined benefit pension plan with a special

funding arrangement administered by the Teacher

RetirementSystemofTexas(TRS).TheSystemreceivesa

proportional share of the net pension liability, pension-

related deferred outflows and pension-related deferred

inflows,andpensionexpensefromtheTexasComptroller

of Public Accounts. The System’s proportion of the

State’s collective net pension liability was based on its

contributions to the pension plan relative to the

contributions of all the employers to the plan. The

Systemreported a netpensionliability of $5.6billionin

2023 compared to $2.3 billion in 2022.  The change is

drivenbyadecreaseinthediscountrateandinvestment

earningsbelowprojections.TheUniversityofTexasM.D.

Anderson Cancer Center has established, primarily for

the physicians of its Physicians Referral Service, the

Physicians Referral Service SRP/RBP Plans. The System

reported a total pension liability of $0.9 billion in 2023

comparedto$1.0billionin2022relatedtotheSRP/RBP

Plans.

DeferredInflows

Total deferred inflows increased $4.5 billion in 2023

primarily driven by changes to OPEB deferred inflows.

OPEBdeferredinflowsincreased$6.5billionin2023due

to benefit changes (and resulting actuarial assumption

changesmade)totheOPEBPlan.

Thefollowingchartcomparestheliabilitiesanddeferred

inflows with or without OPEB and pension to illustrate

these items’ significant impact on the System’s total

liabilitiesanddeferredinflows.

Liabilities&DeferredInflowsComparison

Excluding/Including

OPEB&PensionBalances

($inbillions)

25.3

23.5

22.5

48.4

45.5

42.7

ExcludingOPEB&Pension IncludingOPEB&Pension

2023 2022 2021

NetPosition

Netpositionincreased$4.0billionin2023comparedtoa

$0.2billion decreasein 2022.Thesignificant increasein

net position was primarily due to the increase in

investmentincome.In2023,therewasanincreaseinfair

value of investment of $0.5 billion compared to a

decreaseof$5.0billionin2022,ayearoveryearincrease

of$5.5billion.ThePUFaccountedfor$1.5billionofthis

year over year increase. The three-year trend of the

classificationsofnetpositionisdepictedhere:

NetPosition

($inbillions)

59.5

57.2 57.2

7.0

6.6 6.4

4.2

2.9 3.3

Restricted NetInvestmentinCapitalAssets Unrestricted

2023 2022 2021

NetInvestmentinCapitalAssets

NetinvestmentincapitalassetsrepresentstheSystem’s

capital and intangible assets, net of accumulated

depreciation and amortization and outstanding debt

obligations attributable to the acquisition, construction,

orimprovementofthoseassets.

RestrictedNetPosition

Restricted net position primarily includes the System’s

permanent endowment funds subject to externally

imposedrestrictionsgoverningtheiruse.Theyinclude:

• Permanent University Fund (PUF) - supports

boththeSystemandTAMUS,

• Permanent Health Fund endowments (PHF) -

established in 1999 from tobacco-related

litigation funds which support programs that

benefit medical research, health education or

treatmentathealth-relatedinstitutions,and

• Donor restricted endowments - income

generatedis used to fund various endeavors in

accordancewiththedonors’restrictions.

Restrictednetpositionalsoincludescurrentpurposegifts

and grants. System’s restricted net position was $59.5

billionin2023comparedto$57.2billionin2022.

UnrestrictedNetPosition

System’s unrestricted net position was $4.2 billion in

2023ascomparedto$2.9billionin2022.Theincreasein

unrestricted net position between 2022 and 2023 was

primarily due to long term funds, investments, general

designatedandpracticeplanfunds,andimprovementin

income/loss before other revenue, expenses,

gains(losses),andtransfers.

2022Highlights–StatementofNetPosition

The System’s assets and deferred outflows increased

$2.6 billion to $112.2 billion in 2022 primarily due to

increases in deferred outflows and current assets.

Liabilities and deferred inflows increased $2.8 billion to

$45.5billion in2022 primarilydue toan increasein the

OPEB liability and the related deferred inflows mainly

duetochangesinassumptionsandotherinputs.

Restatements

Therestatementinfiscalyear2021resultedfromOPEB

errorcorrectionsandtheimplementationofGASB

StatementsNo.87,Leases,andNo.97,Certain

ComponentUnitCriteria,andAccountingandFinancial

ReportingforInternalRevenueCodeSection457Deferred

CompensationPlans.Fiscalyear2022wasrestatedasa

resultoftheimplementationofGASBStatementsNo.94,

Public-PrivateandPublic-PublicPartnershipsand

AvailabilityPaymentArrangements,andNo.96,

Subscription-BasedInformationTechnology

Arrangements.Theimplementationofthesenew

accountingstandardshadnoaffectonopeningnet

positionforfiscalyear2022.SeeNote1forfurther

informationontheimpactsofthesestandards.Fiscal

year2021informationhasnotbeenrestatedtoreflect

theeffectsofGASBStatementsNo.94and96.

TheStatementofRevenues,Expensesand

ChangesinNetPosition

Thestatementofrevenues,expensesandchangesinnet

position details the changes in total net position. The

following table summarizes the System’s revenues,

expensesandchangesinnetpositionfortheyearsended

August31,2023,2022and2021:

CondensedStatementsofRevenues,Expensesand

ChangesinNetPosition

($inmillions)

2023 2022 2021

Operatingrevenues:

Netstudenttuitionandfees $ 2,162.3  2,124.3  2,006.9

Sponsoredprograms  5,114.9  4,711.9  4,280.4

Netsalesandservicesofhospitals  9,638.1  8,737.1  7,849.9

Netprofessionalfees  2,577.5  2,354.7  2,204.2

Netauxiliaryenterprises  723.2  646.0  377.8

Other  1,275.8  1,279.9  1,104.9

Totaloperatingrevenues  21,491.8  19,853.9  17,824.1

Totaloperatingexpenses  (26,720.6)  (24,577.4)  (22,670.8)

Operatingincome(loss)  (5,228.8)  (4,723.5)  (4,846.7)

Nonoperatingrevenues(expenses):

Stateappropriations  3,052.8  2,529.9  2,194.3

Nonexchangesponsoredprograms  621.7  958.5  1,247.9

Giftcontributionsforoperations  684.0  634.2  618.6

Netinvestmentincomeexcluding

thechangeinfairvalueof

investments  4,744.2  5,619.3  8,807.4

Netincrease(decrease)infairvalue

ofinvestments  479.2  (5,017.2)  8,905.7

Interestexpenseoncapitalasset

financings  (379.4)  (338.2)  (332.0)

Netothernonoperatingrevenues

(expenses)  139.5  36.9  (25.0)

Income(loss)beforeotherchanges

innetposition  4,113.2  (300.1)  16,570.2

Capitalgiftsandgrantsand

additionstoendowments  347.4  563.1  356.0

NettransferstootherState

agencies  (485.9)  (446.3)  (272.6)

Changeinnetposition  3,974.7  (183.3)  16,653.6

Netposition,beginningoftheyear  66,689.1  66,872.4  48,663.7

Restatement  —  —  1,555.1

Netposition,beginningoftheyear

(asrestated)  66,689.1  66,872.4  50,218.8

Netposition,endoftheyear $ 70,663.8  66,689.1  66,872.4

RevenuesSupportingCoreActivities

Revenues to support the System’s core activities,

including those classified as nonoperating revenues,

were $30.9 billion, $30.2 billion, and $31.0 billion in

2023, 2022, and 2021, respectively. These diverse

sourcesofrevenuesincreasedby$783.0millionin2023

primarilyduetoincreasesinnetinvestmentincome.

The chart below shows a three-year comparison of the

componentsofrevenuesthatsupportthecoreactivities

oftheSystem:

RevenuesSupportingCoreActivities

($inbillions)

2023 2022 2021

NetPatientCare

NetInvestmentIncome

SponsoredPrograms

Sponsored program revenues are primarily generated

from governmental and private sources related to

researchprogramsthattypicallyprovidefortherecovery

ofdirectandindirectcosts.Sponsoredprogramsinclude

student financial aid and contracts with affiliated

hospitals for clinical activities. Sponsored programs

revenueswere$5.7billion,$5.7billion,and$5.5billionin

2023,2022,and2021,respectively.

NetPatientCareRevenues

Netpatientcarerevenues,whichconsistofnetsalesand

services of hospitals and net professional fees, are

principally generated within the System’s hospitals and

physicians’ practice plans under contractual

arrangements with governmental payors and private

insurers.Theserevenuesarereportednetofcontractual

allowances, bad debt expense, and unreimbursed

chargesforfinanciallyormedicallyindigentpatients.Net

patient care revenues were $12.2 billion, $11.1 billion,

and $10.1 billion in 2023, 2022, and 2021, respectively.

Net patient care revenues increased $1.1 billion, or

10.1%, in 2023, primarily because of increased patient

volumes.

NetAuxiliaryEnterprises

Net auxiliary enterprise revenues were earned from a

host of activities such as athletics, housing and food

services, bookstores, parking, student health, and other

activities. Net auxiliary enterprises were $723.2 million,

$646.0 million, and $377.8 million in 2023, 2022, and

2021, respectively. Net auxiliary enterprise revenues

increased $77.2 million or 12.0% in 2023 due to

normalizationofauxiliaryactivitiespostCOVID-19.

StateAppropriations

Stateappropriations,inconjunctionwithstudenttuition

and fees, are core components that support the

instructionalmissionoftheSystem.Stateappropriations

were $3.1 billion, $2.5 billion, and $2.2 billion in 2023,

2022,and2021,respectively.Theincreaseof$0.6billion

was primarily due to $440 million given to UT Austin in

SenateBill30(2023-2024,88thLegislature)forforward-

looking technology research and establishing and

operating a research and development fabrication

facility.

Net Investment Income Excluding the Change in Fair

ValueofInvestments

The System carefully navigates the investment

environmentandworksdiligentlytomanageitsfinancial

resources.Netinvestmentincome,excludingthechange

infairvalueofinvestments,was$4.7billion,$5.6billion,

and $8.8 billion in 2023, 2022, and 2021, respectively.

Net investment income includes realized gains of $1.9

billion in 2023 and $2.7 billion in 2022. Net investment

income, excluding the change in the fair value of

investments, decreased $0.9 billion from 2022 to 2023,

primarily due to decreases in net realized gains and

investmentincomeinthePUF.

NetIncrease(Decrease)inFairValueofInvestments

Net increase (decrease) in fair value of investments

reportedanincreaseof$0.5billionin2023,adecreaseof

$5.0 billion in 2022, and an increase of $8.9 billion in

2021.In2023,therewas anincreasefrom2022of$5.5

billionprimarilyduetofavorablemarketconditions.

Gifts

The System receivesgiftcontributionsfor operations as

wellasnonoperatinggiftsandgrantsofcapitalandgifts

that are held in perpetuity which are added to the

System’s endowment holdings. In 2023, gifts for

operations totaled $684.0 million, an increase of $49.8

million or 7.9% over 2022. Capital gifts and grants and

additions to permanent endowments totaled $347.4

millionfor2023,adecreaseof$215.7millionover2022

primarilyduetodecreasedgiftsforcapitalacquisitionsin

2023. The System continues its fundraising efforts to

address facilities expansion and renovation, and the

establishment of endowments for instruction, research,

andpatientcareactivities.

ExpensesSupportingCoreActivities

Expenses associated with the System’s core activities,

including interest expense classified as nonoperating,

were $27.1 billion, $24.9 billion, and $23.0 billion in

2023, 2022, and 2021, respectively. The changes, by

category,forthethreeyearsaredepictedbelow:

ExpensesAssociatedwithCoreActivities

($inbillions)

2023 2022 2021

Compensation&

Benefits

Materials/Supplies/Cost

ofGoodsSold

ProfessionalFees/

ContractedServices

Depreciation/Amortization

Other

OPEB

Utilities/Maintenance

Pension

Scholarships/Fellowships

Interest

0 2 4 6 8 10 12 14

Operatingexpensesincreasedby$2.1billionin2023and

increased by $1.9 billion in 2022 primarily due to the

growing cost of providing support for the institution’s

primarymissionsofinstruction,research,publicservice,

patientcare,andstudentsupportactivities.Additionally,

operatingexpenses in2023include $0.5billionof OPEB

expense and $795.6 million of pension expense.

Nonoperating expenses include interest expense which

increasedslightlyto$379.4millionin2023.

The following charts illustrate the makeup of operating

expenses by functional classification for the year ended

August31,2023:

FunctionalClassification

Hospitals&Clinics36%

Instruction21%

Research14%

Depreciation/Amortization7%

AcademicSupport5%

InstitutionalSupport5%

Operations/Maint.ofPlant4%

AuxiliaryEnterprises3%

Scholarships&Fellowships2%

PublicService2%

StudentServices1%

Income(Loss)BeforeOtherChangesinNetPosition

Income(Loss)beforeotherchangesinnetpositionisthe

sum of the operating loss plus nonoperating revenues

(expenses).Itisanindicationofrecurringrevenues and

expensesfortheSystemanddoesnottakeintoaccount

capital and endowment-related additions, discussed

above, or transfers. The income (loss) before other

changes in net position totaled  $4.1 billion in 2023, an

increase of $4.4 billion over 2022. This increase was

largelyaresultoftheincreaseinnetinvestmentincome

discussedabove.

NetTransferstoOtherStateAgencies

Net transfers to other State agencies totaled $485.9

million in 2023, an increase of $39.6 million over 2022.

These transfers primarily include $485.9 million and

$446.3 million for 2023 and 2022, respectively, for the

AUF distribution to TAMUS for its one-third share of

distributions from the PUF endowment and PUF land

surface income, in accordance with the Texas

Constitution. In addition to the transfers of the current

yearearnings,thenetchangeinPUFdebtoutstandingat

TAMUSisreflectedasatransfertootherStateagencies.

In2022,thePUFdebtatTAMUSincreased$68.2million,

whereas in 2023 the debt increased $86.4 million

contributing to the increase in net transfers to other

Stateagenciesin2023.

2022Highlights–StatementofRevenues,Expensesand

ChangesinNetPosition

System’s change in net position was a decrease of $0.2

billionin2022comparedtoanincreaseof$16.7billionin

2021.Thesignificantdecreaseinchangeinnetposition

in2022wasduetothefluctuatingvalueofthefairvalue

ofinvestments.In2022therewasadecreaseinfairvalue

ofinvestmentsof$5.0billioncomparedtoanincreaseof

$8.9 billion in 2021, a year over year decrease of $13.9

billion. The PUF accounted for $5.6 billion of this

decreasein2022.

TheStatementofCashFlows

TheStatementofCashFlowsprovidesinformationabout

the System’s financial results by reporting the major

sourcesandusesofcashandcashequivalentsduringthe

fiscal year. Ending cash and cash equivalents were $6.5

billion, $5.5 billion, and $4.9 billion in 2023, 2022, and

2021,respectively.Asummarizedthree-yearcomparison

of the System’s changes in cash and cash equivalents

follows:

CondensedStatementsofCashFlows

($inmillions)

2023 2022 2021

Netcashprovidedby(usedfor):

Operatingactivities $ (2,392.4)  (2,357.8)  (2,316.4)

Noncapitalfinancingactivities  3,637.6  3,750.6  3,882.8

Capitalandrelatedfinancing

activities  (1,619.4)  (2,160.5)  (1,634.2)

Investingactivities  1,390.0  1,355.5  992.0

Netincrease(decrease)incashand

cashequivalents  1,015.8  587.8  924.2

Beginningcashandcashequivalents  5,508.8  4,921.0  3,996.8

Endingcashandcashequivalents $ 6,524.6  5,508.8  4,921.0

In 2023, cash and cash equivalents increased $1,015.8

million.

Cashincreasesduring2023wereprimarilydueto(1)$3.6

billion providedbynoncapitalfinancingactivities,which

includescashinflowsrelatedtostateappropriationsand

nonexchangesponsoredprograms,offsetbytransfersto

other agencies and (2) $1.4 billion of cash provided by

investing activities, which includes cash inflows for

interestandinvestmentincome.

Cash decreases during 2023 were primarily due to (1)

$2.4 billion used by operating activities, which includes

cash payments to employees and suppliers, partially

offset by collection of cash related to tuition and fees,

patient charges, and sponsored program activities and

(2) $1.6 billion used by capital and related financing

activitiesprimarilyforthepurchaseofcapitalassetsand

the net activity associated with issuing and retiring

capitalrelateddebt.

ECONOMICOUTLOOK

The mission of the System is to leverage scientific and

academicinsightsandinnovation,educationandtraining

and the delivery of clinical health care for the common

good,inTexasandaroundtheworld.Itisamissionthat

dependsupontheSystem’sabilitytoattractandsupport

students from backgrounds with various goals and

talents; to recruit and retain a broadly skilled and

respectedfacultyofvariousviewpointsandexpertise;to

employ and appropriately recognize dedicated

administratorsandstaffmembers;tobuildandmaintain

physical environments and facilities that enhance and

complement these other goals; and to encourage

ongoing public and private sector support of higher

education, creating a virtuous cycle of investment and

returnforallofTexas.

Incarryingoutthismission,theSystemhasavast,deep

andpositiveimpactonsocietythroughthegenerationof

a thoughtful, skilled and engaged citizenry and the

dissemination of knowledge, ideas and inventions that

influence public policy and society’s shared economic

success.

TheSystemisoneofthelargestandmostcomprehensive

institutionsofhighereducationinthecountry,aswellas

one of the largest employers in Texas. The System’s

operating budget provides a wide range of services for

Texans. Budgeted revenues of the System include both

operating and nonoperating revenues. Budgeted

revenuesfor 2024increased11.3% to$29.1 billion. The

largest area of growth is net sales and services of

hospitals and clinics. Budgeted expenses for 2024

increased 11.5% to $28.1 billion. The most significant

areaofgrowthispersonnelcostswhichincludesthecost

of the benefits provided to its employees and retirees.

The State provides certain health and life insurance

benefits for retired employeesin accordancewith State

statutes.InadditiontoOPEB,theSystemalsoreceivesa

proportional share of the State’s net pension liability,

which is also guaranteed in State statute. These

significant costs will continue to be a challenge to both

theSystemandthestateofTexasasawhole.TheSystem

continues to sustain the highest credit ratings of Fitch

Ratings (AAA), Moody’s Investors Service (Aaa) and

Standard & Poor’s Global Ratings (AAA). The System’s

ongoing efforts toward revenue diversification and cost

containmentwillenabletheSystemtoachieveitsgoals

andrealizeitsmission.

Public support for this mission, and the resulting

economichealthoftheSystem,isvitaltoourcontinued

success.TheU.T.Systemgreatlyappreciatesthesupport

of the Texas Legislature, which made historic

investments in funding for public institutions and

affordabilityduringthe88thRegularSession,whichwill

result in more than over $1 billion in new funding for

System institutions in the 2024-2025 biennium.

Legislativesupportforanaffordabilityplandevelopedby

thestate’spublicuniversitysystemspriortothesession

resulted in $700 million included in the appropriations

actthatwillallowUTinstitutionstokeeptuitionflatfor

thenexttwoyears.



CONSOLIDATEDFINANCIALSTATEMENTS

FORTHEYEARSENDED

AUGUST31,2023AND2022



ASSETSANDDEFERREDOUTFLOWS

CURRENTASSETS

Cashandcashequivalents $ 5,473,784,479  4,551,818,565

Restrictedcashandcashequivalents  973,964,277  857,752,653

BalanceinStateappropriations  664,215,443  141,809,722

Accountsreceivable,net:

Federal(netofallowancesof$3,957,160and$3,910,665,respectively)  665,841,688  665,076,836

Otherintergovernmental(netofallowancesof$4,100,301and$3,541,020,respectively)  298,835,897  274,813,104

Student(netofallowancesof$55,300,637and$52,792,914,respectively)  379,514,971  376,161,655

Patientandhealthcare(netofallowancesof$695,773,699and$439,178,955,respectively)  1,486,945,600  1,369,175,589

Interestanddividends  101,155,887  81,983,222

Contributions(netofallowancesof$4,097,475and$1,820,620,respectively)  181,084,910  173,286,539

Investmenttrades  703,501,548  345,148,156

Other(netofallowancesof$15,168,682and$16,594,440,respectively)  883,400,303  751,444,363

Leasereceivable  13,959,036  18,637,142

P3receivable  3,237,578  4,202,465

Duefromotheragencies  112,433,174  131,237,557

Inventories  238,891,148  229,590,521

Restrictedloansandcontracts(netofallowancesof$23,081,990and$21,797,065,respectively)  41,343,207  41,067,421

Securitieslendingcollateral  704,550,572  988,091,640

Othercurrentassets  516,703,972  470,420,594

Totalcurrentassets  13,443,363,690  11,471,717,744

NONCURRENTASSETS

Cashandcashequivalents(noncurrentrestricted)  76,865,502  99,203,976

Restrictedinvestments  61,363,454,138  58,114,854,780

Depositwithbrokersforderivativecontracts  292,613,399  141,074,033

Restrictedloansandcontracts(netofallowancesof$13,004,090and$20,048,387,respectively)  29,510,591  34,259,142

Contributionsreceivable(netofallowancesof$3,014,444and$2,682,258,respectively)  377,070,059  433,198,505

Unrestrictedinvestments  17,104,572,735  16,174,609,398

Hedgingderivativeasset  130,779,738  125,007,462

Leasereceivable  215,032,962  230,438,676

P3receivable  36,421,649  380,129,263

Othernoncurrentassets  388,191,302  414,831,068

Grosscapital/intangibleassets  41,388,735,830  39,520,152,343

Lessaccumulateddepreciation/amortization  (21,847,634,137)  (20,456,594,152)

Netcapitalassets  19,541,101,693  19,063,558,191

Totalnoncurrentassets  99,555,613,768  95,211,164,494

TOTALASSETS  112,998,977,458  106,682,882,238

Deferredoutflowsofresources  6,088,895,030  5,546,067,549

TOTALASSETSANDDEFERREDOUTFLOWS $ 119,087,872,488  112,228,949,787

Seeaccompanyingnotestoconsolidatedfinancialstatements

(Continued)

2023 2022

THEUNIVERSITYOFTEXASSYSTEM

CONSOLIDATEDSTATEMENTSOFNETPOSITION—BUSINESS-TYPEACTIVITIES

AUGUST31,2023AND2022

LIABILITIESANDDEFERREDINFLOWS

CURRENTLIABILITIES

Accountspayableandaccruedliabilities $ 1,714,244,380  1,639,769,344

Salariespayable  937,064,048  850,799,344

Investmenttradespayable  1,645,273,366  736,872,733

Incurredbutnotreportedself-insuranceclaims  199,965,066  187,951,915

Totalotherpostemploymentbenefitsliability  208,395,911  243,697,144

Pensionliabilities  72,533,114  —

Securitieslendingobligations  704,550,572  988,091,640

DuetootherStateagencies  258,790,763  153,619,664

Statewideinterfundpayable  65,215,901  58,042,824

Unearnedrevenue  2,202,202,631  1,982,271,942

Employees'compensableleave  523,251,766  445,635,293

Short-termdebt  2,341,061,000  1,788,750,000

Notes,loans,andleasespayable  384,724,163  173,827,855

Bondspayable  1,671,517,223  1,699,296,681

Othercurrentliabilities  220,436,207  204,858,805

Totalcurrentliabilities  13,149,226,111  11,153,485,184

NONCURRENTLIABILITIES

Incurredbutnotreportedself-insuranceclaims  37,936,609  33,767,326

Employees'compensableleave  393,281,192  409,789,419

Assetsheldforothers  145,578,487  135,662,470

Liabilitytobeneficiaries  13,491,033  13,079,769

Totalotherpostemploymentbenefitsliability  7,881,338,444  14,451,897,162

Pensionliabilities  6,485,446,939  3,346,763,840

Notes,loansandleasespayable  787,359,337  1,351,805,344

Bondspayable  8,164,839,316  7,709,342,982

Statewideinterfundpayable  1,502,731,182  1,423,609,953

Hedgingderivativeliability  39,388,655  87,510,811

Payabletobrokersforcollateralheld  204,889,560  223,503,673

Investmentderivatives-liabilitypositions  144,154,033  183,196,878

Assetretirementobligation  20,268,251  19,508,940

Othernoncurrentliabilities  180,421,005  182,866,512

Totalnoncurrentliabilities  26,001,124,043  29,572,305,079

TOTALLIABILITIES  39,150,350,154  40,725,790,263

Deferredinflowsofresources  9,273,707,418  4,814,067,890

TOTALLIABILITIESANDDEFERREDINFLOWS $ 48,424,057,572  45,539,858,153

NETPOSITION

Netinvestmentincapitalassets $ 6,963,671,907  6,570,970,880

Restricted:

Nonexpendable  38,161,618,752  36,029,323,644

Expendable  21,353,034,539  21,145,744,390

Totalrestricted  59,514,653,291  57,175,068,034

Unrestricted  4,185,489,718  2,943,052,720

TOTALNETPOSITION $ 70,663,814,916  66,689,091,634

Seeaccompanyingnotestoconsolidatedfinancialstatements (Concluded)

2023 2022

THEUNIVERSITYOFTEXASSYSTEM

CONSOLIDATEDSTATEMENTSOFNETPOSITION—BUSINESS-TYPEACTIVITIES(Continued)

AUGUST31,2023AND2022

OPERATINGREVENUES

Netstudenttuitionandfees(netofdiscountsandallowancesof$920,673,147and$871,777,535,

respectively)

$ 2,162,269,633  2,124,295,749

Sponsoredprograms  5,114,905,185  4,711,876,833

Netsalesandservicesofeducationalactivities(netofdiscountsandallowancesof$363,083and

$77,302,respectively)

 668,820,587  590,119,778

Netsalesandservicesofhospitals(netofdiscountsandallowancesof$14,613,104,666and

$12,876,923,014,respectively)

 9,638,135,140  8,737,119,023

Netprofessionalfees(netofdiscountsandallowancesof$7,174,634,375and$6,598,098,913,

respectively)

 2,577,503,943  2,354,663,591

Netauxiliaryenterprises(netofdiscountsandallowancesof$21,638,531and$20,123,708,

respectively)

 723,247,145  645,955,901

Other  606,940,322  689,783,082

Totaloperatingrevenues  21,491,821,955  19,853,813,957

OPERATINGEXPENSES

Instruction  5,638,164,384  5,199,819,819

Research  3,640,738,442  3,194,183,886

Publicservice  511,503,631  429,348,663

Hospitalsandclinics  9,676,906,898  8,744,934,586

Academicsupport  1,414,239,637  1,255,690,025

Studentservices  306,673,392  298,348,467

Institutionalsupport  1,279,734,313  1,276,182,991

Operationsandmaintenanceofplant  1,070,710,379  1,017,726,879

Scholarshipsandfellowships  535,517,010  655,962,518

Auxiliaryenterprises  818,920,278  719,059,025

Depreciationandamortization  1,827,434,267  1,786,126,507

Totaloperatingexpenses  26,720,542,631  24,577,383,366

Operatingloss  (5,228,720,676)  (4,723,569,409)

NONOPERATINGREVENUES(EXPENSES)

Stateappropriations  3,052,789,252  2,529,939,818

Nonexchangesponsoredprograms  621,739,519  958,497,034

Giftcontributionsforoperations  684,013,267  634,248,452

Netinvestmentincome  5,223,373,475  602,130,522

Interestexpenseoncapitalassetfinancings  (379,417,070)  (338,180,900)

Gain(loss)onsaleofcapitalassets  11,829,051  (14,276,880)

Other  127,629,171  51,133,270

Netnonoperatingrevenues  9,341,956,665  4,423,491,316

Income(loss)beforeotherchangesinnetposition  4,113,235,989  (300,078,093)

OTHERCHANGESINNETPOSITION

Capitalgiftsandgrants  91,953,165  265,383,743

Additionstopermanentendowments  255,404,287  297,645,918

NettransferstootherStateagencies  (491,344,254)  (439,263,990)

Legislativeappropriationslapsed  5,474,096  (7,034,920)

Changeinnetposition  3,974,723,283  (183,347,342)

NETPOSITION

Netposition,beginningofyear  66,689,091,633  66,872,438,976

Restatement  —  —

Netposition,beginningofyear(asrestated)  66,689,091,633  66,872,438,976

Netposition,endofyear $ 70,663,814,916  66,689,091,634

Seeaccompanyingnotestoconsolidatedfinancialstatements

2023 2022

THEUNIVERSITYOFTEXASSYSTEM

CONSOLIDATEDSTATEMENTSOFREVENUES,EXPENSESANDCHANGESINNETPOSITION—BUSINESS-TYPEACTIVITIES

YEARSENDEDAUGUST31,2023AND2022

CASHFLOWSFROMOPERATINGACTIVITIES

Proceedsfromtuitionandfees $ 2,186,521,845  2,104,420,809

Proceedsfrompatientsandcustomers  12,166,305,616  10,917,142,878

Proceedsfromsponsoredprograms  5,135,503,295  4,718,184,684

Proceedsfromauxiliaries  1,086,757,122  638,529,604

Proceedsfromotherrevenues  1,214,105,473  1,242,747,015

Paymentstosuppliers  (8,867,196,287)  (8,153,067,866)

Paymentstoemployees  (15,323,924,275)  (13,835,044,914)

Paymentsforloansprovided  (74,703,244)  (66,946,084)

Proceedsfromloanprograms  84,196,551  76,275,350

Netcashusedforoperatingactivities  (2,392,433,904)  (2,357,758,524)

CASHFLOWSFROMNONCAPITALFINANCINGACTIVITIES

ProceedsfromStateappropriations  2,535,857,628  2,533,285,114

Proceedsfromoperatinggifts  723,224,391  606,108,141

Proceedsfromprivategiftsforendowmentpurposes  234,256,142  252,687,057

Proceedsfromothernoncapitalfinancingactivities  279,803,519  623,920,373

Receiptsfortransfersfromotheragencies  864,245,229  737,380,761

Paymentsfortransferstootheragencies  (1,243,892,349)  (1,436,193,978)

Paymentsforotheruses  (513,081,650)  (478,789,861)

Proceedsfromnonexchangesponsoredprograms  757,207,336  912,221,027

Netcashprovidedbynoncapitalfinancingactivities  3,637,620,246  3,750,618,634

CASHFLOWSFROMCAPITALANDRELATEDFINANCINGACTIVITIES

Proceedsfromissuanceofcapitaldebt  2,490,240,538  1,168,139,785

Paymentsofothercostsondebtissuance  (5,928,851)  (2,818,969)

Proceedsfromcapitalappropriations,grantsandgifts  64,318,637  135,289,571

Proceedsfromsaleofcapitalassets  53,986,387  10,309,988

Paymentsforadditionstocapitalassets  (1,685,940,404)  (1,843,867,656)

Paymentsofprincipaloncapitalrelateddebtandotherlong-termobligations  (2,066,421,131)  (1,216,650,988)

Paymentsofinterestoncapitalrelateddebtandotherlong-termobligations  (469,704,889)  (410,898,328)

Netcashusedforcapitalandrelatedfinancingactivities  (1,619,449,713)  (2,160,496,597)

CASHFLOWSFROMINVESTINGACTIVITIES

Proceedsfromsalesofinvestments  51,076,535,789  40,952,830,872

Proceedsfrominterestandinvestmentincome  2,820,206,156  3,109,959,169

Paymentstoacquireinvestments  (52,506,639,510)  (42,707,356,676)

Netcashprovidedbyinvestingactivities  1,390,102,435  1,355,433,365

Netincreaseincashandcashequivalents  1,015,839,064  587,796,878

Cashandcashequivalents,beginningofyear  5,508,775,194  4,920,978,316

Cashandcashequivalents,endofyear $ 6,524,614,258  5,508,775,194

Seeaccompanyingnotestoconsolidatedfinancialstatements (Continued)

2023 2022

THEUNIVERSITYOFTEXASSYSTEM

CONSOLIDATEDSTATEMENTSOFCASHFLOWS—BUSINESS-TYPEACTIVITIES

YEARSENDEDAUGUST31,2023AND2022

Reconciliationofoperatinglosstonetcashprovidedby(usedfor)operatingactivities:

Operatingloss $ (5,228,720,676)  (4,723,569,409)

Adjustmentstoreconcileoperatinglosstonetcashprovidedby(usedfor)operatingactivities:

Depreciationandamortizationexpense  1,827,434,267  1,786,126,507

Baddebtexpense  519,888,573  510,724,894

Otherpostemploymentbenefitsobligationexpense  462,609,141  1,150,530,177

Pensionexpense  795,557,940  196,300,549

Changesinassetsandliabilities:

Accountsreceivable  (973,734,899)  (786,540,416)

Lessor-relatedbalances  (1,602,714)  (2,610,002)

P3RelatedBalances

 344,561,998.47

 9,561,867

Inventories  (9,300,627)  (24,278,731)

Loansandcontracts  9,499,354  9,341,378

Othercurrentandnoncurrentassets  (17,874,611)  (102,644,463)

Deferredoutflows-otherpostemploymentbenefits  387,358,832  (1,469,676,692)

Deferredoutflows-pensionrelated  (983,743,005)  353,819,451

Accountspayable  355,733,608  215,096,547

Unearnedrevenue  213,149,901  69,030,025

Employees'compensableleave  61,108,247  35,614,998

Otherpostemploymentbenefitsobligation  (7,068,469,092)  1,613,646,315

Pensionrelatedobligations  2,415,658,273  (2,681,321,506)

Assetretirementobligations  328,392  1,438,430

Deferredinflows-otherpostemploymentbenefits  6,485,154,252  (347,967,009)

Deferredinflows-pensionrelated  (2,000,162,951)  1,832,923,932

Othercurrentandnoncurrentliabilities  13,131,894  (3,305,364)

Totaladjustments  2,836,286,773  2,365,810,887

Netcashusedforoperatingactivities $ (2,392,433,903)  (2,357,758,522)

Noncashtransactions:

Netincrease(decrease)infairvalueofinvestments $ 479,219,230  (5,017,196,360)

Donatedcapitalassets  41,182,030  78,065,085

Capitalassetsacquired/adjustedunderleasepurchasesordirectborrowings  308,284,799  272,745,940

Miscellaneousnoncashtransactions  32,851,542  11,183,512

CapitalAssetsreceivedfromP3arrangement  347,652,000  —

Seeaccompanyingnotestoconsolidatedfinancialstatements (Concluded)

2023 2022

THEUNIVERSITYOFTEXASSYSTEM

CONSOLIDATEDSTATEMENTSOFCASHFLOWS—BUSINESS-TYPEACTIVITIES(Continued)

YEARSENDEDAUGUST31,2023AND2022

ASSETS

Cashandcashequivalents $ —  1,928,948  1,928,948  —  1,888,492  1,888,492

Accountsreceivable,net:

Interestanddividends  220,472  —  220,472  217,355  —  217,355

Investmenttrades  2,964,301  —  2,964,301  1,505,074  —  1,505,074

Other  528,881  4,735  533,616  1,757,072  4,735  1,761,807

Totalaccountsreceivable,net  3,713,654  4,735  3,718,389  3,479,501  4,735  3,484,236

Investmentsatfairvalue:

Investmentderivatives-asset

positions  496,874  —  496,874  719,630  —  719,630

Otherinvestments  293,885,919  —  293,885,919  285,878,283  —  285,878,283

Totalinvestments  294,382,793  —  294,382,793  286,597,913  —  286,597,913

Securitieslendingcollateral  3,234,769  —  3,234,769  4,333,856  —  4,333,856

Depositwithbrokersforderivative

contracts  1,156,668  —  1,156,668  622,586  —  622,586

Otherassets  121,334  —  121,334  3,314  —  3,314

Totalassets  302,609,218  1,933,683  304,542,901  295,037,170  1,893,227  296,930,397

LIABILITIES

Accountspayableandaccrued

liabilities  295,079  46,705  341,784  312,171  23,031  335,202

Investmenttradespayables  6,859,987  —  6,859,987  2,987,464  —  2,987,464

Securitieslendingobligations  3,234,769  —  3,234,769  4,333,855  —  4,333,855

Investmentderivatives-liability

positions  576,154  —  576,154  726,153  —  726,153

Payabletobrokersforcollateralheld  129,286  —  129,286  417,944  —  417,944

Totalliabilities  11,095,275  46,705  11,141,980  8,777,587  23,031  8,800,618

NETPOSITION

Restrictedfor:

Poolparticipants  291,513,943  —  291,513,943  286,259,583  —  286,259,583

Individuals,organizations,andother

governments  —  1,886,978  1,886,978  —  1,870,196  1,870,196

TOTALNETPOSITION $ 291,513,943  1,886,978  293,400,921  286,259,583  1,870,196  288,129,779

Seeaccompanyingnotestoconsolidatedfinancialstatements

2023 2022

CustodialFunds

Total

Fiduciary

Activities

CustodialFunds

Total

Fiduciary

Activities

External

InvestmentPool

Fund

CustodialFunds,

Other

External

InvestmentPool

Fund

CustodialFunds,

Other

THEUNIVERSITYOFTEXASSYSTEM

CONSOLIDATEDSTATEMENTSOFFIDUCIARYNETPOSITION

AUGUST31,2023AND2022

ADDITIONS

Contributions:

Contributionsfromstudent

organizations $ —  302,097  302,097  —  55,903  55,903

Contributionsfromfoundationsor

associations  5,480,078  681,873  6,161,951  2,827,924  633,813  3,461,737

Contributionsfaculty/staff

organizations  —  —  —  —  —  —

Contributionsfromparticipants  —  —  —  —  10,340  10,340

Othercontributions  —  85,651  85,651  —  66,266  66,266

Totalcontributions  5,480,078  1,069,621  6,549,699  2,827,924  766,322  3,594,246

Investmentearnings:

Interest,dividends,andother  6,209,747  —  6,209,747  4,353,736  —  4,353,736

Realizedgain(loss)onsaleof

investments  400,316  —  400,316  1,074,039  —  1,074,039

Netincrease(decrease)infairvalue

ofinvestments  (1,409,739)  —  (1,409,739)  (33,768,703)  —  (33,768,703)

Totalinvestmentearnings  5,200,324  —  5,200,324  (28,340,928)  —  (28,340,928)

Miscellaneous  —  131,995  131,995  —  138,294  138,294

Totaladditions  10,680,402  1,201,616  11,882,018  (25,513,004)  904,616  (24,608,388)

DEDUCTIONS

Paymentstostudentorganizations  —  248,345  248,345  —  37,880  37,880

Paymentstofoundationsor

associations  5,426,043  62,795  5,488,838  4,542,672  119,466  4,662,138

Paymentstofaculty/staff

organizations  —  1,432  1,432  —  605  605

Paymentstoparticipants  —  2,008  2,008  —  81,744  81,744

Otherexpenses  —  870,253  870,253  —  565,799  565,799

Totaldeductions  5,426,043  1,184,833  6,610,876  4,542,672  805,494  5,348,166

Netincrease(decrease)infiduciary

netposition

 5,254,359  16,783  5,271,142  (30,055,676)  99,122  (29,956,554)

Beginningnetposition

 286,259,584  1,870,196  288,129,779  316,315,259  1,771,074  318,086,333

Endingnetposition

$ 291,513,943  1,886,979  293,400,921  286,259,583  1,870,196  288,129,779

Seeaccompanyingnotestoconsolidatedfinancialstatements

2023 2022

CustodialFunds

Total

Fiduciary

Activities

CustodialFunds

Total

Fiduciary

Activities

External

InvestmentPool

Fund

CustodialFunds,

Other

External

InvestmentPool

Fund

CustodialFunds,

Other

THEUNIVERSITYOFTEXASSYSTEM

CONSOLIDATEDSTATEMENTSOFCHANGESINFIDUCIARYNETPOSITION

YEARSENDEDAUGUST31,2023AND2022

THEUNIVERSITYOFTEXASSYSTEM

NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS

YEARSENDEDAUGUST31,2023AND2022

1. TheFinancialReportingEntity

ThefinancialrecordsofTheUniversityofTexasSystem(theSystem)reflectcompliancewithapplicableStatestatutes

andGovernmentalAccountingStandardsBoard(GASB)pronouncements.TheSystem’sfinancialrecordsarereported

as a business-typeactivityin the State of Texas’ Annual Comprehensive Financial Report and the System’scustodial

fundfinancial recordsare reportedas fiduciaryfunds inthe Stateof Texas’Annual ComprehensiveFinancial Report.

The significant accounting policies followed by the System in maintaining accounts and in the preparation of the

consolidatedfinancial statementsare inaccordance withthe TexasComptrollerof PublicAccounts’ AnnualFinancial

ReportingRequirementsandwithgenerallyacceptedaccountingprinciplesintheUnitedStatesofAmerica(GAAP).

TheconsolidatedfinancialstatementsincludeTheUniversityofTexasSystemAdministrationandallinstitutionsofthe

System.Amountsduebetweenandamonginstitutions,amountsheldforinstitutionsbyTheUniversityofTexasSystem

Administrationandotherduplicationsinreportingareeliminatedinconsolidatingthefinancialstatements.

TheSystemiscomposedofthirteeninstitutionsofhighereducation,aswellastheSystemadministrativeoffices.The

thirteen institutions are as follows: The University of Texas at Arlington, The University of Texas at Austin, The

UniversityofTexasatDallas,TheUniversityofTexasatElPaso,TheUniversityofTexasPermianBasin,TheUniversity

ofTexasRioGrandeValley,TheUniversityofTexasatSanAntonio,TheUniversityofTexasatTyler(whichincludestwo

state agencies – The University of Texas at Tyler and The University of Texas Health Science Center at Tyler), The

UniversityofTexasSouthwesternMedicalCenter,TheUniversityofTexasMedicalBranchatGalveston,TheUniversity

of Texas Health Science Center at Houston, The University of Texas Health Science Center at San Antonio, and The

University of Texas M. D. Anderson Cancer Center. The System is governed by a ten-member Board of Regents

(includingonenon-votingstudentmember)appointedbytheGovernor.

BLENDEDCOMPONENTUNITS

Thefollowingcomponent unitsare includedintheconsolidatedfinancial statementsbecausethe Systemappointsa

voting majority of the component units’ boards and the System is able to impose its will on the component units.

Blendedcomponentunitfinancialinformationisavailableuponrequest.

U. T. Southwestern Health Systems is governed by a three-member board appointed by the president of U. T.

SouthwesternMedicalCenter.U.T.SouthwesternHealthSystemsprovidessupportofhealthcareservicesandgrants

to conduct research and provide educational programs to accomplish the mission of U. T. Southwestern Medical

Center. The corporation is blended rather than discretely presented because it is organized as a not-for-profit

corporationandU.T.SouthwesternMedicalCenteristhesolecorporatemember.Thecorporation’sfiscalyearendis

August 31. Separate financial statements may be obtained by contacting U. T. Southwestern Health Systems, 5323

HarryHinesBoulevard,Dallas,Texas75390.

U.T.SouthwesternMoncriefCancerCenterisgovernedbyafour-memberboardappointedbythepresidentofU.T.

SouthwesternMedicalCenter.U.T.SouthwesternMoncriefCancerCenterprovidesresourcesforcancerprevention,

earlydetectionandsupportservicestocancerpatientsandtheirfamilieswithinTarrantCountyandsurroundingareas.

Thecorporationisblendedratherthandiscretelypresentedbecauseitisorganizedasanot-for-profitcorporationand

U. T. Southwestern Medical Center is the sole corporate member. The corporation’s fiscal year end is August 31.

Separatefinancialstatements maybe obtainedbycontactingU.T. SouthwesternMoncriefCancerCenter,400 West

MagnoliaAvenue,FortWorth,Texas76104.

Moncrief Cancer Foundation is governed by a six-member board appointed by the president of U. T. Southwestern

MedicalCenter.MoncriefCancerFoundationsupportscomprehensive,multidisciplinarycancertreatmentprogramsin

Tarrant County and surrounding areas. The foundation is blended rather than discretely presented because it is

organized as a not-for-profit foundation and U. T. Southwestern Medical Center is the sole corporate member. The

foundation’s fiscal year end is August 31. Separate financial statements may be obtained by contacting Moncrief

CancerFoundation,5323HarryHinesBlvd.,Dallas,Texas75390.

UTMBHealthCareSystems,Inc.isgovernedbyaneight-memberboardappointedbyU.T.MedicalBranch-Galveston.

UTMB HealthCare Systems, Inc. provides temporary staffing and leased property, and manages the Medicare Select

insuranceproductin selectedmarketsfor U.T. Medical Branch- Galveston.The corporationis blended ratherthan

discretelypresentedbecauseitisorganizedasanot-for-profitcorporationandU.T.MedicalBranch–Galvestonisthe

solecorporatemember.Thecorporation’sfiscalyearendisAugust31.Separatefinancialstatementsmaybeobtained

bycontactingUTMBHealthCareSystems,Inc.,301UniversityBoulevard,Galveston,Texas77555.

TheUniversityMedicalBranchStudentBookStore,Inc.isgovernedbyafive-memberboardappointedbyU.T.Medical

Branch-Galveston.Thecorporationisblendedratherthandiscretelypresentedbecauseitoperatesthebookstorefor

U.T.MedicalBranch-GalvestonandprovidesservicesentirelyoralmostentirelytoU.T.MedicalBranch-Galveston.

The corporation’s fiscal year end is August 31. Separate financial statements may be obtained by contacting The

UniversityMedicalBranchStudentBookStore,Inc.,301UniversityBoulevard,Galveston,Texas77555.

MedicalBranchInnovations,Inc.isgovernedbyathree-memberboardappointedbyU.T.MedicalBranch–Galveston.

Thecorporationisblendedratherthandiscretelypresentedbecauseitisorganizedasanot-for-profitcorporationand

U.T.MedicalBranch–Galvestonisthesolecorporatemember.Thecorporation’sfiscalyearendisAugust31.Separate

financial statements may be obtained by contacting Medical Branch Innovations, Inc., 301 University Boulevard,

Galveston,Texas77555.

U. T. Physicians is governed by a nine-member board appointed by its sole corporate member. The corporation is

blended rather than discretely presented because it is organized as a not-for-profit corporation and Giuseppe N.

Colasurdo,asPresidentofU.T.HealthScienceCenter-Houston,isthesolecorporatemember.Thecorporation’sfiscal

year end is August 31. Separate financial statements may be obtained by contacting U. T. Physicians, 7000 Fannin

Street,Suite860,Houston,Texas77030.

UniversityPhysiciansGroupisgovernedbyafive-memberboard.TheDeanoftheSchoolofMedicineistheChairman

of the Board, and four board members are members of and elected by the physician practice plan board. The

corporationisblendedratherthandiscretelypresentedbecauseitisorganizedasanot-for-profitcorporationandU.T.

Health Science Center - San Antonio is the sole corporate member. The corporation’s fiscal year end is August 31.

SeparatefinancialstatementsmaybeobtainedbycontactingUniversityPhysiciansGroup,8431FredericksburgRoad,

Suite500,SanAntonio,Texas78229.

U.T.HealthSanAntonioRegionalPhysicianNetworkisgovernedbyaseven-memberboard.TheDeanoftheSchoolof

Medicineis the Chairof the Boardof Directors. Thecorporation owns, operates,and managesanAccountable Care

OrganizationinaccordancewiththerequirementsoftheMedicareSharedSavingsProgram,assetforthinsection1899

oftheSocialSecurityActandrelatedregulations.Thecorporationisblendedratherthandiscretelypresentedbecause

it is organized as a not-for-profit corporation and U. T. Health Science Center - San Antonio is the sole corporate

member.Thecorporation’sfiscalyearendisAugust31.Separatefinancialstatementsmaybeobtainedbycontacting

U.T.HealthSanAntonioRegionalPhysicianNetwork,8431FredericksburgRoad,Suite503,SanAntonio,Texas78229.

M. D. Anderson Physician’s Network is governed by a nine-member board appointed by the president of M. D.

Anderson. M. D. Anderson Physicians Network transfers programs representative of M. D. Anderson to the broad

community. The corporation is blended rather than discretely presented because it is organized as a not-for-profit

corporationandM.D.Andersonisthesolecorporatemember.Thecorporation’sfiscalyearendisAugust31.Separate

financial statements may be obtained by contacting M. D. Anderson Physician’s Network, 1515 Holcomb Blvd., Unit

1670,Houston,TX77030-4009.

M. D. Anderson Services Corporation is governed by a seven-member board appointed by the president of M. D.

Anderson.M.D.AndersonServicesCorporationservesasaninstrumentofM.D.Andersoninitseffortstoachieveits

missionbeyondtheM.D.Andersonmaincampus.Thecorporationisblendedratherthandiscretelypresentedbecause

itisorganizedasanot-for-profitcorporationandM.D.Andersonisthesolecorporatemember.Thecorporation’sfiscal

year end is August 31. Separate financial statements may be obtained by contacting M. D. Anderson Services

Corporation,1515HolcombBlvd.,Unit1670,Houston,TX77030-4009.

EastTexasQualityCareNetwork,Inc.isgovernedbyafour-memberboardappointedbyU.T.HealthScienceCenter-

Tyler. The corporation is blended rather than discretely presented because it is organized as a not-for-profit

corporationandU.T.HealthScienceCenter-Tyleristhesolecorporatemember.Thecorporation’sfiscalyearendis

August31.SeparatefinancialstatementsmaybeobtainedbycontactingEastTexasQualityCareNetwork,Inc.,11937

USHighway271,Tyler,Texas75708-3154.

TheUniversityofTexas/TexasA&MInvestmentManagementCompany(UTIMCO)isgovernedbyanine-memberboard

consistingofatleastthreemembersoftheU.T.SystemBoardofRegents,fourmembersappointedbytheU.T.System

BoardofRegents(oneofwhommaybetheChancelloroftheSystem),andtwomembersappointedbytheTexasA&M

SystemBoard ofRegents. Atleast threemembers appointedby theU. T.System Boardof Regentsandat leastone

memberappointedby the Texas A&M System Board of Regents must have substantial background and expertise in

investments.Thecorporationisblendedratherthandiscretelypresentedbecauseitprovidesinvestmentmanagement

services entirely or almost entirely to the System. The corporation’s fiscal year end is August 31. Separate financial

statements may be obtained by contacting The University of Texas/Texas A&M Investment Management Company

(UTIMCO),210West7thStreet,Suite1700,Austin,Texas78701.

TheUniversityofTexasCommunicationFoundationisgovernedbyathree-memberboardappointedbyU.T.Austin.

TheUniversityofTexasCommunicationFoundationprovidesservicestotheU.T.AustinCollegeofCommunicationto

facilitatethe participationby students,faculty andothersin professionalcommunication projects.The foundationis

blendedratherthandiscretelypresentedbecauseitprovidesservicesentirelytoU.T.Austin.Thefoundation’sfiscal

year end is August 31. Separate financial statements may be obtained by contacting The University of Texas

CommunicationFoundation,U.T.Austin,P.O.Box7322,Austin,Texas78713.

TheUniversityof Texas at Austin – Mexico Institute, A.C.,Centrode Ciencias de la Complejidad (Edificio C3), Planta

Baja,UnidadInternacionaldeSedesUniversitarias,CircuitoCulturalc/n,ZonaCultural,CiudadUniversitaria,Ciudadde

México,México,CP.04510,isgovernedbyafour-memberboardappointedbyU.T.Austin.TheUniversityofTexasat

Austin–MexicoInstitute,A.C.advancescollaborativecross-disciplinaryacademicandscientificresearchpartnerships

in science, technology, engineering, and mathematics, and scholarly and cultural studies between The University of

TexasatAustinandMexico’sacademicinstitutions.Theinstituteisblendedratherthandiscretelypresentedbecauseit

isorganizedasanot-for-profitcorporationandU.T.Austinisthesolecorporatemember.TheMexicoInstitute’sfiscal

year end is December 31. Separate financial statements may be obtained by contacting The University of Texas at

AustinJ.Pinon,DirectorofInstitutionalRelations–Mexico,2275Speedway,Austin,TX,78712.

TheCrow Museumof AsianArt -Foundation isgoverned bya boardof fivedirectorsappointedby U.T. Dallas.The

foundationisblendedratherthandiscretelypresentedbecauseitisorganizedasanot-for-profitcorporationandU.T.

Dallasisthesolecorporatemember.Thefoundation’sfiscalyearendisDecember31.Infiscalyear2021,substantially

allassetsandoperationsofthefoundationtransferredtoU.T.Dallasinaccordancewithaunanimousconsentletter

executed by the board of directors. Assets distributed to U. T. Dallas will be managed in accordance with the

memorandumofunderstandingassociatedwiththe2018donationoftheCrowMuseumofAsianArt.Thefoundation

willcontinueitscorporateexistenceasdeemedadvisablebytheboardofdirectors.

Condensed financial statement information related to the System’s blended component units for the year ended

August31,2023isasfollows:

AsofAugust31,2023

UT

Southwestern

Health

Systems

UT

Southwestern

Moncrief

Cancer

Center

Moncrief

Cancer

Foundation

UTMB

HealthCare

Systems,Inc.

TheUniversity

MedicalBranch

Student

BookStore,Inc.

CondensedStatementofNet

Position

CurrentAssets $ 2,357,970  5,407,990  828,935  22,752,805  740,195

NoncurrentAssets  7,442,775  31,620,298  91,552,701  21,644,699  1,641,209

TotalAssets  9,800,745  37,028,288  92,381,636  44,397,504  2,381,404

CurrentLiabilities  —  9,064,197  1,462,473  4,683,999  70,981

NoncurrentLiabilities  —  —  —  255,322  —

TotalLiabilities  —  9,064,197  1,462,473  4,939,321  70,981

NetInvestmentinCapitalAssets  —  24,793,977  —  1,338,896  —

RestrictedNonexpendable  —  1,704,801  —  —  —

RestrictedExpendable  —  —  90,919,163  —  —

Unrestricted  9,800,745  1,465,313  —  38,119,287  2,310,423

TotalNetPosition $ 9,800,745  27,964,091  90,919,163  39,458,183  2,310,423

CondensedStatementofRevenues,

ExpensesandChangesinNet

Position

OperatingRevenues $ 45,661  8,778,368  25  99,546,414  972,066

OperatingExpenses  (24,004)  (13,182,645)  (509,680)  (92,152,575)  (906,564)

OperatingIncome(Loss)  21,657  (4,404,277)  (509,655)  7,393,839  65,502

NonoperatingRevenues(Expenses)  2,406,197  3,556,408  6,145,765  1,234,555  71,502

Income(Loss)BeforeOther

ChangesinNetPosition  2,427,854  (847,869)  5,636,110  8,628,394  137,004

OtherChangesinNetPosition  (2,743,000)  1,115,690  (3,384,310)  —  —

ChangeinNetPosition  (315,146)  267,821  2,251,800  8,628,394  137,004

NetPosition-August31,2022  —  —  88,667,363  30,829,789  2,173,419

NetPosition-August31,2023 $ (315,146)  267,821  90,919,163  39,458,183  2,310,423

CondensedStatementofCash

Flows

NetCashprovidedby(usedfor):

OperatingActivities $ (167,404)  1,311,183  3,492,178  2,161,864  53,097

NoncapitalFinancingActivities  —  —  (19,000,000)  —  —

CapitalandRelatedFinancing  —  —  —  —  —

InvestingActivities  45,661  (324,326)  11,827,561  (583,369)  5,945

NetIncrease(Decrease)inCashand

CashEquivalents  (121,743)  986,857  (3,680,261)  1,578,495  59,042

CashandCashEquivalents-

August31,2022  —  —  4,410,506  9,946,116  270,649

CashandCashEquivalents-

August31,2023 $ (121,743)  986,857  730,245  11,524,611  329,691

(Continued)

AsofAugust31,2023

MedicalBranch

Innovations,Inc.

U.T.

Physicians

University

Physicians

Group

U.T.HealthSan

AntonioRegional

Physician

Network

M.D.

Anderson

Physician's

Network

CondensedStatementofNet

Position

CurrentAssets $ 1,363,303  117,093,675  —  —  89,554,248

NoncurrentAssets  4,587,569  249,895,512  1,935,622  —  219,554,928

TotalAssets  5,950,872  366,989,187  1,935,622  —  309,109,176

CurrentLiabilities  532,068  85,811,908  —  —  8,500,361

NoncurrentLiabilities  7,409,137  200,009,007  —  —  —

TotalLiabilities  7,941,205  285,820,915  —  —  8,500,361

NetInvestmentinCapitalAssets  —  39,741,361  —  —  704,035

RestrictedNonexpendable  —  —  —  —  —

RestrictedExpendable  —  —  —  —  —

Unrestricted  (1,990,333)  41,426,912  1,935,622  —  299,904,780

TotalNetPosition $ (1,990,333)  81,168,273  1,935,622  —  300,608,815

CondensedStatementofRevenues,

ExpensesandChangesinNet

Position

OperatingRevenues $ 560,952  119,303,470  —  —  45,852,423

OperatingExpenses  (1,026,670)  (122,643,132)  —  (1,537,778)  (17,905,689)

OperatingIncome(Loss)  (465,718)  (3,339,662)  —  (1,537,778)  27,946,734

NonoperatingRevenues(Expenses)  221,418  5,255,345  —  —  11,995,439

Income(Loss)BeforeOther

ChangesinNetPosition  (244,300)  1,915,683  —  (1,537,778)  39,942,173

OtherChangesinNetPosition  —  —  —  1,537,778  —

ChangeinNetPosition  (244,300)  1,915,683  —  —  39,942,173

NetPosition-August31,2022  (1,746,033)  79,252,590  1,935,622  —  260,666,642

NetPosition-August31,2023 $ (1,990,333)  81,168,273  1,935,622  —  300,608,815

CondensedStatementofCash

Flows

NetCashprovidedby(usedfor):

OperatingActivities $ (251,504)  7,069,906  —  —  26,419,670

NoncapitalFinancingActivities  —  —  —  —  —

CapitalandRelatedFinancing  —  (16,821,357)  —  —  (208,191)

InvestingActivities  40,572  28,451,833  —  —  (4,315,529)

NetIncrease(Decrease)inCashand

CashEquivalents  (210,932)  18,700,382  —  —  21,895,950

CashandCashEquivalents-

August31,2022  1,382,440  88,035,192  —  —  62,450,374

CashandCashEquivalents-

August31,2023 $ 1,171,508  106,735,574  —  —  84,346,324

(Continued)

AsofAugust31,2023

M.D.

Anderson

Services

Corporation

EastTexas

Quality

Care

Network,Inc. UTIMCO

TheUniversityof

Texas

Communication

Foundation

CondensedStatementofNet

Position

CurrentAssets $ 84,750,530  197,289  43,750,144  2,042

NoncurrentAssets  809,177,475  —  4,720,620  177,911

TotalAssets  893,928,005  197,289  48,470,764  179,953

CurrentLiabilities  107,457,087  (230,090)  22,148,608  121,528

NoncurrentLiabilities  56,453,369  —  4,244,466  39,052

TotalLiabilities  163,910,456  (230,090)  26,393,074  160,580

NetInvestmentinCapitalAssets  24,679  —  224,226  —

RestrictedNonexpendable  50,000,000  —  —  —

RestrictedExpendable  638,085,173  —  —  —

Unrestricted  41,907,697  427,379  21,853,464  19,373

TotalNetPosition $ 730,017,549  427,379  22,077,690  19,373

CondensedStatementofRevenues,

ExpensesandChangesinNet

Position

OperatingRevenues $ 1,722,666  19,437  67,943,364  —

OperatingExpenses  (1,465,614)  (26,068)  (60,906,770)  —

OperatingIncome(Loss)  257,052  (6,631)  7,036,594  —

NonoperatingRevenues(Expenses)  37,117,793  —  1,750,535  —

Income(Loss)BeforeOther

ChangesinNetPosition  37,374,845  (6,631)  8,787,129  —

OtherChangesinNetPosition  —  —  —  —

ChangeinNetPosition  37,374,845  (6,631)  8,787,129  —

NetPosition-August31,2022  —  434,010  13,290,561  19,373

NetPosition-August31,2023 $ 37,374,845  427,379  22,077,690  19,373

CondensedStatementofCash

Flows

NetCashprovidedby(usedfor):

OperatingActivities $ 924,919  (200,973)  6,847,008  —

NoncapitalFinancingActivities  (28,051,423)  —  —  —

CapitalandRelatedFinancing  (4,633)  —  (1,357,280)  —

InvestingActivities  30,926,795  —  2,141,957  —

NetIncrease(Decrease)inCashand

CashEquivalents  3,795,658  (200,973)  7,631,685  —

CashandCashEquivalents-

August31,2022  —  472,913  34,166,841  2,042

CashandCashEquivalents-

August31,2023 $ 3,795,658  271,940  41,798,526  2,042

(Concluded)

AsofAugust31,2023

TheUniversityof

TexasatAustin-

MexicoInstitute

A.C.

TheCrow

Museumof

AsianArt-

Foundation

Combined

Blended

ComponentUnit

Total

CondensedStatementofNet

Position

CurrentAssets $ 20,070  45,872  368,865,068

NoncurrentAssets  —  —  1,443,951,319

TotalAssets  20,070  45,872  1,812,816,387

CurrentLiabilities  —  —  239,623,120

NoncurrentLiabilities  —  —  268,410,353

TotalLiabilities  —  —  508,033,473

NetInvestmentinCapitalAssets  —  —  66,827,174

RestrictedNonexpendable  —  —  51,704,801

RestrictedExpendable  —  —  729,004,336

Unrestricted  20,070  45,872  457,246,604

TotalNetPosition $ 20,070  45,872  1,304,782,915

CondensedStatementofRevenues,

ExpensesandChangesinNet

Position

OperatingRevenues $ 150,468  —  344,895,314

OperatingExpenses  (177,599)  (1,453)  (312,466,241)

OperatingIncome(Loss)  (27,131)  (1,453)  32,429,073

NonoperatingRevenues(Expenses)  —  —  69,754,957

Income(Loss)BeforeOther

ChangesinNetPosition  (27,131)  (1,453)  102,184,030

OtherChangesinNetPosition  —  —  (3,473,842)

ChangeinNetPosition  (27,131)  (1,453)  98,710,188

NetPosition-August31,2022  47,201  47,325  475,617,862

NetPosition-August31,2023 $ 20,070  45,872  574,328,050

CondensedStatementofCash

Flows

NetCashprovidedby(usedfor):

OperatingActivities $ 35,812  (1,453)  47,694,303

NoncapitalFinancingActivities  —  —  (47,051,423)

CapitalandRelatedFinancing  —  —  (18,391,461)

InvestingActivities  —  —  68,217,100

NetIncrease(Decrease)inCashand

CashEquivalents  35,812  (1,453)  50,468,519

CashandCashEquivalents-

August31,2022  47,201  47,325  201,231,599

CashandCashEquivalents-

August31,2023 $ 83,013  45,872  251,700,118

CondensedfinancialstatementinformationrelatedtotheSystem’sblendedcomponentunitsfortheyearendedAugust31,

2022,withsomefinancialstatementinformationrestatedforGASBStatementNo.96,isasfollows:

AsofAugust31,2022

Southwestern

Health

Systems

Southwestern

Moncrief

Cancer

Center

Moncrief

Cancer

Foundation

UTMB

HealthCare

Systems,Inc.

TheUniversity

MedicalBranch

Student

BookStore,Inc.

CondensedStatementofNet

Position

CurrentAssets $ 10,115,891  4,567,576  4,492,583  13,185,168  650,423

NoncurrentAssets  —  33,308,379  105,752,943  20,974,634  1,573,544

TotalAssets  10,115,891  37,875,955  110,245,526  34,159,802  2,223,967

CurrentLiabilities  —  10,179,685  21,578,163  3,231,312  50,548

NoncurrentLiabilities  —  —  —  98,701  —

TotalLiabilities  —  10,179,685  21,578,163  3,330,013  50,548

NetInvestmentinCapitalAssets  —  25,862,195  —  1,429,800  —

RestrictedNonexpendable  —  1,633,095  —  —  —

RestrictedExpendable  —  —  88,667,363  —  —

Unrestricted  10,115,891  200,980  —  29,399,989  2,173,419

TotalNetPosition $ 10,115,891  27,696,270  88,667,363  30,829,789  2,173,419

CondensedStatementofRevenues,

ExpensesandChangesinNet

Position

OperatingRevenues $ 2,841  6,736,381  429  92,717,894  827,124

OperatingExpenses  (38,636)  (12,104,484)  (505,157)  (88,463,416)  (773,467)

OperatingIncome(Loss)  (35,795)  (5,368,103)  (504,728)  4,254,478  53,657

NonoperatingRevenues(Expenses)  2,128,039  3,467,418  (10,825,651)  (822,099)  (132,959)

Income(Loss)BeforeOther

ChangesinNetPosition  2,092,244  (1,900,685)  (11,330,379)  3,432,379  (79,302)

OtherChangesinNetPosition  (2,800,000)  (593,368)  (3,593,368)  —  —

ChangeinNetPosition  (707,756)  (2,494,053)  (14,923,747)  3,432,379  (79,302)

NetPosition-August31,2021  10,823,647  30,190,323  103,591,110  27,397,410  2,252,721

NetPosition-August31,2022 $ 10,115,891  27,696,270  88,667,363  30,829,789  2,173,419

CondensedStatementofCash

Flows

NetCashprovidedby(usedfor):

OperatingActivities $ 295,853  (500,683)  4,126,209  2,455,709  (14,935)

NoncapitalFinancingActivities  —  —  —  —  —

CapitalandRelatedFinancing  —  —  —  —  —

InvestingActivities  (323,009)  90,909  (859,369)  (601,134)  (3,851)

NetIncrease(Decrease)inCashand

CashEquivalents  (27,156)  (409,774)  3,266,840  1,854,575  (18,786)

CashandCashEquivalents-

August31,2021  2,504,694  1,252,481  1,143,666  8,091,541  289,435

CashandCashEquivalents-

August31,2022 $ 2,477,538  842,707  4,410,506  9,946,116  270,649

(Continued)

AsofAugust31,2022

MedicalBranch

Innovations,Inc.

U.T.

Physicians

University

Physicians

Group

U.T.HealthSan

AntonioRegional

Physician

Network

M.D.

Anderson

Physician's

Network

CondensedStatementofNet

Position

CurrentAssets $ 1,592,834  104,156,809  —  210  66,937,719

NoncurrentAssets  4,406,724  281,848,529  1,935,622  —  203,182,481

TotalAssets  5,999,558  386,005,338  1,935,622  210  270,120,200

CurrentLiabilities  546,454  87,287,265  —  210  9,453,558

NoncurrentLiabilities  7,199,137  219,465,483  —  —  —

TotalLiabilities  7,745,591  306,752,748  —  210  9,453,558

NetInvestmentinCapitalAssets  —  31,865,541  —  —  642,556

RestrictedNonexpendable  —  —  —  —  —

RestrictedExpendable  —  —  —  —  —

Unrestricted  (1,746,033)  47,387,049  1,935,622  —  260,024,086

TotalNetPosition $ (1,746,033)  79,252,590  1,935,622  —  260,666,642

CondensedStatementofRevenues,

ExpensesandChangesinNet

Position

OperatingRevenues $ 946,447  199,985,715  —  —  54,079,887

OperatingExpenses  (1,641,058)  (179,951,056)  —  (1,757,801)  (23,663,421)

OperatingIncome(Loss)  (694,611)  20,034,659  —  (1,757,801)  30,416,466

NonoperatingRevenues(Expenses)  (351,259)  (8,292,622)  —  —  (16,777,997)

Income(Loss)BeforeOther

ChangesinNetPosition  (1,045,870)  11,742,037  —  (1,757,801)  13,638,469

OtherChangesinNetPosition  —  —  —  1,757,801  —

ChangeinNetPosition  (1,045,870)  11,742,037  —  —  13,638,469

NetPosition-August31,2021  (700,163)  67,510,553  1,935,622  —  247,028,173

NetPosition-August31,2022 $ (1,746,033)  79,252,590  1,935,622  —  260,666,642

CondensedStatementofCash

Flows

NetCashprovidedby(usedfor):

OperatingActivities $ (471,618)  37,495,780  —  —  20,349,914

NoncapitalFinancingActivities  —  —  —  —  —

CapitalandRelatedFinancing  —  (18,613,254)  —  —  (172,642)

InvestingActivities  4,380  599,936  —  —  (14,386,024)

NetIncrease(Decrease)inCashand

CashEquivalents  (467,238)  19,482,462  —  —  5,791,248

CashandCashEquivalents-

August31,2021  1,849,678  68,552,730  —  —  56,659,126

CashandCashEquivalents-

August31,2022 $ 1,382,440  88,035,192  —  —  62,450,374

(Continued)

AsofAugust31,2022

M.D.

Anderson

Services

Corp

EastTexas

Quality

Care

Network,Inc. UTIMCO

TheUniversityof

Texas

Communication

Foundation

CondensedStatementofNet

Position

CurrentAssets $ 80,211,672  448,728  35,450,191  2,042

NoncurrentAssets  803,523,651  —  4,593,078  177,911

TotalAssets  883,735,323  448,728  40,043,269  179,953

CurrentLiabilities  100,258,091  14,718  20,144,469  121,528

NoncurrentLiabilities  90,834,528  —  6,608,239  39,052

TotalLiabilities  191,092,619  14,718  26,752,708  160,580

NetInvestmentinCapitalAssets  20,387  —  203,428  —

RestrictedNonexpendable  50,000,000  —  —

RestrictedExpendable  603,195,087  —  —

Unrestricted  39,427,230  434,010  13,087,133  19,373

TotalNetPosition $ 692,642,704  434,010  13,290,561  19,373

CondensedStatementofRevenues,

ExpensesandChangesinNet

Position

OperatingRevenues $ 1,365,571  37,469  60,648,574  2,000

OperatingExpenses  (746,921)  (17,411)  (58,283,634)  (801)

OperatingIncome(Loss)  618,650  20,058  2,364,940  1,199

NonoperatingRevenues(Expenses)  (51,910,767)  —  198,951  —

Income(Loss)BeforeOther

ChangesinNetPosition  (51,292,117)  20,058  2,563,891  1,199

OtherChangesinNetPosition  —  —  (6,000,000)  —

ChangeinNetPosition  (51,292,117)  20,058  (3,436,109)  1,199

NetPosition-August31,2021  743,934,821  413,952  16,726,670  18,174

NetPosition-August31,2022 $ 692,642,704  434,010  13,290,561  19,373

CondensedStatementofCash

Flows

NetCashprovidedby(usedfor):

OperatingActivities $ (2,041,805)  69,344  4,506,494  1,831

NoncapitalFinancingActivities  (34,753,876)  —  (6,000,000)  —

CapitalandRelatedFinancing  —  —  (919,306)  —

InvestingActivities  37,758,714  —  203,209  —

NetIncrease(Decrease)inCashand

CashEquivalents  963,033  69,344  (2,209,603)  1,831

CashandCashEquivalents-

August31,2021  78,663,646  403,569  36,376,444  211

CashandCashEquivalents-

August31,2022 $ 79,626,679  472,913  34,166,841  2,042

(Concluded)

AsofAugust31,2022

CentroGlobalde

Innovaciony

Emprendimiento

A.C.

TheUniversityof

TexasatAustin-

MexicoInstitute

A.C.

TheCrow

Museumof

AsianArt-

Foundation

Combined

Blended

ComponentUnit

Total

CondensedStatementofNet

Position

CurrentAssets $ —  47,201  47,325  321,906,372

NoncurrentAssets  —  —  —  1,461,277,496

TotalAssets  —  47,201  47,325  1,783,183,868

CurrentLiabilities  —  —  —  252,866,001

NoncurrentLiabilities  —  —  —  324,245,140

TotalLiabilities  —  —  —  577,111,141

NetInvestmentinCapitalAssets  —  —  —  60,023,907

RestrictedNonexpendable  —  —  —  51,633,095

RestrictedExpendable  —  —  —  691,862,450

Unrestricted  —  47,201  47,325  402,553,275

TotalNetPosition $ —  47,201  47,325  1,206,072,727

CondensedStatementofRevenues,

ExpensesandChangesinNet

Position

OperatingRevenues $ —  67,492  —  417,417,824

OperatingExpenses  (41,430)  (29,065)  (81,923)  (368,099,681)

OperatingIncome(Loss)  (41,430)  38,427  (81,923)  49,318,143

NonoperatingRevenues(Expenses)  —  —  (634)  (83,319,580)

Income(Loss)BeforeOther

ChangesinNetPosition  (41,430)  38,427  (82,557)  (34,001,437)

OtherChangesinNetPosition  —  —  85,000  (11,143,935)

ChangeinNetPosition  (41,430)  38,427  2,443  (45,145,372)

NetPosition-August31,2021  41,430  8,774  44,882  1,251,218,099

NetPosition-August31,2022 $ —  47,201  47,325  1,206,072,727

CondensedStatementofCash

Flows

NetCashprovidedby(usedfor):

OperatingActivities $ —  38,427  (663,715)  65,646,805

NoncapitalFinancingActivities  —  —  85,000  (40,668,876)

CapitalandRelatedFinancing  —  —  580,527  (19,124,675)

InvestingActivities  —  —  64  22,483,825

NetIncrease(Decrease)inCashand

CashEquivalents  —  38,427  1,876  28,337,079

CashandCashEquivalents-

August31,2021  —  8,774  45,449  255,841,444

CashandCashEquivalents-

August31,2022 $ —  47,201  47,325  284,178,523

ASSETSHELDBYAFFILIATEDORGANIZATIONS

GASB authoritative guidance provides criteria for determining whether certain organizations should be reported as

componentunitsbasedonthenatureandsignificanceoftheirrelationshiptotheSystem.Thisguidancestatesthata

legally separate, tax-exempt organization should be reported as a component unit of a reporting entity if all of the

followingcriteriaaremet:

1. Theeconomicresourcesreceivedorheldbytheseparateorganizationareentirelyoralmostentirelyforthe

directbenefitoftheprimarygovernment,itscomponentunits,oritsconstituents.

2. The primary government is entitled to or has the ability to otherwise access a majority of the economic

resourcesreceivedorheldbytheseparateorganization.

3. Theeconomicresourcesreceivedorheldbyanindividualorganizationthatthespecificprimarygovernment,

or its component units, is entitled to, or has the ability to otherwise access, are significant to that primary

government.

The System has defined significance as 5% of System’s net position. As of August 31, 2023, none of the System’s

potential component units individually meet the 5% of System’s net position criteria for inclusion in the System’s

financialstatements.Baseduponthemostrecentavailableinformation,thecombinednetpositionofthesepotential

component units reported by the organizations total $3,967,673,833 at August 31, 2023 and $3,379,730,061 at

August31,2022.

2. RelatedParties

Through the normal course of operations, the System both receives funds from and provides funds to other State

agenciesinsupportofsponsoredresearchprograms.FundsreceivedandprovidedduringtheyearendedAugust31,

2023,relatedtopass-throughgrantswere$609,197,382and$14,032,008,respectively.Fundsreceivedandprovided

during the year ended August 31, 2022, related to pass-through grants were $533,765,956 and $20,760,320,

respectively.

Otherrelated-partytransactionsidentifiedinthefinancialstatementsincludeDueFrom/ToOtherStateAgencies,State

Appropriations,CapitalAppropriationsandTransfersFrom/ToOtherStateAgencies.

3. JointVentures

The University of Texas Southwestern Medical Center (UTSW) and Texas Health Resources (THR) are participating

members of Southwestern Health Resources (SWHR) entities, including SWHR, SWHR Clinically Integrated Network

(CIN), and SWHR Joint Operating Company (JOC). This integrated regional health network offers key advantages for

patientsinNorthTexasincludingabroad,integratedcontinuumofphysician-drivencareutilizingUTSW’snetworkof

facultyandcommunity-basedphysicians,THR’semployedphysicians,andindependentphysiciansaffiliatedwithboth

organizations; and an integrated hospital network consisting of UTSW’s two university hospitals and THR’s wholly-

controlled and joint-ventured community hospitals. UTSW’s equity interest in SWHR, SWHR CIN, and SWHR JOC at

August31,2023and2022was$861,990and$61,751,430,respectively,orapproximately50%.

UTSWisaparticipatingmemberofTexasHealthHospitalFrisco(THHF).THHFisajointventureenteredintobyUTSW

andTHRonAugust27,2018whosepurposeistoprovidesuperiormedicalcaretotheresidentsofCollinCountyand

other surrounding areas. UTSW’s equity interest in THHF at August 31, 2023 and 2022 was $126,720,765 and

$117,814,831,respectively,or50%.

UTSWisaparticipatingmemberofPediatricHealthManagementServices.PediatricHealthManagementServicesisa

non-profitcorporateentitythatwasformedbyUTSWandChildren’sHealthSystemofTexasonOctober1,2019forthe

purposeofdevelopingajointpediatricenterprise.UTSW’sequityinterestinPediatricHealthManagementServicesat

August 31, 2023 and 2022 was $27,281,015 and $4,389,470, respectively, or 50%. UTSW is committed to providing

fundingofupto$75,000,000peradevelopmentagreementdatedMay11,2022.

U.T. SouthwesternHealth Systems(UTSHS), ablended componentunit ofUTSW,isaparticipating memberof U.T.

SouthwesternDVAHealthcare,LLP(DVA). DVAisajointventurebetweenUTSHSandDaVitaInc.toprovidecarefor

dialysis patients in the Dallas-Fort Worth area. UTSHS's equity interest in DVA at August 31, 2023 and 2022 was

$6,234,205and$6,614,563,respectively,or49%.SeparatefinancialstatementsforDaVitamaybeobtainedatDaVita

Inc.,601HawaiiStreet,ElSegundo,California90245.

UTSHS is a participating member of Crowder Dialysis, LLC (Crowder). Crowder is a joint venture between UTSHS,

Crowder,andRenalTreatmentCenters-Southeast,LP,formedforthepurposeofdeveloping,establishing,owningor

leasing,andoperatingoneormorelicensedoutpatientdialysisandrenalcareservicecentersandforthepurposeof

doing such other things as are necessary, convenient, desirable or incidental to the foregoing, and for such other

purposesasmaybeagreeduponfromtimetotime.UTSHS'sequityinterestinCrowderatAugust31,2023and2022

was$1,208,570and$1,017,704,respectivelyor49%.SeparatefinancialstatementsforCrowdermaybeobtainedatc/

oDaVitaInc.,200016thStreet,Denver,Colorado,80202.

U. T. Health Science Center - Houston’s blended component unit, U. T. Physicians, is a participating member of

Physician’sDialysisofHouston.Physician’sDialysisofHoustonisajointventureenteredintobyU.T.Physiciansand

DaVita, Inc. U. T. Physicians’ equity interest in Physician’s Dialysis of Houston at August 31, 2023 and 2022 was

$562,976and$713,564,respectively,or35.6%.SeparatefinancialstatementsforPhysician’sDialysisofHoustonmay

be obtained at Physician’s Dialysis of Houston, Attention: D. Gieser, JV Accounting, 32275 32nd Ave South, Federal

Way,Washington98001.

U.T.HealthScienceCenter-Houston’sblendedcomponentunit,U.T.Physicians,isa participatingmemberofTMC

HoldingCompany,L.L.C.(TMCHolding).TMCHoldingisaLimitedLiabilityCorporationenteredintobyU.T.Physicians,

BaylorCollege ofMedicine andMemorial Hermann/USPSurgery CentersIII,L.L.P.U. T.Physicians’ equityinterest in

TMC Holding at August 31, 2023 and 2022 was $181,656 and $180,271, respectively, or 18.1%. Separate financial

statementsforTMCHoldingmaybeobtainedbycontactingS.Rossmann,750TownandCountryBoulevard,Suite920,

Houston,Texas77024.

U.T.HealthScienceCenter-Houston’sblendedcomponentunit,U.T.Physicians,isaparticipatingmemberofBluesky

MOB,L.L.P.BlueskyMOB,L.L.P.isaLimitedLiabilityPartnershipofwhichU.T.Physicianspurchasedan18.7%interest

infor$380,755onAugust1,2012.U.T.Physicians’equityinterestinBlueskyMOB,LLPatAugust31,2023and2022

was$380,755,or18.7%.SeparatefinancialstatementsforBlueskyMOB,L.L.P.maybeobtainedatMoore,Reichl,&

Baker,P.C.,c/oC.Presley,CPA,11200WestheimerSuite410,Houston,Texas,77042.

U. T. Health Science Center - Houston and M. D. Anderson are participating members of the Texas Medical Center

CentralHeatingandCoolingServicesCooperativeAssociation(TECO).TECOwasincorporatedonOctober2,1975,for

thepurposeofoperatingacentralheatingandcoolingservicesfacilityonacooperativebasissolelyforthebenefitof

eligibleinstitutions.OnJune1,2003,TECOtransferredsubstantiallyallofitsassetsandoperationtoTECOCorporation,

andTECOCorporationassumedtheliabilitiesandobligationsofTECO.TECOstillrendersservicestomemberandnon-

memberpatrons atcost.Savings ormarginsare refundedtothe memberandnon-member patronson a patronage

basisintheformofcashorequitybyTECO.Infiscalyear2016,U.T.HealthScienceCenter–Houstonpurchasedthe

Jessie Jones Library and obtained additional patronage equity in TECO in the amount of $301,800 via the Houston

Academy of Medicine’s shares of TECO equity. In fiscal year 2022, U. T. Health Science Center – Houston obtained

additional patronage equity in TECO in the amount of $153,252 related to the School of Biomedical Informatics

additionviatheHoustonAcademyofMedicine’ssharesofTECOequity.U.T.HealthScienceCenter-Houston’sequity

interestinTECOatAugust31,2023 and 2022 was $20,790,009 and $19,857,229,respectively,or 10.1% and 10.2%,

respectively.M.D.Anderson’sequityinterestinTECOatAugust31,2023and2022was$68,223,067and$65,034,537,

respectively,or 33.5% and 33.9%, respectively. Separate financial statements for TECO may be obtained at Thermal

EnergyCorporation,1615BraeswoodBoulevard,Houston,Texas77030.

M.D.AndersonisaparticipatingmemberoftheTexasMedicalCenterHospitalLaundryCooperativeAssociation(the

Association).TheAssociationwasestablishedonApril30,1971,forthepurposeofacquiring,owning,andoperatinga

laundry system on a cooperative basis solely for the benefit of members of the Association. Net earnings of the

AssociationmayberefundedtothemembersonapatronagebasisorretainedbytheAssociationasequityallocatedto

themembers. M.D.Anderson’s equityinterestin theAssociationat August31,2023 and2022 was $6,433,549and

$6,519,135,respectively, or40%.Separate financial statementsforthe Association may beobtainedat 9424 Fannin

Street,BuildingC,Houston,Texas77045.

M.D.AndersonisaparticipatingmemberofP.E.T.NetHouston,LLC(PETNet).PETNetisajointventureenteredintoby

M.D.AndersonandP.E.T.Pharmaceuticals,Inc.toleaseandoperateafacilitylocatedonM.D.Anderson’scampusto

producepositronradiopharmaceuticalsandisotopes.Constructionofthefacilitycommencedin2003.M.D.Anderson’s

equityinterestinPETNetatAugust31,2023and2022was$5,202,367and$4,766,112,respectively,or49%.Separate

financialstatementsforPETNet maybeobtained atSiemensMedicalSolutionsUSA,Inc.,51 ValleyStreamParkway,

Malvern,Pennsylvania19355.

M.D.Anderson,NationalResilience, Inc. a Delaware corporation (Resilience), and ResilienceTexas,LLC, a Delaware

limitedliability company enteredinto a newjointventure onOctober21, 2021toform Cell TherapyManufacturing

Center(CTMC).Theentitywasformedforthepurposeofengaginginastrategicmanufacturingrelationshipforgene

andcelltherapycGMPmanufacturingattheResilienceTexas,LLCfacilityforallphasesofclinicaldevelopmentandfor

commercial supply. M. D. Anderson’s participation in such strategic manufacturing relationship for gene and cell

therapy cGMP manufacturing will support and advance its mission by facilitating and funding the development and

commercializationofnewproductsandtechnologiesforthediagnosis,teaching,study,prevention,andtreatmentof

cancer.TheBoardofRegentsoftheUniversityofTexasSystem,onbehalfofM.D.Anderson’sengagementinthejoint

venture,supportthepublicmissionofandservepublicpurposesappropriatetothefunctionofM.D.Anderson.Asof

August31,2023and2022,M.D.Anderson’sequityinterestinCTMCwas$20,516,472and$23,739,656,respectively,

or50%.SeparatefinancialstatementsforResilienceTexas,LLCdbaCTMCmaybeobtainedat2130WHolcombeBlvd.

HoustonTX,77030.

OnMarch1,2018,U.T.HealthScienceCenter–Tyler(UTHSC–Tyler)enteredintoajointventurewithAHSEastTexas

Health System, LLC, to form East Texas Health System, LLC, a Texas Limited Liability Company. The resulting health

system,knownasU.T.HealthEastTexas,isdesignedtoexpandmedicaleducation,researchandcommunityhealthin

NortheastTexas.U.T. HealthScienceCenter– Tyler’shospitalandphysicianclinicoperationsareparticipantsinthe

ten-hospital system, designed to advance the achievement of UTHSC – Tyler’s mission through financial and clinical

alignmentandintegrationandtoimprovethedeliveryofcosteffective,qualityhealthcareservicesintheNortheast

Texasregion.UTHSC–Tyler’sequityinterestinU.T.HealthEastTexasatAugust31,2023and2022was$24,681,700

and$18,709,700,respectively,orapproximately30%.

InMarch2016,U.T.AustinenteredintoajointventurewithAscensionSetonandCentralHealthtoformCapitalCity

Innovation(CCI), a nonprofitorganization.CCI wascreatedto provideavision, focused strategicdirection, advocacy

for, and synergistic coordination of expertise, culture, uses and development to support the creation, growth and

sustainabilityofanInnovationZoneinAustin,Texas.U.T.Austin’sequityinterestinCCIatAugust31,2023and2022

was$350,000,or23.7%.

4. SummaryofSignificantAccountingPolicies

BASISOFACCOUNTING

TheproprietaryfinancialstatementsoftheSystemhavebeenprepared usingtheeconomic resourcesmeasurement

focusand theaccrualbasis ofaccounting and reportsas abusinesstype activity,as definedby GASB. Businesstype

activities(enterprisefunds)arethosethatarefinancedinwholeorinpartbyfeeschargedtoexternalpartiesforgoods

orservices.TheSystem’sfiduciaryfundsaccountforassetsheldinacustodialcapacityandareaccountedforonthe

accrualbasisofaccountinginaccordancewithGASBStatementNo.84,FiduciaryActivities.Allfinancialstatementsof

theSystem have beenpreparedin accordancewithaccounting principles generallyaccepted in theUnitedStates of

AmericaasprescribedbytheGASB.

GASBSTATEMENTSIMPLEMENTEDINFISCALYEAR2022

TherequirementsofGASBStatementNo.87,Leases,wereeffectivein2022.Thisstatementestablishedasinglemodel

forleaseaccountingbasedonthe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.Limitedexceptionstothesingleapproach

guidanceareprovidedforshort-termleases,defined aslastingamaximumoftwelvemonthsatinception,including

any options to extend, financed purchases, leases of assets that are investments and certain regulated leases. The

applicationofthestatementhadaneffectontheSystem’snetpositionandchangeinnetposition.

Otherthantheportionofthisstatementimplementedin2020,therequirementsoftheremainderofGASBStatement

No.97,CertainComponentUnitCriteria,andAccountingandFinancialReportingforInternalRevenueCodeSection457

DeferredCompensationPlans,wereeffectivein2022.Therequirementsofthisstatementimplementedin2022related

totheaccountingandfinancialreportingforSection457plans.Theapplicationofthestatementhadaneffectonthe

System’snetpositionandchangeinnetposition.

Otherthantheportionsofthisstatementimplementedin2021,therequirementsoftheremainderofGASBStatement

No.93,ReplacementofInterbankOfferedRates,wereeffectivebeginning2022orlaterdependingonwhenLIBORisno

longeravailable.Thisstatementpreservesconsistencyandcomparabilityofreportinghedgingderivativeinstruments

andleasesafteragreementsare amendedtoreplaceLIBOR.Theapplicationofthisportionofthestatementhad no

effectontheSystem’snetpositionorchangesinnetposition.

The requirements of GASB Statement No. 98, The Annual Comprehensive Financial Report, were effective in 2022,

establishesthetermannualcomprehensivefinancialreportanditsacronymACFR.TheimplementationofStatement

98hasnoeffectontheSystem.

For GASB Statement No. 99, Omnibus 2022, the following portions of the statement were effective in 2022: the

requirementsrelatedtoextensionoftheuseofLIBOR,accountingfortheSupplementalNutritionAssistanceProgram

(SNAP)distributions, disclosures of nonmonetary transactions,pledges of future revenuesbypledginggovernments,

clarificationofcertainprovisionsinStatement34,asamended,andterminologyupdatesrelatedtoStatement53and

Statement63.TheapplicationoftheseportionsofthestatementhadnoeffectontheSystem’snetpositionorchanges

innetposition.

GASBSTATEMENTSIMPLEMENTEDINFISCALYEAR2023

GASBStatementNo.91,ConduitDebtObligations,effective2023,providesasinglemethodofreportingconduitdebt

obligations.TheapplicationofthestatementhadnoeffectontheSystem’snetpositionorchangesinnetposition.

GASBStatementNo.94,Public-PrivateandPublic-PublicPartnerships(PPPs)andAvailabilityPayment Arrangements,

effective2023,improvesfinancialreportingbyaddressingissuesrelatedtopublic-privateandpublic-publicpartnership

arrangements and provides guidance for availability payment arrangements. Changes adopted to conform to the

provisions of this Statement were applied retroactively by restating the financial statements for the earliest period

presented,August31,2022,andrelateddisclosuresinNotes20,21,and23.

GASB Statement No. 96, Subscription-Based Information Technology Arrangements (SBITA), is effective 2023. This

StatementdefinesaSBITA;establishesthataSBITAresultsinaright-to-usesubscriptionasset—anintangibleasset—

and a corresponding subscription liability; provides the capitalization criteria for outlays other than subscription

payments, including implementation costs of a SBITA; and requires note disclosures regarding a SBITA. Changes

adoptedtoconformtotheprovisionsofthisStatementwereappliedretroactivelybyrestatingthefinancialstatements

fortheearliestperiodpresented,August31,2022,andrelateddisclosuresinNotes1,9,11,12,20,and21.

Otherthantheportion of this statement implemented in 2022, the remainderofGASBStatement No. 99, Omnibus

2022, is effective in 2023 and 2024. The requirements related to leases, PPPs, and SBITAs are effective 2023. The

applicationofthisportionofthestatementhadnoeffectontheSystem’snetpositionorchangesinnetposition.

TheeffectoftheimplementationofGASBStatementNo.94and96ontheSystem’sfinancialstatementsfortheyear

endedAugust31,2022wasasfollows:

AsReportedin

FiscalYear2022

GASBStatement

No.94Restatement

GASBStatement

No.96Restatement

Restated

FiscalYear2022

AssetsandDeferredOutflows

TotalCurrentAssets $ 11,474,182,132  4,202,465  (6,666,853)  11,471,717,744

TotalNoncurrentAssets  94,709,746,366  387,175,087  114,243,041  95,211,164,494

TotalAssets  106,183,928,498  391,377,552  107,576,188  106,682,882,238

TotalDeferredOutflowsofResources  5,546,067,549  —  —  5,546,067,549

TotalAssetsandDeferredOutflows $ 111,729,996,047  391,377,552  107,576,188  112,228,949,787

LiabilitiesandDeferredInflows

TotalCurrentLiabilities $ 11,120,163,187  (8,353,452)  41,675,449  11,153,485,184

TotalNoncurrentLiabilities  29,519,166,256  —  53,138,823  29,572,305,079

TotalLiabilities  40,639,329,443  (8,353,452)  94,814,272  40,725,790,263

TotalDeferredInflowsofResources  4,420,174,296  393,893,594  —  4,814,067,890

TotalLiabilitiesandDeferredInflows $ 45,059,503,739  385,540,142  94,814,272  45,539,858,153

NetPosition

NetInvestmentinCapitalAssets $ 6,543,836,872  7,045,825  20,088,183  6,570,970,880

Restricted:

Nonexpendable  36,029,323,644  —  —  36,029,323,644

Expendable  21,146,284,170  —  (539,780)  21,145,744,390

Unrestricted  2,951,047,622  (1,208,415)  (6,786,487)  2,943,052,720

TotalNetPosition $ 66,670,492,308  5,837,410  12,761,916  66,689,091,634

AsReportedin

FiscalYear2022

GASBStatement

No.94Restatement

GASBStatement

No.96Restatement

Restated

FiscalYear2022

TotalOperatingRevenues $ 19,847,504,034  6,309,923  —  19,853,813,957

TotalOperatingExpenses  24,589,880,632  647,452  (13,144,718)  24,577,383,366

OperatingIncome(Loss)  (4,742,376,598)  5,662,471  13,144,718  (4,723,569,409)

NetNonoperatingRevenues(Expenses)  4,423,699,179  174,938  (382,801)  4,423,491,316

Income(Loss)BeforeOtherChanges  (318,677,419)  5,837,409  12,761,917  (300,078,093)

OtherChanges  116,730,751  —  —  116,730,751

ChangeinNetPosition  (201,946,668)  5,837,409  12,761,917  (183,347,342)

BeginningNetPosition  66,872,438,976  —  —  66,872,438,976

EndingNetPosition $ 66,670,492,308  5,837,409  12,761,917  66,689,091,634

AsReportedin

FiscalYear2022

GASBStatement

No.94Restatement

GASBStatement

No.96Restatement

Restated

FiscalYear2022

CashFlowsfromOperatingActivities $ (2,426,019,082)  7,518,338  60,742,220  (2,357,758,524)

CashFlowsfromNoncapitalFinancing

Activities  3,750,618,633  —  1  3,750,618,634

CashFlowsfromCapitalandRelatedFinancing

Activities  (2,092,061,101)  (7,693,276)  (60,742,220)  (2,160,496,597)

CashFlowsfromInvestingActivities  1,355,258,428  174,938  (1)  1,355,433,365

NetIncrease(Decrease)inCash  587,796,878  —  —  587,796,878

BeginningCashandCashEquivalents  4,920,978,316  —  —  4,920,978,316

EndingCashandCashEquivalents $ 5,508,775,194  —  —  5,508,775,194

CASHANDCASHEQUIVALENTS

Short-term,highlyliquidinvestmentswithmaturitiesofthreemonthsorlesswhenpurchasedaregenerallyconsidered

cash and cash equivalents. It is the System’s policy to exclude items that meet this definition if they are part of an

investmentpool,whichhasaninvestmenthorizonofoneyearorgreater.Therefore,highlyliquidinvestmentsthatare

partofthePermanentUniversityFund(PUF),GeneralEndowmentFund(GEF)andIntermediateTermFund(ITF)are

not considered cash and cash equivalents. Additionally, endowments invested in money market accounts are also

excludedfromCashandCashEquivalentsastheintentistoinvestthesefundsformorethanoneyear.Cashheldinthe

StatetreasuryforthePUF,thePermanentHealthFund(PHF)andtheAvailableUniversityFund(AUF)areconsidered

cashandcash equivalents.Otherhighly liquidinvestmentsof thesemajorfunds whichareheld inpooledfundsand

invested with custodians are not considered cash and cash equivalents according to the investment policies of the

System.RestrictedcashandcashequivalentsincludecashheldintheStatetreasuryforthePUFandPHFandrestricted

sourcesoffundsusedforconstructionofcapitalassetsaswellasfundsheldfordebtservice.TheSystemholdsbond

proceedsinrestrictedinvestmentstobedisbursedtotheinstitutionstosupportcapitalprojectsonacostreimbursable

basis.

BALANCEINSTATEAPPROPRIATIONS

ThisitemrepresentsthebalanceofGeneralRevenuefundsatAugust31ascalculatedintheTexasStateComptroller’s

GeneralRevenueReconciliation.

DERIVATIVEFINANCIALINSTRUMENTS

Derivative instruments are recorded at fair value. The fair value of derivative instruments is recorded as either an

investment, an investment derivative liability, a hedging derivative asset or a hedging derivative liability on the

statement of net position. The valuation of investment derivative instruments is discussed in the Investments

disclosure below. The System has calculated the fair value of the interest rate swaps using a forecast of expected

discountedfuturenetcashflowsandconsideredthenonperformanceriskoftheparties.

TheSystemhasenteredintointerestrateswapagreementswithvariouscounterparties,allofwhicharehighlyrated

financialinstitutions,tomanagevariousrisksassociatedwiththeSystem’sdebtprograms.EachoftheSystem’sinterest

rateswapsisacontractualagreemententeredintobetweentheSystemandacounterpartyunderwhicheachparty

agreestoexchangeperiodicfixedorvariablepayments,baseduponastatednotionalamount,overthestatedlifeof

theagreement.Thenetdifferentialpaidorreceivedisrecognizedoverthelifeoftheagreementasanadjustmentto

interestexpense.

Interest rate swaps determined to be hedging derivative instruments are designated as cash flow hedges. Hedging

derivativeinstrumentassetsand hedgingderivative instrumentliabilities arerecorded onthe System’sstatement of

netposition.Underhedgeaccounting,forderivativeinstrumentsthataredeterminedtobeeffective,changesinthe

fairvalueofhedgingderivativeinstrumentsareconsideredtobedeferredinflows(forhedgingderivativeinstruments

withpositivefairvalues)ordeferredoutflows(forhedgingderivativeinstrumentswithnegativefairvalues).

Changes in the fair value of derivative instruments that are not effective are recorded as investment income in the

statementofrevenues,expensesandchangesinnetposition.

INVESTMENTS

ThemajorityoftheinvestmentsoftheSystem,exceptforPUFlands,aremanagedbyUTIMCO,aprivateinvestment

corporation that provides services to the System and its related foundations. All investments are reported as

noncurrent as these funds have an investment horizon extending beyond one year. Restricted investments include

investments restricted by legal or contractual requirements, including those related to donors and constitutional

restrictions.

TheauditedfinancialstatementsofthefundsmanagedbyUTIMCOmaybefoundonUTIMCO’swebsiteandinquiries

maybedirectedtoUTIMCO.

Investmentsarereportedatfairvalue.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betweentwomarketparticipantsatthemeasurementdate.

The System is authorized to invest funds, as provided in Section 51.0031 of the Texas Education Code and the

Constitution of the State of Texas, under prudent investor investment standards. Such investments include various

fixedincomeandequitytypesecurities,hedgefunds,publicmarketfunds,andprivateinvestments.Theinvestmentsof

theSystemaregovernedbyvariousinvestmentpoliciesapprovedbytheU.T.SystemBoardofRegents.

CONTRIBUTIONSRECEIVABLE

Current and noncurrent contributions receivable are amounts pledged to the System by donors, net of allowances.

Multi-yeargift pledges greater than$10,000must be reported atthediscounted present value. Atthebeginning of

eachfiscalyear,theSystemre-establishesthescaleofdiscountratesapplicableforpresentvaluingnewmulti-yeargift

pledgesthatarereceivedduringthenewfiscalyear.ThescaleofdiscountratesisbaseduponU.S.TreasuryNotesand

BondsaskedyieldsaslistedintheWallStreetJournalonthefirstdayofthefiscalyear.Existinggiftpledgesarenot

recalculatedsincethesepledgeswerepreviouslycalculatedathistoricaldiscountrates.

INVENTORIES

Inventories, consisting primarily of supplies and merchandise for resale, are valued at cost, typically based on the

specificidentification,weightedaverageorfirst-in,first-outmethods,whicharenotinexcessofnetrealizablevalue.

RESTRICTEDASSETS

Restrictedassets include fundsrestrictedby legal orcontractualrequirements, includingthoserelated to sponsored

programs,donors,constitutionalrestrictions,bondcovenants,andloanagreements.

LOANSANDCONTRACTS

Currentandnoncurrentloansandcontractsarereceivables,netofallowances,relatedtostudentloans.

SECURITIESLENDINGCOLLATERALANDOBLIGATIONS

Thecollateralsecuredforsecuritieslentarereportedasanassetonthestatementofnetposition.Theobligationsfor

securities lent are reported as a liability on the statement of net position that directly offsets the cash collateral

received from brokers or dealers in exchange for securities loaned. The costs of securities lending transactions are

reportedaspartofinvestmentincomeinthestatementofrevenues,expensesandchangesinnetposition.SeeNote6

fordetailsregardingthesecuritieslendingprogram.

LEASERECEIVABLES

LeasereceivablesarerecordedbytheSystematthepresentvalueofleasepaymentsexpectedtobereceivedunderall

leases other than short term leases, regulated leases, or leases of assets that are classified as investments. Lease

receivablesaresubsequentlyreducedoverthelifeoftheleaseascashisreceivedintheapplicablereportingperiod.

Shorttermleases,thosewithamaximumperiodof12months,arerecognizedascollected.

P3RECEIVABLE

TheSystem recognizes a receivablefor payments to be receivedfrom the operator underpublic-privateand public-

public partnerships (PPPs or P3s).  The receivable for PPP installment payments is initially measured at the present

value of PPP installment payments expected to be received over the term reduced by any provision for estimated

uncollectible amounts.  Present value of PPP installment payments are discounted based on a borrowing rate

determinedbytheSystem.

ForP3arrangementsthatdonotmeetthe criteriatobea serviceconcessionarrangement,theSystemrecognizesa

receivable for underlying PPP assets when a new asset has been purchased or constructed by an operator and the

System is to receive the asset during or at the end of the PPP term. The receivable for the underlying PPP asset is

measuredattheoperator’sestimatedcarryingvalueoftheunderlingPPPassetasoftheexpecteddateofthetransfer

inownershipfromtheoperatortotheSystem.

CAPITALANDINTANGIBLEASSETS

Capitalassetsarerecordedatcostatthedateofacquisitionoracquisitionvalueatthedateofdonationinthecaseof

gifts.TheSystemfollows the State’s capitalization policy with a cost equal to or greaterthan$5,000for equipment

items, $100,000 for buildings, building improvements and improvements other than buildings, and $500,000 for

infrastructureitems,andanestimatedusefullifeofgreaterthanoneyear.Purchasesoflibrarybooksarecapitalized.

Routine repairs and maintenance are charged to operating expense in the year in which the expense is incurred.

Outlaysforconstructioninprogressarecapitalizedasincurred.Thethresholdsforsoftwareare$100,000forpurchased

softwareand$1,000,000forinternallydevelopedsoftwareincludingEnterpriseResourcePlanningreplacements.The

Systemcapitalizesbutdoesnotdepreciateworksofartandhistoricaltreasuresthatareheldforexhibition,education,

researchandpublicservice.Thesecollectionsareprotectedandpreserved.

Right-of-Use(ROU)intangibleassetsarerecognizedatthecontract’scommencementdateandrepresenttheSystem's

righttouseanunderlyingassetforthecontractterm.ROUassetsaremeasuredattheinitialvalueoftheliabilityplus

anypaymentsmadeatorbeforecommencementandinitialdirectcosts.

Depreciationandamortizationformostcapitalandintangibleassetsiscomputedusingthestraight-linemethodover

theestimatedusefullivesoftheassets,generallytwotofifteenyearsforequipmentitems,fiveyearsforsoftware,six

yearsforEnterpriseResourcePlanningreplacements,fifteenyearsforlibrarybooks,tentofiftyyearsforbuildingsand

their components and fifteen to forty years for infrastructure elements. Amortization for ROU intangible assets is

computedusingthestraight-linemethodovertheshorterofthecontracttermorestimatedusefullivesoftheassets;

butiftheunderlyingcontractcontainsapurchaseoptiondeterminedtobereasonablycertainofbeingexercised,the

ROUintangibleassetisamortizedovertheestimatedusefullifeoftheasset.

OTHERASSETS

Othercurrentassetsareprimarilymadeupofprepaidexpenses,whileothernoncurrentassetsareprimarilymadeup

of equity interests in joint ventures that do not meet the definition of an investment and beneficial interests in

irrevocablesplit-interestagreementsinwhichathird-partyistheintermediary.

DEFERREDOUTFLOWS

Deferredoutflowsconsistofthefairvalueofhedgingderivativeinstrumentsinaliabilityposition,unamortizedlosses

onrefundingofdebt,unamortizedinterestratelockterminationpayments,certainchangesinthepensionandOPEB

liabilities, unamortized portions of asset retirement obligation, and excess consideration paid in a government

acquisition.Changesinfairvalueforeffectivehedgesthatareachievedwithderivativeinstrumentsaretobereported

as deferred inflows and deferred outflows in the statement of net position. For debt refundings, the difference

between the reacquisition price and the net carrying amount of the old debt is deferred and reported as deferred

outflowsordeferredinflows.Thegainorlossisamortized,usingthestraight-linemethod,overtheremaininglifeof

theolddebtorthelifeofthenewdebt,whicheverisshorter,inthestatementofrevenues,expensesandchangesin

netpositionas a componentofinterestexpense.When a Treasury Lock is used to hedge interest rate exposure on

bonds, the lock termination payment is recorded as a deferred outflow and is amortized, using the straight-line

method,overtheremaininglifeoftherelateddebtinthestatementofrevenues,expensesandchangesinnetposition

asacomponentofinterestexpense.Changesinthepensionliabilitiesnotincludedinpensionexpensearerequiredto

be reported as deferred outflows of resources or deferred inflows of resources related to pensions, and employer

contributions subsequent to the measurement date of the pension liabilities are also required to be reported as

deferredoutflowsofresources.Similarly,changesinthetotalOPEBliabilitynotincludedinOPEBexpensearerequired

to be reported as deferred outflows of resources or deferred inflows of resources related to OPEB, and employer

contributions subsequent to the measurement date of the total OPEB liability are also required to be reported as

deferred outflows of resources. For asset retirement obligations, deferred outflows are recognized for anticipated

clean-up and decommissioning costs, amortized over the life of the related assets. Deferred outflows are also

recognizedforexcessconsiderationpaidinagovernmentacquisition,amortizedovertheestimatedservicelife.

UNEARNEDREVENUE

UnearnedrevenuerepresentsrevenuessuchastuitionrecordedinAugustforthefallsemesterandpaymentsreceived

inadvanceforsponsoredprograms.

ASSETSHELDFOROTHERS

Assets held for others is the liability offsetting the assets held for the University of Texas System Governmental

RetirementArrangementexcessbenefitplanmanagedbytheSystemdiscussedinNote18.

LIABILITYTOBENEFICIARIES

TheSystemholdsnumerousirrevocablecharitableremaindertrustsandapooledincomefund.Together,theseassets

arereflectedintheaccompanyingconsolidatedfinancialstatementswithinrestrictedinvestments.

The charitable remainder trusts designate the U. T. System Board of Regents as both trustee and remainder

beneficiary.TheSystemisrequiredtopaytothedonors(orotherdonor-designatedincomebeneficiaries)eitherafixed

amount or the lesser of a fixed percentage of the fair value of the trusts’ assets or the trusts’ income during the

beneficiaries’ lives. Trust assets are measured at acquisition value when received and at fair value thereafter. A

correspondingliabilitytobeneficiariesismeasuredatthepresentvalueofexpectedfuturecashflowstobepaidtothe

beneficiaries based upon the applicable federal rate on the gift date. Upon death of the income beneficiaries,

substantiallyalloftheprincipalbalancepassestotheSystemtobeusedinaccordancewiththedonors’restrictions.

Thepooledincomefundwasformedwithcontributionsfromseveraldonors.Thecontributedassetsareinvestedand

managedbyUTIMCO.Donors(ordesignatedbeneficiaries)periodicallyreceive,duringtheirlives,ashareoftheincome

earned on the fund proportionate to the value of their contributions to the fund. Upon death of the income

beneficiaries,substantiallyalloftheprincipalbalancepassestotheSystemtobeusedinaccordancewiththedonors’

restrictions.Contributionrevenueis measuredat theacquisition valueofthe assetsreceived, discountedfor aterm

equaltothelifeexpectanciesofthebeneficiaries.

TOTALOPEBLIABILITY

OPEB are provided to the System’s retirees under the U. T. System Employee Group Insurance Program (EGIP). The

EGIP is a single-employer defined benefit OPEB plan. The System and member contribution rates are determined

annuallybytheSystembasedontherecommendationsoftheOfficeofEmployeeBenefitsstaffandconsultingactuary.

Thecontributionratesaredeterminedbasedonthebenefitandadministrativecostsexpectedtobeincurredand(i)

the funds appropriated and (ii) the funding policy established by the Texas Legislature in connection with benefits

providedthroughtheEGIP.TheSystemrevisesbenefitswhennecessarytomatchexpectedbenefitandadministrative

costs with available revenue. The plan is operated on a pay-as-you-go basis. The OPEB plan described herein is not

administeredthroughatrust.

PENSIONLIABILITIES

NetPensionLiability

The System participates in a cost-sharing multiple-employer defined benefit pension plan with a special funding

situation administeredby the Teacher RetirementSystemofTexas (TRS). TRS is primarily funded through State and

employeecontributions.TheSystemreceivesaproportionalshareofthenetpensionliability,pension-relateddeferred

outflowsandpension-relateddeferredinflowsfromtheTexasComptrollerofPublicAccounts.

TotalPensionLiability

M.D.AndersonCancerCenterparticipatesinasingle-employerdefinedbenefitdeferredcompensationpensionplan

primarily for physicians, the Physicians Referral Service Supplemental Retirement Plan and Retirement Benefit Plan

(SRP/RBPPlan).TheSRP/RBPPlanisanonqualifiedplandescribedbySection457(f)oftheInternalRevenueCodeof

1986(IRC),asamended.TheSRP/RBPPlanisfundedthroughcontributionsfromM.D.AndersonCancerCenterandis

administeredthroughatrustthatisnotprotectedfromthecreditorsofM.D.AndersonCancerCenter.TheSRP/RBP

Plan assets are measured at fair value and presented as restricted investments in the System’s statement of net

position.Thetotalpensionliabilityandrelateddeferredoutflowsofresourcesanddeferredinflowsofresourcesare

measuredandreportedinaccordancewithGASBStatementNo.73,AccountingandFinancialReportingforPensions

and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of

GASBStatements67and68.

NOTES,LOANS,ANDLEASESPAYABLE

LeaseLiability

Leaseliabilities,includedaspartof notes,loans,and leasespayableonthestatementof netposition,representthe

System's obligation to make lease payments arising from leases other than short term leases. Lease liabilities are

recognizedattheleasecommencementdatebasedonthepresentvalueoffutureleasepaymentsovertheremaining

leaseterm.Shorttermleases,thosewithamaximumperiodof12months,areexpensedasincurred.

SubscriptionLiability

Subscriptionliabilities,includedaspartofnotes,loans,andleasespayableonthestatementofnetposition,represent

theSystem’sobligationtomakepaymentstothevendor,measuredatthepresentvalueofsubscriptionpaymentsover

theremainingterm.SubscriptionliabilitiesarerecognizedattheSBITAcommencementdatebaseduponthepresent

valueoffuturesubscriptionpaymentsovertheremainingSBITAterm.Shorttermsubscriptionliabilities,thosewitha

maximumperiodof12months(orless),areexpensedasincurred.

ASSETRETIREMENTOBLIGATION

Theliabilityrelatedtoclean-upanddecommissioningofitemsusingradiationsuchasbroadscopelicenses,cyclotrons,

and nuclear reactors is reported as asset retirement obligation. The liability is measured using best estimates of

expectedoutlaysforclean-upanddecommissioningcosts.

DEFERREDINFLOWS

Deferredinflowsconsistofthefairvalueofhedgingderivativeinstrumentsinanassetposition,unamortizedgainson

refunding of debt, certain changes in the pension and total OPEB liabilities, beneficial interests in irrevocable split-

interestagreements,futureperiodrevenuesfromleases,andfutureperiodrevenuesfromPPPs.Changesinfairvalue

foreffectivehedgesthatareachievedwithderivativeinstrumentsaretobereportedasdeferredinflowsanddeferred

outflowsinthestatementofnetposition.Fordebtrefundings,thedifferencebetweenthereacquisitionpriceandthe

netcarryingamountoftheolddebtisdeferredandreportedasdeferredoutflowsordeferredinflows.Thegainorloss

is amortized, using the straight-line method, over the remaining life of the old debt or the life of the new debt,

whicheverisshorter,inthestatementofrevenues,expensesandchangesinnetpositionasacomponentofinterest

expense.Changes in thepensionliabilities not includedinpension expense arerequiredto be reportedas deferred

outflowsofresourcesordeferredinflowsofresourcesrelatedtopensions.Similarly,changesinthetotalOPEBliability

not included in OPEB expense are required to be reportedas deferredoutflowsof resourcesordeferredinflowsof

resources related to OPEB. For irrevocable split-interest agreements in which U. T. System has an unconditional

beneficialinterest,the fairvalue ofthe giftbeneficial interestis deferredandreportedasdeferred inflowsuntil the

resources become applicable to the reporting period. Future period revenues from leases where the System is the

lessor are recorded as deferred inflows and amortized using the straight-line method over the lease term. Future

period revenues from PPPs where the System is the transferor are recorded as deferred inflows and are amortized

usingthestraight-linemethodoverthePPPterm.

NETPOSITION–EnterpriseFunds

TheSystemhasclassifiedresourcesintothefollowingthreenetpositioncategories:

NetInvestmentinCapitalAssets

Capital assets, net of accumulated depreciation and outstanding principal balances of debt and other liabilities and

deferredinflowsofresourcesattributabletotheacquisition,constructionorimprovementofthoseassets.

Restricted:

Nonexpendable

Netpositionsubjecttoexternally imposedstipulationsthatrequirethe amountsbe maintainedinperpetuitybythe

System.SuchassetsincludetheSystem’spermanentendowmentfunds.

Expendable

NetpositionwhoseusebytheSystemissubjecttoexternallyimposedstipulationsthatcanbefulfilledbyactionsofthe

Systempursuanttothosestipulationsorthatexpirewiththepassageoftime.

Unrestricted

Net position that is not subject to externally imposed stipulations. Unrestricted net position may be designated for

special purposes by action of management or the U. T. System Board of Regents. Substantially all unrestricted net

position is designated for academic programs, patient care, research programs and initiatives, and capital programs

(seeNote21fordetailsonunrestrictednetposition).

Whenanexpenseisincurredthatcanbepaidusingeitherrestrictedorunrestrictedresources,theSystemaddresses

eachsituationonacase-by-casebasispriortodeterminingtheresourcestobeusedtosatisfytheobligation.Generally,

theSystem’spolicyistofirstapplytheexpensetowardsrestrictedresourcesandthentowardsunrestrictedresources.

NETPOSITION–FiduciaryFunds

TheSystemfiduciaryfundsclassifyresourcesintothefollowingtwonetpositioncategories:

RestrictedforPoolParticipants

Netpositionrelatedtocustodialfunds-externalinvestmentpool

RestrictedforIndividuals,Organizations,andOtherGovernments

Netpositionrelatedtocustodialfunds-other

REVENUESANDEXPENSES

Operating revenues include activities such as student tuition and fees; net sales and services of hospitals; net

professionalfees;netsalesandservicesofauxiliaryenterprises;theexchangebasisfederal,stateandlocalgrantsand

contracts.Operatingexpensesincludesalariesandwages,payrollrelatedcosts,materialsandsupplies,depreciation,

othercontractedservices,pensionexpense,postemploymentbenefits,andscholarshipsandfellowships.Inaddition,all

changestoincurredbutnotreportedliabilitiesrelatedtoinsuranceprogramsarereflectedasoperating.

Nonoperating revenues include activities such as gifts and contributions, insurance recoveries received in years

subsequenttotheassociatedloss,Stateappropriations,investmentincome,thenonexchangebasisfederalandstate

grants and contracts, and other revenue sources that are defined as nonoperating revenues by GASB. The System’s

institutionsarethenamedbeneficiariesincertainlawsuits,wills,trusts,andinsurancepolicies.TheSystemdoesnot

recognizethesepotentialrefunds,giftsandcontributionsuntilrealized.Nonoperatingexpensesincludeactivitiessuch

as interest expense on capital asset financings, and other expenses that are defined as nonoperating expenses by

GASB.

SCHOLARSHIPALLOWANCESANDSTUDENTAID

FinancialaidtostudentsisreportedinthefinancialstatementsasprescribedbytheNationalAssociationofCollegeand

University Business Officers (NACUBO). Certain aid (student loans, funds provided to students as awarded by third

partiesandFederalDirectLending)isaccountedforasthird-partypayments(creditedtothestudent’saccountasifthe

studentmadethepayment).Allotheraidisreflectedinthefinancialstatementsasoperatingexpenseorscholarship

allowances,whichreducerevenues.Theamountreportedasoperatingexpenserepresentstheportionofaidthatwas

provided to the student in the form of cash. Scholarship allowances represent the portion of aid provided to the

studentintheformofreducedtuition.Underthealternativemethod,theseamountsarecomputedonanentity-wide

basisbyallocatingcashpaymentstostudents,excludingpaymentsforservices,ontheratiooftotalaidtotheaidnot

consideredtobethirdpartyaid.

STATEWIDEINTERFUNDTRANSFERSANDINTERFUNDPAYABLES

InaccordancewiththeprovisionssetforthinArticle7,Section18oftheTexasConstitution,theSystemtransfersone-

third of the annual earnings of the PUF investments and lands to the Texas A&M University System (TAMUS). In

additiontothetransferofthecurrentyearearningsin2023and2022of$450,227,364and$418,847,698,respectively,

theSystemrecordeda liabilityof$1,567,537,241and$1,481,155,516atAugust31,2023and2022,respectively,for

futureamountsduetoTAMUSfromthePUFtocoverprincipalonoutstandingPUFbondsandnotesissuedbyTAMUS.

This liability is reported as current and noncurrent statewide interfund payable on the statement of net position.

Additionaldetails relatedto theoperations ofthe PUFcan befoundin Note8. Alsoincluded instatewideinterfund

payables as of August 31, 2023 and 2022 is $409,842 and $497,261, respectively, related to the revolving loan

programsadministeredbytheTexasStateComptroller’sOffice.

UNCOMPENSATEDCAREANDCHARITYCARE

The System’s health-related institutions and medical schools provide uncompensated care to patients who meet

certaincriteria.Uncompensatedcareincludestheunreimbursedcostsfortheuninsuredandtheunderinsuredaswell

asthe unreimbursedcostsfrom government-sponsoredhealth programs. Tocalculate uncompensatedcare,charges

are converted to costs which are offset by appropriate patient specific and lump sum funding. Hospital charges are

convertedtocostbytheapplicationoftheMedicarecosttochargeratio,ascalculatedinthemostrecentMedicare

cost report. Since a standard cost report does not exist for physician charges, a proxy cost to charge ratio was

developed through a process involving all Texas public academic medical centers and the State Auditor’s Office.

Uncompensatedcarecostsamountedto$1,428,236,852and$1,179,418,717for2023and2022,respectively.

GASB requires health-related institutions to report the cost of providing “charity care.” The American Institute of

CertifiedPublicAccountants(AICPA)definescharitycareascareforwhichhospitalsneverexpectedtobereimbursed.

Charitycareoccurswhenapatientappliestothehospitalforfinancialassistanceandthehospitalwaivesallorpartof

itschargesinaccordancewiththehospital’sestablishedfinancialassistancepolicy.Thecostofcharitycareiscalculated

usingtheuncompensatedcarecalculationmethodologydiscussedabove.Charitycarecostsamountedto$169,371,268

and$180,340,866for2023and2022,respectively.

NETPATIENTSERVICEREVENUE

TheSystem’shealth-relatedinstitutionsandmedicalschoolshaveagreementswiththird-partypayorsthatprovidefor

payments to these institutions at amounts different from their established rates. A summary of the payment

arrangementswithmajorthird-partypayorsfollows:

Medicare

U. T. Southwestern Medical Center’s, U. T. Medical Branch - Galveston’s and U. T. Health Science Center - Tyler’s

inpatient acute care services and outpatient services rendered to Medicare program beneficiaries are reimbursed

under a prospective reimbursement methodology. Also, additional reimbursement is received for graduate medical

education, disproportionate share, bad debts and other reimbursable costs, as defined, under a variety of payment

methodologies.

M.D.Anderson’sinpatientacutecareservicesrenderedtoMedicareprogrambeneficiariesarepaidbasedonacost

reimbursementmethodologythatislimitedbyafacility-specificamountperdischarge.Thefinalreimbursementalso

includesacalculationofanincentiveorreliefpaymentdeterminedthroughacomparisonofthefacility’scurrentyear

costto thefacility-specificcostperdischarge.Certainoutpatient servicesand definedcapital andmedical education

costsrelatedtoMedicarebeneficiariesarepaidbasedonacostreimbursementmethodology.EffectiveAugust1,2000,

the Medicare program implemented a prospective payment system for outpatient services. However, as M. D.

Anderson is designated as a cancer hospital, the Medicare program provides for a “hold-harmless” payment that is

equalto thedifferencebetweentheprospectivelydeterminedamounts andthe currentyear adjustedcost (i.e.,the

current year adjusted cost is determined through application of a payment to cost ratio, which is derived from a

previous Medicarecostreportto the currentyearactual cost). M. D. Anderson is reimbursed for cost reimbursable

itemsatatentativeratewithfinalsettlementdeterminedaftersubmissionofannualcostreportsandauditsthereofby

theMedicarefiscalintermediary.

Thephysicianpracticesatotherinstitutions–U.T.HealthScienceCenter-Houston,U.T.HealthScienceCenter–San

Antonio,U.T.AustinDellMedicalSchool,andU.T.RioGrandeValley–arereimbursedbyMedicareaccordingtothe

MedicarePhysicianFeeScheduleand/orvariousMedicareAlternativePaymentModels.

Medicaid

TheSystem’shealth-relatedinstitutions’hospitalsarereimbursedforcostreimbursableitemsatatentativeratewith

final settlement determined after submission of annual cost reports by the System’s health-related institutions and

auditsthereofbytheMedicaidfiscalintermediary.InpatientservicesrenderedtoMedicaidprogrambeneficiariesare

reimbursed based on a TEFRA (Tax Equity and Fiscal Responsibility Act) methodology. Certain outpatient services

renderedtoMedicaidprogrambeneficiariesarereimbursedunderacostreimbursementmethodology.

The System’s health-related institutions have also entered into payment agreements with certain commercial,

MedicaidandMedicarepayorswhichofferbenefitplansforhealthmaintenanceorganizations,andpreferredprovider

organizations. The basis for payment to the System’s health-related institutions under these agreements includes

prospectively determined rates for inpatient and outpatient services. The System’s health-related institutions

recognizedbaddebtexpenseof$520,966,225and$512,303,847in2023and2022,respectively.

USEOFESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United

States of America requires management to make estimates and assumptions that affect the reported amounts of

assetsandliabilitiesanddisclosureofcontingentassetsandliabilitiesatthedateofthefinancialstatements.Estimates

alsoaffectthereportedamountsofrevenuesandexpensesduringthereportingperiod.Actualresultscoulddifferfrom

thoseestimates.

5. DisaggregationofOtherReceivableBalances

NetotherreceivablesatAugust31,2023and2022fortheSystemaredetailedbytypeasfollows:

2023 2022

ReceivablesRelatedtoInvestments $ 317,279,526  396,060,459

ReceivablesRelatedtoGifts,GrantsandSponsoredPrograms  193,971,324  79,735,806

ReceivablesRelatedtoExternalParties/OtherCompanies  264,284,754  173,132,614

ReceivablesRelatedtoAuxiliaryEnterprises  38,842,943  36,379,065

ReceivablesRelatedtoPayroll  3,551,258  9,616,780

ReceivablesRelatedtoPatents  235,000  825,632

ReceivablesRelatedtoTravel  1,260,967  1,352,490

ReceivablesRelatedtoLoanFundsandFinancialAid  7,182,358  4,456,317

ReceivablesRelatedtoOtherVariousActivities  56,792,173  49,885,200

Total $ 883,400,303  751,444,363

In addition, net other receivables at August 31, 2023 and 2022 for the System’s fiduciary funds were $533,616 and

$1,761,807,respectively.

6. Deposits,InvestmentsandRepurchaseAgreements

DEPOSITSOFCASHINBANK

As of August 31, 2023 and 2022,the carrying amount of the System’s deposits was $66,237,194and $103,098,355,

respectively,aspresentedbelow:

2023 2022

CashandCashEquivalentsperStatementofCashFlowsandStatementofNetPosition $ 6,524,614,258  5,508,775,194

Less:CashinStateTreasury  1,381,704,404  1,268,126,557

RepurchaseAgreement–TexasTreasurySafekeepingTrustCo.  10,321,917  2,550,637

OtherCashEquivalentInvestments  5,040,478,597  4,057,590,726

Other  25,872,146  77,408,919

DepositsofCashinBank $ 66,237,194  103,098,355

Inaddition,cashandcashequivalentsatAugust31,2023and2022fortheSystem’sfiduciaryfundswere$1,928,948

and$1,888,492,respectively.

As of August 31, 2023 and 2022, the total bank balances held by System were $112,139,814 and $168,423,931,

respectively.

DEPOSITRISKS

CustodialCreditRisk

Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the

Systemwillnotbeabletorecoverdepositsorwillnotbeabletorecovercollateralsecuritiesthatareinthepossession

of an outside party. The System maintains depository relationships with various banking institutions. The System’s

policy is that all deposits are governed by a bank depository agreement between the System and the respective

bankinginstitution. State law requiresthat the System’sdeposits,to the extentsuchdeposits exceed themaximum

insured limit under deposit insurance provided by the Federal Deposit Insurance Corporation, shall at all times be

collateralizedwithgovernmentsecurities.

AsofAugust31,2023,U.T.HealthScienceCenteratTyler’sblendedcomponentunit,EastTexasQualityCareNetwork

(ETQCN),helddepositsthatwereexposedtocustodialcreditrisk.ETQCNhasnopoliciesregardingthesedeposits.As

of August 31, 2023, the bank balances exposed to custodial risk as uninsured and uncollateralized deposits were

$112,723. As of August 31, 2022, there were no System bank balances exposed to custodial risk as uninsured and

uncollateralizeddeposits.

INVESTMENTS

Investmentsarereportedatfairvalue.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 between two market participants at the measurement date. GAAP

provides a hierarchy that prioritizes the inputs of fair value measurements based on the extent to which inputs to

valuationtechniques areobservablein themarketplace. Thehierarchyassigns ahigher prioritytoobservable inputs

thatreflectverifiableinformationobtainedfromindependentsources,andalowerprioritytounobservableinputsthat

wouldreflectmanagement’sassumptionsabouthowmarketparticipantswouldvalueanassetorliabilitybasedonthe

bestinformationavailable.Fairvaluemeasurementsmustmaximizetheuseofobservableinputsandminimizetheuse

ofunobservableinputs.

Thethreelevelsofthehierarchyofinputsusedtomeasurefairvalueareasfollows:

• Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that are available at the

measurementdate.

• Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,

eitherdirectlyorindirectly.

• Level3–Unobservableinputs.

The System’s investments with readily available fair values are primarily valued on the basis of market valuations

providedbyindependentpricingservices.

DebtsecuritiesheldbySystemincludeU.S.governmentandagencyobligations,corporateobligations,corporateasset

and mortgage-backed securities, and international obligations. U.S. government obligations valued based on

unadjusted prices in active markets are categorized as Level 1. Debt securities, including corporate obligations and

governmentalandinternationalobligationsarevaluedbaseduponpricessuppliedbyIntercontinentalExchangeData

Services and other major fixed income pricing services, external broker quotes and internal pricing matrices. Debt

securitiesvaluedbasedonmultiplequotationsormodelsutilizingobservablemarketinputsarecategorizedasLevel2;

otherwise,theywouldbecategorizedasLevel3.

Fixedincomemoneymarketandbondmutualfundsconsistprimarilyofmoneymarketinvestments,foreigncurrencies

andotherovernightfunds.InvestmentsinpubliclylistedmoneymarketfundsarecategorizedasLevel1.

Mutual funds include a large portion of the holdings for the University of Texas System Governmental Retirement

Arrangement(UTGRA),discussedinNote18.AmajorityoftheunderlyinginvestmentsinUTGRAarevaluedbasedon

the closing price on the primary exchange on which they are traded and are classified as Level 1. The remaining

holdingsareclassifiedasLevels2and3.

Equity securities, including common and preferred stocks, fair values are based on the closing price on the primary

exchangeonwhichtheyaretraded(ifaclosingpriceisnotavailable,theaverageofthelastreportedbidandaskprice

isused).Whenthesesecuritiesareactivelytraded,andvaluationadjustmentsarenotapplied,theyarecategorizedas

Level1.Intheeventthatastockisnotactivelytradedoraclosingpriceisunavailableonanationalorinternational

securitiesexchange,thelastavailablepricepertheexchangewouldbeused,andthesecuritywouldbecategorizedas

Level2.

OthercommingledfundsatfairvalueincludefixedincomeandU.S.equityfunds.Internationalothercommingledfunds

atfairvalue includenon-U.S.developed equity,emergingmarkets,real estateandnatural resources.Fairvaluesare

basedontheclosingpriceontheprimaryexchangeonwhichthesecurityistraded(ifaclosingpriceisnotavailable,

theaverageofthelastreportedbidandaskpriceisused).InvestmentsvaluedassuchareclassifiedasLevel1.

Realestateand otherinvestments includerealestate,commoditiesand theassetpositionsofinvestmentderivative

instruments.ThefairvalueofthePUFland’sinterestinoilandgasisbasedonathirdpartyreservestudyofproved,

probable,andpossiblereserves.Thepresentvalueoftheroyaltycashflowsiscalculatedbyapplyinga10%discount

rateto future expectedproductionvolumes of oil andgasbased on the priceofoil and gas onAugust31. The PUF

lands’ surface interests are reported at the price per acre from the American Society of Farm Managers and Rural

Appraisers. The PUF lands are categorized as Level 3 in the fair value hierarchy. The remaining minerals, the trust

minerals,becauseofsize,distribution,andlimitedproductionhistoriesaregenerallyvaluedatthreetimestheprevious

12months’revenue.Asaruleofthumb,thismeasurehasbeenusedhistoricallytodeterminethesellingpriceofthese

types of properties by willing parties. Other real estate holdings are reported by one of the following methods of

valuation: the latest available appraised amount as determined by an independent State certified or other licensed

appraiser,taxassessmentsuseforrealestateinvestmentswithvaluesthatarenotsignificantorbyanyothergenerally

accepted industry standard. All other real estate is categorized as Level 3 in the fair value hierarchy, with a small

amountvaluedusingnetassetvalue.

All derivative instrument investments are categorized as Level 2 in the fair value hierarchy, except for some of the

purchasedoptionswhicharecategorizedasLevel1.ThefairvaluesoftheinterestrateswapsonU.T.System’sdebt

are calculated using a forecast of expected discounted future net cash flows. Other swaps are fair valued by using

independent broker quotes or using models with primarily externally verifiable model inputs. Foreign exchange

contractsarefairvaluedatclosingmarketpricesonthevaluationdate.

Alternativeinvestmentsincludeprivateequitysecuritiesandlimitedpartnerships,orprivateinvestmentfunds.Equity

securitiesrelatedtonon-publicequityinvestmentsarevaluedusingavarietyofmethods,includinginformationfrom

recentrounds of financing,theGuideline Public Companymethod, the DiscountedCashFlow method, theCommon

StockEquivalentmethodandtheOption-Pricingmethod.Thefairvalueofprivateinvestmentfunds,whichconsistof

non-regulated investment funds and various other investment vehicles, are estimated by management using the

investment’s capital account balance at the closest available reporting date, as communicated by the investment

manager, adjusted for contributions and withdrawals subsequent to the latest available reporting date as well as

considerationofanyotherinformation,whichhasbeenprovidedbytheinvestmentmanagerorothersources.These

investmentsareclassifiedasLevel3.

Miscellaneous investments primarily include municipal bonds, valued on multiple quotations or models utilizing

observablemarketinputs,andarecategorizedasLevel2.Investmentswithfairvaluesbasedontheclosingpriceonthe

primaryexchangeonwhichtheyaretradedarecategorizedasLevel1.

GAAPpermitsmanagementtofairvaluecertaininvestmentsthatdonothaveareadilydeterminablefairvalueusing

the investment’s net asset value per share or the System’s ownership interest in partners’ capital as a practical

expedient.Investmentsvaluedinthismannerarenotclassifiedinthefairvaluehierarchy.

ThefollowingtablesreflectfairvaluemeasurementsofinvestmentsasofAugust31,2023and2022,respectively,as

categorizedbylevelofthefairvaluehierarchy,andincludeboththeSystem’senterpriseandfiduciaryfunds:

InvestmentsbyFairValueLevel:

DebtSecurities:

U.S.GovernmentTreasurySecurities $ 2,436,951,905  2,436,951,905  —  —

U.S.GovernmentTreasuryTIPS  1,504,143,392  1,504,143,392  —  —

U.S.GovernmentAgencyObligations  360,446,554  —  360,446,554  —

CorporateObligations  84,962,471  —  84,773,003  189,468

CorporateAssetandMortgage-BackedSecurities  179,073,878  —  179,073,878  —

InternationalObligations(Governmentand

Corporate)  994,413,357  —  994,413,357  —

FixedIncomeMoneyMarketandBondMutual

Funds  3,333,716,533  2,859,416,533  474,300,000  —

MutualFunds  493,569,031  489,270,259  4,298,772  —

EquitySecurities:

Equity  3,231,574,441  3,231,064,436  —  510,005

InternationalEquity  3,527,663,911  3,527,659,191  4,720  —

OtherCommingledFunds:

FixedIncome  144,858,334  144,858,334  —  —

U.S.Equity  11,268,172  11,268,172  —  —

InternationalOtherCommingledFunds:

Non-U.S.DevelopedEquity  312,346,898  312,346,898  —  —

EmergingMarkets  36,732,048  36,732,048  —  —

RealEstateandOther:

PUFLands  11,111,083,413  —  —  11,111,083,413

OtherRealEstate  679,958,750  —  —  679,958,750

InvestmentDerivativeInstruments–Asset

Positions  168,650,144  6,272,064  162,378,080  —

AlternativeInvestments:

PrivateInvestments  522,841,473  —  —  522,841,473

Miscellaneous  2,812,649  1,704,801  1,107,823  25

TotalInvestmentsbyFairValueLevel  29,137,067,354  14,561,688,033  2,260,796,187  12,314,583,134

FairValueMeasurementUsing

TypeofSecurity

FairValueasof

August31,2023

QuotedPricesin

Activemarketsfor

IdenticalAssets

(Level1)

SignificantOther

ObservableInputs

(Level2)

Significant

UnobservableInputs

(Level3)

InvestmentFundsFairValuedUsingNetAsset

Value:

RealEstate  35,386,543

HedgeFunds  15,352,264,565

InternationalOtherCommingledFunds  10,261,298,622

OtherInvestmentFunds  39,536,000

PrivateInvestments  23,787,531,978

TotalInvestmentFundsFairValuedUsingNet

AssetValue  49,476,017,708

InvestmentsHeldinCash(NotatFairValue)  148,866,412

OtherInvestments(NotatFairValue)  458,192

TotalInvestments $ 78,762,409,666

SecuritiesLendingCollateralInvestmentPool(See

SecuritiesLendingSection) $ 707,785,341  —  707,785,341  —

InvestmentsClassifiedasCashEquivalents:

RepurchaseAgreement–TexasTreasury

SafekeepingTrustCo.(NotatFairValue) $ 10,321,917

FixedIncomeMoneyMarketFunds  5,040,371,989  5,040,371,989  —  —

TimeDeposits(NotatFairValue)  106,608

TotalInvestmentsClassifiedasCashEquivalents $ 5,050,800,514

DepositwithBrokersforDerivativeContracts,Net

(RelatedtoInvestments):

U.S.GovernmentDirectObligations $ 97,445,283  97,445,283  —  —

HeldinCash(NotatFairValue)  152,345,938

TotalDepositwithBrokersforDerivative

Contracts,Net(RelatedtoInvestments) $ 249,791,221

FairValueMeasurementUsing

TypeofSecurity

FairValueasof

August31,2023

QuotedPricesin

Activemarketsfor

IdenticalAssets

(Level1)

SignificantOther

ObservableInputs

(Level2)

Significant

UnobservableInputs

(Level3)

InvestmentsbyFairValueLevel:

DebtSecurities:

U.S.GovernmentTreasurySecurities $ 1,931,621,893  1,931,621,893  —  —

U.S.GovernmentTreasuryTIPS  1,605,784,871  1,605,784,871  —  —

U.S.GovernmentAgencyObligations  303,582,859  —  303,582,859  —

CorporateObligations  491,136,083  —  490,891,694  244,389

CorporateAssetandMortgage-BackedSecurities  271,497,076  —  271,497,076  —

InternationalObligations(Governmentand

Corporate)  1,996,994,605  262,798  1,996,731,807  —

FixedIncomeMoneyMarketandBondMutual

Funds  3,179,692,034  3,179,692,034  —  —

MutualFunds  468,652,537  464,616,496  4,036,041  —

EquitySecurities:

Equity  2,191,245,912  2,188,076,555  3,169,357  —

InternationalEquity  2,657,725,884  2,656,823,904  901,980  —

OtherCommingledFunds:

FixedIncome  139,391,702  139,391,702  —  —

U.S.Equity  410,596,173  410,596,173  —  —

InternationalOtherCommingledFunds:

Non-U.S.DevelopedEquity  97,615,120  97,615,120  —  —

EmergingMarkets  5,400,010  5,400,010  —  —

RealEstateandOther:

PUFLands  11,113,844,125  —  —  11,113,844,125

OtherRealEstate  713,210,749  —  —  713,210,749

InvestmentDerivativeInstruments–Asset

Positions  214,034,766  31,253,451  182,781,315  —

AlternativeInvestments:

PrivateInvestments  618,601,269  —  —  618,601,269

ReverseRepurchaseAgreements  257,900,000  —  257,900,000  —

Miscellaneous  13,463,684  1,790,182  11,673,477  25

TotalInvestmentsbyFairValueLevel  28,681,991,352  12,712,925,189  3,523,165,606  12,445,900,557

FairValueMeasurementUsing

TypeofSecurity

FairValueasof

August31,2022

QuotedPricesin

Activemarketsfor

IdenticalAssets

(Level1)

SignificantOther

ObservableInputs

(Level2)

Significant

UnobservableInputs

(Level3)

InvestmentFundsFairValuedUsingNetAsset

Value:

RealEstate  39,712,834

HedgeFunds  13,409,062,571

OtherCommingledFunds  3,855,692,308

InternationalOtherCommingledFunds  6,197,034,824

PrivateInvestments  22,216,888,849

TotalInvestmentFundsFairValuedUsingNet

AssetValue  45,718,391,386

InvestmentsHeldinCash(NotatFairValue)  175,224,507

OtherInvestments(NotatFairValue)  454,846

TotalInvestments $ 74,576,062,091

SecuritiesLendingCollateralInvestmentPool(See

SecuritiesLendingSection) $ 992,425,496  –  992,425,496  –

InvestmentsClassifiedasCashEquivalents:

RepurchaseAgreement–TexasTreasury

SafekeepingTrustCo.(NotatFairValue) $ 2,550,637

FixedIncomeMoneyMarketFunds  4,057,481,665  4,057,481,665  –  –

TimeDeposits(NotatFairValue)  109,061

TotalInvestmentsClassifiedasCashEquivalents $ 4,060,141,363

DepositwithBrokersforDerivativeContracts,Net

(RelatedtoInvestments):

U.S.GovernmentDirectObligations $ 40,498,619  40,498,619  –  –

HeldinCash(NotatFairValue)  (8,923,617)

TotalDepositwithBrokersforDerivative

Contracts,Net(RelatedtoInvestments) $ 31,575,002

FairValueMeasurementUsing

TypeofSecurity

FairValueasof

August31,2022

QuotedPricesin

Activemarketsfor

IdenticalAssets

(Level1)

SignificantOther

ObservableInputs

(Level2)

Significant

UnobservableInputs

(Level3)

Thefollowingtablesdisplaythebreakoutoftotalinvestments,securitieslendingcollateral,totalinvestmentsclassified

ascashequivalents,andtotaldepositwithbrokersforderivativecontracts,netbetweenenterpriseandfiduciaryfunds

asofAugust31,2023and2022:



August31,2023

EnterpriseFunds FiduciaryFunds Total

TotalInvestments $ 78,468,026,873  294,382,793  78,762,409,666

SecuritiesLendingCollateral  704,550,572  3,234,769  707,785,341

TotalInvestmentsClassifiedasCashEquivalents  5,050,800,514  —  5,050,800,514

TotalDepositwithBrokersforDerivativeContracts,Net(Relatedto

Investments)  248,763,839  1,027,382  249,791,221

August31,2022

EnterpriseFunds FiduciaryFunds Total

TotalInvestments $ 74,289,464,178  286,597,913  74,576,062,091

SecuritiesLendingCollateral  988,091,640  4,333,856  992,425,496

TotalInvestmentsClassifiedasCashEquivalents  4,060,141,363  —  4,060,141,363

TotalDepositwithBrokersforDerivativeContracts,Net(Relatedto

Investments)  31,370,360  204,642  31,575,002

Investment funds fair valued at net asset value per share or based on the System’s ownership interest in partner’s

capitalincludeexternallymanagedfunds,limitedpartnerships,andcorporatestructureswhicharegenerallyunrated

and may be unregulated. The composition of investment funds that are fair valued using Net Asset Value (NAV) at

August31,2023and2022issummarizedinthetablesbelowastheyareincludedwithintheassetmixoftheSystem.

TablesanddisclosuresthatfollowincludeboththeSystem’senterpriseandfiduciaryfunds.

FairValueasof

August31,2023

Unfunded

Commitments

Redemption

Frequency

Redemption

NoticePeriod

InvestmentFundsFairValuedUsingNetAssetValue

RealEstate

RedeemableWithinOneYear $ 35,386,543  — Quarterly 60days

HedgeFunds

RedeemableWithinOneYear  7,601,346,011 MonthlytoAnnually 5-100Days

RedeemableBeyondOneYear  5,502,664,331 MonthlytoAnnually 5-100Days

Nonredeemable  2,248,254,223 NotApplicable NotApplicable

TotalHedgeFunds  15,352,264,565  1,104,178,390

GlobalDevelopedEquity

RedeemableWithinOneYear  7,558,868,335 DailytoAnnually 5-105Days

RedeemableBeyondOneYear  344,488,423 MonthlytoAnnually 45-105Days

Nonredeemable  1,419,197 NotApplicable NotApplicable

TotalGlobalDevelopedEquity  7,904,775,955  28,565,144

EmergingMarkets

RedeemableWithinOneYear  2,132,504,776

DailytoSemi-

Annually 1-120Days

RedeemableBeyondOneYear  221,242,975

MonthlytoSemi-

Annually

60Days

Nonredeemable  2,774,916 NotApplicable NotApplicable

TotalEmergingMarkets  2,356,522,667  24,300,992

TotalInternationalOtherCommingledFunds  10,261,298,622  52,866,136

Other

RedeemableWithinOneYear  9,884,000 Quarterly 90Days

RedeemableBeyondOneYear  29,652,000 Quarterly 90Days

TotalOther  39,536,000  —

LimitedPartnerships(PrivateInvestments)

RedeemableWithinOneYear  36,286,284 Quarterly 90days

Nonredeemable  23,751,245,694 NotApplicable NotApplicable

TotalLimitedPartnerships(PrivateInvestments)  23,787,531,978  13,696,032,465

TotalInvestmentFundsFairValuedUsingNAV $ 49,476,017,708  14,853,076,991

FairValueasof

August31,2022

Unfunded

Commitments

Redemption

Frequency

Redemption

NoticePeriod

InvestmentFundsFairValuedUsingNetAssetValue

RealEstate

RedeemableWithinOneYear $ 39,712,834  — Quarterly 60days

HedgeFunds

RedeemableWithinOneYear  7,044,667,460 MonthlytoAnnually 5–100Days

RedeemableBeyondOneYear  4,403,595,679

Quarterlyto

Annually 30–120Days

Nonredeemable  1,960,799,432 NotApplicable NotApplicable

TotalHedgeFunds  13,409,062,571  1,337,329,761

OtherCommingledFunds:

FixedIncome

RedeemableWithinOneYear  9,257,744  — Daily 1Day

U.S.Equity

RedeemableWithinOneYear  3,009,736,171 DailytoAnnually 5–105Days

RedeemableBeyondOneYear  836,698,393 Annually 90–105Days

TotalU.S.Equity  3,846,434,564  28,565,144

TotalOtherCommingledFunds  3,855,692,308  28,565,144

InternationalOtherCommingledFunds:

Non-U.S.DevelopedEquity

RedeemableWithinOneYear  1,280,929,121 DailytoQuarterly 5–30Days

TotalNon-U.S.DevelopedEquity  1,280,929,121  —

GlobalDevelopedEquity

RedeemableWithinOneYear  1,990,892,912 DailytoQuarterly 5–60Days

RedeemableBeyondOneYear  488,417,076 Monthly 45–60Days

Nonredeemable  1,912,293

TotalGlobalDevelopedEquity  2,481,222,281  —

EmergingMarkets

RedeemableWithinOneYear  2,231,469,056

DailytoSemi-

Annually 1–90Days

RedeemableBeyondOneYear  159,559,845 MonthlytoAnnually 60Days

Nonredeemable  43,854,521 NotApplicable NotApplicable

TotalEmergingMarkets  2,434,883,422  48,300,992

TotalInternationalOtherCommingledFunds  6,197,034,824  48,300,992

LimitedPartnerships(PrivateInvestments)

RedeemableWithinOneYear  32,594,029 Quarterly 90days

Nonredeemable  22,184,294,820 NotApplicable NotApplicable

TotalLimitedPartnerships(PrivateInvestments)  22,216,888,849  12,137,786,657

TotalInvestmentFundsFairValuedUsingNAV $ 45,718,391,386  13,551,982,554

TheSysteminvestsinhedgefundpoolswhichareinvestedinprivatefundswithexternalinvestmentmanagerswho

invest in equity and fixed income securities of both domestic and international issuers. These investment managers

mayinvestin both long and short securities and may utilize leveragein their portfolios. The funds invested may be

subject to a lock-up restriction of typically one to three years before the investment may be withdrawn from the

manager without significant penalty. The amounts shown as nonredeemable are considered illiquid in that they

typicallybecomeliquidovermulti-yearperiodswhenandifthefundmanagersdistributeproceedsrealizedfromthe

underlyingfundinvestmentsandthetimingcannotbeestimated.Therearecertainrisksassociatedwiththeseprivate

funds, some of which include investment manager risk, market risk and liquidity risk, as well as the risk of utilizing

leverageintheportfolios.Thehedgefundpoolshavecommitted$1,104,178,390and$1,337,329,761offuturefunding

to various hedge fund investments as of August 31, 2023 and 2022, respectively. Hedge funds are fair valued by

management based on net asset value information provided by the investment manager, as well as other relevant

factors.

Public market funds are invested in exchange traded funds, index funds and private placements with external

investment managers who invest in equity and fixed income securities of both domestic and international issuers.

These funds are characterized as public market funds based on individual risk/return characteristics and their

relationshiptothe overall asset mix of the funds. Some of theseinvestmentmanagers may invest in both long and

short securities and may utilize modest leverage in their portfolios. The amounts shown as nonredeemable are

considered illiquid in that they typically become liquid over multi-year periods when and if the fund managers

distribute proceeds realized from the underlying fund investments and the timing cannot be estimated. Certain of

theseinvestmentsareheldthroughlimitedliabilitycompaniesofwhichUTIMCOisthesolemanagingmember.There

are certain risks associated with these investments, some of which are investment manager risk, market risk and

liquidityrisk,aswellastheriskofutilizingleverageintheportfolios.AsofAugust31,2023and2022,futurefundingsin

theamountof$52,866,136and$76,866,136,respectively,havebeencommittedtocertainpublicmarketfunds.The

fair value of private investment funds, are estimated using the investment’s capital account balance at the closest

available reporting date, as communicated by the investment manager, adjusted for contributions and withdrawals

subsequentto the latest availablereporting date as wellasconsideration of any otherinformation, which has been

providedbytheinvestmentmanagerorothersources.

TheSysteminvestsinprivateinvestmentsthroughprivateinvestmentpoolswhichareinvestedinlimitedpartnerships

with external investment managers or general partners who invest primarily in private equity securities. These

investments,domesticandinternational,areilliquidandtypicallybecomeliquidovermulti-yearperiodswhenandif

thefundmanagersdistributeproceedsrealizedfromunderlyingfundinvestments.Itisestimatedthattheunderlying

assets of the private investments will be liquidated over seven to ten years. There are certain risks associated with

these investments, some of which are liquidity risk, market risk, event risk and investment manager risk. Certain of

theseinvestmentsareheldthroughLLCs,ofwhichUTIMCOisthesolemanagingmember.TheSystemhadcommitted

$13,696,032,465and$12,137,786,657offuturefundingtovariousprivateinvestmentsasofAugust31,2023and2022,

respectively.

Hedgefunds,privateinvestmentsandpublicmarketfundsincludeinvestmentsinprivateplacementvehiclesthatare

subjecttorisk,whichcouldresultinthelossofinvestedcapital.Therisksincludethefollowing:

• Keypersonnelrisk–Thesuccess ofcertainfunds issubstantiallydependent uponkeyinvestmentmanagersand

thelossofthoseindividualsmayadverselyimpactthefund’sperformance.

• Liquidityrisk–ManyoftheSystem’sinvestmentfundsmayimposelock-upperiods,whichwouldcausetheSystem

toincur penaltiesto redeemits unitsor preventthe Systemfrom redeemingits sharesuntil acertainperiodof

timehaselapsed.

• Limited transparency – As private placement investment vehicles, these funds may not disclose the holdings of

theirportfolios.

• Investmentstrategy risk – These funds often employ sophisticatedinvestmentstrategies and may use leverage,

whichcouldresultinthelossofinvestedcapital.

Investments in hedge funds, private investments and public market funds are also subject to the investment risks

discussedbelow.Fixedincomeinvestmentsheldbythesefundswouldalsobesubjecttocreditriskandinterestrate

risk;moreover,theymayinvestinsecuritieswhosefairvalueswouldbesensitivetochangesininterestrates.

Thefairvaluesofthesevariousinvestmentfunds,excludingthepubliclytradedfunds,asofAugust31,2023and2022

were$49,476,017,708and$45,718,391,386,respectively.

INVESTMENTRISKS

(A) CreditRisk-ArticleVII,Section11boftheTexasConstitutionauthorizestheU.T.SystemBoardofRegents,subject

to procedures and restrictions it establishes, to invest System funds in any kind of investment and in amounts it

considersappropriate,providedthatitadherestotheprudentinvestorstandard.ThisstandardprovidesthattheU.T.

SystemBoardof Regents, in making investments, may acquire, exchange,sell,supervise,manage or retain, through

proceduresandsubjecttorestrictionsitestablishesandinamountsitconsidersappropriate,anykindofinvestment

thatprudentinvestors,exercisingreasonablecare,skillandcaution,wouldacquireorretaininlightofthepurposes,

terms, distribution requirements and other circumstances of the fund then prevailing, taking into consideration the

investmentofalloftheassetsofthefundratherthanasingleinvestment.

Creditriskistheriskthatanissuerofaninvestmentwillnotfulfillitsobligationtotheholderoftheinvestment.Thisis

measuredbytheassignmentofaratingbyanationallyrecognizedstatisticalratingorganization(NRSRO).TheSystem’s

investment policy does not provide specific requirements and limitations regarding investment ratings. Per GASB

authoritativeguidance,unlessthereisinformationtothecontrary,obligationsoftheU.S.governmentorobligations

explicitlyguaranteedbytheU.S. governmentarenotconsideredto havecreditriskand donotrequiredisclosureof

credit quality. The following tables present each applicable investment type, in both the System’s enterprise and

fiduciaryfunds,groupedbyratingasofAugust31,2023and2022:

InvestmentsandInvestmentsClassified

asCashEquivalents:

U.S.GovernmentDirectObligations $ 3,941,095,297 Aaa  3,941,095,297 AA  20,786,394 AAA

 3,920,308,903 AA

U.S.GovernmentAgencyObligations  121,797,653 Aaa  121,797,653 AA  116,101,127 AAA

 238,648,901 NR  238,648,901 NR  5,696,526 AA

 238,648,901 NR

CorporateObligations  3,822,491 Aaa  6,251,301 AAA  1,830,531 AAA

 11,906,833 Aa  9,465,159 AA  13,267,312 AA

 49,468,351 A  45,437,203 A  20,132,141 A

 15,155,718 Baa  21,725,444 BBB  17,387,076 BBB

 1,033,433 Ba  186,188 BB  32,345,411 NR

 3,575,645 NR  1,897,176 NR  —

CorporateAssetandMortgage-Backed

Securities  64,423,502 Aaa  45,359,687 AAA  44,451,829 AAA

 9,223,914 Aa  8,057,321 AA  6,807,854 AA

 6,059,886 A  6,184,987 A  3,274,080 A

 690,890 Baa  1,879,090 BBB  45,052 BBB

 98,424 Ba  2,503,173 BB  969,195 BB

 2,010,443 B  2,185,446 B  246,615 CC

 3,111,453 Caa  3,475,641 CCC  122,432,014 NR

 1,451,477 Ca  2,101,425 CC  847,239 C

 1,018,128 C  107,327,108 NR  —

 90,985,761 NR  —  —

August31,2023

MOODY’S STANDARD&POOR’S FITCH

InvestmentType FairValue Rating FairValue Rating FairValue Rating

InternationalObligations(Government

andCorporate)  91,691,591 Aaa  79,888,872 AAA  72,092,502 AAA

 32,341,625 Aa  13,320,303 AA  65,498,986 AA

 88,577,589 A  51,470,304 A  99,672,322 A

 271,869,678 Baa  284,720,072 BBB  170,782,439 BBB

 66,308,365 Ba  75,372,756 BB  172,839,594 BB

 10,290,216 B  489,641,050 NR  10,290,217 B

 433,334,293 NR  —  403,194,497 NR

 42,800 C

InvestmentFunds,Other  39,536,000 NR  39,536,000 NR  39,536,000 NR

FixedIncomeMoneyMarketandMutual

Funds  7,524,768,779 Aaa  7,524,768,779 AAA  510,740,517 AAA

 998,186,155 NR  998,186,155 NR  8,012,214,417 NR

RepurchaseAgreement–TexasTreasury

SafekeepingTrustCo.  10,321,917 NR  10,321,917 AA  10,321,917 NR

Miscellaneous  709,272 Aaa  398,551 A  398,551 A

 398,551 A  145,674,214 NR  145,674,214 NR

 144,964,942 NR  —  —

TotalInvestmentsandInvestments

ClassifiedasCashEquivalents $ 14,278,877,173  14,278,877,173  14,278,877,173

DepositwithBrokersforDerivative

Contracts,Net(Relatedto

Investments):

U.S.GovernmentDirectObligations $ 97,445,283 Aaa  97,445,283 AA  97,445,283 AA

Cash  152,345,938 NR  152,345,938 NR  152,345,938 NR

TotalDepositwithBrokersforDerivative

Contracts,Net(Relatedto

Investments) $ 249,791,221  249,791,221  249,791,221

August31,2023

MOODY’S STANDARD&POOR’S FITCH

InvestmentType FairValue Rating FairValue Rating FairValue Rating

InvestmentsandInvestmentsClassified

asCashEquivalents:

U.S.GovernmentDirectObligations $ 3,537,406,764 Aaa  3,537,406,764 AA  3,537,406,764 AAA

U.S.GovernmentAgencyObligations  271,112,784 Aaa  227,071,626 AA  271,045,253 AAA

 32,470,075 NR  76,511,233 NR  32,537,606 NR

CorporateObligations  24,899,759 Aaa  13,941,120 AAA  8,933,294 AAA

 28,853,656 Aa  41,904,793 AA  55,635,856 AA

 226,559,906 A  210,266,438 A  124,843,947 A

 182,706,375 Baa  203,980,906 BBB  122,236,692 BBB

 9,459,931 Ba  5,492,236 BB  1,165,838 BB

 675,500 Caa  675,500 CCC  1,298,785 F

 1,298,785 P  14,875,090 NR  177,021,671 NR

 16,682,171 NR  —  —

CorporateAssetandMortgage-Backed

Securities  105,152,126 Aaa  53,087,218 AAA  71,187,096 AAA

 11,027,595 Aa  11,905,286 AA  7,264,829 AA

 8,936,084 A  14,061,715 A  4,471,440 A

 3,723,817 Baa  3,542,485 BBB  74,045 BBB

 113,514 Ba  2,277,671 BB  283,719 BB

 4,049,142 B  4,144,918 B  784,070 B

 2,549,832 Caa  6,888,904 CCC  252,630 CC

 1,705,650 Ca  1,422,982 CC  187,179,247 NR

 1,045,207 C  1,045,207 D  —

 2,762,120 P  173,120,690 NR  —

 130,431,989 NR  —  —

InternationalObligations(Government

andCorporate)  247,415,837 Aaa  193,945,192 AAA  198,815,664 AAA

 148,485,329 Aa  69,329,486 AA  267,095,316 AA

 215,998,429 A  117,884,272 A  151,048,750 A

 320,502,479 Baa  295,944,287 BBB  254,713,810 BBB

 95,299,916 Ba  110,269,574 BB  178,150,843 BB

 6,267,733 B  7,363,722 B  1,660,658 B

 963,024,882 NR  1,202,258,072 NR  945,509,564 NR

FixedIncomeMoneyMarketandMutual

Funds  6,181,210,223 Aaa  6,181,210,223 AAA  84,928,687 AAA

 1,231,187,983 NR  1,231,187,983 NR  7,327,469,519 NR

RepurchaseAgreement–TexasTreasury

SafekeepingTrustCo.  2,550,637 NR  2,550,637 AA  2,550,637 NR

ReverseRepurchaseAgreements  257,900,000 NR  257,900,000 NR  257,900,000 NR

Miscellaneous  765,485 Aaa  3,271,590 AAA  3,271,590 AAA

 7,270,205 Aa  3,998,615 AA  3,998,615 AA

 3,490,079 A  1,914,201 A  3,622,628 BBB

 148,906,215 NR  1,708,428 BBB  149,539,151 NR

 —  149,539,150 NR  —

TotalInvestmentsandInvestments

ClassifiedasCashEquivalents $ 14,433,898,214  14,433,898,214  14,433,898,214

August31,2022

MOODY’S STANDARD&POOR’S FITCH

InvestmentType FairValue Rating FairValue Rating FairValue Rating

DepositwithBrokersforDerivative

Contracts,Net(Relatedto

Investments):

U.S.GovernmentDirectObligations $ 40,498,619 Aaa  40,498,619 AA  40,498,619 AAA

Cash  (8,923,617) NR  (8,923,617) NR  (8,923,617) NR

TotalDepositwithBrokersforDerivative

Contracts,Net(Relatedto

Investments) $ 31,575,002  31,575,002  31,575,002

August31,2022

MOODY’S STANDARD&POOR’S FITCH

InvestmentType FairValue Rating FairValue Rating FairValue Rating

(B) ConcentrationsofCreditRisk–TheSystem’sinvestmentpolicystatementsforfundsmanagedbyUTIMCOcontain

the limitation that no more than 5% of the fair value of fixed income securities may be invested in corporate or

municipalbondsofasingleissuer.AsofAugust31,2023and2022,thesefundsdidnotholdanydirectinvestmentsin

any one issuer of corporate or municipal bonds that were 5% or more of the fair value of the fund’s fixed income

investments.

(C) CustodialCreditRisk–Thecustodialcreditriskforinvestmentsistheriskthat,intheeventofthefailureofthe

counterpartytoatransaction,theSystemwillnotbeabletorecoverthevalueofitsinvestmentorcollateralsecurities

thatareinthepossessionofanotherparty.TexasStateStatutesandtheSystem’sinvestmentpolicystatementsdonot

containlegalorpolicyrequirementsthatwouldlimittheexposuretocustodialcreditriskfordepositsorinvestments.

AsofAugust31,2023and2022,theSystemdidnothaveanyinvestmentsthatareexposedtocustodialcreditrisk.

(D) InterestRateRisk–Interestrateriskistheriskthatchangesinmarketinterestrateswilladverselyaffectthefair

valueofaninvestment.Generally,thelongerthematurityofaninvestmentthegreaterthesensitivityofitsfairvalue

tochangesinmarketinterestrates.InterestrateriskinherentintheSystem’sinvestmentsismeasuredbymonitoring

themodifieddurationoftheoverallinvestmentportfolio.ModifieddurationestimatesthesensitivityoftheSystem’s

investmentsto changesininterestrates. The System has no specific policy statement limitations with respect to its

overallmodifiedduration.ThefollowingtablesummarizestheSystem’smodifieddurationinyearsbyinvestmenttype,

inboththeSystem’senterpriseandfiduciaryfunds,asofAugust31,2023and2022:

August31,2023 August31,2022

InvestmentType FairValue

Modified

Duration FairValue

Modified

Duration

Investments:

U.S.GovernmentGuaranteed:

U.S.TreasuryBills $ 23,567,463 0.10  9,499,386 0.18

U.S.TreasuryBondsandNotes  2,413,384,442 13.57  1,922,122,507 11.26

U.S.TreasuryInflationProtected  1,504,143,392 6.62  1,605,784,871 7.10

U.S.AgencyAssetBacked  9,248,776 5.54  675,736 0.65

TotalU.S.GovernmentGuaranteed  3,950,344,073 10.82  3,538,082,500 9.34

U.S.GovernmentNon-Guaranteed:

U.S.Agency  5,696,526 10.27  55,789,746 7.03

U.S.AgencyAssetBacked  345,501,252 6.36  247,117,377 7.34

TotalU.S.GovernmentNon-Guaranteed  351,197,778 6.42  302,907,123 7.28

TotalU.S.Government  4,301,541,851 10.47  3,840,989,623 9.17

CorporateObligations:

Domestic  264,036,349 3.17  762,633,159 5.43

Foreign  188,058,260 2.85  392,473,405 2.89

TotalCorporateObligations  452,094,609 3.04  1,155,106,564 4.57

ForeignGovernmentandProvincialObligations  806,355,097 13.14  1,604,521,200 6.47

OtherDebtSecurities  1,107,823 1.52  11,673,477 6.15

TotalDebtSecurities  5,561,099,380 9.15  6,612,290,864 7.71

OtherInvestmentFunds-Debt  144,858,334 1.52  148,649,446 1.65

FixedIncomeMoneyMarketandMutualFunds  3,482,582,945 0.43  3,354,916,541 0.33

InvestmentFunds,Other  39,536,000 —  — —

ReverseRepurchaseAgreements  — —  257,900,000 —

TotalInvestments $ 9,228,076,659 5.69  10,373,756,851 5.04

InvestmentsClassifiedasCashEquivalents:

RepurchaseAgreement-TexasTreasurySafekeepingTrustCo. $ 10,321,917 —  2,550,637 —

FixedIncomeMoneyMarketFunds  5,040,371,989 0.08  4,057,481,665 0.08

TimeDeposits  106,608 —  109,061 —

TotalInvestmentsClassifiedasCashEquivalents $ 5,050,800,514 0.08  4,060,141,363 0.08

DepositwithBrokersforDerivativeContracts,Net(Relatedto

Investments):

U.S.GovernmentGuaranteed:

U.S.GovernmentDirectObligations $ 97,445,283 0.14  40,498,619 0.70

TotalU.S.GovernmentGuaranteed  97,445,283 0.14  40,498,619 0.70

Cash  152,345,938 —  (8,923,617) —

TotalDepositwithBrokersforDerivativeContracts,Net(Relatedto

Investments) $ 249,791,221 —  31,575,002 —

(E) InvestmentswithFairValuesThatAreHighlySensitivetoInterestRateChanges–TheSystemmayinvestinvarious

mortgage-backed securities, such as collateralized mortgage-backed obligations. The System also may invest in

investmentsthathave floatingrateswithperiodiccoupon changesinmarketrates,zerocouponbondsand stripped

treasuryandagencysecuritiescreatedfromcouponsecurities.Nopercentageofholdingslimitationsarespecifiedin

theinvestmentpolicy statements regardingthesetypes of securities. As of August 31,2023and 2022, the System’s

investmentsincludedthefollowinginvestmentsthatarehighlysensitivetointerestratechanges:

• Collateralizedmortgageobligationswhicharesubjecttoearlypaymentinaperiodofdeclininginterestrates.The

resultantreductioninexpectedtotalcashflowswillaffectthefairvalueofthesesecurities.AsofAugust31,2023

and2022,thesesecuritiesamountedto$127,461,330and$215,310,881,respectively.

• Mortgage-backed securities which are subject to early payment in a period of declining interest rates. The

resultantreductioninexpectedtotalcashflowswillaffectthefairvalueofthesesecurities.AsofAugust31,2023

and2022,thesesecuritiesamountedto$354,133,590and$246,767,929,respectively.

• Asset backed securities which are backed by home equity loans, auto loans, equipment loans and credit card

receivables. Prepayments by the obligees of the underlying assets in periods of decreasing interest rates could

reduceoreliminatethestreamofincomethatwouldhavebeenreceived.AsofAugust31,2023and2022,these

securitiesamountedto$98,922,914and$151,335,548,respectively.

(F) ForeignCurrencyRisk–Foreigncurrencyriskistheriskthatchangesinexchangerateswilladverselyaffectthefair

valueoftheSystem’snon-U.S.dollarinvestments.Therearenolimitationsoninvestmentsin non-U.S.denominated

bondsorcommonstocksinrelationtotheSystem’stotalfixedincomeanddevelopedcountryequityexposuresinthe

System’sinvestmentpolicystatements.

Classificationbetweendomesticcommonstockandforeigncommonstockisbasedonthecountryofdomicileofthe

issuer,notthecurrencyinwhichthesecurityistraded.ThefollowingtablessummarizetheSystem’sexposuretonon-

U.S.dollarinvestmentsbyassettypeasofAugust31,2023and2022.



August31

InvestmentType 2023 2022

ForeignCommonStock:

AustralianDollar $ 22,399,245  8,919,847

BrazilianReal  176,988,105  171,242,058

CanadianDollar  25,560,870  37,837,825

ChileanPeso  203,998  522,978

ChineseYuanRenminbi  165,100,251  158,839,837

CzechKoruna  555,918  62,772

DanishKrone  57,083,420  37,354,459

EgyptianPound  1,325,151  795,405

Euro  431,191,573  293,054,538

HongKongDollar  176,325,268  94,987,990

HungarianForint  1,036,377  909,339

IndianRupee  97,974,096  48,997,000

IndonesianRupiah  36,021,046  28,932,563

IsraeliShekel  —  960,416

JapaneseYen  449,415,790  271,293,050

MalaysianRinggit  12,735,993  6,076,615

MexicanPeso  13,264,746  4,355,446

NewZealandDollar  2,064,088  365,088

NorwegianKrone  24,686,023  14,497,334

PeruvianSol  —  122,644

PhilippinePeso  2,026,883  605,527

PolishZloty  6,580,784  6,834,035

QatariRiyal  1,972,469  2,441,098

SingaporeDollar  10,039,655  2,800,626

SouthAfricanRand  17,359,855  6,466,703

RussianRuble  153  —

SaudiArabianRiyal  775,852  —

SouthKoreanWon  214,674,700  180,751,018

SwedishKrona  27,210,452  15,939,698

SwissFranc  113,792,044  58,586,940

TaiwanDollar  375,832,170  296,750,500

ThaiBaht  17,442,624  18,210,711

TurkishLira  7,356,306  2,829,371

UKPound  266,806,251  217,788,844

UnitedArabEmiratesDirham  6,887,062  2,374,589

TotalForeignCommonStock  2,762,689,218  1,992,506,864

Other-EquitySecurities:

BrazilianReal  11,084  —

IndianRupee  —  17,862

SwissFranc  72,543  48,949

TaiwanDollar  32  —

TotalOther-EquitySecurities  83,659  66,811

ForeignPreferredStocks:

BrazilianReal  37,988,325  60,253,202

Euro  922,045  2,914,496

SouthAfricanRand  —  88,712

SouthKoreanWon  46,857,220  30,357,556

TotalForeignPreferredStock  85,767,590  93,613,966

August31

InvestmentType 2023 2022

ForeignGovernmentandProvincialObligations:

AustralianDollar  10,440,330  66,866,614

BrazilianReal  56,284,769  71,776,218

CanadianDollar  12,854,952  55,243,455

ChineseYuanRenminbi  956,176  65,027,579

ColombianPeso  66,459,824  70,876,372

CzechKoruna  —  7,467,463

Euro  38,035,704  218,728,544

HungarianForint  —  6,260,428

IndonesianRupiah  4,950,494  25,600,177

IsraeliShekel  2,041,384  27,827,846

JapaneseYen  257,953,828  397,540,256

MalaysianRinggit  32,829,644  27,857,376

MexicanPeso  147,447,577  177,684,021

NewZealandDollar  18,133,414  10,959,332

NorwegianKrone  8,014,771  36,043,586

PeruvianSol  —  10,976,262

PolishZloty  1,902,946  31,255,775

RomanianLeu  —  7,435,732

RussianRuble  4,396,565  9,425,722

SingaporeDollar  10,377,427  48,061,324

SouthAfricanRand  47,623,809  58,361,423

SouthKoreanWon  25,398,675  102,939,378

UKPound  28,524,998  43,596,927

TotalForeignGovernmentandProvincialObligations  774,627,287  1,577,811,810

CorporateObligations:

AustralianDollar  2,067,378  2,283,640

BrazilianReal  455,792  556,635

CanadianDollar  —  23,909,858

DanishKrone  15,563,303  24,924,994

Euro  24,623,207  45,239,839

IndianRupee  —  791

UKPound  36,166,002  78,132,657

TotalCorporateObligations  78,875,682  175,048,414

PurchasedOptions:

BrazilianReal  284,124  171,296

Euro  433,477  722,700

TotalPurchasedOptions  717,601  893,996

InvestmentFunds-EmergingMarkets:

BrazilianReal  1,172,760  6,356,312

PrivateInvestments:

AustralianDollar  51,277,328  108,206,247

CanadianDollar  171,723,226  197,445,816

Euro  1,056,615,290  789,502,646

JapaneseYen  41,780,446  29,582,375

SwedishKrona  56,802,563  52,544,344

UKPound  246,318,795  212,702,494

TotalPrivateInvestments  1,624,517,648  1,389,983,922

August31

InvestmentType 2023 2022

CashandCashEquivalents:

AustralianDollar  1,115,317  986,612

BrazilianReal  14,302,680  7,218,450

CanadianDollar  (29,542)  864,701

ChileanPeso  263  16,704

ChineseYuanRenminbi  4,532,387  5,240,418

ColombianPeso  —  379,570

CzechKoruna  20,405  30,430

DanishKrone  80,543  110,435

EgyptianPound  226,138  1,052

Euro  29,490,167  35,522,404

HongKongDollar  (526,957)  1,620,370

HungarianForint  —  3

IndianRupee  109,194  394,376

IndonesianRupiah  77,682  1,322,065

IsraeliShekel  2,700  18,927

JapaneseYen  (4,443,921)  13,778,639

MalaysianRinggit  106,569  880,555

MexicanPeso  9,094  32,754

NewZealandDollar  136,465  201,616

NorwegianKrone  641  192,018

PhilippinePeso  —  4,394

PolishZloty  3,528  5,852

QatariRiyal  —  7,595

RomanianLeu  72  378

RussianRuble  —  21

SingaporeDollar  181,559  544,500

SouthAfricanRand  2,625,981  2,902,878

SouthKoreanWon  4,720,787  7,150,973

SwedishKrona  115,920  84,666

SwissFranc  71,720  1,400,810

TaiwanDollar  1,380,985  1,538,120

ThaiBaht  919  1,718

TurkishLira  31,209  126

UKPound  (5,607,501)  5,108,592

UnitedArabEmiratesDirham  —  10,452

TotalCashandCashEquivalents  48,735,004  87,573,174

WrittenOptions:

BrazilianReal  (331,526)  (236,134)

Euro  (413,319)  (1,025,269)

UKPound  (2,820)  (37,279)

TotalWrittenOptions  (747,665)  (1,298,682)

August31

InvestmentType 2023 2022

Swaps:

AustralianDollar  62,927  1,814,610

CanadianDollar  (4,144,298)  (5,362,487)

ChineseYuanRenminbi  (1,554,193)  252,938

CzechKoruna  (35,489)  (116,140)

Euro  (1,702,327)  (40,128,900)

IndianRupee  22,477  182,950

JapaneseYen  110,068  (143,140)

MalaysianRinggit  66,700  455,029

MexicanPeso  (123,892)  (260,670)

NewZealandDollar  (1,004,302)  (874,653)

SingaporeDollar  (6,140)  (146,350)

SouthAfricanRand  —  18,601

SouthKoreanWon  (484,362)  (1,283,489)

SwedishKrona  (103,476)  (195,500)

SwissFranc  (340,939)  (4,033,028)

ThaiBaht  (6,446)  316,418

UKPound  (6,661,297)  (11,524,408)

TotalSwaps  (15,904,989)  (61,028,219)

Futures:

AustralianDollar  (165,027)  53,515

BrazilianReal  196,688  (3,646)

CanadianDollar  (39,972)  314,828

Euro  (4,876,376)  3,091,601

JapaneseYen  87,550  (82,169)

UKPound  533,183  1,097,276

TotalFutures  (4,263,954)  4,471,405

Total $ 5,356,269,841  5,265,999,773

(G) Counterparty (Credit) Risk – The derivative instruments utilized by the System contain varying degrees of off-

statementofnetpositionriskwherebychangesinthefairvaluesofsecuritiesunderlyingthefinancialinstrumentsmay

exceedtheamountsrecognizedinthestatementofnetposition.TheSystemmanagestheserisksonanaggregatebasis

alongwiththerisksassociatedwithitsotherinvestmentsaspartofitsoverallriskmanagementprocess.

TheSystemhadgrosscounterpartyexposureasofAugust31,2023foroptions,swaps,andforeigncurrencyexchange

contractsasshowninthefollowingtable:

Notional FairValue

Assets Liabilities Assets Liabilities

Counterparty

Rating

Options $ 563,624,974  504,689,870  11,650,756  10,409,175 AA

Options  949,997,520  750,898,225  31,680,509  9,145,897 A

Swaps  648,523,660  935,113,558  13,612,907  28,374,404 AA

Swaps  12,625,099  230,833,970  2,977,376  13,259,353 A

ForeignCurrencyExchangeContracts  894,864,740  634,768,783  14,231,057  9,769,338 AA

ForeignCurrencyExchangeContracts  918,907,713  894,830,705  16,187,024  32,882,146 A

$ 3,988,543,706  3,951,135,111  90,339,629  103,840,313

TheSystemhadgrosscounterpartyexposureasofAugust31,2022foroptions,swaps,andforeigncurrencyexchange

contractsasshowninthefollowingtable:

Notional FairValue

Assets Liabilities Assets Liabilities

Counterparty

Rating

Options $ —  12,770,485  —  721,200 AA

Options  100,685,235  106,675,029  31,168,803  7,528,770 AA–

Options  —  108,365,139  —  264,324 A

Swaps  236,637,131  836,665,174  5,887,664  21,651,679 AA

Swaps  —  517,568  —  120,181 AA–

Swaps  78,180,673  91,409,515  3,209,527  18,775,670 A

ForeignCurrencyExchangeContracts  1,324,012,062  612,662,155  30,122,108  11,211,574 AA

ForeignCurrencyExchangeContracts  1,643,592,387  1,002,993,980  63,605,962  23,825,272 A

$ 3,383,107,488  2,772,059,045  133,994,064  84,098,670

AsofAugust31,2023and2022,theSystemalsohadinvestmentsinfuturescontracts,optionsonfuturescontractsand

exchange-cleared swaps. Futures contracts, options on futures contracts and exchange-cleared swaps expose the

System to minimal counterparty credit risk since they are exchange traded and the exchange’s clearinghouse, as

counterparty to all exchange traded futures, guarantees the futures against default, and therefore, they are not

presentedintheprevioustables.

Counterparty risk for swaps, options and foreign currency exchange contracts which are traded over-the-counter is

mitigatedby havingmaster nettingarrangements betweenthe Systemandits counterparties,and bytheposting of

collateralonadailybasisbythecounterpartytotheSystemtocovertheSystem’sexposuretoacounterpartyabove

thelimitssetinplaceineachmasternettingagreement.CollateralpostedbycounterpartiesisheldbytheSystemin

oneofitsaccountsattheSystem’scustodianbank.AsofAugust31,2023and2022,theSystemheld$43,978,845and

$110,121,616,respectively,ascollateralrelatedtoderivativeinstrumentsotherthanfutures,andhadondepositwith

brokers $239,341,773 and $118,302,873, respectively, as collateral related to derivative instruments other than

futures.

SECURITIESLENDING

Inaccordancewiththeprudentinvestorinvestmentstandards,theSystemparticipatesinasecuritieslendingprogram.

TheSystembegantheprogram,underacontractwiththeSystem’slendingagent,onSeptember1,1995.Thelending

agent is authorized to lend any securities held by the System’s custodian except those securities, which the policy

guidelinesprohibit lending.At August31, 2023and 2022,there werea totalof $1,046,773,903and $1,075,164,462,

respectively,ofsecuritiesoutonloantobrokers/dealers.Acombinationofcashandqualifiednon-cashsecuritiesare

held as collateral against the outstanding securities on loan. The value of cash collateral held for these securities

consistedof$707,785,341atAugust31,2023and$992,425,496atAugust31,2022.Theseamountsarerecordedas

assets,withanoffsettingliabilitytoreturnthecollateralontheconsolidatedstatementofnetposition.Thequalified

non-cash securities received as collateral for securities lending activities are not recorded as assets because these

securitiesremainunderthecontrolofthetransferor,exceptintheeventofdefault.

Insecuritylendingtransactions,theSystemtransfersitssecuritiestobrokers/dealersforcollateral,whichmaybecash,

securitiesissuedorguaranteedbytheUnitedStatesgovernmentoritsagencies,andirrevocablebanklettersofcredit,

andsimultaneouslyagreestoreturnthecollateralforthesamesecuritiesinthefuture.

Cash received as collateral for securities lending activities is invested and reinvested in a non-commingled pool

exclusivelyforthebenefitoftheSystem.Thepoolismanagedinaccordancewithinvestmentguidelinesestablishedin

thesecuritieslendingcontractbetweentheSystemanditssecuritieslendingagent.Thematuritiesoftheinvestments

inthepooldonotnecessarilymatchthetermoftheloans,ratherthepoolismanagedtomaintainamaximumdollar

weighted average maturity of 60 days and an overnight liquidity of 20%. The System was collateralized 106% on

August31,2023and103%onAugust31,2022forsecuritiesonloancollateralizedbycash.TheSystem’scollateralpool

investments,ratingbyNRSROandweightedaveragematurityindaysasofAugust31,2023and2022,areshowninthe

followingtableandincludeboththeSystem’senterpriseandfiduciaryfunds:

August31,2023 August31,2022

Description FairValue Rating

Weighted

Average FairValue Rating

Weighted

Average

RepurchaseAgreements $ 440,394,170 NotRated 1 $ 552,776,500 NotRated 1

CommercialPaper  145,864,142 A 19  172,603,891 A 13

CorporateObligations  11,099,158 AA  10,000,000 A

CorporateObligations  —  21,400,000 P

CorporateObligations  —  5,975,000 NotRated

TotalCorporateObligations  11,099,158 1  37,375,000 1

InternationalObligations  —  128,974,420 AA

InternationalObligations  —  92,949,998 A

InternationalObligations  —  24,975,000 P

InternationalObligations  —  8,475,000 NotRated

TotalInternationalObligations  — —  255,374,418 1

CertificateofDeposit  33,053,827 AA  —

CertificateofDeposit  79,726,982 A  —

TotalCertificateofDeposit  112,780,809 1  — —

OtherReceivables/Payables  (2,352,938) NotRated —  (25,704,313) NotRated —

TotalCollateralPoolInvestment $ 707,785,341 5 $ 992,425,496 3

Collateralpoolinvestmentsareuninsuredandareheldbythesecuritieslendingagent,initsname,onbehalfofthe

System,exceptfortheinvestmentsinrepurchaseagreements,whichareheldinthesecuritieslendingagent’snameby

athirdpartycustodiannotaffiliatedwiththeSystemortheborroweroftheassociatedloanedsecurities.Therefore,

thecollateralpoolisnotexposedtocustodialcreditrisk,becausethepoolinvestmentsarenotheldbycounterparties

to the lending transactions or a counterparties’ trust department or agent. All collateral pool investments are

categorized as Level 2 in the fair value hierarchy and are valued based upon prices supplied by major fixed income

pricingservices,externalbrokerquotesandinternalpricingmatrices.

Lendingincomeisearnedifthereturnsonthoseinvestmentsexceedthe“rebate”paidtoborrowersofthesecurities.

Theincomeisthensharedwiththelendingagentbasedonacontractuallynegotiatedratesplit.Iftheinvestmentof

thecashcollateraldoesnotprovideareturnexceedingtherebateoriftheinvestmentincursalossofprincipal,partof

thepaymenttotheborrowerwouldcomefromtheSystem’sresourcesandthelendingagentbasedontheratesplit.

Loansthatarecollateralizedwithsecuritiesgenerateincomewhentheborrowerpaysaloanpremiumorfeeforthe

securitiesloan.Thisincomeissplitwiththesameratioastheearningsforcashcollateral.Thecollateralpledgedtothe

Systembytheborroweriscustodiedbythelendingagentorthroughathird-partyarrangement.Thesesecuritiesheld

ascollateralarenotavailabletotheSystemforsellingorpledgingunlesstheborrowerisindefaultoftheloan.The

Systemheldcollateralequalto103%and104%ofthesecuritiesonloanthatwerecollateralizedbynon-cashsecurities

asofAugust31,2023andAugust31,2022,respectively.

Thecollateralreceivedmusthaveafairvalueof102%oftheloanedsecuritiesofUnitedStatesissuers.Ifthefairvalue

ofthecollateralheldinconnectionwithloansofsecuritiesofUnitedStatesissuersislessthan100%atthecloseof

tradingonanybusinessday,theborrowerisrequiredtodeliveradditionalcollateralbythecloseofthenextbusiness

daytoequal102%ofthefairvalue.

Fornon-U.S. issuers,except thoseforeign securitiesthat aredenominated andpayable inU.S.Dollars,thecollateral

shouldremainat105%ofthefairvalueoftheloanedsecuritiesatthecloseofanybusinessday.Ifitfallsbelow105%,

the borrower must deliver additional collateral by the close of the following business day. The System was

collateralized121%forinternationalloansonAugust31,2023and107%forinternationalloansonAugust31,2022.

Intheeventofdefault,wheretheborrowerisunabletoreturnthesecuritiesloaned,theSystemhasauthorizedthe

lendingagenttoseizethecollateralheld.Thecollateralisthenusedtoreplacetheborrowedsecuritieswherepossible.

Due to some market conditions, it is possible that the original securities cannot be replaced. If the collateral is

insufficient to replace the securities, the lending agent has indemnified the System from any loss due to borrower

default.

AtAugust31,2023and2022,theSystemhadnocreditriskexposuretoborrowersbecausetheamountstheSystem

owedtoborrowersexceededtheamountstheborrowersowedtheSystem.

Therewerenosignificantviolationsoflegalorcontractualprovisions,noborrowerorlendingagentdefaultlossesand

norecoveriesofpriorperiodlossesduringtheyearsendedAugust31,2023and2022.

DERIVATIVEFINANCIALINSTRUMENTS

Derivativeinstrumentsecuritiesarefinancialinstrumentswhosevalueisderived,inwholeorinpart,fromthevalueof

anyoneormoreunderlyingsecuritiesorassets,orindexofsecuritiesorassets,suchasstocks,bonds,commoditiesor

currencies.Derivativeinstrumentscoverabroadrangeoffinancialinstruments,suchasforwards,futures,optionsand

swaps.

(A) FuturesContracts–Futurescontractsareusedtofacilitatevarioustradingstrategies,primarilyasatooltoincrease

ordecreasemarketexposuretovariousassetclasses.Thefairvalueoftheassetpositionsisincludedininvestments,

andthefairvalueoftheliabilitypositionsisincludedininvestmentderivatives-liabilitypositionsontheconsolidated

statementofnetposition.Futurescontractsaremarkedtomarketdaily;thatis,theyarevaluedatthecloseofbusiness

eachdayandagainorlossisrecordedbetweenthevalueofthecontractsthatdayandonthepreviousday.Thedaily

gainorlossdifferenceisreferredtoasthedailyvariationmargin,whichissettledincashwiththebrokereachmorning

fortheamountofthepreviousday’smarktomarket.Theamountthatissettledincashwiththebrokereachmorning

isthefairvalueofthefuturescontracts.

Thechangesinfairvalueofopenfuturescontractswereincreasesof$66,634,619and$30,951,309fortheyearsending

August31,2023and2022,respectively,whichareincludedininvestmentincomeontheconsolidatedstatementsof

revenues,expensesandchangesinnetposition.TheSystemhad$54,428,293and$23,393,745ondepositwithbrokers

forcollateralasmarginfor thefuturescontractsasof August31,2023and2022,respectively.Shortfuturesmaybe

usedbyinternalmanagersandalimitednumberofexternalmanagersoftheSystemtohedgetheSystem’sinterest

rateorcurrencyriskassociatedwithsecuritypositions.TheSystemexecutessuchcontractseitheronmajorexchanges

orwithmajorinternationalfinancialinstitutionsandminimizesmarketandcreditriskassociatedwiththesecontracts

throughthemanagers’varioustradingandcreditmonitoringtechniques.

Thefollowingdisclosesthetype,notionalvalue,andfairvalueoffuturescontractsatAugust31,2023:

NotionalValueat

August31,2023

FairValueat

August31,2023

Long Short Assets Liabilities

DomesticFixedIncome $ 1,960,018,260  669,942,895  10,470,648  1,377,350

InternationalFixedIncome  389,465,242  2,107,176,210  1,402,561  5,435,135

DomesticEquity  785,925,143  59,049,980  411,442  5,834,373

InternationalEquity  101,386,918  6,831,265  14,605  245,985

Totals $ 3,236,795,563  2,843,000,350  12,299,256  12,892,843

Thefollowingdisclosesthetype,notionalvalue,andfairvalueoffuturescontractsatAugust31,2022:

NotionalValueat

August31,2022

FairValueat

August31,2022

Long Short Assets Liabilities

DomesticFixedIncome $ 996,142,017  567,543,379  338,238  4,376,631

InternationalFixedIncome  144,484,504  1,434,032,603  3,749,183  506,446

DomesticEquity  438,308,290  93,983,335  927,766  2,360,557

InternationalEquity  125,030,161  117,229,432  1,396,062  167,394

Totals $ 1,703,964,972  2,212,788,749  6,411,249  7,411,028

(B) Foreign Currency Exchange Contracts – The System enters into forward foreign currency exchange contracts to

hedge against foreign currency exchange rate risks on its non-U.S. dollar denominated investment securities and to

facilitatetradingstrategiesprimarilyasatooltoincreaseordecreasemarketexposuretovariousforeigncurrencies.

When enteringintoa forwardcurrencycontract,the System agrees to receive or deliver a fixed quantity of foreign

currencyforanagreed-uponpriceonan agreedfuturedate.Thesecontractsare valued daily and the System’snet

equity therein, representing unrealized gain or loss on the contracts, as measured by the difference between the

forwardforeignexchangeratesatthedatesofentryintothecontractsandtheforwardratesatthereportingdate,is

includedininvestmentsfortheassetpositionsandinvestmentderivatives-liabilitypositionsfortheliabilitypositions.

Theseinstrumentsinvolvemarketand/orcreditriskinexcessoftheamountrecognizedintheconsolidatedstatement

ofnetposition.Risksarisefromthepossibleinabilityofcounterpartiestomeetthetermsoftheircontractsandfrom

movementincurrencyandsecuritiesvaluesandinterestrates.

Thefollowingtablessummarize,bycurrency,thecontractualamountsoftheSystem’sforeignexchangecontractsat

August31,2023and2022.ForeigncurrencyamountsaretranslatedatexchangeratesasofAugust31,2023and2022.

The“NetBuy”amountsrepresenttheU.S.dollarequivalentofnetcommitmentstopurchaseforeigncurrenciesand

the“NetSell”amountsrepresenttheU.S.dollarequivalentofnetcommitmentstosellforeigncurrencies.

August31,2023

Currency NetBuy NetSell

UnrealizedGains

onForeign

Exchange

Contracts

UnrealizedLosses

onForeign

Exchange

Contracts

AustralianDollar $ 37,929,306  —  782,898  1,106,428

BrazilianReal  —  8,820,026  1,180,049  866,327

CanadianDollar  31,485,963  16,558,590  1,055,626  944,165

ChileanPeso  29,086  2,095,333  294,083  48,458

ChineseYuanRenminbi  —  58,784,892  1,362,505  761,551

ColombianPeso  —  49,042,260  668,664  261,639

CzechKoruna  10,339,975  2,700,973  30,140  128,613

DanishKrone  —  14,287,333  272,339  15,426

EgyptianPound  —  25,566  —  71

Euro  —  133,896,097  2,896,084  409,425

HongKongDollar  20,985  294,860  2,080  —

HungarianForint  1,810,773  411,639  26,189  9,501

IndianRupee  36,224,956  —  76,038  157,652

IndonesianRupiah  2,326,485  4,726,823  84,205  68,236

IsraeliShekel  8,394  4,084,785  639,516  163,418

JapaneseYen  —  84,865,281  13,246,925  30,459,621

MalaysianRinggit  —  963,395  19,162  18

MexicanPeso  —  113,541,296  650,594  952,722

NewZealandDollar  —  23,167,835  1,058,835  647,859

NorwegianKrone  42,533,045  —  524,119  1,206,178

PeruvianSol  —  1,292,628  39,793  40,126

PhilippinesPeso  —  2,102,527  39,716  65,401

PolishZloty  —  10,205,150  39,274  61,393

RomanianLeu  —  2,085,209  6,803  12,628

SingaporeDollar  —  19,287,238  727,792  475,355

SouthAfricanRand  —  28,429,615  66,127  181,848

SouthKoreanWon  —  13,859,902  1,043,199  1,383,073

SwedishKrona  30,187,864  —  97,550  266,773

SwissFranc  —  7,733,804  234,899  144,208

TaiwanDollar  —  10,411,267  495,798  15,104

ThailandBaht  4,585,546  2,268,510  834,073  552,978

TurkishLira  50,526  —  46,133  46,141

UKPound  —  106,401,148  1,876,873  1,199,148

TOTAL $ 197,532,904  722,343,982  30,418,081  42,651,484

ThechangeinfairvalueofopenforeigncurrencyexchangecontractsfortheyearendingAugust31,2023wasadecreasein

theamountof$12,233,403,whichisincludedininvestmentincomeontheconsolidatedstatementofrevenues,expenses

andchangesinnetposition.

August31,2022

Currency NetBuy NetSell

UnrealizedGains

onForeign

Exchange

Contracts

UnrealizedLosses

onForeign

Exchange

Contracts

AustralianDollar $ —  76,772,827  4,803,639  1,596,715

BrazilianReal  —  44,100,394  250,192  3,594,191

CanadianDollar  —  72,184,915  2,735,736  1,487,851

ChileanPeso  36,864,134  —  1,831,663  1,196,214

ChineseYuanRenminbi  —  140,892,054  3,849,575  538,508

ColombianPeso  —  47,948,939  981,115  658,265

CzechKoruna  —  10,113,863  366,222  23,431

DanishKrone  —  29,179,467  466,426  79,286

Euro  —  366,754,925  8,401,002  1,692,254

HongKongDollar  —  90,832  —  4

HungarianForint  12,710,377  —  371,616  1,018,828

IndianRupee  1,584,941  —  19,602  25,906

IndonesianRupiah  —  24,307,525  215,755  263,614

IsraeliShekel  —  47,355,441  1,038,273  1,086,616

JapaneseYen  —  381,562,235  42,297,736  11,145,655

MalaysianRinggit  —  1,296,083  1,719,747  324,033

MexicanPeso  —  145,081,145  288,684  1,193,766

NewZealandDollar  —  31,159,156  3,700,031  1,143,293

NorwegianKrone  —  6,143,957  442,278  608,504

PeruvianSol  —  16,547,670  245,857  640,175

PhilippinesPeso  —  7,826,606  83,129  —

PolishZloty  —  21,925,190  508,661  289,013

RomanianLeu  —  6,284,586  238,573  —

SingaporeDollar  —  45,750,172  250,935  63,288

SouthAfricanRand  —  55,457,382  2,472,525  459,802

SouthKoreanWon  —  95,022,898  4,569,263  209,706

SwedishKrona  70,878,755  —  512,327  2,188,764

SwissFranc  —  16,186,904  1,031,975  746,930

TaiwanDollar  —  1,304,335  45,741  36,163

ThailandBaht  —  12,202,745  1,976,121  910,514

TurkishLira  —  3,624,760  —  21,790

UKPound  —  150,490,891  8,013,671  1,793,767

TOTAL $ 122,038,207  1,857,567,897  93,728,070  35,036,846

The change in fair value of open foreign currency exchange contracts for the year ending August 31, 2022 was an

increase in the amount of $58,691,224, which is included in investment income on the consolidated statement of

revenues,expensesandchangesinnetposition

(C) Written Options – Written options are used to alter the market (systematic) exposure without trading the

underlyingcashmarketsecurities,andtohedgeandcontrolrisks,sothattheactualrisk/returnprofileismoreclosely

alignedwiththetargetrisk/returnprofile.Thefairvalueisincludedontheconsolidatedstatementofnetpositionin

investmentderivatives-liabilitypositions.Thefollowingdisclosesthefairvaluesoftheoutstandingwrittencalloptions

contractsasofAugust31,2023and2022:

FairValueat

August31,2023

Type Assets Liabilities

Equity  —  8,846,918

InterestRateSwap  33,335  65,458

Other  —  15,963

$ 33,335  8,928,339

ThechangeinfairvalueofopencalloptionsfortheyearendingAugust31,2023,wasanincreaseintheamountof

$417,783,whichisincludedininvestmentincomeontheconsolidatedstatementofrevenues,expensesandchangesin

netposition.

FairValueat

August31,2022

Type Assets Liabilities

Currency $ —  56

Equity  149  7,571,904

InterestRateSwap  34,518  151,178

Other  75  15,559

$ 34,742  7,738,697

ThechangeinfairvalueofopencalloptionsfortheyearendingAugust31,2022,wasanincreaseintheamountof

$15,866,628, which is included in investment income on the consolidated statement of revenues, expenses and

changesinnetposition.

ThefollowingdisclosesthefairvaluesoftheoutstandingwrittenputoptionscontractsasofAugust31,2023and2022:

FairValueat

August31,2023

Type Assets Liabilities

Equity  —  10,623,079

InterestRateSwap  —  1,454,366

Other  —  53,012

$ —  12,130,457

ThechangeinfairvalueofopenputoptionsfortheyearendingAugust31,2023,wasan increaseintheamountof

$2,022,266,whichisincludedininvestmentincomeontheconsolidatedstatementofrevenues,expensesandchanges

innetposition.

FairValueat

August31,2022

Type Assets Liabilities

Currency $ —  6,806

Equity  —  197,706

InterestRateSwap  —  6,296,157

Other  —  37,804

$ —  6,538,473

Thechange infair valueof openput optionsfor theyear endingAugust 31,2022, wasa decreasein theamount of

$5,199,202,whichisincludedininvestmentincomeontheconsolidatedstatementofrevenues,expensesandchanges

innetposition.

(D) Swaps–Swapsareusedtoadjustinterestrateandyieldcurveexposures.Thefairvalueoftheassetpositionsis

included in investments, and the fair value of the liability positions is included in investment derivatives-liability

positionsontheconsolidatedstatementofnetposition.Thefollowingdisclosesthenotionalamount(presentedinUS

dollarequivalents)andthefairvaluesoftheoutstandingswapcontractsasofAugust31,2023:

FairValueat

August31,2023

Type

USD

NotionalValue Assets Liabilities

InterestRate(Pay-FixedReceive-Variable) $ 2,119,495,052  16,929,671  40,606,022

InterestRate(Pay-VariableReceive-Fixed)  263,864,073  12,222,985  23,075

Commodity  197,576,514  —  2,664,416

CreditDefault  344,614,079  4,895,863  476,602

Currency  12,895,400  1,284,453  1,242,567

Equity  1,426,259,205  14,395,971  35,881,009

FixedIncome  135,806,676  760,969  147,284

Volatility  20,989,665  575,694  12,261

Total $ 4,521,500,664  51,065,606  81,053,236

ThechangeinfairvalueofopenswappositionsfortheyearendingAugust31,2023,wasadecreaseintheamountof

$25,303,709, which is included in investment income on the consolidated statement of revenues, expenses and

changesinnetposition.

Thefollowingdisclosesthenotionalamount(presentedinUSdollarequivalents)andthefairvaluesoftheoutstanding

swapcontractsasofAugust31,2022:

FairValueat

August31,2022

Type

USD

NotionalValue Assets Liabilities

InterestRate(Pay-FixedReceive-Variable) $ 1,619,776,728  9,376,149  93,188,565

InterestRate(Pay-VariableReceive-Fixed)  1,115,286,562  38,599,479  —

Commodity  71,259,311  —  152,024

CreditDefault  189,099,349  2,486,471  470,216

Currency  30,478,920  1,817,226  2,044,696

Equity  991,170,297  5,779,299  34,293,071

FixedIncome  6,451,743  639,269  6,625

Inflation  8,959,720  —  1,874,916

Volatility  141,588,641  1,456,581  1,639,564

Total $ 4,174,071,271  60,154,474  133,669,677

ThechangeinfairvalueofopenswappositionsfortheyearendingAugust31,2022,wasadecreaseintheamountof

$73,297,468,whichisincludedininvestmentincomeontheconsolidatedstatementofrevenues,expensesandchangesin

netposition.

7. DerivativeInstruments

Derivativeinstrumentsarefinancialinstrumentsthevalueofwhichisderived,inwholeorpart,fromthevalueofany

oneormoreunderlyingassetsorindexofassetvalues.Derivativeinstrumentsincludeforwards,futures,optionsand

swaps. Hedging derivative instrument contracts are entered into for the purpose of reducing the overall cost of

borrowinglong-termcapitalandtoprotecttheSystemagainsttheriskofrisinginterestrates.Thehedgingderivative

instrumentsprimarilyconsistofinterestrateswapagreementsenteredintoinconnectionwithlong-termbonds.The

derivativeinstrumentcontractsenabletheSystemtoissuebondsatacostlessthanwhattheSystemwouldhavepaid

to issue conventional fixed-rate debt. Investment derivative instruments are entered into with the intention of

managingtransaction orcurrencyexchangeriskin purchasing,selling or holdinginvestments. Ineffectivehedges are

alsoreportedasinvestmentderivativeinstruments.

AllderivativeinstrumentsarecategorizedasLevel2inthefairvaluehierarchy,exceptforfuturescontractsandsome

of the purchasedoptionswhicharecategorizedas Level 1. The fair values of the interest rate swaps are calculated

usingaforecastofexpecteddiscountedfuturenetcashflows.Otherswapsarefairvaluedbyusingindependentbroker

quotes or using models with primarily externally verifiable model inputs. Futures contracts and foreign exchange

contracts are fair valued at closing market prices on the valuation date. The following disclosures summarize the

System’s derivative instrument activity, in both the System’s enterprise and fiduciary funds, as reported in the

consolidatedfinancialstatements.

ChangeinFairValue(FV)

August31,2022toAugust31,2023 FairValueatAugust31,2023

Classification Amount Classification Amount NotionalAmount

InterestRateSwaps

FairValueHedgingDerivative

InstrumentAssetsPay-Variable

Receive-Fixed DefInflows $ 540,818

HedgingDerivative

InstrumentAsset $ 540,818  128,180,000

CashFlowHedgingDerivative

InstrumentAssetsPay-Fixed

Receive-Variable DefInflows  5,231,458

HedgingDerivative

InstrumentAsset  130,238,920  500,000,000

CashFlowHedgingDerivative

InstrumentLiabilitiesPay-Fixed

Receive-Variable DefOutflows  48,122,156

HedgingDerivative

InstrumentLiab  (39,388,655)  976,475,000

InvestmentDerivativeInstrument

AssetsBasisSwaps

NetIncr.(Decr.)in

FVofInvest  13,606,748 Investments  41,277,103  804,760,000

InvestmentDerivativeInstrument

LiabilitiesBasisSwaps

NetIncr.(Decr.)in

FVofInvest  974,081

InvestDeriv

Instrument–Liab

Positions  —  —

InvestmentDerivativeInstruments

InvestmentDerivativeInstrumentAssets:

Swaps:

Pay-FixedReceive-Variable  16,388,033  16,929,671  722,909,240

Pay-VariableReceive-Fixed  8,774,567  12,222,985  256,456,211

Commodity  —  —  —

CreditDefault  4,673,046  4,895,863  317,514,079

Currency  (52,319)  1,284,453  6,217,440

Equity  14,395,971  14,395,971  526,687,054

FixedIncome  760,969  760,969  91,850,000

Inflation  —  —  —

Volatility  550,160  575,694  14,142,557

TotalSwaps

NetIncr.(Decr.)in

FVofInvest  45,490,427 Investments  51,065,606  1,935,776,581

Futures

NetIncr.(Decr.)in

FVofInvest  12,299,256

OtherAccounts

Receivable  12,299,256  3,236,795,563

UnrealizedGainsonForeignForwards

NetIncr.(Decr.)in

FVofInvest  30,418,081 Investments  30,418,081  1,813,772,453

PurchasedOptions

NetIncr.(Decr.)in

FVofInvest  (13,932,374) Investments  45,889,354  1,606,156,470

InvestmentDerivativeInstrument

Liabilities:

Swaps:

Pay-FixedReceive-Variable  (31,819,186)  (40,606,022)  1,396,585,812

Pay-VariableReceive-Fixed  (23,075)  (23,075)  7,407,862

Commodity  (2,664,416)  (2,664,416)  197,576,514

CreditDefault  (476,602)  (476,602)  27,100,000

Currency  229,697  (1,242,567)  6,677,960

Equity  (35,881,009)  (35,881,009)  899,572,151

FixedIncome  (147,284)  (147,284)  43,956,676

Inflation  —  —  —

Volatility  (12,261)  (12,261)  6,847,108

TotalSwaps

NetIncr.(Decr.)in

FVofInvest  (70,794,136)

InvestDeriv–Liab

Positions  (81,053,236)  2,585,724,083

Futures

NetIncr.(Decr.)in

FVofInvest  (12,892,843)

CurrentAccounts

Payable  (12,892,843)  2,843,000,350

UnrealizedLossesonForeign

Forwards

NetIncr.(Decr.)in

FVofInvest  (42,651,484)

InvestDeriv–Liab

Positions  (42,651,484)  1,529,599,488

OptionsWritten

NetIncr.(Decr.)in

FVofInvest  2,440,049

InvestDeriv–Liab

Positions  (21,025,461)  1,451,390,932

ChangeinFairValue(FV)

August31,2021toAugust31,2022 FairValueatAugust31,2022

Classification Amount Classification Amount NotionalAmount

InterestRateSwaps

FairValueHedgingDerivative

InstrumentAssetsPay-Variable

Receive-Fixed DefInflows $ —

HedgingDerivative

InstrumentAsset $ —  —

CashFlowHedgingDerivative

InstrumentAssetsPay-Fixed

Receive-Variable DefInflows  107,491,753

HedgingDerivative

InstrumentAsset  125,007,462  740,340,000

CashFlowHedgingDerivative

InstrumentLiabilitiesPay-Fixed

Receive-Variable DefOutflows  205,849,951

HedgingDerivative

InstrumentLiab  (87,510,811)  1,024,660,000

InvestmentDerivativeInstrument

AssetsBasisSwaps

NetIncr.(Decr.)in

FVofInvest  9,460,411 Investments  27,670,355  631,590,000

InvestmentDerivativeInstrument

LiabilitiesBasisSwaps

NetIncr.(Decr.)in

FVofInvest  (442,173)

InvestDeriv

Instrument–Liab

Positions  (974,081)  206,010,000

InvestmentDerivativeInstruments

InvestmentDerivativeInstrumentAssets:

Swaps:

Pay-FixedReceive-Variable  8,897,765  9,376,149  413,469,720

Pay-VariableReceive-Fixed  37,943,540  38,599,479  1,115,286,562

Commodity  —  —  —

CreditDefault  1,716,803  2,486,471  146,040,517

Currency  (179,654)  1,817,226  9,254,925

Equity  5,779,299  5,779,299  206,681,360

FixedIncome  639,269  639,269  211,743

Inflation  —  —  —

Volatility  1,456,581  1,456,581  63,070,029

TotalSwaps

NetIncr.(Decr.)in

FVofInvest  56,253,603 Investments  60,154,474  1,954,014,856

Futures

NetIncr.(Decr.)in

FVofInvest  6,411,249

OtherAccounts

Receivable  6,411,249  1,703,964,972

UnrealizedGainsonForeignForwards

NetIncr.(Decr.)in

FVofInvest  93,728,070 Investments  93,728,070  2,967,604,449

PurchasedOptions

NetIncr.(Decr.)in

FVofInvest  9,436,135 Investments  32,481,867  111,480,027

InvestmentDerivativeInstrument

Liabilities:

Swaps:

Pay-FixedReceive-Variable  (91,786,346)  (93,188,565)  1,206,307,008

Pay-VariableReceive-Fixed  —  —  —

Commodity  (152,024)  (152,024)  71,259,311

CreditDefault  (236,369)  (470,216)  43,058,832

Currency  16,847  (2,044,696)  21,223,995

Equity  (34,293,071)  (34,293,071)  784,488,937

FixedIncome  (6,625)  (6,625)  6,240,000

Inflation  (1,453,919)  (1,874,916)  8,959,720

Volatility  (1,639,564)  (1,639,564)  78,518,612

TotalSwaps

NetIncr.(Decr.)in

FVofInvest  (129,551,071)

InvestDeriv–Liab

Positions  (133,669,677)  2,220,056,415

Futures

NetIncr.(Decr.)in

FVofInvest  (7,411,028)

CurrentAccounts

Payable  (7,411,028)  2,212,788,749

UnrealizedLossesonForeign

Forwards

NetIncr.(Decr.)in

FVofInvest  (35,036,846)

InvestDeriv–Liab

Positions  (35,036,846)  1,615,656,135

OptionsWritten

NetIncr.(Decr.)in

FVofInvest  10,667,426

InvestDeriv–Liab

Positions  (14,242,427)  797,770,648

Fiduciary fund investment derivative instrument assets of $496,874 and $719,630 as of August 31, 2023 and 2022,

respectively, are included in the numbers in the tables above. Fiduciary fund investment derivative instrument

liabilitiesof$576,154and$726,153asofAugust31,2023and2022,respectively,areincludedinthenumbersinthe

tablesabove.

SeeNote 13formore informationonCash Flow Hedges– Interest RateSwaps and Note6 for moreinformation on

InvestmentDerivativeInstruments.

8. Endowments

Investments include $59,937,190,064 and $57,204,588,630 of endowment funds as of August 31, 2023 and 2022,

respectively. The net position classifications on the statement of net position related to endowment funds as of

August31,2023and2022areasfollows:



NetPositionClassificationofEndowments 2023 2022

Restricted,Nonexpendable $ 38,161,618,752  36,029,323,644

Restricted,Expendable:

NetAppreciationonTrueEndowments  17,487,270,676  17,343,207,979

FundsFunctioningasEndowments  1,031,549,265  983,968,501

BookValueofTermEndowments  42,599,504  43,040,932

NetAppreciationonTermEndowments  55,979,709  58,063,077

Unrestricted:

FundsFunctioningasEndowments  1,342,467,476  1,319,166,760

Total $ 58,121,485,382  55,776,770,893

Inthetableabove,amounts reported as “Net Appreciation” represent netappreciationoninvestmentsof donor or

constitutionallyrestrictedendowmentsthatareavailableforauthorizationforexpenditurebytheU.T.SystemBoard

of Regents.For donor restrictedendowments,pursuant to the Uniform Prudent Management of Institutional Funds

Act,asadoptedbyTexas,theU.T.SystemBoardofRegentsmaydistributenetappreciation,realizedandunrealized,in

thefairvalueoftheassetsofendowmentholdingsoverthehistoricdollarvalueofthegifts,totheextentprudent.The

System’spolicyistoretainallundistributednetrealizedandunrealizedappreciationwithintheendowmentfunds.The

System’sendowmentdistributionpolicyisfurtherdiscussedbelow.

ENDOWMENTSANDSIMILARFUNDS–STATE

TheseendowmentsarecomprisedofthePUFandthePHF.ThePUFwasestablishedforthebenefitoftheSystemand

theTexasA&MUniversitySystem.TheUniversityofTexasSystemadministersthePHFandthedistributionsfromthe

PHFbenefittheSystem’shealth-relatedinstitutions,aswellasfortheTexasA&MUniversityHealthScienceCenter,the

UniversityofNorthTexasHealthScienceCenteratFortWorth,theTexasTech UniversityHealthScienceCenterand

BaylorCollegeofMedicine.

ThePUFwasestablishedbyArticle7,Section11oftheTexasConstitutionof1876throughtheappropriationofland

grants.AmendmentstotheConstitution,approvedbyvotersin1999,wererelatedtotheinvestmentofthePUFand

thedistributionsfromthePUFtotheAUF.TheConstitution,asamended,issummarizedasfollows:(i)TheU.T.System

BoardofRegentsisheldtoa“prudentinvestor”ratherthana“prudentperson”standard;(ii)distributionstotheAUF

aremadefrom thetotalreturnonall PUFinvestmentassets;(iii)theU. T.SystemBoardofRegentsdeterminesthe

amount of distributions to the AUF, which may not exceed an amount equal to 7% of the average net fair value of

investment assets, except as necessary to pay debt service on PUF bonds and notes; (iv) the U. T. System Board of

RegentsdeterminestheamountofdistributionstotheAUFinamannerintendedtoprovidetheAUFwithastableand

predictablestreamofannualdistributionsandtomaintain,overtime,thepurchasingpowerofPUFinvestmentsand

annualdistributionstotheAUF;and(v)theexpensesofmanagingPUFlandandinvestmentsarepaidbythePUF.

TheU.T.SystemBoardofRegentsmanagescertainpermanentfundsforhealth-relatedinstitutionsofhighereducation

as more fully described in Chapter 63 of the Texas Education Code. Certain funds created by this statute were

transferredtotheU.T.SystemBoardofRegentsonAugust30,1999,tobemanagedandinvestedinthesamemanner

astheU.T.SystemBoardofRegentsmanagesandinvestsotherendowmentfunds.ThePHFasdefinedinthestatuteis

classified as Endowment and Similar Funds – State. These endowments provide support for programs that benefit

medical research, health education or treatment at health-related institutions. The U. T. System Board of Regents

determinestheamountofdistributionstosupporttheprogramsonanannualbasis.

The annual payout of the PHF is determined by the U. T. System Board of Regents. The annual payout is typically

adjusted by the average consumer price index of the previous twelve quarters provided that the distribution rate

remainswithin a rangeof 3.5% to5.5% of thePHF’s net position;however, theU.T. System Boardof Regentsmay

approvedistributionamountabove,within,orbelowthisrange.

TheGeneralEndowmentFund(GEF),createdMarch1,2001,isapooledfundestablishedforthecollectiveinvestment

oflong-termfundsunderthecontrolandmanagementoftheU.T.SystemBoardofRegents.TheGEFisorganizedasa

pooledinvestmentandhastwoparticipants,thePHFandtheLTF.ThePHFandLTFinitiallypurchasedunitsoftheGEF

on March 1, 2001, in exchange for the contribution of their investment assets. The GEF provides for greater

diversificationofinvestmentsthanwouldbepossibleifeachaccountweremanagedseparately.Theannualpayoutof

theLTFisalsodeterminedbytheU.T.SystemBoardofRegents.Theannualpayoutistypicallyadjustedbytheaverage

consumer price index of the previous twelve quarters provided that the distribution rate remains within a range of

3.5%to5.5%oftheLTF’snetposition;however,theU.T.SystemBoardofRegentsmayapprovedistributionamount

above,within,orbelowthisrange.

ENDOWMENTANDSIMILARFUNDS-OTHERTHANSTATE

Thefundsaresubjecttorestrictionsofendowmentandtrustinstruments,requiringthattheprincipalbemaintained

and that only the income be utilized. Funds may include Permanent Endowments, Term Endowments and Funds

FunctioningasEndowments.FundsFunctioningasEndowmentsconsistofamountsthathavebeeninternallydedicated

by the System for long-term investment purposes. Funds with external donor restrictions are classified as Funds

FunctioningasEndowments–Restricted.Ifnoexternalrestrictionexists,thefundsareclassifiedasFundsFunctioning

asEndowments–Unrestricted.EndowmentholdingsmaybeinvestedintheLTF,ormaybeseparatelyinvestedbased

upon the following three factors: (i) there are investment restrictions incorporated into the trust or endowment

document;(ii)theinabilitytosellthegiftedinvestmentasset;or(iii)theyareholdingsbeingmigrateduponliquidation

intotheLTF.Distributionsarebasedupontheactualincomereceivedfromtheseparatelyinvestedholdings.

AVAILABLEUNIVERSITYFUND

TheAUFconsistsofdistributionsmadetoitfromthetotalreturnon thePUFinvestmentassets andsurfaceincome

fromPUF lands. All surface incomefromthe PUF lands (i.e.,grazingleases and land easements)isdeposited to the

AUF.TheAUFmustbeusedfirsttopaydebtserviceonthePUFbondsandnotes.Afterdebtservicerequirementsare

met,theAUFmaybeappropriatedforthesupportandmaintenanceofU.T.AustinandU.T.SystemAdministration.

9. CapitalAssets

A summary of changes in the capital assets for the year ended August 31, 2023, is presented below.

NondepreciableAssets:

LandandLandImprovements $ 1,129,134,066  8,657,278  —

ConstructioninProgress(CIP)  1,232,888,101  (776,807,967)  —

NondepreciableCollections  802,829,247  28,503  —

NonamortizableIntangibleAssets  24,596,943  —  1,030,343

TotalNondepreciable/NonamortizableAssets  3,189,448,357  (768,122,186)  1,030,343

DepreciableAssets:

BuildingsandBuildingImprovements  24,988,624,631  566,492,061  —

Infrastructure  807,835,306  24,832,556  —

FacilitiesandOtherImprovements  1,310,148,423  33,059,512  (1,030,343)

FurnitureandEquipment  5,429,492,054  28,635,968  207,790

Vehicles,BoatsandAircraft  103,080,654  447,354  —

OtherDepreciableAssets(includingLibraryBooks)  1,059,610,677  95,159,830  —

TotalDepreciableAssetsatHistoricalCost  33,698,791,745  748,627,281  (822,553)

LessAccumulatedDepreciationfor:

BuildingsandBuildingImprovements  (13,264,799,249)  —  —

Infrastructure  (347,520,031)  —  —

FacilitiesandOtherImprovements  (693,130,290)  —  —

FurnitureandEquipment  (3,955,699,950)  —  (112,471)

Vehicles,BoatsandAircraft  (78,308,318)  —  —

OtherDepreciableAssets(includingLibraryBooks)  (692,919,278)  —  —

TotalAccumulatedDepreciation  (19,032,377,116)  —  (112,471)

DepreciableAssets,Net  14,666,414,629  748,627,281  (935,024)

AmortizableIntangibleAssets:

ComputerSoftware  1,339,031,443  19,494,905  —

OtherIntangibles  700,000  —  —

Right-of-UseLand  85,536,270  —  —

Right-of-UseBuilding  975,543,614  —  —

Right-of-UseEquipment  74,871,279  —  —

Right-of-UseInfrastructure  1,715,358  —  —

Right-of-UseSBITA  154,514,277  —  —

TotalAmortizableIntangibleAssets  2,631,912,241  19,494,905  —

LessAccumulatedAmortizationfor:

ComputerSoftware  (1,176,856,529)  —  —

OtherIntangibles  (420,000)  —  —

Right-of-UseLand  (3,049,899)  —  —

Right-of-UseBuilding  (166,471,128)  —  —

Right-of-UseEquipment  (36,754,637)  —  —

Right-of-UseInfrastructure  (393,608)  —  —

Right-of-UseSBITA  (40,271,235)  —  —

TotalAccumulatedAmortization  (1,424,217,036)  —  —

IntangibleCapitalAssets,Net  1,207,695,205  19,494,905  —

CapitalAssets,Net $ 19,063,558,191  —  95,319

Balance

September1,2022

Reclassifications

CompletedCIP

Reclassifications

Interagency

Transfers-In

NondepreciableAssets:

LandandLandImprovements $ —  10,109,040  (5,365,421)  1,142,534,963

ConstructioninProgress(CIP)  —  1,079,194,432  (1,097,663)  1,534,176,903

NondepreciableCollections  —  47,470,869  (579,474)  849,749,145

NonamortizableIntangibleAssets  (1,030,343)  —  —  24,596,943

TotalNondepreciable/NonamortizableAssets  (1,030,343)  1,136,774,341  (7,042,558)  3,551,057,954

DepreciableAssets:

BuildingsandBuildingImprovements  —  384,870,166  (184,395,994)  25,755,590,864

Infrastructure  —  1,172  (2,608,517)  830,060,517

FacilitiesandOtherImprovements  1,030,343  8,864,820  (1,963,503)  1,350,109,252

FurnitureandEquipment  (163,355)  449,610,443  (202,646,303)  5,705,136,597

Vehicles,BoatsandAircraft  —  8,953,211  (3,753,574)  108,727,645

OtherDepreciableAssets(includingLibraryBooks)  —  30,154,007  (14,686,168)  1,170,238,346

TotalDepreciableAssetsatHistoricalCost  866,988  882,453,819  (410,054,059)  34,919,863,221

LessAccumulatedDepreciationfor:

BuildingsandBuildingImprovements  (162,545)  (952,359,783)  170,376,022  (14,046,945,555)

Infrastructure  —  (32,244,320)  2,608,517  (377,155,834)

FacilitiesandOtherImprovements  —  (60,879,563)  1,963,503  (752,046,350)

FurnitureandEquipment  113,355  (428,415,222)  178,187,023  (4,205,927,265)

Vehicles,BoatsandAircraft  —  (7,312,033)  3,604,376  (82,015,975)

OtherDepreciableAssets(includingLibraryBooks)  —  (58,684,464)  14,353,490  (737,250,252)

TotalAccumulatedDepreciation  (49,190)  (1,539,895,385)  371,092,931  (20,201,341,231)

DepreciableAssets,Net  817,798  (657,441,566)  (38,961,128)  14,718,521,990

AmortizableIntangibleAssets:

ComputerSoftware  —  17,982,519  (8,166,591)  1,368,342,276

OtherIntangibles  —  —  —  700,000

Right-of-UseLand  —  1,146,933  (157,630)  86,525,573

Right-of-UseBuilding  —  141,133,694  (26,175,514)  1,090,501,794

Right-of-UseEquipment  —  48,999,194  (22,834,821)  101,035,652

Right-of-UseVehicle  —  265,361  —  265,361

Right-of-UseInfrastructure  —  408,672  —  2,124,030

Right-of-UseSBITA  —  130,070,877  (16,265,185)  268,319,969

TotalAmortizableIntangibleAssets  —  340,007,250  (73,599,741)  2,917,814,655

LessAccumulatedAmortizationfor:

ComputerSoftware  —  (85,768,332)  8,154,463  (1,254,470,398)

OtherIntangibles  —  (140,000)  —  (560,000)

Right-of-UseLand  —  (1,592,963)  139,422  (4,503,440)

Right-of-UseBuilding  —  (95,071,633)  20,055,062  (241,487,699)

Right-of-UseEquipment  —  (31,375,580)  22,490,673  (45,639,544)

Right-of-UseVehicle  —  (26,240)  —  (26,240)

Right-of-UseInfrastructure  —  (258,001)  —  (651,609)

Right-of-UseSBITA  —  (72,939,580)  14,256,839  (98,953,976)

TotalAccumulatedAmortization  —  (287,172,329)  65,096,459  (1,646,292,906)

IntangibleCapitalAssets,Net  —  52,834,921  (8,503,282)  1,271,521,749

CapitalAssets,Net $ (212,545)  532,167,696  (54,506,968)  19,541,101,693

Reclassifications

Interagency

Transfers-Out Additions Deletions

Balance

August31,2023

A summary of changes in the capital assets for the year ended August 31, 2022, is presented below and includes

adjustments made for GASB Statement No. 94 and 96. See Note 4 for further details on the restatements.

NondepreciableAssets:

LandandLandImprovements $ 997,515,696  2,950  —

ConstructioninProgress(CIP)  1,497,415,939  (1,291,484,206)  —

NondepreciableCollections  714,510,491  1,638,459  —

NonamortizableIntangibleAssets  24,597,868  —  —

TotalNondepreciable/NonamortizableAssets  3,234,039,994  (1,289,842,797)  —

DepreciableAssets:

BuildingsandBuildingImprovements  23,662,335,586  1,134,461,371  —

Infrastructure  767,127,817  40,689,365  —

FacilitiesandOtherImprovements  1,297,961,682  32,275,996  —

FurnitureandEquipment  5,134,069,554  15,373,578  904,703

Vehicles,BoatsandAircraft  101,129,516  106,132  —

OtherDepreciableAssets(includingLibraryBooks)  992,355,249  39,987,457  —

TotalDepreciableAssetsatHistoricalCost  31,954,979,404  1,262,893,899  904,703

LessAccumulatedDepreciationfor:

BuildingsandBuildingImprovements  (12,324,633,166)  —  —

Infrastructure  (316,790,369)  —  —

FacilitiesandOtherImprovements  (664,223,150)  —  —

FurnitureandEquipment  (3,661,348,777)  —  (836,648)

Vehicles,BoatsandAircraft  (74,133,435)  —  —

OtherDepreciableAssets(includingLibraryBooks)  (663,498,728)  —  —

TotalAccumulatedDepreciation  (17,704,627,625)  —  (836,648)

DepreciableAssets,Net  14,250,351,779  1,262,893,899  68,055

AmortizableIntangibleAssets:

ComputerSoftware  1,312,700,009  26,948,898  —

OtherIntangibles  700,000  —  —

Right-of-UseLand  85,396,848  —  —

Right-of-UseBuilding  821,065,758  —  —

Right-of-UseEquipment  71,834,784  —  —

Right-of-UseInfrastructure  1,486,381  —  —

Right-of-UseSBITA  94,828,058  —  —

TotalAmortizableIntangibleAssets  2,388,011,838  26,948,898  —

LessAccumulatedAmortizationfor:

ComputerSoftware  (1,097,273,683)  —  —

OtherIntangibles  (280,000)  —  —

Right-of-UseLand  (1,471,723)  —  —

Right-of-UseBuilding  (82,028,020)  —  —

Right-of-UseEquipment  (27,155,598)  —  —

Right-of-UseInfrastructure  (191,791)  —  —

Right-of-UseSBITA  —  —  —

TotalAccumulatedAmortization  (1,208,400,815)  —  —

IntangibleCapitalAssets,Net  1,179,611,023  26,948,898  —

CapitalAssets,Net $ 18,664,002,796  —  68,055

Balance

September1,2021

Reclassifications

CompletedCIP

Reclassifications

Interagency

Transfers-In

NondepreciableAssets:

LandandLandImprovements $ —  131,615,420  —  1,129,134,066

ConstructioninProgress(CIP)  —  1,028,347,223  (1,390,855)  1,232,888,101

NondepreciableCollections  —  86,770,009  (89,712)  802,829,247

NonamortizableIntangibleAssets  —  —  (925)  24,596,943

TotalNondepreciable/NonamortizableAssets  —  1,246,732,652  (1,481,492)  3,189,448,357

DepreciableAssets:

BuildingsandBuildingImprovements  —  205,931,207  (14,103,533)  24,988,624,631

Infrastructure  —  18,124  —  807,835,306

FacilitiesandOtherImprovements  —  11,327,801  (31,417,056)  1,310,148,423

FurnitureandEquipment  (554,150)  433,977,331  (154,278,962)  5,429,492,054

Vehicles,BoatsandAircraft  —  5,417,529  (3,572,523)  103,080,654

OtherDepreciableAssets(includingLibraryBooks)  —  42,455,955  (15,187,984)  1,059,610,677

TotalDepreciableAssetsatHistoricalCost  (554,150)  699,127,947  (218,560,058)  33,698,791,745

LessAccumulatedDepreciationfor:

BuildingsandBuildingImprovements  —  (951,283,893)  11,117,810  (13,264,799,249)

Infrastructure  —  (30,729,662)  —  (347,520,031)

FacilitiesandOtherImprovements  —  (60,195,006)  31,287,866  (693,130,290)

FurnitureandEquipment  424,532  (426,885,955)  132,946,898  (3,955,699,950)

Vehicles,BoatsandAircraft  —  (7,591,366)  3,416,483  (78,308,318)

OtherDepreciableAssets(includingLibraryBooks)  —  (44,605,784)  15,185,234  (692,919,278)

TotalAccumulatedDepreciation  424,532  (1,521,291,666)  193,954,291  (19,032,377,116)

DepreciableAssets,Net  (129,618)  (822,163,719)  (24,605,767)  14,666,414,629

AmortizableIntangibleAssets:

ComputerSoftware  —  18,144,588  (18,762,052)  1,339,031,443

OtherIntangibles  —  —  —  700,000

Right-of-UseLand  —  139,422  —  85,536,270

Right-of-UseBuilding  —  172,272,301  (17,794,445)  975,543,614

Right-of-UseEquipment  —  24,120,847  (21,084,352)  74,871,279

Right-of-UseInfrastructure  —  228,977  —  1,715,358

Right-of-UseSBITA  —  59,686,219  —  154,514,277

TotalAmortizableIntangibleAssets  —  274,592,354  (57,640,849)  2,631,912,241

LessAccumulatedAmortizationfor:

ComputerSoftware  —  (98,156,336)  18,573,490  (1,176,856,529)

OtherIntangibles  —  (140,000)  —  (420,000)

Right-of-UseLand  —  (1,578,176)  —  (3,049,899)

Right-of-UseBuilding  —  (97,567,410)  13,124,302  (166,471,128)

Right-of-UseEquipment  —  (26,552,738)  16,953,699  (36,754,637)

Right-of-UseInfrastructure  —  (201,817)  —  (393,608)

Right-of-UseSBITA  —  (40,271,235)  —  (40,271,235)

TotalAccumulatedAmortization  —  (264,467,712)  48,651,491  (1,424,217,036)

IntangibleCapitalAssets,Net  —  10,124,642  (8,989,358)  1,207,695,205

CapitalAssets,Net $ (129,618)  434,693,575  (35,076,617)  19,063,558,191

Reclassifications

Interagency

Transfers-Out Additions Deletions

Balance

August31,2022

GASBStatementNo.42,AccountingandFinancialReportingforImpairmentofCapitalAssetsandInsuranceRecoveries,

requiresthedisclosureofimpairmentlossesandassociatedinsurancerecoveries.

TheSystemreportednoimpairmentofcapitalassetsfortheyearsendedAugust31,2023and2022.InFebruary2021,

U. T. System institutions experienced significant property damage and business income losses as a result of Winter

StormUri,whichresultedininsurancerecoveriestotaling$24.2millionfortheyearendedAugust31,2022and$24.4

millionfortheyearendedAugust31,2023.

GASBStatementNo.83,CertainAssetRetirementObligations,requiresthedisclosureofassetretirementobligations

resulting from Texas Administrative Code, Title 25, Part 1, Chapter 289. Subchapter F, Rule 289.252, Licensing of

Radioactive Material. The liabilities were measured using best estimates of current values of outlays expected. The

TexasAdministrativeCode,Title25,Part1,Chapter289.SubchapterF,Rule289.252(gg)(6)(D)exemptsStatelicenses

fromprovidingfinancialassurancesandnoassetshavebeenrestrictedforpaymentoftheliability.

The Asset Retirement Obligation as of August 31, 2023 is presented below (remaining life of the corresponding

DeferredOutflowsinmonths):

AssetRetirementObligation Amount Life

Broadscope $ 9,285,751 0-41months

Cyclotron  2,060,663 0months

GammaKnife  2,981,819 0-31months

ProtonTherapy  1,289,963 0months

GammaPod  334,753 12months

Irradiator  51,097 0months

NuclearEngineeringTeachingLab  4,264,205 27months

Total $ 20,268,251

TheAssetRetirementObligationasofAugust31,2022ispresentedbelow:

AssetRetirementObligation Amount Life

Broadscope $ 9,285,751 0-53months

Cyclotron  2,060,663 0months

GammaKnife  2,346,043 0-43months

ProtonTherapy  1,289,963 0months

GammaPod  334,753 24months

Irradiator  51,097 0months

NuclearEngineeringTeachingLab  4,140,670 39months

Total $ 19,508,940

10. Short-TermDebt

TheSystemhadRFS CommercialPaperNotesand PUFCommercialPaperNotes outstandingatAugust31, 2023and

2022.Thenotesareissuedtoprovideinterimfinancingforcapitalimprovementsandtofinanceequipmentpurchases.

While the interest is payable on these notes in periodic installments not to exceed 270 days, they are generally

intended to be refinanced with long-term debt. Short-term debt activity for the year ended August 31, 2023, is

summarizedbelow:

Balance

September1,2022 Additions Reductions

Balance

August31,2023

CommercialPaperNotes:

PermanentUniversityFundCPNotes $ 832,300,000  350,000,000  176,000,000  1,006,300,000

RevenueFinancingSystemCPNotes  956,450,000  913,151,000  534,840,000  1,334,761,000

TotalCommercialPaperNotes $ 1,788,750,000  1,263,151,000  710,840,000  2,341,061,000



Short-termdebtactivityfortheyearendedAugust31,2022,issummarizedbelow:

Balance

September1,2021 Additions Reductions

Balance

August31,2022

CommercialPaperNotes:

PermanentUniversityFundCPNotes $ 1,095,000,000  280,000,000  542,700,000  832,300,000

RevenueFinancingSystemCPNotes  796,053,000  603,388,000  442,991,000  956,450,000

TotalCommercialPaperNotes $ 1,891,053,000  883,388,000  985,691,000  1,788,750,000

Reductionsofshort-termdebtinclude$417,700,000ofPUFcommercialpapernotesreclassifiedtolong-

termnotesandloanspayableonthestatementofnetpositionasaresultofrefundingcommercial

papernotessubsequenttoAugust31,2022throughtheissuanceoflong-termbonds.

GeneralinformationrelatedtothecommercialpapernotesatAugust31,2023,issummarizedasfollows:

• 

Note or Loan Payable issue name: Permanent University Fund Commercial Paper Notes, Series A and Taxable

CommercialPaperNotes,SeriesB

Purpose:Toprovideinterimfinancingforcapitalimprovementsandtofinancecapitalequipmentpurchases

AuthorizedAmount:Aggregateprincipalamountnottoexceed$1.25billion

Sourceofrevenuefordebtservice:AvailableUniversityFund

Terms: Interest payable in periodic installments not to exceed 270 days at interest rates established by the

System’scommercialpaperdealers

• 

NoteorLoanPayableissuename:RevenueFinancingSystem(RFS)CommercialPaperNotes,SeriesAandTaxable

CommercialPaperNotes,SeriesB

Purpose:Toprovideinterimfinancingforcapitalimprovementsandtofinancecapitalequipmentpurchases

AuthorizedAmount:Aggregateprincipalamountnottoexceed$1.75billion

Source of revenue for debt service: All pledged revenues, subject to the provisions of the Prior Encumbered

Obligations, collectively: (a) the pledged tuition fee; (b) the pledged General Fee; and (c) any or all of the

revenues, funds, and balances lawfully available to the U. T. System Board of Regents and derived from and

attributabletoanyMemberoftheRevenueFinancingSystem,whicharelawfullyavailabletotheU. T.System

BoardofRegentsforpaymentsonparitydebt.

Terms: Interest payable in periodic installments not to exceed 270 days at interest rates established by the

System’scommercialpaperdealers

11. LeasesandSBITAs

LEASESWHERETHESYSTEMISTHELESSEE

TheSystementeredintovariousleasesforland,building,equipment,vehicle,andinfrastructure.Oftheseleases,some

agreementscallforpaymentsthatarepartiallyorcompletelyvariableandthereforewerenotincludedinROUassets

orleaseliabilities.Thesevariableleasepaymentsarederivedfromapercentageofsales,useoftheleasedasset,or

changes in indexes or rates. The System recognized a total of $7,828,402 and $3,406,107 as expenses from these

variablepaymentsfortheyearsendedAugust31,2023and2022,respectively.

SeeNote9 fora summaryof changesin theROUassets,displayedby thenature ofunderlyingassets,forthe years

endedAugust31,2023and2022.SeeNote12fortheleaseliabilityactivityfortheyearsendedAugust31,2023and

2022.

Theprincipalandinterestexpenseforthenextfiveyearsandbeyondareprojectedbelowforleaseobligations:

FiscalYear Principal Interest Total

2024 $ 329,093,142  14,422,949  343,516,091

2025  94,210,414  12,168,149  106,378,563

2026  84,532,791  10,694,151  95,226,942

2027  76,678,870  9,296,457  85,975,327

2028  64,784,167  8,039,702  72,823,869

2029–2033  187,368,000  27,844,335  215,212,335

2034–2038  86,292,416  15,862,134  102,154,550

2039–2043  28,831,342  10,447,990  39,279,332

2044–2048  7,512,531  8,601,750  16,114,281

2049–2053  5,809,506  7,919,570  13,729,076

2054–2058  2,961,045  7,380,583  10,341,628

2059–2063  2,319,663  7,051,302  9,370,965

2064–2068  1,328,166  6,793,407  8,121,573

2069–2073  2,427,380  6,539,494  8,966,874

2074–2078  3,260,659  6,110,306  9,370,965

2079–2083  2,414,915  5,706,659  8,121,574

2084–2088  3,682,456  5,284,417  8,966,873

2089–2093  4,710,136  4,660,829  9,370,965

2094–2098  4,088,903  4,032,671  8,121,574

2099–2103  5,615,731  3,351,143  8,966,874

2104–2108  6,942,857  2,428,107  9,370,964

2109–2113  6,667,453  1,454,120  8,121,573

2114–2118  5,709,931  400,419  6,110,350

TotalRequirements $ 1,017,242,474  186,490,644  1,203,733,118

FUTURELEASES

TheSystem entered intoadditionalleases that havenot yet commencedasof August 31,2023,including leasesfor

building, with both fixed and variable payments required. Terms range from 2024 to 2034 with a total future

commitmentof$21,741,448.

SUBLEASES

TheSystemsubleasescertainportionsofvariousRight-of-Usebuildingassetstothirdparties.SincetheSystemisbotha

lessee and a lessor in these sublease arrangements, the System’s lessor transactions are included within lessor

disclosures,separatelyfromtheSystem’slesseetransactionsrelatedto theoriginalleaseswhich areincludedwithin

thelesseedisclosures.

LEASESWHERETHESYSTEMISTHELESSOR

Forthe years ended August31, 2023 and 2022,the System earnedatotal of $20,013,844and$26,833,195 inlease

revenue and $5,684,402 and $5,344,277 in lease interest revenue, respectively, from arrangements meeting the

definitionofalease.

TheSystementeredintosomeleaseswhichcallforpaymentsthatarepartiallyorcompletelyvariableandtherefore

were not included in lease receivables or deferred inflows of resources. These variable lease payments are derived

fromapercentageofsales,useoftheleasedasset,orchangesinindexesorrates.TheSystemrecognizedatotalof

$3,387,753and$2,293,757asrevenuefromthesevariablepaymentsfortheyearsendedAugust31,2023and2022,

respectively.

SBITAs

TheSystementeredintovariousSBITAsthatconveytheSystemcontroloftherighttousevendor-providedsoftware,

alone or in combination with an underlying tangible IT capital asset. Of these SBITAs, some agreements call for

payments that are partially or completely variable and therefore were not included in ROU subscription assets or

subscriptionliabilities.Thesevariablepaymentsarederivedfromanumberoflicensesthatchangefromtimetotime,

useoftheITasset,orchangesinindexrates.TheSystemrecognizedatotalof$992,551and$709,544asexpenses

fromthesevariablepaymentsfortheyearsendedAugust31,2023,and2022,respectively.

Theprincipalandinterestexpenseforthenextfiveyearsandbeyondareprojectedbelowforsubscriptionobligations:



SBITAMaturitySchedule

FiscalYear Principal Interest Total

2024 $ 54,369,896  2,311,472  56,681,368

2025 $ 36,395,202  1,669,007  38,064,209

2026 $ 25,037,141  998,097  26,035,238

2027 $ 15,388,834  512,006  15,900,840

2028 $ 4,729,768  179,784  4,909,552

2029-2033 $ 2,567,232  74,067  2,641,298

TotalRequirements $ 138,488,073  5,744,433  144,232,506

FUTURESBITAS

TheSystemhasenteredintoadditionalSBITAsthathavenotyetcommencedasofAugust31,2023,withbothfixedand

variablepaymentsrequired.Termsrangefrom2024to2028withatotalfuturecommitmentof$8,368,398.

12. SummaryofLong-TermLiabilities

Long-termliabilityactivityfortheyearendedAugust31,2023,issummarizedasfollows:

Balance

September1,2022 Additions Reductions

Balance

August31,2023

Amountsdue

withinoneyear

BondsPayable:

PermanentUniversityFund $ 2,248,090,000  748,185,000  381,805,000  2,614,470,000  399,390,000

RevenueFinancingSystem  6,544,540,000  337,915,000  322,920,000  6,559,535,000  1,176,745,000

SubtotalBondsPayable–Par  8,792,630,000  1,086,100,000  704,725,000  9,174,005,000  1,576,135,000

UnamortizedNetPremiums  616,009,663  144,429,189  98,087,313  662,351,539  95,382,223

TotalBondsPayable  9,408,639,663  1,230,529,189  802,812,313  9,836,356,539  1,671,517,223

Notes,LoansandLeasesPayable:

NotesandLoansPayable  436,700,000  —  436,700,000  —  —

NotesfromDirectBorrowings  31,720,463  (13,473,267)  1,894,242  16,352,954  1,261,125

LeaseObligations  963,057,878  191,953,855  137,769,259  1,017,242,474  329,093,142

SBITALiability  94,154,858  130,070,877  85,737,662  138,488,073  54,369,896

TotalNotes,LoansandLeasesPayable  1,525,633,198  308,551,465  662,101,163  1,172,083,500  384,724,163

TotalOPEBLiability  14,695,594,306  1,357,523,674  7,963,383,625  8,089,734,355  208,395,911

NetPensionLiability  2,300,711,499  3,338,429,170  —  5,639,140,669  —

TotalPensionLiability  1,046,052,341  63,233,057  190,446,014  918,839,384  72,533,114

HedgingDerivativeLiability  87,510,811  —  48,122,156  39,388,655  —

EmployeeCompensableLeave  855,424,712  544,226,620  483,118,374  916,532,958  523,251,766

IncurredButNotReportedSelf-

InsuranceClaims  221,719,241  1,857,021,751  1,840,839,317  237,901,675  199,965,066

AssetRetirementObligation  19,508,940  759,311  —  20,268,251  —

Total $ 30,160,794,711  8,700,274,237  11,990,822,962  26,870,245,986  3,060,387,243



Long-termliabilityactivityfortheyearendedAugust31,2022,asrestatedforGASBStatementNo.96issummarizedas

follows:

Balance

September1,2021 Additions Reductions

Balance

August31,2022

Amountsdue

withinoneyear

BondsPayable:

PermanentUniversityFund $ 2,307,025,000  —  58,935,000  2,248,090,000  386,695,000

RevenueFinancingSystem  6,702,085,000  256,395,000  413,940,000  6,544,540,000  1,224,490,000

SubtotalBondsPayable–Par  9,009,110,000  256,395,000  472,875,000  8,792,630,000  1,611,185,000

UnamortizedNetPremiums  677,676,799  30,320,873  91,988,009  616,009,663  88,111,681

TotalBondsPayable  9,686,786,799  286,715,873  564,863,009  9,408,639,663  1,699,296,681

Notes,LoansandLeasesPayable:

NotesandLoansPayable  19,000,000  417,700,000

 —  436,700,000  19,000,000

NotesfromDirectBorrowings



 17,678,505  16,519,598  2,477,640  31,720,463  6,443,614

LeaseObligations



 888,343,155  196,761,546  122,046,823  963,057,878  107,368,206

SBITALiability  94,815,658  59,698,619  60,359,419  94,154,858  41,016,036

TotalNotes,LoansandLeasesPayable

 1,019,837,318  690,679,763  184,883,883  1,525,633,198  173,827,855

TotalOPEBLiability



 11,931,417,814  2,945,429,208  181,252,716  14,695,594,306  243,697,144

NetPensionLiability  4,805,427,562  —  2,504,716,063  2,300,711,499  —

TotalPensionLiability



 1,026,357,235  66,700,741  47,005,635  1,046,052,341  —

HedgingDerivativeLiability  293,360,762  —  205,849,951  87,510,811  —

EmployeeCompensableLeave  819,809,713  460,625,101  425,010,102  855,424,712  445,635,293

IncurredButNotReportedSelf-Insurance

Claims  177,110,866  1,753,641,214  1,709,032,839  221,719,241  187,951,915

AssetRetirementObligation  18,178,517  1,330,423  —  19,508,940  —

Total

1,2

$ 29,778,286,586  6,205,122,323  5,822,614,198  30,160,794,711  2,750,408,888

  Additions of Notes and Loans Payable include $417,700,000 of commercial paper notes reclassified from short-term debt to long-term notes and loans payable on the

statementofnetpositionasaresultofrefundingcommercialpapernotessubsequenttoAugust31,2022throughtheissuanceoflong-termbonds.Seenote10relatedto

short-termdebtandnote24fordetailsonthesubsequentevents.

IncludesretroactiverestatementsrelatedtoGASBStatementNo.96.SeeNote4forfurtherdetails.



PROJECTEDBONDDEBTSERVICEREQUIREMENTS

The principal and interest expense for the next five years and beyond are projected below for bonds issued and

outstanding:

FiscalYear Principal Interest Total

2024 $ 1,576,135,000  351,905,496  1,928,040,496

2025  341,695,000  333,658,298  675,353,298

2026  373,915,000  316,794,406  690,709,406

2027  287,145,000  298,384,320  585,529,320

2028  256,505,000  284,253,913  540,758,913

2029–2033  1,693,215,000  1,207,518,020  2,900,733,020

2034–2038  1,065,404,000  827,593,054  1,892,997,054

2039–2043  964,256,000  601,168,323  1,565,424,323

2044–2048  1,901,600,000  354,101,248  2,255,701,248

2049–2053  714,135,000  50,820,658  764,955,658

TotalRequirements $ 9,174,005,000  4,626,197,736  13,800,202,736

The System’s variable rate demand bonds mature at various dates through August 1, 2045. Outstanding principal

balances on variable rate demand bonds may be classified as non-current liabilities if the issuer has entered into a

“take-out agreement” to convert bonds “put” but not resold into some other form of long-term obligation. In the

absenceofsuchanagreement,thetotaloutstandingprincipalbalancesforthesebondsarerequiredtobeclassifiedas

currentliabilities. Although itisthe System’s intenttorepay its variable ratedemand bonds in accordancewiththe

maturities set forth in the bond offering circulars, the System does not have “take-out” agreements in place.

Accordingly,the System has classified the totaloutstandingprincipal balances on its variable ratedemandbondsas

current liabilities. The obligations totaled $1,226,475,000 and $1,274,660,000 at August 31, 2023 and 2022,

respectively.

PLEDGEDFUTUREREVENUES

ThefollowingtableprovidesthepledgedfuturerevenueinformationfortheSystem’sbonds:

2023 2022

PledgedRevenueRequiredforFuturePrincipalandInterest

onExistingBonds $ 13,800,202,736  13,331,009,655

TermofCommitmentYearEnding8/31 2052 2052

PercentageofSpecificRevenuesPledged 100% 100%

CurrentYearPledgedRevenue $ 16,843,156,924  14,994,269,165

CurrentYearPrincipalandInterestPaid $ 767,185,761  768,817,572

DIRECTBORROWINGS

Certaindirectborrowingstofinancethepurchaseofpropertyarecapitalizedatthepresentvalueoffutureminimum

direct borrowing payments. The original capitalized cost of all such property financed with direct borrowings as of

August31,2023and2022isasfollows:

Assets-DirectBorrowings 2023 2022

FurnitureandEquipment $ 4,837,000  25,099,067

Less:AccumulatedDepreciation  (3,176,762)  (1,331,329)

Buildings  13,581,387  13,581,387

Less:AccumulatedDepreciation  (1,439,819)  (775,287)

NondepreciableCollections  1,420,997  407,712

Total $ 15,222,803  36,981,550

Direct borrowing obligations are due in annual installments through 2046.The following is a schedule of the future

minimumpaymentsfordirectborrowingsatAugust31,2023.

FiscalYear Principal Interest Total

2024 $ 1,261,125  680,583  1,941,708

2025  734,490  657,531  1,392,021

2026  643,479  631,806  1,275,285

2027  889,939  605,061  1,495,000

2028  670,775  579,225  1,250,000

2029–2033  2,464,647  2,535,352  4,999,999

2034–2038  3,108,314  1,891,685  4,999,999

2039–2043  3,920,082  1,079,918  5,000,000

2044–2048  2,660,103  173,231  2,833,334

TotalMinimumPayments $ 16,352,954  8,834,392  25,187,346

POLLUTIONREMEDIATIONOBLIGATION

TheUniversityofTexasSystemAdministrationpurchasedcontaminatedlandwithplanstoremediate.Theestimated

outlays for the pollution remediation are $3,500,000 using the expected cash flow technique. These pollution

remediationoutlaysqualifyforcapitalizationand$3,161,511and$3,148,595werecapitalizedthroughAugust31,2023

and2022respectively.Thepurchasepriceof$213,584,352andtotalexpectedoutlaysdidnotexceedthefairmarket

valueoftheuncontaminatedpropertyof$232,290,000,andassuch,nopollutionremediationliabilitywasestablished.

EMPLOYEES’COMPENSABLELEAVE

Employees’ compensable leave is the System’s liability for accrued compensable absences. This obligation is usually

paidfromthesamefundingsource(s)astheemployee’ssalaryorwagecompensation.

13. BondedIndebtedness

At August 31, 2023 and 2022, the System had outstanding bonds payable of $9,174,005,000 and $8,792,630,000,

respectively.PermanentUniversityFundbondsaresecuredbyandpayablefromtheSystem’sinterestintheAvailable

University Fund, which consists of distributions from the investment income of the Permanent University Fund.

RevenueFinancingSystemdebtissecuredbyandpayablefromPledgedRevenuesasdefinedintheMasterResolution

establishing the Revenue Financing System. Pledged Revenues consist of all lawfully available revenues, funds and

balances, with certain exceptions, pledged to secure revenue-supported indebtedness issued under the Master

Resolution.

BondedIndebtedness InterestRates

Maturity

Dates

Outstanding

Principal

PermanentUniversityFund 2.00%-5.262% 2024-2052 $ 2,614,470,000

RevenueFinancingSystem 2.00%-5.375% 2024-2052  6,559,535,000

AsofAugust31,2023,thefollowingamountswereauthorized,butunissued:PermanentUniversityFundbondsuptoa

maximumaggregateamountof$975millionandRevenueFinancingSystembondsuptoamaximumaggregateamount

of$975million,eachauthorizedtobeissuedonorbeforeAugust23,2024.AllbondsissuedbytheSystemaredefined

as revenue bonds. Segment information requirements are not applicable, due to the bond indentures’ lack of

specificallyidentifiable activitiesandexternal partyimposedseparate accountingrequirements.General information

relatedtobondsoutstandingasofAugust31,2023,issummarizedinthefollowingtable.

PermanentUniversityFund:

RefundingBonds,Series2006B

Torefund$85,545,000principalamountofPermanent

UniversityFundBonds,Series2002B,maturingonJuly1in

theyears2020through2022,bothinclusive;torefund

$172,985,000principalamountofPermanentUniversity

FundBonds,Series2004B,maturingonJuly1intheyears

2023,2026and2028through2030,bothinclusive;torefund

$51,905,000principalamountofPermanentUniversityFund

Bonds,Series2005B,maturingonJuly1intheyear2035,

andpaythecostofissuance

January24,2007 $ 284,065,000

TaxableBonds,Series2009A

Torefund$250,000,000principalamountofPermanent

UniversityFundTaxableCommercialPaperNotes,SeriesB

andpaythecostofissuance

September17,2009  250,000,000

Bonds,Series2014B

Torefund$17,240,000principalamountofPermanent

UniversityFundBonds,Series2004A,maturingonJuly1in

theyears2015and2016;andtorefund$223,535,000

principalamountofPermanentUniversityFundBonds,Series

2004B,maturingonJuly1intheyears2024,2025,2027and

2033,andpaythecostofissuance

April2,2014  221,580,000

RefundingBonds,Series2015A

Torefund$50,390,000principalamountofPermanent

UniversityFundRefundingBonds,Series2005A,maturingon

July1intheyears2016through2019,bothinclusive;to

refund$72,720,000principalamountofPermanent

UniversityFundBonds,Series2005B,maturingonJuly1in

theyears2018,2019,2034and2035;andtorefund

$87,485,000principalamountofPermanentUniversityFund

Bonds,Series2006C,maturingonJuly1intheyears2017

through2035,bothinclusive,andpaythecostofissuance

April2,2015  197,970,000

Bonds,Series2015B Torefund$252,500,000principalamountofPermanent

UniversityFundTaxableCommercialPaperNotes,SeriesB

andpaythecostofissuance

August25,2015  220,565,000

Bonds,TaxableSeries2015C

Torefund$125,500,000principalamountofPermanent

UniversityFundTaxableCommercialPaperNotes,SeriesB

andpaythecostofissuance

December9,2015  126,020,000

Bonds,Series2016A

Torefund$137,000,000principalamountofPermanent

UniversityFundTaxableCommercialPaperNotes,SeriesB

andpaythecostofissuance

January5,2016  117,270,000

Bonds,Series2016B

Torefund$319,000,000principalamountofPermanent

UniversityFundCommercialPaperNotes,SeriesAandpay

thecostofissuance

September1,2016  272,350,000

BondSeries Purpose IssueDate

AmountIssued

Bonds,TaxableSeries2017A

Torefund$81,000,000principalamountofPermanent

UniversityFundCommercialPaperNotes,SeriesA,andto

refund$220,000,000principalamountofPermanent

UniversityFundTaxableCommercialPaperNotes,SeriesB

andpaythecostofissuance

November14,2017  302,640,000

Bonds,Series2022A

Torefund$417,700,000principalamountofPermanent

UniversityFundCommercialPaperNotes,SeriesAandpay

thecostofissuance

October13,2022  372,915,000

Bonds,Series2023A

Torefund$240,340,000ofPermanentUniversityFund

Bonds,Series2014A,torefund$176,000,000ofPermanent

UniversityFundCommercialPaperNotes,SeriesA,andpay

thecostofissuance

April4,2023  375,270,000

RevenueFinancingSystem:

RefundingBonds,Series2010B

Torefund$393,690,000principalamountofportionsof

RevenueFinancingSystemBonds,2006B,2006Dand2006F

andpaythecostofissuance

April14,2010  385,380,000

TaxableBonds,Series2010C

Toprovidenewmoneyof$600,741,596andpaythecostof

issuance

September23,2010  604,310,000

TaxableBonds,Series2010D

Torefund$349,415,000principalamountofRevenue

FinancingSystemCommercialPaperNotes,SeriesA,provide

newmoneyof$163,441,000andpaythecostofissuance

June30,2010  516,245,000

Bonds,Series2014A

Torefund$179,411,000principalamountofRevenue

FinancingSystemCommercialPaperNotes,SeriesA,provide

newmoneyof$103,148,328andpaythecostofissuance

May1,2014  259,135,000

RefundingBonds,Series2014B

Torefund$261,840,000principalamountofportionsof

RevenueFinancingSystemBonds,2006B,2006Dand2006F,

andpaythecostofissuance

November24,2014  250,700,000

Bonds,TaxableSeries2016A

Torefund$48,494,000principalamountofRevenue

FinancingSystemCommercialPaperNotes,SeriesA,to

refund$107,630,000principalamountofRevenueFinancing

SystemTaxableCommercialPaperNotes,SeriesB,provide

newmoneyof$98,745,350andpaythecostofissuance

January14,2016  255,825,000

Bonds,Series2016B

Torefund$105,478,000principalamountofRevenue

FinancingSystemCommercialPaperNotes,SeriesA,provide

newmoneyof$118,490,125andpaythecostofissuance

January22,2016  206,040,000

RefundingBonds,Series2016C

Torefund$87,145,000principalamountofRevenue

FinancingSystemBonds,Series2008A,providenewmoney

of$64,800,000andpaythecostofissuance

May10,2016  133,240,000

Bonds,Series2016D

Toprovidenewmoneyof$260,000,000andpaythecostof

issuance

July1,2016  213,180,000

Bonds,Series2016E

Toprovidenewmoneyof$245,000,000andpaythecostof

issuance

August22,2016  196,215,000

Bonds,Series2016F

Torefund$465,019,000principalamountofRevenue

FinancingSystemCommercialPaperNotes,SeriesA,andpay

thecostofissuance

September1,2016  376,030,000

RefundingBonds,Series2016H

Torefund$266,640,000principalamountofportionsof

RevenueFinancingSystemBonds,2006Dand2006F,andpay

thecostofissuance

November17,2016  233,350,000

BondSeries Purpose IssueDate

AmountIssued

RefundingBonds,Series2016I

Torefund$202,010,000principalamountofportionsof

RevenueFinancingSystemBonds,2006Eand2010A,andpay

thecostofissuance

November30,2016  184,725,000

Bonds,Series2016J

Toprovidenewmoneyof$352,832,000andpaythecostof

issuance

January4,2017  306,925,000

Bonds,TaxableSeries2017A

Torefund$349,000,000principalamountofRevenue

FinancingSystemTaxableCommercialPaperNotes,SeriesB,

andpaythecostofissuance

September14,2017  350,815,000

Bonds,Series2017B

Torefund$87,455,000principalamountofRevenue

FinancingSystemCommercialPaperNotes,SeriesA,to

refund$191,664,000principalamountofRevenueFinancing

SystemTaxableCommercialPaperNotes,SeriesB,andpay

thecostofissuance

October24,2017  265,490,000

RefundingBonds,Series2017C

Torefund$265,855,000principalamountofportionsof

RevenueFinancingSystemBonds,2009D,2012Aand2012B,

andpaythecostofissuance

December7,2017  258,465,000

RefundingBonds,Series2019A

Torefund$386,785,000principalamountofportionsof

RevenueFinancingSystemBonds,2009Band2014B,andpay

thecostofissuance

June13,2019  320,435,000

Bonds,Series2019B

Torefund$449,478,000principalamountofRevenue

FinancingSystemCommercialPaperNotes,SeriesA,andpay

thecostofissuance

July18,2019  318,715,000

Bonds,Series2020A

Torefund$381,590,000principalamountofRevenue

FinancingSystemCommercialPaperNotes,SeriesA,to

refund$99,530,000ofRevenueFinancingSystemBonds,

Series2016Fandpaythecostofissuance

April14,2020  347,580,000

Bonds,TaxableSeries2020B

Torefund$159,500,000principalamountofRevenue

FinancingSystemCommercialPaperNotes,SeriesA,to

refund$139,412,000principalamountofRevenueFinancing

SystemTaxableCommercialPaperNotes,SeriesBandpay

thecostofissuance

May29,2020  300,805,000

Bonds,Series2020C

Torefund$98,800,000principalamountofRevenue

FinancingSystemCommercialPaperNotes,SeriesA,to

refund$28,405,000ofRevenueFinancingSystemBonds,

Series2017Bandpaythecostofissuance

June16,2020  101,065,000

Bonds,Series2021A

Torefund$300,000,000principalamountofRevenue

FinancingSystemCommercialPaperNotes,SeriesA,to

refund$115,000,000ofRevenueFinancingSystemBonds,

Series2016Bandpaythecostofissuance

May19,2021  381,865,000

Bonds,Series2022A

Torefund$194,911,000principalamountofRevenue

FinancingSystemCommercialPaperNotes,SeriesA,to

refund$11,920,000ofRevenueFinancingSystemBonds,

Series2012A,torefund$76,855,000ofRevenueFinancing

SystemBonds,Series2012Bandpaythecostofissuance

May18,2022  256,395,000

Bonds,Series2023A

Torefund$389,340,000principalamountofRevenue

FinancingSystemCommercialPaperNotes,SeriesA,andpay

thecostofissuance

June21,2023  337,915,000

BondSeries Purpose IssueDate

AmountIssued

DEMANDBONDS

RevenueFinancingSystem RefundingBonds, Series2007B,RevenueFinancingSystem Bonds,Series 2008B,Revenue

FinancingSystemBonds,TaxableSeries2016G,andPermanentUniversityFundBonds,Series2008Aarevariablerate

demandbonds with an optiontotender on sevendays’ notice. TheSystemhas entered intocorrespondinginterest

rateswapagreementstoconverttheSystem’sinterestrateexposuretoafixedrate.TheRevenueFinancingSystem

Refunding Bonds, Series 2007B and the corresponding swap agreements extend to August 1, 2034. The Revenue

FinancingSystemBonds,Series2008BandthecorrespondingswapagreementsextendtoAugust1,2039.TheRevenue

FinancingSystemBonds,TaxableSeries2016GandthecorrespondingswapagreementsextendtoAugust1,2045.The

PermanentUniversityFundBonds,Series2008AandthecorrespondingswapagreementsextendtoJuly1,2038.The

BoardofRegentsisobligatedtopaythepurchasepriceofdemandbondstenderedforpurchaseandnotremarketed

byusinglawfullyavailablefunds.Generalinformationrelatedtothesedemandbondsissummarizedinthefollowing

table:

BondSeries Purpose IssueDate AmountIssued

PermanentUniversityFund:

Bonds,Series2008A

Torefund$400,000,000ofPermanentUniversityFundFlexible

Notes,SeriesAandpaycostsofissuance

October30,2008 $ 400,905,000

RevenueFinancingSystem:

RefundingBonds,Series

2007B

Torefund$169,015,000ofRevenueFinancingSystemBonds,Series

2003Band$149,860,000ofRevenueFinancingSystemBonds,Series

2004D,andpaycostsofissuance

December20,2007  345,460,000

Bonds,Series2008B Torefund$461,922,000ofRevenueFinancingSystemCommercial

PaperNotes,SeriesAand$34,715,000ofRevenueFinancingSystem

Bonds,Series1998B,provide$182,590,000ofnewmoneyto

financethecostsofcampusimprovements,andpaycostsof

issuance

March18,2008  685,485,000

Bonds,TaxableSeries2016G

Torefund$250,000,000principalamountofRevenueFinancing

SystemCommercialPaperNotes,SeriesA,andpaythecostof

issuance

September15,2016  250,000,000

BUILDAMERICABONDS

TheAmericanRecoveryandReinvestmentActof2009authorizedtheissuanceofBuildAmericaBonds(BABs),whereby

certainissuersareauthorizedtoissuetaxablebondsandreceivefromthefederalgovernmentasubsidyequalto35%

oftheinterestpaymentsonDirectPaymentBABsreducedbytheapplicablefederalsequestrationreductionrate.The

System did not issue any BABs during 2023 or 2022. The System had $1,125,360,000 and $1,157,030,000 of BABs

outstandingatAugust31,2023and2022,respectively.

EARLYEXTINGUISHMENTSINFISCALYEAR2023

OnSeptember20,2022,$79,675,000principalamountofPermanentUniversityFundBonds,Series2014B,werelegally

defeasedusingavailablefunds.

• Thedefeasanceinvolvedusingavailablefundstopurchase$81,967,061ofeligibledefeasancesecurities.

• Thedefeasedbondsareconsideredfullydefeasedandtheliabilityfortheseobligationshasbeenremovedfrom

theconsolidatedstatementofnetposition.

• Anaccountinglossof$973,238resultedfromthetransactionasthereacquisitionpriceof$81,967,061exceeded

thenetcarryingamountof$79,675,000parvalueand$1,318,823unamortizedoriginalissuepremium.

• Asaresultofthisdefeasance,theSystemreduceditsfuturedebtservicepaymentsby$106,229,750fromclosing

throughJuly1,2032.

Permanent University Fund Bonds, Series 2022A were issued on October 13, 2022, to current refund $417,700,000

principal amount of Permanent University Fund Commercial Paper Notes, Series A and to pay the costs of issuance

relatedthereof.

• Net proceeds related to the issuance were $418,184,091, which represents the principal amount of the 2023A

Bonds of $372,915,000, plus an original issue premium of $46,291,287, less an underwriting discount of

$1,022,196.Thenetproceedswereusedtopaycostsofissuanceof$316,140,topurchase$417,867,442ofeligible

defeasancesecuritiesandtodeposit$510withtheescrowagentfortherefundednotes.

• Therefundednotesareconsideredfullydefeasedandtheliabilityfortheseobligationshasbeenremovedfromthe

consolidatedstatementofnetposition.

• Anaccountinglossof$167,442resultedfromthetransactionasthereacquisitionpriceof$417,867,442exceeded

thenetcarryingamountof$417,700,000parvalue.

PermanentUniversityFundBonds,Series2023AwereissuedonApril4,2023,tocurrentrefund$176,000,000principal

amountofPermanentUniversityFundCommercialPaperNotes,SeriesA,tocurrentrefund$240,340,000principalof

PermanentUniversityFundBonds,Series2014A,andtopaythecostsofissuancerelatedthereof.

• Net proceeds related to the issuance were $420,077,523, which represents the principal amount of the 2023A

Bonds of $375,270,000, plus an original issue premium of $45,958,372, less an underwriting discount of

$1,150,849.Thenetproceedswereusedtopaycostsofissuanceof$297,242,topurchase$419,779,650ofeligible

defeasancesecuritiesandtodeposit$631withtheescrowagentfortherefundedbondsandnotes.

• The refunded bonds and notes are considered fully defeased and the liability for these obligations has been

removedfromtheconsolidatedstatementofnetposition.

• An accounting loss of $3,066,122 resulted from the transaction as the reacquisition price of $419,779,650

exceededthenetcarryingamountof$416,340,000parvalueand$373,528unamortizedoriginalissuepremium.

• As a result of this refunding, the System reduced its future debt service payments by $42,115,329from closing

through July 1, 2041, and an economic gain from the transaction resulted in a net present value savings of

$28,306,665betweentheoldandnewdebtservicepayments.

RevenueFinancingSystemBonds,Series2023AwereissuedonJune21,2023,tocurrentrefund$389,340,000amount

ofRevenueFinancingSystemCommercialPaperNotes,SeriesAandtopaythecostsofissuancerelatedthereof.

• Net proceeds related to the issuance were $389,159,546, which represents the principal amount of the 2023A

Bondsof$337,915,000,plusanoriginalissuepremiumof$52,179,529,lessanunderwritingdiscountof$934,984.

Thenetproceedswereusedtopaycostsofissuanceof$365,988,topurchase$388,793,557ofeligibledefeasance

securities.

• Therefundednotesareconsideredfullydefeasedandtheliabilityfortheseobligationshasbeenremovedfromthe

consolidatedstatementofnetposition.

• Anaccountinggainof$546,443resultedfromthetransactionasthereacquisitionpriceof$388,793,557wasbelow

thenetcarryingamountof$389,340,000parvalue.

EARLYEXTINGUISHMENTSINFISCALYEAR2022

RevenueFinancingSystemBonds,Series2022AwereissuedonMay18,2022tocurrentrefund$194,911,000principal

amountofRevenueFinancingSystemCommercialPaperNotes,SeriesA,tocurrentrefund$11,920,000principalofRFS

Bonds, Series 2012A, to current refund $76,855,000 principal amount of Revenue Financing System Bonds, Series

2012B,andtopaythecostsofissuancerelatedthereof.

• Net proceeds related to the issuance were $285,877,754, which represents the principal amount of the 2022A

Bondsof$256,395,000,plusanoriginalissuepremiumof$30,320,873,lessanunderwritingdiscountof$838,119.

The net proceeds along with $163,904 of System funds were used to pay costs of issuance of $297,528, to

purchase$78,695,781ofeligibledefeasancesecuritiesandtodeposit$1withtheescrowagentfortherefunded

bonds,andtodeposit$207,048,348withtheescrowagentfortherefundednotes.

• The refunded bonds and notes are considered fully defeased and the liability for these obligations has been

removedfromtheconsolidatedstatementofnetposition.

• An accounting loss of $1,566,031 resulted from the transaction as the reacquisition price of $285,744,130

exceededthenetcarryingamountof$283,686,000parvalueand$492,099unamortizedoriginalissuepremium.

• As a result of this refunding, the System reduced its future debt service payments by $24,940,493from closing

throughAugust 15, 2043,andan economic gain fromthe transaction resultedina net present valuesavingsof

$18,824,826betweentheoldandnewdebtservicepayments.

DERIVATIVEINSTRUMENTS–HEDGINGDERIVATIVEINSTRUMENTINTERESTRATESWAPS

Allinterestrateswapsarevaluedusingthefairvaluehierarchyoflevel2.TheSystemhascalculatedthefairvalueof

the interest rate swaps using a forecast of expected discounted future net cash flows and considered the

nonperformance risk of the parties. The following table outlines the terms of the System’s hedging derivative

instrumentinterestrateswapagreementsineffectatAugust31,2023:

Interest

Rate

Swaps-

byType

Hedgeable

Item

Current

Notional EffectiveDate

Maturity

Date Terms*

Embedded

Options?

CashPaid

or

Received

Counterparty

CreditRating

(Moody's/

S&P)

Weighted

Average

Maturity

Asof

08/31/23

PayFixed;

Receive

Variable

PUFBonds

2008A

$ 162,452,500 11/3/2008 7/1/2038 Pay3.696%;

receiveSIFMA

No No Aa2/A+ 11.5yrs

PUFBonds

2008A

 162,452,500 11/3/2008 7/1/2038 Pay3.6575%;

receiveSIFMA

No No Aa3/A+ 11.5yrs

RFSBonds

2007B

 141,760,000 12/20/2007 8/1/2034 Pay3.805%;

receiveSIFMA

No No Aa2/A+ 6.0yrs

RFSBonds

2007B

 141,760,000 12/20/2007 8/1/2034 Pay3.805%;

receiveSIFMA

No No Aa2/A+ 6.0yrs

RFSBonds

2008B

 94,830,000 3/18/2008 8/1/2036 Pay3.900%;

receiveSIFMA

No No Aa2/A+ 8.5yrs

RFSBonds

2008B

 94,830,000 3/18/2008 8/1/2036 Pay3.900%;

receiveSIFMA

No No A1/A- 8.5yrs

RFSBonds

2008B

 178,390,000 3/18/2008 8/1/2039 Pay3.614%;

receiveSIFMA

No No Aa2/A+ 8.2yrs

RFSBonds

2016G

 250,000,000 12/1/2016 8/1/2045

Pay2.000%;

receive100%

of100%of

SOFR+

No No Aa3/A+ 21.9yrs

RFSTaxable

Commercial

Paper

 250,000,000 11/1/2020 8/1/2049

Pay1.576%;

receive100%

of100%of

SOFR+

No No Aa3/A+ 25.9yrs

Pay

Variable;

Receive

Fixed

PUFBonds

2023A

 128,180,000 9/1/2023 7/1/2033 PaySIFMA;

receive

3.250%

No No Aa2/A+ 9.3yrs

TOTAL

$1,604,655,000

*SecuredOvernightFinancingRate(SOFR)

SecuritiesIndustryandFinancialMarketsAssociation(SIFMA)

USD-FederalFunds-H.15(FedFunds)

100

ThefollowingtableoutlinesthetermsoftheSystem’shedgingderivativeinstrumentinterestrateswapagreementsin

effectatAugust31,2022:

Interest

Rate

Swaps-

byType

Hedgeable

Item

Current

Notional EffectiveDate

Maturity

Date Terms*

Embedded

Options?

CashPaid

or

Received

Counterparty

CreditRating

(Moody's/

S&P)

Weighted

Average

Maturity

Asof

08/31/2022

PayFixed;

Receive

Variable

PUFBonds

2008A

$ 166,042,500 11/3/2008 7/1/2038 Pay3.696%;

receiveSIFMA

No No Aa2/A+ 12.2yrs

PUFBonds

2008A

 166,042,500 11/3/2008 7/1/2038 Pay3.6575%;

receiveSIFMA

No No Aa3/A+ 12.2yrs

PUFBonds

2014A

 240,340,000 6/30/2023 7/1/2041 Pay0.720%;

receive80%of

FedFunds

No No Aa3/A+ 18.3yrs

RFSBonds

2007B

 151,552,500 12/20/2007 8/1/2034 Pay3.805%;

receiveSIFMA

No No Aa2/A+ 6.6yrs

RFSBonds

2007B

 151,552,500 12/20/2007 8/1/2034 Pay3.805%;

receiveSIFMA

No No Aa2/A+ 6.6yrs

RFSBonds

2008B

 99,205,000 3/18/2008 8/1/2036 Pay3.900%;

receiveSIFMA

No No Aa2/A+ 9.1yrs

RFSBonds

2008B

 99,205,000 3/18/2008 8/1/2036 Pay3.900%;

receiveSIFMA

No No A1/A- 9.1yrs

RFSBonds

2008B

 191,060,000 3/18/2008 8/1/2039 Pay3.614%;

receiveSIFMA

No No Aa2/A+ 8.7yrs

RFSBonds

2016G

 250,000,000 12/1/2016 8/1/2045 Pay2.000%;

receive100%

of1MLIBOR

No No Aa3/A+ 22.9yrs

RFSTaxable

Commercial

Paper

 250,000,000 11/1/2020 8/1/2049 Pay1.576%;

receive100%

of1MLIBOR

No No Aa3/A+ 26.9yrs

TOTAL

$1,765,000,000

*LondonInterbankOfferRate(LIBOR)

SecuritiesIndustryandFinancialMarketsAssociation(SIFMA)

USD-FederalFunds-H.15(FedFunds)

101

The following is the fair value of the derivative instrument agreements related to debt in effect at August 31, 2023

basedonthezero-couponmethodandtheclassificationofchangeinfairvaluefromthepreviousfiscalyear:

Derivative

Instrumentsby

Type

Hedgeable

Item

Current

Notional

AccruedInterest

(through

08/31/2023)

FairValueasof

08/31/2023

FairValueasof

08/31/2022

ChangeinFair

Value08/31/2022

-08/31/2023

ChangeinFair

ValueRecorded

Hedging

Derivative

Assets PUFBonds2014A $ —  —  —  44,006,224  (44,006,224) DefInflow

PUFBonds2023A  128,180,000  —

—

 540,818  —  540,818 DefInflow

RFSBonds2016G  250,000,000  (735,444)  57,075,740  32,631,844  24,443,896 DefInflow

RFSTaxableCP  250,000,000  (823,778)  73,163,180  48,369,394  24,793,786 DefInflow

 628,180,000  (1,559,222)  130,779,738  125,007,462  5,772,276

Hedging

Derivative

Liabilities PUFBonds2008A  162,452,500  469,578  (7,713,532)  (17,120,521)  9,406,989 DefOutflow

PUFBonds2008A  162,452,500  459,502  (7,169,550)  (16,511,329)  9,341,779 DefOutflow

RFSBonds2007B  141,760,000  15,129  (4,905,722)  (10,823,257)  5,917,535 DefOutflow

RFSBonds2007B  141,760,000  15,129  (4,545,722)  (10,823,257)  6,277,535 DefOutflow

RFSBonds2008B  94,830,000  17,628  (4,820,866)  (9,461,705)  4,640,839 DefOutflow

RFSBonds2008B  178,390,000  (9,355)  (5,412,397)  (13,309,037)  7,896,640 DefOutflow

 976,475,000  985,239  (39,388,655)  (87,510,811)  48,122,156

Investment

Derivatives-

AssetPositions PUFBonds2006B  180,350,000  (129,249)  1,199,420  —  1,199,420

Incr./Decr.inFair

ValueofInv

PUFBonds2008A  162,452,500  (490,739)  8,123,820  4,697,372  3,426,448

Incr./Decr.inFair

ValueofInv

PUFBonds2008A  162,452,500  (582,388)  11,138,314  8,215,211  2,923,103

Incr./Decr.inFair

ValueofInv

RFSBonds2008B  90,270,000  (151,298)  7,977,272  5,528,660  2,448,612

Incr./Decr.inFair

ValueofInv

RFSBonds2008B  92,045,000  (126,604)  3,846,609  2,716,535  1,130,074

Incr./Decr.inFair

ValueofInv

RFSBonds2008B  117,190,000  (199,127)  8,991,668  6,512,577  2,479,091

Incr./Decr.inFair

ValueofInv

 804,760,000  (1,679,405)  41,277,103  27,670,355  13,606,748

Investment

Derivatives-

LiabilityPositions PUFBonds2006B  —  —  —  (974,081)  974,081

Incr./Decr.inFair

ValueofInv

 —  —  —  (974,081)  974,081

TOTAL $ 2,409,415,000  (2,253,388)  132,668,186  64,192,925  68,475,261

102

The following is the fair value of the derivative instrument agreements related to debt in effect at August 31, 2022

basedonthezero-couponmethodandtheclassificationofchangeinfairvaluefromthepreviousfiscalyear:

Derivative

Instrumentsby

Type

Hedgeable

Item

Current

Notional

AccruedInterest

(through

08/31/2022)

FairValueasof

08/31/2022

FairValueasof

08/31/2021

ChangeinFair

Value08/31/2021

-08/31/2022

ChangeinFair

ValueRecorded

Hedging

Derivative

Assets PUFBonds2014A $ 240,340,000  —  44,006,224  17,515,709  26,490,515 DefInflow

RFSBonds2016G  250,000,000  (92,215)  32,631,844  —  32,631,844 DefInflow

RFSTaxableCP  250,000,000  (180,549)  48,369,394  —  48,369,394 DefInflow

 740,340,000  (272,764)  125,007,462  17,515,709  107,491,753

Hedging

Derivative

Liabilities PUFBonds2008A  166,042,500  782,720  (17,120,521)  (50,525,255)  33,404,734 DefOutflow

PUFBonds2008A  166,042,500  772,065  (16,511,329)  (49,765,271)  33,253,942 DefOutflow

RFSBonds2007B  151,552,500  261,399  (10,823,257)  (32,529,951)  21,706,694 DefOutflow

RFSBonds2008B  99,205,000  178,963  (9,461,705)  (26,641,589)  17,179,884 DefOutflow

RFSBonds2008B  191,060,000  299,131  (13,309,037)  (44,294,009)  30,984,972 DefOutflow

RFSBonds2016G  —  —  —  (24,977,781)  24,977,781 DefOutflow

RFSTaxableCP  —  —  —  (5,455,366)  5,455,366 DefOutflow

 1,024,660,000  2,734,640  (87,510,811)  (293,360,762)  205,849,951

Investment

Derivatives-

AssetPositions PUFBonds2008A  166,042,500  (152,361)  4,697,372  3,230,931  1,466,441

Incr./Decr.inFair

ValueofInv

PUFBonds2008A  166,042,500  103,345  8,215,211  5,179,802  3,035,409

Incr./Decr.inFair

ValueofInv

RFSBonds2008B  90,270,000  (99,158)  5,528,660  3,862,789  1,665,871

Incr./Decr.inFair

ValueofInv

RFSBonds2008B  92,045,000  (86,256)  2,716,535  1,672,858  1,043,677

Incr./Decr.inFair

ValueofInv

RFSBonds2008B  117,190,000  (130,183)  6,512,577  4,263,564  2,249,013

Incr./Decr.inFair

ValueofInv

 631,590,000  (364,613)  27,670,355  18,209,944  9,460,411

Investment

Derivatives-

LiabilityPositions PUFBonds2006B  206,010,000  (46,130)  (974,081)  (531,908)  (442,173)

Incr./Decr.inFair

ValueofInv

 206,010,000  (46,130)  (974,081)  (531,908)  (442,173)

TOTAL $ 2,602,600,000  2,051,133  64,192,925  (258,167,017)  322,359,942

103

DerivativeInstrumentObjectives

Derivative

Instrumentsby

Type

Hedgeable

Item

Current

Notional Objective

Effectiveat

08/31/2023

Evaluationfor

Effectiveness

Hedging

Derivative

Instruments

PUFBonds2008A $ 162,452,500 HedgechangesincashflowsonSeries2008Abonds Yes ConsistentCritical

Terms

PUFBonds2008A  162,452,500 HedgechangesincashflowsonSeries2008Abonds Yes ConsistentCritical

Terms

PUFBonds2023A  128,180,000 HedgechangesinfairvalueofSeries2023Abonds Yes ConsistentCritical

Terms

RFSBonds2007B  141,760,000 HedgechangesincashflowsonSeries2007Bbonds Yes ConsistentCritical

Terms

RFSBonds2007B  141,760,000 HedgechangesincashflowsonSeries2007Bbonds Yes ConsistentCritical

Terms

RFSBonds2008B  94,830,000 HedgechangesincashflowsonSeries2008Bbonds Yes ConsistentCritical

Terms

RFSBonds2008B  94,830,000 HedgechangesincashflowsonSeries2008Bbonds Yes ConsistentCritical

Terms

RFSBonds2008B  178,390,000 HedgechangesincashflowsonSeries2008Bbonds Yes ConsistentCritical

Terms

RFSBonds2016G  250,000,000 HedgechangesincashflowsonSeries2016Gbonds Yes ConsistentCritical

Terms

RFSTaxableCP  250,000,000 HedgeinterestrateriskonRFStaxablecommercialpaper Yes OtherQuantitative

Method

Investment

Derivative

Instruments

PUFBonds2006B  180,350,000 ManagechangesincashflowsonSeries2006Bbonds N/A N/A

PUFBonds2008A  162,452,500 ManagechangesincashflowsonSeries2008Abonds N/A N/A

RFSBonds2008B  90,270,000 ManagechangesincashflowsonSeries2008Bbonds N/A N/A

RFSBonds2008B  92,045,000 ManagechangesincashflowsonSeries2008Bbonds N/A N/A

RFSBonds2008B  117,190,000 ManagechangesincashflowsonSeries2008Bbonds N/A N/A

TOTAL $ 2,409,415,000

104

DerivativeInstrumentObjectives

Derivative

Instrumentsby

Type

Hedgeable

Item

Current

Notional Objective

Effectiveat

08/31/2022

Evaluationfor

Effectiveness

Hedging

Derivative

Instruments

PUFBonds2008A $ 166,042,500 HedgechangesincashflowsonSeries2008Abonds Yes ConsistentCritical

Terms

PUFBonds2008A  166,042,500 HedgechangesincashflowsonSeries2008Abonds Yes ConsistentCritical

Terms

PUFBonds2014A  240,340,000 HedgechangesincashflowsonSeries2014Abonds Yes ConsistentCritical

Terms

RFSBonds2007B  151,552,500 HedgechangesincashflowsonSeries2007Bbonds Yes ConsistentCritical

Terms

RFSBonds2007B  151,552,500 HedgechangesincashflowsonSeries2007Bbonds Yes ConsistentCritical

Terms

RFSBonds2008B  99,205,000 HedgechangesincashflowsonSeries2008Bbonds Yes ConsistentCritical

Terms

RFSBonds2008B  99,205,000 HedgechangesincashflowsonSeries2008Bbonds Yes ConsistentCritical

Terms

RFSBonds2008B  191,060,000 HedgechangesincashflowsonSeries2008Bbonds Yes ConsistentCritical

Terms

RFSBonds2016G  250,000,000 HedgechangesincashflowsonSeries2016Gbonds Yes ConsistentCritical

Terms

RFSTaxableCP  250,000,000 HedgeinterestrateriskonRFStaxablecommercialpaper Yes OtherQuantitative

Method

Investment

Derivative

Instruments

PUFBonds2006B  206,010,000 ManagechangesincashflowsonSeries2006Bbonds N/A N/A

PUFBonds2008A  166,042,500 ManagechangesincashflowsonSeries2008Abonds N/A N/A

RFSBonds2008B  90,270,000 ManagechangesincashflowsonSeries2008Bbonds N/A N/A

RFSBonds2008B  92,045,000 ManagechangesincashflowsonSeries2008Bbonds N/A N/A

RFSBonds2008B  117,190,000 ManagechangesincashflowsonSeries2008Bbonds N/A N/A

TOTAL $ 2,602,600,000

Thefairvalueofinterestrateswapsreportedasinvestmentderivativeinstruments-assetpositionsof$41,277,103and

$27,670,355asofAugust31,2023and2022,respectively,isincludedontheconsolidatedstatementofnetpositionas

noncurrentunrestrictedinvestmentsandinthesummaryofinvestmentsinNote6.Thefairvalueofinterestrateswaps

reportedasinvestmentderivativeinstruments-liabilitypositionsof$0and$974,081asofAugust31,2023and2022is

included on the consolidated statement of net position as investment derivative instruments-liability positions. The

changeinfairvalueofinterestrateswapsreportedasinvestmentderivativeinstrumentsareincludedininvestment

income on the consolidated statement of revenues, expenses and changes in net position. For the years ending

August 31, 2023 and 2022, the change in fair value of interest rate swaps reported as investment derivative

instrumentswasanincreaseintheamountof$14,580,829andanincreaseintheamountof$9,018,238,respectively.

105

HedgingDerivativeInstrumentandInvestmentDerivativeInstrumentRisks

CreditRisk:TheSystemisexposedtocreditriskifthecounterpartytoaninterestrateswapfailstomeetthetermsand

obligationsof its contracts.Contracts withapositive fair valueexpose the Systemto creditrisk.The Systemfacesa

maximum possible loss equivalent to the amount of the swap contract’s fair value, less any collateral held by the

Systemprovidedbythecounterparty.ContractswithanegativefairvaluedonotexposetheSystemtocreditrisk.Allof

thecounterpartiesassociatedwithswapcontractswiththeSystemarecreditworthyfinancialinstitutions.Additionally,

each of the System’s swap counterparties has agreed to provide collateral to the System to the extent the positive

valuebeforeconsideringnonperformanceriskofthepartiesexceedscertainthresholdamounts.Shouldacounterparty

failtomeetitscontractualagreements,oriftheSystem’screditratingfallsbelowinvestmentgrade(Baa2byMoody’s

orBBBbyS&P),theSystemcouldberequiredtopayorreceiveasubstantialterminationpayment.AsofAugust31,

2023,theSystem’screditratingswereAaabyMoody’sandAAAbyS&P.TheSystemdoesnothavetopostcollateral

due to changes in fair value of its swap agreements unless the System does not have a credit rating or the System

commitsaspecifiedeventofdefaultandtheeventofdefaultiscontinuing.AsofAugust31,2023,themaximumloss

duetocreditriskwas$33,844,819.ItistheSystem’spolicytorequirecounterpartycollateralpostingprovisionsinits

non-exchange-tradedderivativeinstruments.Thesetermsrequirecollateralizationoftheaggregatevalueofderivative

instrumentsinassetpositions,netoftheeffectofapplicablethresholdamountsbasedoneachcounterparty’scredit

rating.Althoughcollateralpostedcanbeintheformofcash,U.S.TreasuryorU.S.agencysecuritieshelddirectlybythe

Systemorbyathird-partycustodianapproved bythe System,collateralpostediscurrentlyonlyin theform ofcash

helddirectlybytheSystem.TheSystemhasnotenteredintomasternettingarrangements.

BankruptcyRisk:TheSystemisexposedtobankruptcyriskofitsswapcounterparties.Theamountofanytermination

theSystemwouldreceive,if aterminationpaymentis owed,would besubjecttotheswapcounterparty’sabilityto

maketherequiredpayment.Upontheswapcounterparty’sbankruptcy,theSystem’sobligationtomakepayments,the

timingoftermination,andthevaluationoftheswapuponterminationmaybeaffectedbyrelevantbankruptcylaw.

InterestRateRisk:InterestrateriskinvolvestheriskthatthevalueoftheSystem’sinterestrateswapswillfluctuate

because of changes in interest rates. The value of interest rate swap agreements with a longer weighted average

maturity tend to be more sensitive to changing interest rates, and therefore, more volatile than those with shorter

maturities.

BasisRisk:TheSystemisexposedtobasisriskwhenthevariableratereceivedunderaninterestrateswapdoesnot

matchthevariableratepaidonhedgedbonds.TheinterestrateontheSystem’svariableratebondsisatax-exempt

interestratebasedontheSystem’screditratings.ThevariablereceiptontheSystem’sinterestrateswapsisbasedon

either a tax-exempt index (SIFMA) or a taxable index (SOFR). Tax-exempt interest rates can change without a

corresponding change in taxable interest rates due to factors affecting the tax-exempt market that do not have a

similareffectonthetaxablemarket.

IndexRisk:TheSystemisexposedtoriskthatthemethodofestablishingSOFR,theThomsonMunicipalMarketData

(MMD)ortheSIFMAindexcouldchangeovertime.AchangeinSOFR,MMDortheSIFMAindexmayaffecttherate

thattheSystempaysorreceivesoncertaininterestrateswaps.

Liquidity Risk: The System is exposed to risk that, under certain market conditions, the System may be unable to

terminate,assignornovateaninterestrateswap.TheSystemmaynotamend,assignornovateaswapwithoutthe

swapcounterparty’sconsent.Therecanbenoassurancethatanotherpartywillbewillingtoacceptanassignmentor

novationoftheSystem’sinterestrateswap.

TerminationRisk:Terminationriskistheriskthattheswapmaybeterminatedpriortoitsscheduledmaturitydateasa

resultofcertainspecifiedevents.NoneoftheSystem’sinterestrateswapsaresubjecttoautomaticearlytermination.

TheSystemissubjecttoterminationriskiftheSystem’screditratingfallsbelowinvestmentgrade(Baa2byMoody’sor

BBBbyS&P),oriftheSystemcommitsaspecifiedeventofdefaultorotherspecifiedeventoftermination.TheSystem

has the right to optionally terminate any of its swaps at any time. At termination, if the fair value of the swap is

negative,theSystemwouldbeliabletopayaterminationpaymenttotheappropriatecounterpartyintheamountof

theswap’sfairvalue.Ifthefairvalueoftheswapispositiveattermination,thecounterpartywouldoweatermination

paymenttotheSystemintheamountoftheswap’sfairvalue.

Amortization Risk: Amortization risk is the risk caused by a mismatch between the amortization of a derivative

instrument contract and the underlying hedged bonds. The System is not exposed to amortization risk by exactly

matching the notional amounts and amortization schedules of its swap contracts with the principal amounts and

amortizationschedulesoftheassociatedhedgedbonds.

106

MarketAccessRisk:Eachswapassociatedwithunderlyingvariableratedebtthatissubjecttotenderattheoptionof

thebondholderissubjecttomarketaccessrisk.IntheeventtheSystemisunabletoremarketitsvariableratebonds,

theSystemmaychoosetorefundthevariableratebondswithfixed-ratebondsandoptionallyterminatetherelated

interestrate swap agreements.Shouldan early termination eventoccur,the System couldberequired to pay or to

receiveasubstantialterminationpayment.AsofAugust31,2023,theSystemhadmarketaccessriskassociatedwith

$1,226,475,000aggregatenotional amount of pay-fixed, receive-variable interest rate swaps used to hedge interest

rateriskonvariableratebondssubjecttotender.AsofAugust31,2023,theSystem’svariableratebondscarriedthe

highestshort-termratingsfromMoody’sandS&PofVMIG1andA-1+,respectively.

HedgingDerivativeInstrumentSwapScheduledPayments

The following tables reflect the scheduled payments on the hedging derivative instrument swap agreements which

differfromthepresentationintheprojectedbonddebtservicerequirementstablefortherelateddemandbondsand

commercialpaper.Thedebtservicerequirementsreflecttheentireoutstandingbalanceofthedemandbondsin2024

becausethebondsaresupportedbyinternalliquidity.

AsofAugust31,2023

Associated

VariableRateBondsandCommercial

Paper

Pay-Fixed

Receive-Variable

InterestRate

Swaps

TotalFiscalYear Principal

Interest

2024 $ 49,785,000  65,762,900  (21,249,650)  94,298,250

2025  57,325,000  63,808,391  (21,097,382)  100,036,009

2026  50,360,000  61,551,687  (20,925,219)  90,986,468

2027  59,605,000  59,578,166  (20,770,135)  98,413,031

2028  61,850,000  57,233,825  (20,590,758)  98,493,067

2029-2033  313,440,000  250,124,954  (100,289,349)  463,275,605

2034-2038  374,870,000  189,141,800  (95,829,430)  468,182,370

2039-2043  9,240,000  135,359,600  (90,953,210)  53,646,390

2044-2048  250,000,000  95,127,500  (65,228,400)  279,899,100

2049-2053  250,000,000  13,710,500  (9,621,200)  254,089,300

1ReflectsscheduledprincipalandinterestpaymentsofRevenueFinancingSystemRefundingBonds,Series2007B,RevenueFinancing

System Bonds, Series 2008B, Revenue Financing System Bonds, Taxable Series 2016G, and Permanent University Fund Bonds,

Series 2008A to be optionally or mandatorily redeemed in the fiscal years reflected. Also includes $250 million of projected

principalinAugust2049ofRevenueFinancingSystemCommercialPaper.

2AnnualdebtservicerequirementsarecomputedusingtheSystem’sinterestratesineffectonAugust31,2023,onitsSeries2008A

Bonds,Series2007BBonds,Series2008B,Series2016GBonds,andtaxablecommercialpaper.

3Reflectsnetpaymentsonpay-fixed,receive-variableinterestrateswapsbasedonstaticinterestrateenvironmentasofAugust31,

2023,andappliedontherespectivenotionalamountsoftheswapsthroughtheirrespectiveterminationdates.

AsofAugust31,2023

AssociatedFixedRateBonds

Receive-Fixed

Pay-Variable

InterestRate

Swaps

TotalFiscalYear Principal Interest

2024 $ —  6,409,000  850,996  7,259,996

2025  —  6,409,000  1,038,258  7,447,258

2026  —  6,409,000  1,038,258  7,447,258

2027  —  6,409,000  1,038,258  7,447,258

2028  —  6,409,000  1,038,258  7,447,258

2029-2033  128,180,000  28,918,750  4,684,838  161,783,588

Reflectsscheduledprincipalandinterest paymentsofPermanentUniversityFund Bonds,Series2023Amaturingin thefiscalyears

reflected.

Reflectsnetpaymentsonreceive-fixed,pay-variableinterestrateswapsbasedonstaticinterestrateenvironmentasofAugust31,

2023,andappliedontherespectivenotionalamountsoftheswapsthroughtheirrespectiveterminationdates.

107

AsofAugust31,2022

Associated

VariableRateBondsandCommercial

Paper

Pay-Fixed

Receive-Variable

InterestRate

Swaps

TotalFiscalYear Principal

Interest

2023 $ 48,185,000  27,428,430  17,447,007  93,060,437

2024  49,785,000  26,673,896  16,443,353  92,902,249

2025  57,325,000  25,894,157  15,405,760  98,624,917

2026  50,360,000  24,993,281  14,207,854  89,561,135

2027  59,605,000  24,206,295  13,159,334  96,970,629

2028-2032  307,955,000  106,816,027  46,863,944  461,634,971

2033-2037  339,775,000  82,917,837  15,355,796  438,048,633

2038-2042  111,670,000  57,494,992  (16,738,574)  152,426,418

2043-2047  250,000,000  43,961,250  (16,368,600)  277,592,650

2048-2052  250,000,000  10,639,500  (4,887,150)  255,752,350

1

ReflectsscheduledprincipalandinterestpaymentsofRevenueFinancingSystemRefundingBonds,Series2007B,RevenueFinancing

System Bonds, Series 2008B, Revenue Financing System Bonds, Taxable Series 2016G, and Permanent University Fund Bonds,

Series 2008A to be optionally or mandatorily redeemed in the fiscal years reflected. Also includes $250 million of projected

principalinAugust2049ofRevenueFinancingSystemCommercialPaper.

2

AnnualdebtservicerequirementsarecomputedusingtheSystem’sinterestratesineffectonAugust31,2022onitsSeries2008A

Bonds,Series2007BBonds,Series2008B,Series2016GBonds,andtaxablecommercialpaper.

3

Reflectsnetpaymentsonpay-fixed,receive-variableinterestrateswapsbasedonstaticinterestrateenvironmentasofAugust31,

2022andappliedontherespectivenotionalamountsoftheswapsthroughtheirrespectiveterminationdates.

14. Stewardship,ComplianceandAccountability

TheSystemhadnosignificantviolationsofbondornotecovenants.PerStatelaw,theSystemcannotspendamountsin

excessofappropriationsgrantedbytheTexasLegislature.Therearenodeficitsreportedinnetposition.

15. RiskManagementandRelatedInsurance

TheSystemhaseightfundedself-insurance/highretentionplansprovidingcoverageinthefollowingareas:employee

health and dental, unemployment compensation, workers’ compensation, professional medical liability, property

protection, directors and officers/employment practices and cyber liability, construction contractor insurance, and

automobile,propertyandliability.

EMPLOYEEANDRETIREEINSURANCEBENEFITS

The U. T. System Employee Benefits program provides health insurance, dental insurance, vision insurance, life

insurance, accidental death and dismemberment (AD&D), long-term disability, short-term disability, and flexible

spendingaccountcoveragetoallbenefits-eligible employeesandretireesoftheSystem anditsthirteeninstitutions.

These insurance benefits are provided through both self-funded and fully-insured arrangements. A portion of the

System’scostofprovidinggrouphealthandbasiclifeinsurancecoverageispaidbytheStateasspecifiedintheGeneral

AppropriationsAct.TheSystem’sOfficeofEmployeeBenefits(OEB)isresponsiblefortheoveralladministrationofthe

insuranceplans.TheSystem’sOEBprogramwasestablishedbyChapter1601oftheTexasInsuranceCodeandcomplies

withStatelawsandstatuespertinenttoemployeebenefitsfortheSystem.

UNEMPLOYMENTCOMPENSATIONINSURANCE

TheGeneralAppropriationsActrequirestheSystemtoreimbursetheTexasWorkforceCommission(TWC)for50%of

the unemployment benefits paid to qualified former employees paid from general revenue funds and 100% of the

unemploymentbenefitspaidfromlocalfunds.

WORKERS’COMPENSATIONINSURANCE

The Workers’ Compensation Insurance (WCI) program provides coverage to all employees of the System and its

institutions. Under the oversight of the System’s Office of Risk Management (ORM), the System self-insures and

administersthesystemwideprogramthroughtheuseofathird-partyadministrator.Thecoverageprovidesincomeand

medicalbenefitstoallemployeeswhohavesustainedcompensablejob-relatedinjuriesoroccupationaldiseases.The

program’sstatutoryauthorityisembodiedinChapter503oftheTexasLaborCode.

108

PROFESSIONALMEDICALLIABILITYBENEFITPLAN

ThecoverageprovidedundertheProfessionalMedicalLiabilityBenefitPlan(the“Plan”)isonanoccurrencebasis;thus,

aparticipantiscoveredbythePlanforclaimsandlawsuitsrelatingtoeventsthatoccurredwhileenrolledinthePlan,

includingthosefiledaftertheparticipanthaslefttheSystem’semploymentortraining.ThePlancoversalltheSystem

staffphysicians,dentists,residents,fellows,andmedicalanddentalstudentswhohavebeenenrolled.EffectiveJuly1,

2020,healthcareprofessional staffmembersand facultywho arelicensed,certified, orregisteredto providepatient

carehavePlancoverage.ThelimitsofliabilityofthePlanincludeanannualpolicyaggregateof$30million,anannual

aggregateof $1.5 million for each staff physician, resident, fellow and healthcare professional($500,000per claim),

and a $75,000 annual aggregate for each medical and dental student ($25,000 per claim). Additional coverage is

availableoutsideofTexasandforapprovedinternationalactivities.Liabilityislimitedto$2millionperclaim,regardless

ofthenumberofclaimantsorplanparticipantsinvolvedinanincident.

Thelimitsofliabilityareprescribedbylawas$100,000perhealthcareliabilityclaimperphysiciandeterminedtobea

public servant. U. T. institutions are covered under the Plan for actions that could have been brought against an

individual plan participant. The liability of a U. T. institution is limited by law to $250,000 per person injured and

$500,000peroccurrenceforbodilyinjuryordeath.

COMPREHENSIVEPROPERTYPROTECTIONPROGRAM

TheComprehensivePropertyProtectionPlan(CPPP)usesacombinationofinterimfinancingandcommercialinsurance

toprovideFireandAllOtherPerils(FireandAOP) andNamedWindstormandFlood(Wind andFlood)coverage.All

coverageissubjecttotheterms,exclusions,limitsandconditionsoftheInsurancePolicies.TheFireandAOPprogram

providesa$1.3billionperoccurrencelimitformostperils,withsub-limitsthatdoapply.TheSystemparticipatesina

quotashareofthefollowinglayersofcommercialinsurancecoverage:thirteenpercent(13%)ofthe$25millionlayer

excessof$25million,twelvepercent(12%)ofthe$25millionlayerexcessof$50million,ninepercent(9%)ofthe$25

millionlayerexcessof$75million,andfivepercent(5%)ofthe$50millionlayerexcessof$100million.Deductiblesfor

FireandAOPare$10millionperoccurrencewitha$20millionannualaggregatelimit;institutionshavea$500,000per

occurrencedeductible.ThecommercialinsurancecoverageforNamedWindstormandresultingperilsprovidesa$250

million per occurrence limit with the System participating in a quota share of the following layers of commercial

insurancecoverage:thirteenpercent(13%)ofthe$25millionlayerexcessof$25million,twelvepercent(12%)ofthe

$25millionlayerexcessof$50million,ninepercent(9%)ofthe$25millionlayerexcessof$75million,andfivepercent

(5%)ofthe$50millionlayerexcessof$100million.M.D.Andersonpurchasesadedicated$100millionpolicyexcessof

the$250millionperoccurrenceNamedWindstormCPPPlimit.DeductiblesforWindandFlood are$100millionper

occurrence for U. T. Medical Branch - Galveston (locations in Galveston only), $50 million per occurrence for U. T.

Health Science Center - Houston (locations in Texas Medical Center only) and M. D. Anderson (locations in Texas

Medical Center Only), 5% of affected values in other Tier 1 counties subject to a $10 million minimum, and AOP

deductiblesforallotherlocations.Tier1countiesincludecountiesalongtheTexascoastpluspartsofHarrisCounty.

Primary insurance policies are purchased on certain flood and wind exposed properties to partially offset the large

deductibles.Thesepoliciesprovideunderlyinglimits(upto$4.4millionperbuilding/contentsforwindand$1million

maximumbuilding/contentsforflood)andarepurchasedthroughtheTexasWindstormInsuranceAssociation(TWIA)

for facilities in Tier 1 seacoast territories and the National Flood Insurance Program (NFIP) for properties located in

higherriskfloodzones.U.T.MedicalBranch-Galvestonpurchasesa$50millionNamedWindstormbuydownpolicyto

reducethe$100millionWindandFlood deductibleforlocationsinGalvestononly.M.D.Andersonpurchasesa$25

millionNamed WindstormMulti YearSingle Limit(MYSL)buydown policyto reducethe $50millionWind andFlood

deductible; they have a 25% share of the $25 million to $50 million layer. The interim financing component of the

programparticipatesinlossesresultingfromphysicaldamagethatexceedsthecoverageavailableundertheseprimary

policies and the institution’s deductible.TheinterimfinancingfortheWindand Flood program is funded by annual

contributionsmadebyeachinstitutioninadditiontothepaymentofinsurancepremiums.

DIRECTORSANDOFFICERS/EMPLOYMENTPRACTICESLIABILITYPLANANDCYBERLIABILITYPROGRAM

TheDirectorsandOfficersLiability(D&O)andEmploymentPracticesLiability(EPL)Plan(the“Plan”)providescoverage

forclaimsarisingfromactualorallegedwrongfulactsperformedbythePlanbeneficiariesandforEPLclaims,suchas

wrongfultermination,failuretopromote,andwrongfuldiscipline.

109

Coverageappliestoindividualboardmembers,employees,faculty,andothercoveredindividuals,aswellastoeachof

theinstitutionsandU.T.SystemAdministration.Thelimitofliabilityisa$15millionannualaggregate(CoveragesA,B

andCcombined),withanadditional$5millionself-insuredannualaggregateexcesslimitforCoveragesAandB.Self-

insuredretentionsforthePlanaresubjecttoa$5millionannualaggregate.CoverageAappliestonon-indemnifiable

claimsmadeagainstindividualsandithasnodeductible.CoverageBappliestoaU.T. institutionthatisrequiredto

indemnifyacoveredindividualwithdeductiblesof$100,000perindividualand$300,000peroccurrence.CoverageC

appliestoaU.T.institutionwitha$300,000deductible.IntheeventalossinvolvesanyorallofCoveragesA,B,andC,

thenonlythesinglelargestdeductibleamountwillapply.

The Cyber Liability Program provides coverage for claims arising from the following causes of loss: media liability,

network security liability, privacy liability, regulatory liability, loss of digital assets, network asset protection, and

PaymentCardIndustryDataSecurityStandard(PCI-DSS).Eachclaimissubjecttoa$10millionself-insuredretention;

institutionshavea$500,000peroccurrencedeductible.

ROLLINGOWNERCONTROLLEDINSURANCEPROGRAM

TheRollingOwnerControlledInsuranceProgram(ROCIP)wasestablishedforthecentralizedpurchaseofconstruction

contractor insurance on various capital improvement projects. This program provides workers’ compensation,

employers’liabilityandgeneralliabilityinsurancecoverageforallcontractorsenrolledonprojectsparticipatinginthe

program.Eachcoveragecarriesa$250,000peroccurrencedeductiblewithamaximum$375,000peroccurrenceclash

deductible,ifmorethanonecoverageistriggeredbythesameoccurrence.Deductiblesarepaidthroughtheprogram’s

self-insurancefund.Theself-insurancefundalsopaysportionsofBuilder’sRiskdeductibles.

AUTOMOBILE,PROPERTY&LIABILITYPLAN

The Automobile, Property & Liability Plan provides automobile liability and physical damage coverage for owned,

leased,hired,andnon-owned(excessliabilityonly)vehicles,alongwithgeneralliabilitycoverageforcertainscheduled

exposures.All auto liabilityandgeneral liabilitycoveragesare subjecttoa self-insured retentionof $100,000witha

corridor endorsement for an additional layer of up to $50,000 per occurrence with an aggregate limit of $200,000

applicabletolossesover$100,000subjecttoa$996,000annualaggregatestoplossforthefiscalyear2023policyterm.

Physical Damage claims are subject to a $25,000 deductible per occurrence. Institution deductibles are $2,500 per

occurrenceforliability,$1,000pervehicleforphysicaldamage,and$5,000pervehicleforphysicaldamageforvehicles

valuedover$100,000.

INCURREDBUTNOTREPORTEDSELF-INSURANCECLAIMS

InsuranceclaimsthatwereIncurredButNotReported(IBNR)wereactuariallydeterminedfortheemployee’shealth

anddental,workers’compensation,professionalmedicalliability,directorsandofficers/employmentpracticesliability

andcyberliabilityprogram,rollingownercontrolled,andautomobile,propertyandliabilityself-insuranceplans.IBNR

figures for the workers’ compensation, professional medical liability, directors and officers/employment practices

liabilityandcyberliabilityprogram,rollingownercontrolled,andautomobile,propertyandliabilityself-insuranceplans

include liabilities for unpaid reported claims and are reported on an undiscounted basis. The IBNR liability for the

propertyprotectionself-insuranceplanisnotactuariallydeterminedbutestimatedbasedonunpaidreportedclaims.

SinceanannualaccrualisrecordedforthethirdquarterTWCbilling,noIBNRliabilityisrecordedforUnemployment

CompensationInsurance.Nosettlementsexceededinsurancecoverageinthepastthreefiscalyears.

Since the responsibility for processing all claims for self-funded employee health and dental benefits has been fully

delegatedtothirdparties,theIBNRclaimsliabilityforthosebenefitsdoesnotincludeaprovisionforunallocatedloss

adjustmentexpenses(ULAE).However,itdoesincludeaprovisionof5%oftheprojectedincurredbutunpaidclaimsfor

the administrative expenses associated with processing those claims. The IBNR claims liability for the workers’

compensation, professional medical liability, directors and officers/employment practices liability and cyber liability

program,rollingownercontrolled,andautomobile,propertyandliabilityself-insuranceplansincludesarelatedaccrual

forallocated loss adjustment expenses(ALAE), which are theclaim-specificdefense and settlementcosts associated

with the ultimate settlement of those claims. They do not include a provision for ULAE, which are general

administrativeexpensesassociatedwithclaimssettlement,butarenotspecificallyattributabletoindividualclaims.

110

ChangesintheSystem’sclaimsliabilitiesforthevariousself-insuranceplansduringfiscalyears2023and2022wereas

follows:

FiscalYear2023

Plan

IBNRLiability

09/01/2022

CurrentYear

Claimsand

Changesin

Estimates ClaimsPayments

IBNRLiability

08/31/2023

EmployeeHealthandDental $ 179,000,000  1,826,588,154  (1,816,488,154)  189,100,000

Workers’Compensation  4,145,000  4,551,855  (4,093,855)  4,603,000

ProfessionalMedicalLiability  20,450,642  4,897,466  (3,620,866)  21,727,242

PropertyProtection–Fire&AOP  7,596,212  15,837,827  (12,629,406)  10,804,633

PropertyProtection–Wind&Flood  —  —  —  —

DirectorsandOfficers/EPL/Cyber  5,753,058  4,122,788  (2,118,471)  7,757,375

ROCIP  4,280,367  46,279  (1,091,215)  3,235,431

Automobile,Property&Liability  493,962  977,382  (797,350)  673,994

TOTAL $ 221,719,241  1,857,021,751  (1,840,839,317)  237,901,675



FiscalYear2022

Plan

IBNRLiability

09/01/2021

CurrentYear

Claimsand

Changesin

Estimates ClaimsPayments

IBNRLiability

08/31/2022

EmployeeHealthandDental $ 134,300,000  1,750,116,117  (1,705,416,117)  179,000,000

Workers’Compensation  3,486,000  4,973,970  (4,314,970)  4,145,000

ProfessionalMedicalLiability  20,973,497  3,766,215  (4,289,070)  20,450,642

PropertyProtection–Fire&AOP  10,047,571  (9,113,950)  6,662,591  7,596,212

PropertyProtection–Wind&Flood  —  —  —  —

DirectorsandOfficers/EPL/Cyber  3,340,089  2,612,969  (200,000)  5,753,058

ROCIP  4,442,581  700,545  (862,759)  4,280,367

Automobile,Property&Liability  521,128  585,348  (612,514)  493,962

TOTAL $ 177,110,866  1,753,641,214  (1,709,032,839)  221,719,241

16. PostemploymentHealthCareandLifeInsuranceBenefits

HEALTHANDLIFEINSURANCEBENEFITSFORRETIREDEMPLOYEES

Inadditiontoprovidingpensionbenefits,theStateprovidescertainhealth(medicalandpharmacy)andlifeinsurance

benefitsforretiredemployees(OPEB),inaccordancewithStatestatutes.Manyemployeesmaybecomeeligibleforthe

healthandlifeinsurancebenefitsasaretiredemployeeiftheymeetcertainageandservicerequirementsasdefined

bytheState.Similarbenefitsforactiveemployeesareprovidedthroughthesameself-fundedplan.Priortoandduring

fiscal year 2022 and continuing through December 31, 2022, all retiree medical benefits were provided through UT

Select,System’sself-fundedhealthplan.EffectiveJanuary1,2023,medicalbenefitsforretireesforwhomMedicareis

primary (Medicare-primary retirees) and retiree dependents for whom Medicare is primary (Medicare-primary

dependents)areprovidedthroughUTCare,afullyinsuredMedicareAdvantageplanprovidedbyBlueCrossBlueShield

of Texas. Medical benefits for retirees and retiree dependents for whom Medicare is not primary continue to be

providedthroughUTSelect.PharmacybenefitsforallretireesregardlessofMedicarestatushavebeenandcontinueto

be provided through UT Select.  For the years ended August 31, 2023 and 2022, the employer and retiree monthly

contributionratesforfull-timeretiredemployeeareshowninthefollowingtable.Theretireecontributesanypremium

chargedoverandabovetheemployercontributions.Notecontributionratesforfiscalyear2023arethesameforUT

SelectandUTCare.

111



2023 2022

LevelofCoverage Employer Retiree Employer Retiree

RetireeOnly $ 675.16  —  628.06  —

Retiree/Spouse  1,029.06  290.70  957.26  270.42

Retiree/Children  901.60  304.04  838.70  282.82

Retiree/Family  1,257.62  572.46  1,169.88  532.52

RetireecontributionsasofJanuary1,2023underUTCareMedicareAdvantageare$316.87forthespouse,ifretireeis

deceased,$316.87fordependentchildren,and$633.74forspousepluschildren,ifretireeisdeceased.

PLANDESCRIPTIONANDFUNDINGPOLICY

OPEBareprovidedtotheSystem’sretireesundertheUTSystemEmployeeGroupInsuranceProgram(EGIP).TheEGIP

isasingle-employerdefinedbenefitOPEBplan;however,duetotheStatestatuterequiringappropriationsforfunding

theplan,theStateisreportingaproportionateshare.Chapter1551oftheTexasInsuranceCode,Sections310and311,

require that the State contribute to the cost of each participant’s insurance coverage. The funds are appropriated

undertheGeneralAppropriationsActHigherEducationEmployeesGroupInsurance(HEGI)Contributions.TheState’s

proportion was 17.18% and 18.06% of the collective OPEB-related liabilities, deferred outflows and inflows and

expensebasedonHEGIcontributionsbytheStatetototalcontributionsasofAugust31,2023and2022.TheSystem’s

proportionasofAugust31,2023and2022was82.82%and81.94%.AtAugust31,2023and2022,theamountofthe

totalOPEBliabilityrelatedtotheSystemreportedbytheStatewas$1,678,372,322and$3,239,950,544,respectively.

The amount reported by the State is related to the premium sharing contributions, which are recognized as State

appropriationgeneral revenue on theSystem’sfinancial statements inthefiscal year that theStatecontributed the

amountsforOPEBontheSystem’sbehalf.

TheSystemandmembercontributionratesaredeterminedannuallybytheSystembasedontherecommendationsof

theOEBstaffandconsultingactuary.Thecontributionratesaredeterminedbasedonthebenefitandadministrative

costs expected to be incurred and (i) the funds appropriated and (ii) the funding policy established by the Texas

Legislature in connection with benefits provided through the EGIP. The System revises benefits when necessary to

matchexpectedbenefitandadministrativecostswithavailablerevenue.Theplanisoperatedonapay-as-you-gobasis

andnoassetsareaccumulatedinatrustthatmeetsthecriteriainparagraph4ofGASBStatementNo.75.

EMPLOYEESCOVEREDBYBENEFITTERMS

ThebenefitsprovidedarediscussedinNote15.Theauthorityunderwhichtheobligationsoftheplanmembersandthe

SystemareestablishedandmaybeamendedisChapter1601,TexasInsuranceCode.Attherespectivemeasurement

dates,thefollowingemployeeswerecoveredbythebenefitterms:



MeasurementDates

December31,2022

&December31,

2021

InactiveEmployeesorBeneficiaries

CurrentlyReceivingBenefitPayments 31,104

InactiveEmployeesEntitledtobutnotyet

ReceivingBenefitPayments 15,091

ActiveEmployees 104,546

Total 150,741

TOTALOPEBLIABILITY

TheSystemhaselectedtouseameasurementdatethatiseightmonthsinadvanceofthefiscalyearend.TheSystem’s

proportionateshare ofthetotal OPEBliabilityof $8,089,734,355,current portionof$208,395,911anda noncurrent

portionof$7,881,338,444,reportedforthefiscalyearendedAugust31,2023wasmeasuredasofDecember31,2022

andwasdeterminedbyanactuarialvaluationasofDecember31,2021androlledforwardtwelvemonthstoDecember

31, 2022. The System’s proportionate share of the total OPEB liability of $14,695,594,306, current portion of

$243,697,144andanoncurrent portionof $14,451,897,162,reported forthe fiscalyearended August31, 2022was

measuredasofDecember31,2021,andwasdeterminedbyanactuarialvaluationasofthesamedate.

112

ACTUARIALASSUMPTIONSANDOTHERINPUTS

ThetotalOPEBliabilityasofDecember31,2022wasdeterminedbyanactuarialvaluationasofDecember31,2021

androlledforwardtwelvemonthstoDecember31,2022.Thefollowingactuarialassumptionsappliedtoallperiods

includedinthemeasurement,unlessotherwisespecified:



SummaryofActuarialMethodsandAssumptions–OPEB

Inflation 2.30%

SalaryIncreases 3.05%to9.05%(includesinflation)

DiscountRate 3.72%forDecember31,2022;2.06%forDecember31,2021;

HealthcarecostTrendRates:

Medical UTSelect:5.50%forCY24,5.25%forCY25,5.00%forCY26,4.75%forCY27,4.60%

forCY28,4.50%forCY29,4.40%forCY30and4.30%forCY31andlateryears

UTCare:0.00%forCY24,3.00%forCY25,5.00%forCY26,4.75%forCY27,4.60%

forCY28,4.50%forCY29,4.40%forCY30and4.30%forCY31andlateryears

Pharmacy 10.00%forCY24,9.50%forCY25,9.00%forCY26,8.00%forCY27,7.00%forCY28,

6.00%forCY29,5.00%forCY30and4.30%forCY31andlateryears

Retireecontributionsandopt-out

credittrendrates

7.50%

forCY23,6.90%forCY24,6.60%forCY25,6.25%forCY26,5.80%forCY27,

5.35%forCY28,4.95%forCY29,4.60%forCY30and4.30%forCY31andlateryears

Mortality:

a. ServiceRetirees,SurvivorsandotherInactiveMembers:

TablesbasedonTRSexperiencewithUltimateMPProjectionScalefromtheyear

2018.

b. DisabilityRetirees:

TablesbasedonTRSexperiencewithUltimateMPProjectionScalefromtheyear

2018usinga3-yearsetforwardandminimummortalityratesoffourper100

malemembersandtwoper100femalemembers.

c. ActiveMembers:

SexDistinctRP-2014EmployeeMortalitymultipliedby90%withUltimateMP

ProjectionScalefromtheyear2014.

DiscountRate:

a. ForfiscalyearendedAugust31,2023:Thediscountrateusedtomeasurethetotal

OPEBliabilityasofDecember31,2022was3.72%.Thediscountrateusedto

determinethetotalOPEBliabilityasofDecember31,2021was2.06%.

b. ForfiscalyearendedAugust31,2022:Thediscountrateusedtomeasurethetotal

OPEBliabilityasofDecember31,2021was2.06%.Thediscountrateusedto

measurethetotalOPEBliabilityasofDecember31,2020was2.12%.

c. MunicipalBondRate:3.72%asofDecember31,2022and2.06%asofDecember

31,2021;thesourceofthemunicipalbondrateistheBondBuyerIndexof

generalobligationbondswith20yearstomaturityandmixedcreditquality.In

describingtheirindex,theBondBuyernotesthatthebonds’averagecredit

qualityisroughlyequivalenttoMoody’sInvestorsService’sAa2ratingand

Standard&Poor’sCorp.’sAA.

ForFY23,actualretireecontributionsareequaltoFY22retireecontributionsincreasedby7.50%forallcoveragelevelsexceptas

indicated in the following sentence.  Retiree contributions as of 1/1/2023 under UT Care Medicare Advantage are $316.87 for

“Spouse,ifRetireeisdeceased”,$316.87for“DependentChildren”and$633.74for“SpouseplusChildren,ifRetireeisdeceased”.

113

LastStateEmployerAssumption:

Memberswhoterminate employmentareassumedtoparticipate inthe EGIP(i.e.,asaresultofUT System

being their last State employer), provided all other eligibility requirements are satisfied, according to the

followingschedule:

AgeatTerminationRate Participation

<20 20%

20-24 20%

25-34 20%

35-44 40%

45-54 40%

≥55 40%

Manyofthe actuarialassumptionsusedinthis valuationwerebased ontheresultsofan actuarialexperiencestudy

performedbytheTRSretirementplanactuaryasofAugust31,2017.

Thefollowingassumptionsorotherinputswerechangedsincethepreviousmeasurementdate:

i. EconomicAssumptions

• Assumed Per Capita Health Benefit Costs and Health Benefit Cost trends have been updated since the

previousvaluationtoreflectincreasesinretireecostsharinginUTSelectandtheimplementationofUT

CareeffectiveJanuary1,2023.

• The expenses directly related to the payment of EGIP health benefits have been updated since the

previousvaluation.

• The Patient-Centered Outcome Research Institute (PCORI) fees payable under the Affordable Care Act

(ACA)havebeenupdatedsincethepreviousvaluation.

ii. OtherInputs

ThediscountratewaschangedasaresultofrequirementsbyGASBStatementNo.75toutilizetheyieldor

indexrateasofthemeasurementdatefor20-year,tax-exemptgeneralobligationmunicipalbondsrated

AA/Aa(orequivalent)orhigher.

AsofthemeasurementdateofDecember31,2022,thebenefittermshavechangedtoreflect:i)increasesinretiree

costsharingforretireesforwhomMedicareisnotprimaryandii)anincreasein theemployerfundedlifeinsurance

coverageforretireeswhodonotoptoutofEGIPhealthcoverageuponretirement.Accordingly,thebenefittermsused

inthisvaluationhavechangedsincethepriorvaluation.

SensitivityoftheSystem’sProportionateShareoftheTotalOPEBLiabilitytoChangesintheDiscountRate

1%Decrease

FY23

DiscountRate 1%Increase

(2.72)% (3.72)% (4.72)%

TotalOPEBLiability $ 9,558,708,298 $ 8,089,734,355 $ 6,927,817,838

1%Decrease

FY22

DiscountRate 1%Increase

(1.06)% (2.06)% (3.06)%

TotalOPEBLiability $ 17,933,558,969 $ 14,695,594,306 $ 12,207,045,887

114

SensitivityoftheSystem’sProportionateShareoftheTotalOPEBLiabilitytoChangesintheHealthcareCostTrendRates



1%Decrease

FY23

HealthcareCost

TrendRates

1%Increase

TotalOPEBLiability $ 6,754,616,645 $ 8,089,734,355 $ 9,847,385,898

1%Decrease

FY22

HealthcareCost

TrendRates

1%Increase

TotalOPEBLiability $ 11,924,338,193 $ 14,695,594,306 $ 18,456,093,101



HealthcareCostTrendRatesusedforfiscalyear2023areshownbelow:



Medical-UTSelect Medical-UTCare

CalendarYear 1%Decrease

HealthcareCost

TrendRates 1%Increase 1%Decrease

HealthcareCost

TrendRates 1%Increase

2024

4.50% 5.50% 6.50% (1.00)% —% 1.00%

2025

4.25% 5.25% 6.25% 2.00% 3.00% 4.00%

2026

4.00% 5.00% 6.00% 4.00% 5.00% 6.00%

2027

3.75% 4.75% 5.75% 3.75% 4.75% 5.75%

2028

3.60% 4.60% 5.60% 3.60% 4.60% 5.60%

2029

3.50% 4.50% 5.50% 3.50% 4.50% 5.50%

2030

3.40% 4.40% 5.40% 3.40% 4.40% 5.40%

2031and

beyond

3.30% 4.30% 5.30% 3.30% 4.30% 5.30%

Pharmacy

CalendarYear 1%Decrease

HealthcareCost

TrendRates 1%Increase

2024

9.00% 10.00% 11.00%

2025

8.50% 9.50% 10.50%

2026

8.00% 9.00% 10.00%

2027

7.00% 8.00% 9.00%

2028

6.00% 7.00% 8.00%

2029

5.00% 6.00% 7.00%

2030

4.00% 5.00% 6.00%

2031and

beyond

3.30% 4.30% 5.30%

HealthcareCostTrendRatesusedforfiscalyear2022areshownbelow:

115

Medical Pharmacy

CalendarYear 1%Decrease

Healthcare

CostTrendRates 1%Increase 1%Decrease

Healthcare

CostTrendRates 1%Increase

2023 5.00% 6.00% 7.00% 9.50% 10.50% 11.50%

2024 4.50% 5.50% 6.50% 9.00% 10.00% 11.00%

2025 4.25% 5.25% 6.25% 8.50% 9.50% 10.50%

2026 4.00% 5.00% 6.00% 8.00% 9.00% 10.00%

2027 3.75% 4.75% 5.75% 7.00% 8.00% 9.00%

2028 3.60% 4.60% 5.60% 6.00% 7.00% 8.00%

2029 3.50% 4.50% 5.50% 5.00% 6.00% 7.00%

2030 3.40% 4.40% 5.40% 4.00% 5.00% 6.00%

2031andbeyond 3.30% 4.30% 5.30% 3.30% 4.30% 5.30%

CHANGESINTHESYSTEM’SPROPORTIONATESHAREOFTHETOTALOPEBLIABILITY

Increase(Decrease)inTotalOPEBLiability

ForMeasurementYear

from12/31/2021-

12/31/2022

ForMeasurementYear

from12/31/2020-

12/31/2021

BalanceatBeginningofMeasurementYear $ 14,695,594,306  11,931,417,814

ChangesfortheYear:

ServiceCost  877,350,009  708,022,293

Interest  321,938,242  266,654,173

BenefitTerms  (52,783,790)  —

DifferencesBetweenExpectedandActualExperience  —  160,861,824

ChangesofAssumptionsorOtherInputs  (7,704,380,357)  1,780,677,623

BenefitPayments(Employer)  (206,219,478)  (181,252,716)

NetChanges  (6,764,095,374)  2,734,963,197

ChangesinProportionateShare  158,235,423  29,213,295

BalanceatEndofMeasurementYear $ 8,089,734,355  14,695,594,306

TheSystemrecognizedOPEBexpenseof$462,609,141forthefiscalyearendedAugust31,2023and$1,150,530,177

forthefiscalyearendedAugust31,2022.

116

The changes in the total OPEB liability, including both the System’s and the State’s portion, are shown in the table

below.

Increase(Decrease)inTotalOPEBLiability

ForMeasurementYear

from12/31/2021-

12/31/2022

ForMeasurementYear

from12/31/2020-

12/31/2021

BalanceatBeginningofMeasurementYear $ 17,935,544,850  14,597,601,922

ChangesfortheYear:

ServiceCost  1,059,373,288  864,120,588

Interest  388,730,575  325,443,652

BenefitTerms  (63,734,811)  —

DifferencesBetweenExpectedandActualExperience  —  196,327,171

ChangesofAssumptionsorOtherInputs  (9,302,803,516)  2,173,265,178

BenefitPayments(Employer)  (249,003,709)  (221,213,661)

NetChanges  (8,167,438,173)  3,337,942,928

ChangesinProportionateShare  —  —

BalanceatEndofMeasurementYear $ 9,768,106,677  17,935,544,850

Ateachfiscalyear-end,theSystemreporteddeferredoutflowsofresourcesanddeferredinflowsofresourcesrelated

toOPEBfromthesourceslistedinthetablebelow.



AsofAugust31,2023 AsofAugust31,2022

Deferred

Outflowsof

Resources

Deferred

Inflowsof

Resources

Deferred

Outflowsof

Resources

Deferred

Inflowsof

Resources

DifferencesBetweenExpectedandActual

Experience $ 124,515,711  81,950,260  142,025,545  110,741,721

ChangesofAssumptionsorOtherInputs  2,485,262,865  7,706,119,307  2,871,138,715  1,184,874,462

ChangeinProportionandContribution

Difference  529,653,958  12,919,463  500,240,792  20,218,595

ContributionsSubsequenttotheMeasurement

Date  127,487,908  —  140,874,223  —

Total $ 3,266,920,442  7,800,989,030  3,654,279,275  1,315,834,778

117

AmountsreportedasDeferredOutflows/(Inflows)ofResourceswillberecognizedinOPEBexpenseasfollows:

FortheFiscalYearendedAugust31,2023:

FiscalYearEnded

August31 Amount

2024 $ (687,018,165)

2025  (642,018,293)

2026  (528,481,088)

2027  (484,628,521)

2028  (425,741,144)

Thereafter  (1,893,669,285)

Total $ (4,661,556,496)

CHANGESINTHETOTALOPEBLIABILITYBETWEENTHEMEASUREMENTDATEANDAUGUST31,2023

Thefollowingchangewas made to the OPEB plan between theDecember31, 2022 measurement date of theTotal

OPEBLiabilityandtheEmployer’sfiscalyear2023reportingdateofAugust31,2023:

• Texas Senate Bill 1055, which was signed by the Governor on May 10, 2023, added Stephen F. Austin State

UniversityintotheUniversityofTexasSystem.Asaresult,eligibleemployeesofStephenF.AustinStateUniversity

willbecomemembersunderthisOPEBplaneffectiveSeptember1,2023.

TheSystemestimatesthattheabovechangewouldincreasetheTotalOPEBLiability,includingboththeSystem’sand

theState’sportion,to$9.9billionasofDecember31,2022,usingthecurrentdiscountrateof3.72%.

17. PensionPlans

TEACHERRETIREMENTSYSTEM(TRS)

TheStateofTexashasjointcontributoryretirementplansforsubstantiallyallitsemployees.Oneoftheprimaryplans

in which the System participates is a cost-sharing multiple-employer defined benefit pension plan with a special

fundingsituationadministeredbytheTeacherRetirementSystemofTexas.TRSisprimarilyfundedthroughStateand

employeecontributions.Dependinguponthesourceoffundingforaparticipant’ssalary,theSystemmayberequired

tomakecontributionsinlieuoftheState.

AllSystempersonnelemployedinapositiononahalftimeorgreaterbasisforatleastfourandonehalfmonthsor

moreare eligiblefor membershipinthe TRSretirement plan.However,studentsemployedin positionsthat require

studentstatusasaconditionof employment do not participate. Members with at least fiveyearsofservicehave a

vested right to unreduced retirement benefits at age 65 or provided they have a combination of age plus years of

servicetotaling80ormore.However,memberswhobeganTRSparticipationonorafterSeptember1,2007mustbe

age60toretirewithunreducedbenefitsandmemberswhoarenotvestedinTRSonAugust31,2014mustbeage62

toretirewithunreducedbenefitsunderthesecondoption.Membersarefullyvestedafterfiveyearsofserviceandare

entitledtoany reducedbenefitsfor whichtheeligibilityrequirementshavebeen metpriorto meetingtheeligibility

requirementsforunreducedbenefits.

TheTRSPlan provides retirement, disability annuitiesanddeathand survivor benefits. The benefit andcontribution

provisionsoftheTRSPlanareauthorizedbystatelawand maybeamendedbytheLegislature.Thepensionbenefit

formulas are based on members’ average annual compensation and years of service credit. The standard annuity is

2.3%oftheaverageofthefivehighestannualsalariesmultipliedbyyearsofservicecredit.Forgrandfatheredmembers

whowerehiredonorbeforeAugust31,2005andmeetcertaincriteria,thestandardannuityisbasedontheaverageof

thethreehighestannualsalaries.Theplandoesnotprovideautomaticcostoflivingadjustments.

118

TRScontributionratesforbothemployersandemployeesarenotactuariallydeterminedbutarelegallyestablishedby

theStateLegislature.Contributionsbyemployeeswere8.0%ofgrossearningsfor2023,and8.0%ofgrossearningsfor

2022.Dependinguponthesourceoffundingfortheemployee’scompensation,theStateortheSystemcontributesa

percentageofparticipantsalariestotaling8.0%ofannualcompensationfor2023,and7.75%ofannualcompensation

for 2022. The System’s actual contributions excluding the State match to TRS for the years ended August 31, 2023,

2022and2021were$514,850,265,$439,933,274,and$381,611,428,respectively.

The total pension liability is determined by an annual actuarial valuation. The tables below present the actuarial

methodsandassumptionsusedtomeasurethetotalpensionliabilityasoftheAugust31,2022andAugust31,2021

measurementdates.

SummaryofActuarialMethodsandAssumptions–TRSPlan

ActuarialValuationDate Aug31,2021rolledforwardtoAug31,2022

ActuarialCostMethod IndividualEntryAgeNormal

AssetValuationMethod MarketValue

ActuarialAssumptions:

DiscountRate 7.00%

Long-termExpectedRateofReturn 7.00%

MunicipalBondRateasofAugust2022* 3.91%

Inflation 2.30%

SalaryIncrease 2.95%to8.95%includinginflation

PayrollGrowthRate 2.90%

Mortality:

Active BasedonthePUB(2010),Amount-Weighted,Below-

MedianIncome,Teacher,MaleandFemaletables,witha

2-yearsetforwardformales.Theratesareprojectedona

fullygenerationalbasisbythelong-termratesofscale

UMP2021toaccountforfuturemortalityimprovements.

Post-Retirement The2021TRSofTexasHealthyPensionerMortalityTables.

Theratesareprojectedonafullygenerationalbasisby

ScaleUMP2021,butwithimmediateconvergence,to

accountforfuturemortalityimprovements.Fordisabled

retirees,athree-yearsetforwardofthesetablesareused,

withminimummortalityratesof0.0200forfemalesand

0.0400formales,respectively.

AdHocPost-EmploymentBenefitChanges None

119

SummaryofActuarialMethodsandAssumptions–TRSPlan

ActuarialValuationDate Aug31,2020rolledforwardtoAug31,2021

ActuarialCostMethod IndividualEntryAgeNormal

AssetValuationMethod MarketValue

ActuarialAssumptions:

DiscountRate 7.25%

Long-termExpectedRateofReturn 7.25%

MunicipalBondRateasofAugust2021* 1.95%

Inflation 2.30%

SalaryIncrease 3.05%to9.05%includinginflation

PayrollGrowthRate 3.00%

Mortality:

Active 90%oftheRP2014EmployeeMortalityTablesformales

andfemaleswithfullgenerationalmortality

Post-Retirement 2018TRSHealthyPensionerMortalityTableswithfull

generationprojectionusingScaleU-MP

AdHocPost-EmploymentBenefitChanges None

Notes:

*SourceforthemunicipalbondrateistheFixedIncomeMarketData/YieldCurve/DataMunicipalBonds

with20yearstomaturitythatincludeonlyfederallytax-exemptmunicipalbondsasreportedinFidelity

Index’s“20-YearMunicipalGOAAIndex.”

The actuarial assumptions used in the determination of the total pension liability as of the August 31, 2022

measurement date were updated from the assumptions used in the actuarial valuation as of August 31, 2021. The

actuarial assumptions used in the August 31, 2022 valuation were primarily based on the result of an actuarial

experiencestudyfortheperiodendingAugust31,2021andadoptedonJuly15,2022.Therehavebeennochangesto

thebenefitprovisionsoftheplansincethepriormeasurementdate.

Thefollowingassumptionsorotherinputswerechangedsincethepreviousmeasurementdate:

i. EconomicAssumptions

• The discount rate and long-term expected rate of return were updated based on the current capital

marketassumptionsfromAon(TRS’investmentconsultant)andtheSystem’stargetassetallocation.

• The salary increase and payroll growth rates were updated to reflect a 0.10% decrease in the general

wageinflationassumption.

ii. DemographicAssumptions

• Pre-andpost-retirementmortalitytableswereupdatedbasedonobservationsduringthefive-yearperiod

endingAugust31,2019.

• Theterminationanddisabilitytableswereupdatedtocombinemaleandfemaleexperiencepatterns.

• Theretirementtableswereupdatedtoreflectsmalldecreasestotheretirementprobabilities.

The discount rate of 7.00% was applied to measure the total pension liability. The discount rate was based on the

expectedrateofreturnonpensionplaninvestmentsof7.00%.Theprojectedcashflowsintoandoutofthepension

planassumedthatactivemembers,employers,andnon-employercontributingentitymaketheircontributionsatthe

statutorilyrequiredrates.ItisassumedthatfutureemployerandStatecontributionswillbe8.50%ofpayrollforthe

measurementperiodendingAugust31,2020,graduallyincreasingto9.55%overthenextseveralyears.Thisincludesa

factorforallemployerandStatecontributionsforactiveandrehiredretirees.Basedontheseassumptions,thepension

plan’sfiduciarynetpositionandfuturecontributionsweresufficienttofinancethebenefitpaymentsofcurrentplan

members.Asaresult,thelong-termexpectedrateofreturnonpensionplaninvestmentswasappliedtoallprojected

benefitpaymentstodeterminethetotalpensionliability.

120

Thelong-termexpectedrateofreturnonplaninvestmentswasdevelopedusingabuilding-blockmethod,inwhichbest

estimate ranges of expected future real rates of return (net of pension plan investment expense and inflation) are

developedforeachmajorassetclass.Theserangesarecombinedtoproducethelong-termexpectedrateofreturnby

weighingtheexpectedfuturereal rates of returnbythetargetasset allocation percentage and by adding expected

inflation.

The target allocation and best estimates of geometric real rates of return for each major asset class for the plan’s

investmentportfolioasoftheAugust31,2022,measurementdatearepresentedbelow:

AssetClass*

Target

Allocation**

Long-TermExpected

GeometricReal

RateofReturn***

GlobalEquity

U.S. 18.0% 4.6%

Non-U.S.Developed 13.0% 4.9%

EmergingMarkets 9.0% 5.4%

PrivateEquity 14.0% 7.7%

StableValue

U.S.Treasury 16.0% 1.0%

AbsoluteReturn — 3.7%

StableValueHedgeFunds 5.0% 3.4%

RealReturn

RealAssets 15.0% 4.1%

Energy,NaturalResources,and

Infrastructure

6.0% 5.1%

Commodities — 3.6%

RiskParity

RiskParity 8.0% 4.6%

AssetAllocationLeverageCash 2.0% 3.0%

AssetAllocationLeverage (6.0)% 3.6%

Total 100.0%

Notes:

*AbsoluteReturnincludesCreditSensitiveInvestments.

**Targetallocationsarebasedonfiscalyear2022policymodel.

***CapitalMarketassumptionscomefromAonHewitt(asof08/31/2022).

121

The target allocation and best estimates of geometric real rates of return for each major asset class for the plan’s

investmentportfolioasoftheAugust31,2021,measurementdatearepresentedbelow:

AssetClass

Target

Allocation*

Long-TermExpected

GeometricReal

RateofReturn**

GlobalEquity

U.S. 18.0% 3.6%

Non-U.S.Developed 13.0% 4.4%

EmergingMarkets 9.0% 4.6%

PrivateEquity 14.0% 6.3%

StableValue

U.S.Treasury 16.0% (0.2)%

AbsoluteReturn — 1.1%

StableValueHedgeFunds 5.0% 2.2%

RealReturn

RealAssets 15.0% 4.5%

Energy,NaturalResources,and

Infrastructure

6.0% 4.7%

Commodities — 1.7%

RiskParity

RiskParity 8.0% 2.8%

AssetAllocationLeverageCash 2.0% (0.7)%

AssetAllocationLeverage (6.0)% (0.5)%

Total 100.0%

Notes:

*Targetallocationsarebasedonfiscalyear2021policymodel.

**CapitalMarketassumptionscomefromAonHewitt(asof08/31/2021).

SensitivityanalysiswasperformedontheimpactofchangesinthediscountrateontheSystem’sproportionateshare

ofthenetpensionliability.Theresultoftheanalysisispresentedinthetablebelow:

SensitivityofSystem’sProportionateShareoftheNetPensionLiability

toChangesintheDiscountRateFY23

1%Decrease CurrentDiscountRate 1%Increase

6.00% 7.00% 8.00%

$8,772,364,757 $5,639,140,669 $3,099,515,475



SensitivityofSystem’sProportionateShareoftheNetPensionLiability

toChangesintheDiscountRateFY22

1%Decrease CurrentDiscountRate 1%Increase

6.25% 7.25% 8.25%

$5,027,419,794 $2,300,711,499 $88,523,417

122

Thepensionplan’sfiduciarynetpositionisdeterminedusingeconomicresourcesmeasurementfocusandtheaccrual

basisofaccounting,whichisthesamebasisusedbyTRS.Benefitsandrefundsofcontributionsarerecognizedwhen

due and payable in accordance with the terms of the plan. Investments are reported at fair value. Fair value is a

market-basedmeasurement,notanentity-specificmeasurement.TRSutilizesoneormoreofthefollowingvaluation

techniquesinordertomeasurefairvalue:themarketapproach,thecostapproach,andtheincomeapproach.More

detailed information on the plan’s investment policy, assets, and fiduciary net position, may be obtained from TRS’

fiscal 2022 Annual Comprehensive Financial Report. Further information regarding actuarial assumptions and

conclusions,togetherwithauditedfinancialstatementsareincludedintheTRS’annualfinancialreport,whichmaybe

obtainedfromtheTRSwebsite.

AsofAugust31,2023and2022,respectively,theSystemreportedaliabilityof$5,639,140,669and$2,300,711,499for

itsproportionate shareofthe collectivenetpension liability.Thecollective netpension liability wasmeasuredas of

August31,2022and2021,andthetotalpensionliabilityusedtocalculatethenetpensionliabilitywasdeterminedby

anactuarialvaluationasofAugust31,2021and2020,respectively,androlledforwardtothemeasurementdate.The

System’s proportion as of the August 31, 2022 and 2021 measurements dates was 9.4987114% and 9.0342804%,

respectively. The System’s proportion of the collective net pension liability was based on its contributions to the

pensionplanrelativetothecontributionsofalltheemployersandnon-employercontributingentitytotheplanforthe

periodsSeptember1,2021throughAugust31,2022andSeptember1,2020throughAugust31,2021.AtAugust31,

2023and2022,respectively,theamountofthenetpensionliabilityrelatedtotheSystemreportedbytheStatewas

$2,209,241,002and$729,928,272.TheamountreportedbytheStateisrelatedtotheon-behalfcontributions,which

arerecognizedasStateappropriationgeneralrevenueontheSystem’sfinancialstatementsinthefiscalyearthatthe

StatecontributedtheamountstoTRSontheSystem’sbehalf.

For the years ending August 31, 2023 and 2022, the System recognized pension expense of $739,191,094 and

$125,990,889, respectively. At August 31, 2023 and 2022, the System reported deferred outflows of resources and

deferredinflowsofresourcesrelatedtopensionsfromthefollowingsources:



2023 2022

DeferredOutflows

ofResources

DeferredInflows

ofResources

DeferredOutflows

ofResources

DeferredInflows

ofResources

DifferenceBetweenExpectedandActual

Experience

$ 81,767,085  122,943,946  3,850,171  161,971,911

ChangesofAssumptions  1,050,755,436  261,877,598  813,256,571  354,510,118

NetDiffBetweenProjectedandActual

InvestmentReturn

 557,129,061  —  —  1,929,116,735

ChangeinProportionandContribution

Difference

 450,681,969  178,847,679  404,726,884  242,046,563

ContributionsSubsequenttotheMeasurement

Date

 514,850,265  —  439,933,274  —

Total $ 2,655,183,816  563,669,223  1,661,766,900  2,687,645,327

The $514,850,265 and $439,933,274 reported as deferred outflows of resources resulting from contributions

subsequenttothemeasurementdatewillberecognizedasareductioninthenetpensionliabilityfortheyearsending

August31,2024and2023,respectively.

123

Amounts reported as deferred outflows and inflows of resources related to pensions as of August 31, 2023 will be

recognizedinpensionexpenseinthefollowingyears:



FiscalYear

Increase(Reduction)of

PensionExpense

2024

$ 427,721,381

2025

 246,997,078

2026

 102,650,629

2027

 687,111,814

2028

 112,183,426

Total

$ 1,576,664,328

OPTIONALRETIREMENTPROGRAM(ORP)

TheStatehasalsoestablishedanoptionaldefinedcontributionretirementprogramforinstitutionsofhighereducation.

ParticipationintheORPisinlieuof participationintheTRS.ORPisavailabletocertaineligibleemployeeswhohold

faculty positions and other professional positions including but limited to director-level and above, librarians and

coaches. The ORP provides for the purchase of annuity contracts and mutual funds. Participants are vested in the

employer contributions after one year and one day of service. Depending upon the source of funding for the

employee’scompensation,theSystemmayberequiredtomaketheemployercontributionsinlieuoftheState.Since

these are individual annuity contracts, the State and the System have no additional or unfunded liability for this

program.TheemployeeandemployercontributionratesareestablishedbytheStateLegislatureeachbiennium.The

Stateprovidesanoptionforalocalsupplementontopofthestatebaserate.EachinstitutionwithintheSystemcan

decidetoadoptandfundalocalsupplementeachyeartoprovideeachORPemployeethemaximumemployerrate.

Thechancellor thenapproves theemployerrates eachfiscal year.The contributionsmadeby participants(6.65% of

annualcompensation)andtheSystem(6.6%Statebaserateplusanylocalsupplementforamaximumof8.5%)forthe

fiscalyearsendedAugust31,2023,2022and2021,respectively,areprovidedinthefollowingtable.

2023 2022 2021

ParticipantContributions $ 206,452,660  194,384,449  183,972,473

SystemContributions  264,003,722  248,522,747  235,157,931

Total $ 470,456,382  442,907,196  419,130,404

EMPLOYEESRETIREMENTSYSTEM(ERS)

CertainemployeesatU.T.MedicalBranch-GalvestonparticipateintheEmployeesRetirementSystemofTexas.The

BoardofTrusteesoftheEmployeesRetirementSystemofTexasistheadministratoroftheERS,whichisconsideredto

beasingleemployerdefinedbenefitpensionplan.ERScoverstheeligibleSystememployeeswhoarenotcoveredby

theTRSortheORP.Benefitsvestafterfiveyearsofcreditedservice.Employeesmayretireatage60withfiveyearsof

serviceoranycombinationofageplusyearsofservicethatequals80.

TheERSplanprovidesastandardmonthlybenefitinalifeannuityatretirementaswellasdeathanddisabilitybenefits

for members. Additional payment options are available. The benefit and contribution provisions are authorized by

Statelaw and may beamended by theTexasLegislature. Contribution requirementsare not actuariallydetermined.

The ERS contribution requirement, calculated using entry age normal actuarial cost method, is established through

Statestatute.

ThefundingpolicyrequiresmonthlycontributionsbyboththeStateandemployees.FortheyearbeginningSeptember

1,2015,the requiredcontributionsfortheStateandthe employeeareeach9.5%of pay.For LawEnforcementand

Custodial OfficersSupplementalRetirementFund eligible employees, the State and the employee contribution is an

additional0.50%ofpay,respectively.

TheTexasStateComptroller’sOfficehasdecidednottoallocateERSpensiontoproprietaryfundsduetoimmateriality,

as a result, there is no ERS pension net pension liability reported in the System’s financial statements. Additional

information can be obtained from the separately issued ERS Annual Comprehensive Financial Report which can be

obtainedfromtheEmployeesRetirementSystemofTexas,200East18thStreet,Austin,Texas78701orfoundonthe

ERSwebsite.

124

PHYSICIANSREFERRALSERVICE(PRS)SUPPLEMENTALRETIREMENTPLAN(SRP)/RETIREMENTBENEFITPLAN(RBP)

M.D.Andersonhasestablished,primarilyforthephysiciansofitsPhysiciansReferralService,thePhysiciansReferral

ServiceSRP/RBPPlans(theSRP/RBPPlans).TheSRP/RBPPlansarenonqualifiedplansdescribedbySection457(f)ofthe

InternalRevenueCodeof1986(IRC),asamended.TheassetsoftheSRP/RBPPlansofapproximately$622millionand

$585 million at August 31, 2023 and 2022, respectively, are measured at fair value and presented as restricted

investmentsintheSystem’sstatementofnetposition.SRP/RBPdeferredcompensationplanassetsremainsubjectto

theclaimsofthegeneralcreditorsofM.D.Anderson.

PRSofferseligibleemployeesparticipationinoneoftwononqualifiedretirementplansbasedondateofemployment.

TheassetsintheSRP/RBPtrustcanbeusedtopaythebenefitsofeitherplan’sparticipants.ThePRSExecutiveCouncil

andRetirementBoardmembershavetheauthoritytoadministerthePlansunderthetermsthatareestablishedand

mayapproveamendmentstothePlans.ThePRSBylawsestablishthePRSRetirementBoardandExecutiveCouncil.Per

thePRSBylaws,oneofthestandingcommitteesforthePhysiciansReferralServiceFacultyPracticePlan(Plan)isthe

PRSRetirementBoard.Achairisappointed,andelectionsareheldeverytwoyearsforcommitteemembership.There

are both voting members and non-voting ex-officio members. The PRS Retirement Board is advisory to the PRS

Executive Council which is chaired by the President. The PRS Executive Council also has committee membership

electionseverythreeyearsandincludesvotingandex-officiomembers.ThePresidentistheheadofthePlanandhas

theultimatedecisionauthority.

EmployeesCoveredbyBenefitTerms

Attherespectivemeasurementdates,thefollowingemployeesofM.D.Andersonwerecoveredbythebenefitterms:

MeasurementDate

September1,2022

MeasurementDate

September1,2021

InactiveEmployeesorBeneficiariesReceiving

BenefitPayments  511 508

InactiveEmployeesEntitledtobutnotyet

ReceivingBenefitPayments  278 279

ActiveEmployees  1,590 1,597

Total  2,379 2,384

SRPoftheAndersonHospital

EligibleemployeesofM.D.AndersonpriortoJuly1,1986mayparticipateintheSRP,asingle-employernonqualified

noncontributorydefinedbenefitpensionplan.Eligibleemployeesincludephysicianswithalicensetopracticemedicine

inthestateofTexas;anyindividualwithaPh.D.rankofassistantorhigher;D.D.S.withtherankofclinicalinstructoror

higher; D.V.M. degree or equivalent having attained the rank of assistant or higher; and individuals elected to

membershipbytheExecutiveCouncilofPRSasanadministrativestaffofficer.Nonewmembershavebeenadmittedto

theSRPsinceMay31,1989astheSRPisclosedtonewentrants.Ingeneral,participantsarefullyvestedinthe SRP

afterfiveyearsofcreditedservice.FormerparticipantsnotinactiveserviceonJanuary1,1985,requiretenyearsof

creditedserviceasrequiredbypreviousplanprovisions.Anactivememberreceivesfullretirementbenefitsbasedon

the SRP payment formula at age 65, age 60 with 20 years of credited service, or age 55 with 25 years of credited

service.Avestedmemberwhobecomesinactiveforanyreasonotherthandeathorretirementisentitledtoanearned

retirementallowance.Thisisadeferredallowancewithbenefitpaymentsbeginningattheformerparticipant'snormal

retirementage.ParticipantsintheSRParenottaxedontheemployer’scontributionsmadeuntilbenefitsarepaidsince

theSRPisgrandfatheredundertheprovisionsofSection457oftheInternalRevenueCode.

PRSRBP

OnSeptember1,1990,PRSestablishedtheRBP,asingle-employernonqualifiednoncontributorydefinedbenefitplan.

Eligible employees may participate in the RBP upon the later of their employment date or September 1, 1990.

Employees who were eligible for the SRP because of their employment date had a one-time option to become

membersoftheRBPandforegomembershipintheSRP.

Theamountofaparticipant'sbenefitisequaltoeachparticipant'saccountbalance,asoutlinedintheRBPprovisions.

Ingeneral,a participant's account balance is equal to a stated percentage of annual compensationforeachyearof

service plus a provision for annual interest credits. The earnings credit percentageis equal to the Moody's Average

CorporateBondyielddeterminedasofthefirstdayofsuchplanyear.

125

Participants are taxed on the employer’s contributions made when the contributions become vested. Participants

becomevestedintheiraccountbalancesafterfiveyearsofservice.Anyvestedmemberwhobecomesinactiveforany

reason other than death or retirement and has not attained the age of 55 will have his or her account maintained

underRBPuntilretirementandearnhalftheinterestcreditsofactiveparticipants.

FederalincomeandSocialSecuritytaxesresultingfromannualbenefitsearnedintheRBParereimbursedbythePlans

totheEmployer,whopaysthetaxesto,oronbehalfof,participantsatthetimeparticipantsvestintheircontributions

andarereflectedasaliabilityinthetrust’sfinancialstatements.

TotalPensionLiabilityforSRP/RBPPlans

The total pension liability for the SRP/RBP Plans is determined by an annual actuarial valuation. The tables below

presenttheactuarialmethodsandassumptionsusedtomeasurethetotalpensionliabilityasoftheSeptember1,2022

and2021measurementdates.

SummaryofActuarialMethodsandAssumptions

ActuarialValuationDate September1,2022

ActuarialCostMethod IndividualEntryAgeNormal

AmortizationMethod AverageRemainingServiceLife

AssetValuationMethod N/A–UnfundedPlan

ActuarialAssumptions:

DiscountRate* 3.59%

RateofCompensationIncrease 4.00%

Mortality: Themortalitytableisbaseduponthefinalreportof

PRI-2012MortalityTablesandMP-2021mortality

improvementscaleaspublishedbytheSocietyof

Actuaries’(SOA’s)RetirementPlansExperience

Committee(RPEC).Thistableandprojectionscale

representthemostrecentavailabledataasofthe

valuationdate.

Theotherkeydemographicassumptions,suchas

TerminationandRetirement,arebaseduponareviewof

thePRSparticipantexperience.Thisexperiencestudyis

documentedintheAssumptionRationaleaslastbeing

conductedin2021.

126

SummaryofActuarialMethodsandAssumptions

ActuarialValuationDate September1,2021

ActuarialCostMethod IndividualEntryAgeNormal

AmortizationMethod AverageRemainingServiceLife

AssetValuationMethod N/A–UnfundedPlan

ActuarialAssumptions:

DiscountRate* 2.14%

RateofCompensationIncrease 4.00%

Mortality: ThemortalitytableisbaseduponthefinalreportofRP-

2014MortalityTablesandMP-2014mortality

improvementscaleaspublishedbytheSocietyof

Actuaries'(SOA’s)RetirementPlansExperience

Committee(RPEC),withadjustmentsthatalignwiththe

SOA’ssubsequentreleaseofupdatestomortality

improvementscales.

Theotherkeydemographicassumptions,suchas

TerminationandRetirement,arebaseduponareviewof

thePRSparticipantexperience.Thisexperiencestudyis

documentedintheAssumptionRationaleaslastbeing

conductedin2021.

Notes:

*Thediscountratesusedinthesevaluationsweredeterminedusingthe20-yearyieldsontheBondBuyer20-Bond

GOIndexasofAugust31,priortothemeasurementdate.

ThetotalpensionliabilityforthefiscalyearendingAugust31,2023wasmeasuredasofSeptember1,2022basedon

anactuarialvaluationasofthatdateThetotalpensionliabilityforthefiscalyearendedAugust31,2022wasmeasured

asofSeptember1,2021basedonactuarialvaluationasofthatdate.

• Benefit accruals during each period were estimated by calculating the accruals as a percentage of payroll for

September 1, 2022 and then applying that percentage to the expected payroll for measurement dates

September1,2021.

Thedeferred outflows(inflows) includedinthe expenseeach yearforassumption changesreflect theimpactof the

changesindiscountratesnotedabove.

Thedeferredoutflows(inflows)includedintheexpenseeachyeardonotincludeanydifferenceinactualandexpected

demographicexperiencewhichwillbemeasuredinfutureyears.

Thevaluationdoesnotincludeanyassetssincetheassetsarenotinatrustthatisprotectedfromcreditorsandthus,

theplanisconsideredunfundedunderGASB73.

Sensitivityanalysis was performedon the impact ofchangesin the discountrate on M. D.Anderson’stotal pension

liability.Theresultoftheanalysisispresentedinthetablebelow:



SensitivityofTotalPensionLiability

toChangesintheDiscountRateFY23

1%Decrease CurrentDiscountRate 1%Increase

2.59% 3.59% 4.59%

$1,001,974,232 $918,839,384 $846,111,334

127



SensitivityofTotalPensionLiability

toChangesintheDiscountRateFY22

1%Decrease CurrentDiscountRate 1%Increase

1.14% 2.14% 3.14%

$1,150,980,528 $1,046,052,341 $955,425,484

AtAugust31,2023and2022,M.D.Andersonreportedatotalpensionliabilityof$918,839,384and$1,046,052,341

respectively,fortheSRP/RBPPlans.

Increase(Decrease)inTotalPensionLiability

ForMeasurementYear

from09/01/2021to

08/31/2022

ForMeasurementYear

from09/01/2020to

08/31/2021

BalanceatBeginningofMeasurementYear $ 1,046,052,341  1,026,357,235

ChangesfortheYear:

ServiceCost  40,513,997  37,988,952

Interest  22,719,060  22,898,554

ChangesofAssumptionsorOtherInputs  (140,590,003)  5,813,235

BenefitPayments(Employer)  (49,856,011)  (47,005,635)

NetChanges  (127,212,957)  19,695,106

BalanceatEndofMeasurementYear $ 918,839,384  1,046,052,341

For the years ended August 31, 2023 and 2022, M. D. Anderson recognized pension expense of $56,366,846 and

$70,309,660,respectively.AtAugust31,2023and2022,M.D.Andersonreporteddeferredoutflowsofresourcesand

deferredinflowsofresourcesrelatedtothePRSRBPandSRPfromthefollowingsources:

AsofAugust31,2023 AsofAugust31,2022

Deferred

Outflowsof

Resources

Deferred

Inflowsof

Resources

Deferred

Outflowsof

Resources

Deferred

Inflowsof

Resources

ChangesofAssumptions $ 50,706,142  123,813,153  58,641,508  —

BenefitPaymentsSubsequenttothe

MeasurementDate  49,321,919  51,531,435  —

AdministrativeCostsSubsequenttothe

MeasurementDate  847,079  376,107  —

Total $ 100,875,140  123,813,153  110,549,050  —

The $49,321,919 and $51,531,435 reported as deferred outflows and inflows of resources resulting from benefit

paymentssubsequenttothemeasurementdatewillberecognizedasareductioninthetotalpensionliabilityforthe

years ending August 31, 2024 and 2023, respectively. Other amounts reported as deferred outflows and inflows of

resourcesrelatedtotheSRP/RBPPlansasofAugust31,2023willberecognizedinpensionexpenseinthefollowing

years:



FiscalYearEnded

August31

Increase(Reduction)

ofPensionExpense

2024 $ (6,883,724)

2025  (7,370,803)

2026  (7,370,803)

2027  (7,370,803)

2028  (7,370,803)

Thereafter  (35,892,996)

Total $ (72,259,932)

128

18. DeferredCompensation

DEFERREDCOMPENSATION-457(b)

TheSystememployeesmayelecttodeferaportionoftheirearningsforincometaxandinvestmentpurposespursuant

toauthoritygrantedintheTexasGovernmentCode,Sec.609.001.TheSystemoffersitsowndeferredcompensation

plan,createdinaccordancewithInternalRevenueCodeSection457(b).AllSystememployeesareeligibletoparticipate

in the System's plan and cannot participate in the plan offered by the state of Texas. All investments, amounts,

property,andrightsheldundertheDeferredCompensationTrustFundareheldfortheexclusivebenefitofparticipants

andbeneficiariesatthefairmarketvalueoftheplanaccountforeachparticipantintheaccountsestablishedbythe

participantswiththeSystem’sretirementproviders.TheSystemhasnoliabilityundertheplan.

TAX-SHELTEREDANNUITY-403(b)

TheSystemalsoadministerstheUTSaverTax-ShelteredAnnuityProgram(TSA),createdinaccordancewithIRCSection

403(b). All employees are eligible to participate. The UTSaver TSA is a private plan, and the deductions, purchased

investmentsandearningsattributedtoeachemployee’s403(b)planareheldbyvendorschosenbytheemployee.The

vendors may be insurance companies, banks or approved non-bank trustees such as mutual fund companies. The

assetsofthisplandonotbelongtotheSystemortheState.Therefore,neithertheSystemnortheStatehasaliability

relatedtothisplan.

THEUNIVERSITYOFTEXASSYSTEMGOVERNMENTALRETIREMENTARRANGEMENT(UTGRA)

TheUniversityofTexasSystemGovernmentalRetirementArrangement(UTGRA)isanexcessbenefitplanestablished

bytheSystem,viaSection415(m)oftheInternalRevenueCode,toprovidecertainparticipantsintheORPthatportion

oftheirbenefitsthatwouldotherwisebepayableundertheORPexceptforthe$66,000limitoncontributionsimposed

by Section 415 of the Internal Revenue Code (IRC) for calendar year 2023 ($61,000 for calendar year 2022). As of

August31,2023and2022,therewere557and577planmembers,respectively.PersonsemployedbytheSystemprior

to September 1, 1996, whose compensation exceeds the limit set by IRC Section 401(a)(17) and whose ORP

contributionislimitedbythe$66,000capunderIRCSection415(c)forcalendaryear2023($61,000forcalendaryear

2022),defer6.65% of their excess compensation while the System contributes between 6.58%and 8.5%depending

upontheinstitutionandthedateofemployment.TheSystemcontributed$3,240,602fortheyearendedAugust31,

2023and$3,449,994fortheyearendedAugust31,2022.Theparticipantscontributed$2,535,294fortheyearended

August 31, 2023 and $2,699,113 for the year ended August 31, 2022. Plan provisions are established and may be

amendedatanytimebytheU.T.SystemBoardofRegents.

Plan assets are recorded at fair value and are invested in contracts and accounts in a similar manner to the ORP.

Participants are immediately vested in the plan, both for the employee deferrals and the employer contributions.

However,deferrals,contributions,purchasedinvestmentsandearningsattributabletotheplanarethepropertyofthe

SystemandsubjectonlytotheclaimsoftheSystem’sgeneralcreditors.Participant’srightsundertheplanareequalto

thoseofthegeneralcreditorsoftheSysteminanamountequaltothefairvalueoftheparticipant’saccountbalance.

The System has no liability under the UTGRA that would exceed the aggregate value of the investments, and it is

unlikelythatanyofUTGRA’sassetswillbeusedtosatisfytheclaimsofgeneralcreditorsinthefuture.

19. CommitmentsandContingentLiabilities

OnAugust31,2023,variouslawsuitsandclaimsinvolvingtheSystemwerepending.Afterconferringwithlegalcounsel

concerning pending litigation and claims, the System’s management believes that the outcome of pending litigation

shouldnothaveamaterialadverseeffectonthefinancialstatementsoftheSystem.

TheSystemcontinuestoimplementits$8.6billioncapitalimprovementprogram,plannedforfiscalyears2024through

2029,toupgradefacilities.Contractshavebeenenteredintofortheconstructionandrenovationofvariousfacilities.

Theseprojectsareinvariousstagesofcompletion.

TheSystemreceivesgrantsandotherformsofreimbursementfromvariousfederalandstateagencies.Theseactivities

aresubjecttoauditbyagentsofthefundingauthority,thepurposeofwhichistoensurecompliancewithconditions

precedenttoprovidingsuchfunds.TheSystembelievesthattheliability,ifany,forreimbursementwhichmayariseas

theresultofaudits,wouldnotbematerial.

Basedonthecreditsupportannexagreementswithallcounterparties,theSystemdoesnothavetopostanycollateral

foranyhedgingderivativeinstruments.

129

Laws and regulations governing the Medicare and Medicaid programs and certain other third-party programs are

complexandsubjecttointerpretation.Asaresult,thereisatleastareasonablepossibilitythatrecordedestimatesof

third-partysettlementswillchangebyamaterialamountinthenearterm.TheSystem’sintentistobeincompliance

with all applicable laws and regulations, and it is not aware of any significant pending or threatened investigations

involving allegations of potential wrongdoing. Compliance with such laws and regulations can be subject to future

reviewandinterpretation.ChangesintheMedicareandMedicaidprogramsandareductionoffundingcouldhavean

adverseeffectontheSystem.

130

20. MatrixofOperatingExpensesReportedbyFunction

FortheyearendedAugust31,2023,thefollowingtablerepresentsoperatingexpensesforbothnaturalandfunctional

classificationsfortheSystem:

OperatingExpenses Instruction Research PublicService

Hospitalsand

Clinics

CostofGoodsSold $ 141,719  85,108  3,285,723  75,873,856

SalariesandWages  4,016,295,153  1,780,307,068  203,341,038  4,193,135,966

PayrollRelatedCosts  793,121,825  403,219,268  48,653,417  1,000,751,038

MembershipDues  13,038,011  3,156,394  454,341  10,068,866

RegistrationFees/Meetings/Conferences  21,080,514  14,267,151  5,579,445  6,218,179

ProfessionalFeesandServices  59,116,049  145,227,619  52,624,859  334,040,910

OtherContractedServices  56,394,388  360,859,280  68,879,355  378,733,465

FeesandOtherCharges  11,872,694  60,441,800  3,991,238  20,799,736

Travel  33,133,679  49,556,214  5,191,360  19,411,495

MaterialsandSupplies  114,615,766  404,899,340  64,053,717  2,875,337,502

Utilities  864,529  1,167,607  297,178  17,011,686

Communications  6,444,719  3,817,216  2,606,282  25,673,470

RepairsandMaintenance  26,573,302  27,630,113  6,009,387  187,785,007

RentalsandLeases  12,593,387  7,518,172  2,694,305  36,414,124

PrintingandReproduction  5,319,453  6,460,395  3,430,379  4,925,616

RoyaltyPayments  62,672  5,294,223  112  1,821,530

BadDebtExpense  —  —  —  —

ImpairmentofCapitalAssets  —  —  —  —

AssetRetirementExpense  —  —  —  —

InsuranceCosts/Premiums  7,230,723  874,879  261,230  37,123,138

ClaimsandLosses  —  —  —  —

OPEBExpense  153,206,338  67,023,617  7,117,672  154,982,096

PensionExpense  244,804,416  107,095,292  11,373,143  304,008,699

ScholarshipsandFellowships  15,389,008  56,209,636  2,952,078  74,025

DepreciationandAmortization  —  —  —  —

FederalSponsoredPass-throughtoState

Agencies  1,836,499  6,134,030  3,096,702  —

StateSponsoredPass-throughtoState

Agencies  —  1,001,374  71,355  —

OtherOperatingExpenses  45,029,540  128,492,646  15,539,315  (7,283,506)

TotalOperatingExpenses $ 5,638,164,384  3,640,738,442  511,503,631  9,676,906,898

131

OperatingExpenses AcademicSupport StudentServices

Institutional

Support

Operationsand

Maintenanceof

Plant

CostofGoodsSold $ 523,933

 14,684  1,863,854  525

SalariesandWages  740,298,664

 140,158,074  616,503,573  303,005,404

PayrollRelatedCosts  191,781,437

 35,602,472  (5,431,355)  83,987,956

MembershipDues  4,508,021

 601,023  5,217,361  652,759

RegistrationFees/Meetings/Conferences  13,168,057

 2,347,165  4,806,693  826,867

ProfessionalFeesandServices  42,711,633

 10,212,986  95,779,280  31,823,174

OtherContractedServices  80,721,060

 42,800,543  79,162,615  71,036,454

FeesandOtherCharges  3,974,810

 2,624,322  1,620,703  (117,908)

Travel  17,236,429

 6,237,426  7,243,502  1,201,166

MaterialsandSupplies  119,350,861

 21,587,549  56,363,895  96,066,246

Utilities  256,558

 29,476  13,764,167  244,198,909

Communications  5,162,804

 1,452,798  15,271,994  3,096,239

RepairsandMaintenance  22,946,511

 3,704,998  52,711,467  172,063,654

RentalsandLeases  6,756,907

 3,336,625  9,674,250  13,332,047

PrintingandReproduction  4,033,722

 2,929,524  4,418,578  170,364

RoyaltyPayments  58,361,886

 784  141,534  1,688

BadDebtExpense  —

 (1,077,652)  —  —

ImpairmentofCapitalAssets  —

 —  —  —

AssetRetirementExpense  —

 —  —  328,392

InsuranceCosts/Premiums  128,529

 340,673  14,621,276  6,238,142

ClaimsandLosses  —

 —  218,137,957  —

OPEBExpense  28,452,395

 5,470,210  24,110,626  11,355,923

PensionExpense  45,463,341

 8,740,706  38,525,741  18,145,334

ScholarshipsandFellowships  5,542,340

 5,608,915  1,373,712  75

DepreciationandAmortization  —

 —  —  —

FederalSponsoredPass-throughtoState

Agencies  —

 16,304  25,933  —

StateSponsoredPass-throughtoState

Agencies  —

 —  2,326,065  —

OtherOperatingExpenses  22,859,739

 13,933,787  21,500,892  13,296,969

TotalOperatingExpenses $ 1,414,239,637  306,673,392  1,279,734,313  1,070,710,379

132

OperatingExpenses

Scholarships

andFellowships

Auxiliary

Enterprises

Depreciationand

Amortization TotalExpenses

CostofGoodsSold

$ (110,899)  44,949,789  —  126,628,292

SalariesandWages

 19,934,736  271,709,859  —  12,284,689,535

PayrollRelatedCosts

 2,122,696  60,555,625  —  2,614,364,379

MembershipDues

 42,451  3,713,554  —  41,452,781

RegistrationFees/Meetings/Conferences

 501,514  4,979,464  —  73,775,049

ProfessionalFeesandServices

 846,944  25,311,408  —  797,694,862

OtherContractedServices

 614,956  120,534,354  —  1,259,736,470

FeesandOtherCharges

 1,161,383  7,649,105  —  114,017,883

Travel

 969,970  40,619,556  —  180,800,797

MaterialsandSupplies

 1,291,701  52,265,403  —  3,805,831,980

Utilities

 (17,960)  39,188,647  —  316,760,797

Communications

 11,792  8,190,426  —  71,727,740

RepairsandMaintenance

 80,816  44,724,822  —  544,230,077

RentalsandLeases

 333,735  11,099,063  —  103,752,615

PrintingandReproduction

 74,378  2,919,783  —  34,682,192

RoyaltyPayments

 —  87,750  —  65,772,179

BadDebtExpense

 —  —  —  (1,077,652)

ImpairmentofCapitalAssets

 —  —  —  —

AssetRetirementExpense

 —  —  —  328,392

InsuranceCosts/Premiums

 13,858  3,133,428  —  69,965,876

ClaimsandLosses

 —  —  —  218,137,957

OPEBExpense

 792,632  10,097,632  —  462,609,141

PensionExpense

 1,266,526  16,134,743  —  795,557,941

ScholarshipsandFellowships

 502,714,531  19,468,900  —  609,333,220

DepreciationandAmortization

 —  —  1,827,434,267  1,827,434,267

FederalSponsoredPass-throughtoState

Agencies

 (22,465)  —  —  11,087,003

StateSponsoredPass-throughtoState

Agencies

 (453,788)  —  —  2,945,006

OtherOperatingExpenses

 3,347,503  31,586,967  —  288,303,852

TotalOperatingExpenses $ 535,517,010  818,920,278  1,827,434,267  26,720,542,631

133

FortheyearendedAugust31,2022,thefollowingtablerepresentsoperatingexpensesforbothnaturalandfunctional

classificationsfortheSystem,withsomeexpensesrestatedforGASBStatementNo.94and96.SeeNote4forfurther

detailsontherestatements:

OperatingExpenses Instruction Research PublicService

Hospitalsand

Clinics

CostofGoodsSold $ 799,837  12,128  2,194,377  48,003,377

SalariesandWages  3,691,024,775  1,614,723,226  171,477,922  3,733,806,074

PayrollRelatedCosts  708,833,299  368,942,811  41,451,040  878,059,737

MembershipDues  12,650,721  3,221,002  322,854  9,275,833

RegistrationFees/Meetings/Conferences  16,451,823  8,995,993  3,048,853  4,627,887

ProfessionalFeesandServices  48,454,878  124,266,618  33,052,668  339,759,927

OtherContractedServices  59,346,409  320,552,302  69,164,901  389,394,653

FeesandOtherCharges  12,192,030  17,184,984  4,263,336  21,823,975

Travel  18,167,180  25,094,058  2,813,703  9,417,650

MaterialsandSupplies  100,507,271  271,530,001  48,607,804  2,528,682,323

Utilities  655,296  1,286,279  263,294  12,450,950

Communications  15,982,440  4,206,668  2,284,946  24,817,697

RepairsandMaintenance  12,167,996  30,535,054  7,871,256  170,621,084

RentalsandLeases  8,561,040  6,359,447  1,845,334  43,785,800

PrintingandReproduction  4,632,863  5,644,205  2,062,141  4,869,986

RoyaltyPayments  43,478  3,413,318  63  1,424,650

BadDebtExpense  —  —  —  —

ImpairmentofCapitalAssets  —  —  —  —

AssetRetirementExpense  —  —  —  —

InsuranceCosts/Premiums  8,016,293  546,824  248,447  29,665,956

ClaimsandLosses  —  —  —  —

OPEBExpense  384,324,944  173,262,164  18,200,920  373,456,821

PensionExpense  42,086,199  18,973,387  1,993,125  111,205,725

ScholarshipsandFellowships  15,051,259  55,161,354  2,456,992  116,775

DepreciationandAmortization  —  —  —  —

FederalSponsoredPass-throughtoState

Agencies  1,095,522  6,518,317  2,051,803  —

StateSponsoredPass-throughtoState

Agencies  60,000  550,657  172,541  —

OtherOperatingExpenses  38,714,266  133,203,089  13,500,343  9,667,706

TotalOperatingExpenses $ 5,199,819,819  3,194,183,886  429,348,663  8,744,934,586

134

OperatingExpenses AcademicSupport StudentServices

Institutional

Support

Operationsand

Maintenanceof

Plant

CostofGoodsSold $ 207,588

 (13,868)  1,010,887  109

SalariesandWages  685,470,954

 131,787,505  580,869,695  273,585,248

PayrollRelatedCosts  181,526,258

 32,583,901  (29,869,940)  77,299,306

MembershipDues  4,148,496

 679,751  4,732,307  465,202

RegistrationFees/Meetings/Conferences  8,141,991

 1,630,175  3,515,636  515,176

ProfessionalFeesandServices  33,686,428

 8,645,630  67,410,403  33,689,072

OtherContractedServices  64,716,612

 50,158,244  85,084,998  64,457,922

FeesandOtherCharges  3,767,387

 2,919,461  66,422,269  1,276,606

Travel  8,724,588

 3,839,936  3,608,209  711,775

MaterialsandSupplies  96,866,459

 21,244,278  38,969,194  93,566,903

Utilities  132,674

 24,484  7,044,753  241,632,850

Communications  4,573,454

 1,344,746  17,411,955  3,221,613

RepairsandMaintenance  14,631,824

 4,088,657  57,665,411  162,247,982

RentalsandLeases  5,684,758

 2,558,787  8,205,331  12,804,268

PrintingandReproduction  3,213,615

 2,529,002  5,142,494  226,150

RoyaltyPayments  26,543,084

 432  215,762  1,376

BadDebtExpense  —

 (1,578,953)  —  —

ImpairmentofCapitalAssets  —

 —  —  —

AssetRetirementExpense  —

 —  —  1,438,430

InsuranceCosts/Premiums  222,324

 1,533,186  1,049,252  8,021,835

ClaimsandLosses  —

 —  273,083,485  —

OPEBExpense  70,917,916

 14,198,745  59,355,305  28,294,717

PensionExpense  7,765,995

 1,554,859  6,499,810  3,098,464

ScholarshipsandFellowships  5,484,432

 6,413,143  2,863,808  5,000

DepreciationandAmortization  —

 —  —  —

FederalSponsoredPass-throughtoState

Agencies  —

 —  —  —

StateSponsoredPass-throughtoState

Agencies  8,769,094

 —  919,316  —

OtherOperatingExpenses  20,494,094

 12,206,366  14,972,651  11,166,875

TotalOperatingExpenses $ 1,255,690,025  298,348,467  1,276,182,991  1,017,726,879

135

OperatingExpenses

Scholarships

andFellowships

Auxiliary

Enterprises

Depreciationand

Amortization TotalExpenses

CostofGoodsSold

$ (55,384)  32,121,848  —  84,280,899

SalariesandWages

 19,095,970  243,270,674  —  11,145,112,043

PayrollRelatedCosts

 1,973,833  55,906,892  —  2,316,707,137

MembershipDues

 38,927  3,154,562  —  38,689,655

RegistrationFees/Meetings/Conferences

 226,666  4,253,846  —  51,408,046

ProfessionalFeesandServices

 866,472  15,139,222  —  704,971,318

OtherContractedServices

 497,711  104,703,947  —  1,208,077,699

FeesandOtherCharges

 1,033,959  7,363,581  —  138,247,588

Travel

 628,399  34,004,003  —  107,009,501

MaterialsandSupplies

 1,790,699  44,338,339  —  3,246,103,271

Utilities

 (7,489)  38,051,641  —  301,534,732

Communications

 22,888  8,221,664  —  82,088,071

RepairsandMaintenance

 269,811  33,502,363  —  493,601,438

RentalsandLeases

 96,240  10,137,622  —  100,038,627

PrintingandReproduction

 70,453  2,374,799  —  30,765,708

RoyaltyPayments

 2,500  37,634  —  31,682,297

BadDebtExpense

 —  —  —  (1,578,953)

ImpairmentofCapitalAssets

 —  —  —  —

AssetRetirementExpense

 —  —  —  1,438,430

InsuranceCosts/Premiums

 4,979  3,851,094  —  53,160,190

ClaimsandLosses

 —  —  —  273,083,485

OPEBExpense

 2,152,325  26,366,320  —  1,150,530,177

PensionExpense

 235,694  2,887,291  —  196,300,549

ScholarshipsandFellowships

 619,887,185  20,187,294  —  727,627,242

DepreciationandAmortization

 —  —  1,786,126,507  1,786,126,507

FederalSponsoredPass-throughtoState

Agencies

 37,071  —  —  9,702,713

StateSponsoredPass-throughtoState

Agencies

 586,000  —  —  11,057,608

OtherOperatingExpenses

 6,507,609  29,184,389  —  289,617,388

TotalOperatingExpenses $ 655,962,518  719,059,025  1,786,126,507  24,577,383,366

136

21. NetPosition

TheSystem’snetpositionatAugust31,2023and2022wascomprisedofthefollowing:

2023 Restated2022*

NetInvestmentinCapitalAssets $ 6,963,671,907  6,570,970,880

Restricted:

Nonexpendable  38,161,618,752  36,029,323,644

Expendable  21,353,034,539  21,145,744,390

TotalRestricted  59,514,653,291  57,175,068,034

UnrestrictedNetPosition:

Unrestricted:

Reserved:

Encumbrances  1,813,523,746  1,545,150,178

StateAppropriationstobeLapsed  —  —

AccountsReceivable(LessUnearnedRevenuePortion)  2,105,381,601  1,832,236,035

Inventories  238,891,148  229,590,521

Self-insurancePlans  329,128,558  509,247,085

OtherSpecificPurposes:

AdvancedResearchProgram/AdvancedTechnologyProgram/

TDT  —  —

NotesReceivable  244  37,610

Deposits  486,519  1,057,339

PrepaidExpenses  186,603,530  162,828,969

DeferredCharges  102,650  50,043

ImprestFunds  822,207  891,305

TravelAdvances  11,574,819  7,943,025

Unreserved:

Allocated:

FundsFunctioningasEndowment-unrestricted  1,342,467,476  1,319,166,760

ProvisionforOperatingBudgets  78,536,877  52,904,471

CapitalProjects  5,419,127,496  5,034,070,157

DebtService  207,339,660  177,355,885

Start-up/Matching  171,806,915  118,090,400

UtilitiesReserve  9,866,192  10,767,469

ResearchEnhancementandSupport  733,147,013  683,630,370

MarketAdjustments  115,009,663  96,278,063

StudentFees  247,591,086  253,016,442

TexasTomorrowFundShortfall  2,079,144  2,606,196

InstructionalProgramSupport  1,938,485,335  1,306,105,922

Dean,ChairandFacultyRecruitmentPackages  3,621,921  6,629,387

Self-supportingEnterprises  339,040,388  232,208,368

PotentialLawsuits  —  —

PatientCareSupport  3,071,423,581  2,869,014,517

PracticePlanMinimumOperatingReserveof90Days  372,233,253  377,616,544

UncompensatedPatientCare  —  —

Unallocated  (14,552,801,304)  (13,885,440,341)

TotalUnrestricted  4,185,489,718  2,943,052,720

TotalNetPosition $ 70,663,814,916  66,689,091,634

*August31,2022netinvestmentincapitalassets,restricted,andunrestrictednetpositionwasrestatedasaresultofimplementing

GASBStatementNo.94and96.SeeNote4forfurtherdetails.

137

AsofAugust31,2023and2022,restrictednonexpendablenetpositionincludes$30,601,703,562and$28,824,603,058,

respectively,ofthePermanentUniversityFundcorpus,and$820,000,000forbothyearsofthePermanentHealthFund

corpus. As of August 31, 2023 and 2022, restricted expendable net position includes $12,257,112,433 and

$12,086,454,920,respectively, of the Permanent UniversityFundappreciation,and $639,231,070and $630,484,275,

respectively,ofthePermanentHealthFundappreciation.

Unrestrictednetposition,detailedinthetableabove,isnotsubjecttoexternallyimposedstipulations.Unrestrictednet

position may be designated for special purposes by actions of the Texas Legislature, internal management, and the

U. T. System Board of Regents, or may otherwise be limited by contractual agreements with outside parties.

Substantiallyall unrestricted net position isdesignatedfor academic programs, patientcare,research programs and

initiatives,andcapitalprograms.

TheSystem’sfiduciaryfundnetpositionatAugust31,2023and2022wascomprisedofthefollowing:

2023 2022

Restrictedfor:

PooledParticipants $ 291,513,943  286,259,583

Individuals,Organizations,andOtherGovernments  1,886,978  1,870,196

TotalFiduciaryFundNetPosition $ 293,400,921  288,129,779

22. TerminationBenefits

U. T. System Administration contracted with NextJob to provide outplacement services to employees of the System

whoimplementedareductioninforce.U.T.SystemAdministrationincurredexpensesof$94,365for272terminated

employees of the System as of August 31, 2023, and $56,050 for 174 terminated employees of the System as of

August31,2022.While U. T. System Administration contracted with NextJob, the U. T. institutions may incur travel

expensesforNextJobiftheyrequestNextJobtocometotheircampusoriftheinstitutionrequestsservicesthatfall

outsideofthestandardserviceinthecontract.

In2023,UTSanAntoniohadthreeemployeeswhoreceivedalump-sumpaymentof$125,000,$145,000,and$48,264,

respectively, upon separation from the University. In 2023, UT San Antonio offered a Phased Faculty Retirement

program,atypeofVoluntaryIncentiveRetirementProgram,toeligibletenuredfaculty.Phasedretirementrefersto

reducedappointmentsinteachingservicestoassist anindividualinpreparingforfullretirement.Apost-retirement

contractisenteredintoforuptooneacademicyear.Tentenuredfacultyparticipatedintheprogramandreceiveda

lump-sumpayouttotaling$719,416.

In 2021, U. T. Austin Intercollegiate Athleticsterminated10employeesentitled to buyoutclauses. The total buyout

payments of $20,759,265 span from January 1, 2021 to December 31, 2023. As of August 31, 2023, $19,350,931 in

buyoutpaymentshavebeenmade.Additionally,in2022,U.T.AustinIntercollegiateAthleticsterminated1employee

entitledto abuyoutclause. AsofAugust 31,2023, thetotalbuyout paymentof $573,125spanningfrom January1,

2022toFebruary31,2023hasbeenpaid.

138

Healthcare continuation under the Consolidated Omnibus Budget Reconciliation Act (COBRA) is provided for both

voluntaryandinvoluntaryterminations.COBRAparticipantsareeligibletocontinuegroupbenefitsfor18to36months,

dependinguponthecircumstancesleadingtolossofcoverage.COBRAbenefitsfortheself-insuredplansofferedbythe

SystemfortheyearsendedAugust31,2023and2022areprovidedbelow:

2023 2022

TotalNumberofParticipants

2,062 2,886

PremiumRevenue

$ 5,634,482  5,900,342

2%AdministrativeFeeRevenue

 (113,475)  (118,934)

NetCOBRAPremium  5,521,007  5,781,408

LessClaimsPaid  (13,524,041)  (13,990,913)

CosttoSystem $ (8,003,034)  (8,209,505)

Theparticipantsabovearefortheself-insuredprogram.

ThepremiumrevenueinFY2023andFY2022include$97,967and$496,490,respectively,ofFederalCOBRAsubsidyfundingrecognizedby

theSystemunderARPforthemedical,dentalandvisioninsuranceplansoffered.

The2%administrativefeeisretainedbyU.T.COBRAinOEBforadministeringtheCOBRAbenefitandispaidbytheparticipant.

23. DeferredOutflowsofResourcesandDeferredInflowsofResources

AsofAugust31,2023and2022,theSystemreporteddeferredoutflowsofresourcesanddeferredinflowsofresources

inconnectionwith its hedging derivativeinstruments, unamortized (losses)/gainsonrefunding debt, the OPEBplan,

theTRSandSRP/RBPpensionplans,unamortizedinterestratelockterminationpayments,assetretirementobligations,

beneficial interests in irrevocable split-interest agreements, acquisitions, lease revenues, and P3 related balances as

presentedinthetablebelow:

2023 Restated2022*

Deferred

Outflows

Deferred

Inflows

Deferred

Outflows

Deferred

Inflows

HedgingDerivativeInstruments $ 39,388,655  130,779,738  87,510,811  125,007,462

UnamortizedLoss/GainonRefundingDebt  4,543,043  2,363,765  9,724,176  3,104,870

OPEB-Related  3,266,920,443  7,800,989,030  3,654,279,275  1,315,834,778

PensionRelated  2,756,058,955  687,482,376  1,772,315,950  2,687,645,327

UnamortizedInterestRateLockTermination  7,452,384  —  7,769,755  —

AssetRetirementObligation  1,611,014  —  1,180,094  —

Split-InterestAgreements

 —

 35,379,352

 —

 43,965,260

AcquisitionRelated  12,920,536  —  13,287,488  —

LeaseRevenueRelated  —  222,930,065  —  244,616,599

P3RelatedBalances*  —  393,783,092  —  393,893,594

Total $ 6,088,895,030  9,273,707,418  5,546,067,549  4,814,067,890

Deferredoutflows of resourcesof $39,388,655 and$87,510,811as ofAugust31, 2023and2022, respectively,were

related to hedging derivative instruments in a liability position. Deferred inflows of resources of $130,779,738  and

$125,007,462asofAugust31,2023and2022,respectively,wererelatedtohedgingderivativeinstrumentsinanasset

position.ThehedgingderivativeinstrumentassetandliabilityaredisclosedinNote7.

Deferred outflows of resources of $4,543,043 and $9,724,176 as of August 31, 2023 and 2022, respectively, were

relatedtotheunamortizedlossesonrefundingdebt.Deferredinflowsofresourcesof$2,363,765and$3,104,870asof

August31,2023and2022,respectively,wererelatedtotheunamortizedgainsonrefundingdebt.Fordebtrefundings,

thedifferencebetweenthereacquisitionpriceandthenetcarryingamountoftheolddebtisdeferredandreportedas

deferredoutflowsordeferredinflows.

Deferred outflows of resources of $3,266,920,443 and $3,654,279,275 and deferred inflows of resources of

$7,800,989,030 and $1,315,834,778 as of August 31, 2023 and 2022, respectively, were related to the OPEB plan.

August31,2022deferredoutflowsandinflowsofresourceswererestatedasaresultofcorrectionofOPEBerrors.See

Note4and16foradditionalinformation.

139

Deferred outflows of resources of $2,655,183,815 and $1,661,766,899 and deferred inflows of resources of

$563,669,223and$2,687,645,327asofAugust31,2023and2022,respectively,wererelatedtotheTRSpensionplan.

Deferredoutflowsofresourcesof$100,875,140and$110,549,051asofAugust31,2023and2022,respectively,were

relatedtotheSRP/RBPpensionplans.ThesedeferredoutflowsrelatedtotheSRP/RBPpensionplansarenewdueto

implementing GASB Statement No. 97 in 2022. August 31, 2022 balances were retroactively restated as a result of

implementingthisstatement.SeeNote4andNote17foradditionalinformation.

Deferred outflows of resources of $7,452,384 and $7,769,755 as of August 31, 2023 and 2022, respectively, were

relatedtounamortizedinterestratelockterminationpayments.

Deferred outflows of resources of $1,611,014 and $1,180,094 as of August 31, 2023 and 2022, respectively, were

relatedtoassetretirementobligations.

Deferredoutflows of resourcesof $12,920,536 and$13,287,488as ofAugust31, 2023and2022, respectively,were

related to unamortized excess consideration paid as a result of an asset purchase agreement with PTC- Houston

Management,LPinfiscalyear2019.

Deferred inflows of resources of $35,379,352 and $43,965,260 as of August 31, 2023 and 2022, respectively, were

relatedtotheSystem’sunconditionalbeneficialinterestsinirrevocablesplit-interestagreements.

Deferredinflowsofresourcesof$222,930,065and$244,616,599asofAugust31,2023and2022,respectively,were

relatedtofutureperiodrevenuesfromleasesinwhichtheSystemisthelessorotherthanshorttermleases,regulated

leases,andleasesofassetsclassifiedasinvestments.

Deferredinflowsofresourcesof$393,783,092and$393,893,594asofAugust31,2023and2022,respectively,were

relatedtoP3RelatedBalancesinwhichtheSystemisthetransferor.

24. Public-PrivateandPublic-PublicPartnerships

TheSystemhasenteredintovariousPPPsunderwhichtheSystemmeetsthedefinitionofthetransferor,inwhichthe

operator has been contracted to provide public services for, but not limited to the operation of student housing,

operationofsports/recreationalarenas,andgeneralimprovementsmadetodiningfacilitiesonbehalfoftheSystem.

ThenatureandextentofrightsretainedbytheSystemastransferorunderthePPParrangementsinclude,butarenot

limitedto,maintainingresidualinterestoftheutilityoftheassetsusedinP3agreementsandsettingpricesandhours

ofoperations.Rightsgrantedtooperatorsintheseagreementsmayincludetheabilitytomakeimprovementstothe

spacewithwrittenpermissionfromtheSystem.

Totalsof$33,699,879and$30,720,628wererecognizedastheReceivableforPPPInstallmentPaymentsfortheyears

endedAugust31,2023and2022,respectively.Ofthetotalreceivable,$3,237,578and$4,202,465wererecognizedas

the current portion of the receivable for PPP installment payments for the years ended August 31, 2023 and 2022,

respectively.PresentvalueofPPPinstallmentpaymentsarediscountedbasedonaborrowingratedeterminedbythe

Systemandrangedfrom0.106%to3.809%.

VariablepaymentsarearesultoftheunderlyingPPPmeasurednotinafixedrate,butrathervariableduetounderlying

paymentsderivedfromarevenueand/orprofit-sharingarrangements,usageoftheunderlyingPPPasset,orchangesin

anindexorrate.Atotalof$7,895,137and$1,288,391wasrecognizedasrevenuefromthesevariablepaymentsforthe

yearsendedAugust31,2023,and2022,respectively.

ForcapitalassetsunderP3agreements,atotalof$365,461,001and$15,039,785wererecognizedfortheyearsended

August31,2023,and2022respectively.

Receivables for the Underlying PPP Assets purchased or constructed and placed into service by the operator were

$5,959,348 and $353,611,099 for the years ended August 31, 2023, and 2022, respectively. Ownership of the

underlyingassetofthePPPhasnotyetbeentransferredtotheSystemforassetscarriedbytheSystemasPPPasset

receivables.

DeferredInflowofResourcescorrespondingtotheP3Receivables,P3AssetstobeTransferred,andP3capitalassets

were$393,783,092and$393,893,594fortheyearsendedAugust31,2023and2022,respectively.

140

A general description of the PPP arrangements, including the status of projects during the construction period and

termsispresentedinthetablebelow:

Institution Partner Description

Construction

Status

Termof

Concession

Contract

Begin

Contract

End

UTArlington Chartwells DiningServices Complete 10years 2021 2031

UTArlington CentennialApartments CollegeApartments Complete 35years 1994 2029

UTArlington Follett Bookstore Complete 25years 1999 2024

UTAustin MoodyCenter Arena Complete 35years 2022 2057

UTDallas Chartwells DiningServices Complete 16Years 2019 2035

UTRioGrandeValley Boyer MedicalOfficeBuilding Complete 21Years 2009 2030

UTRioGrandeValley HarlingenCISD SchoolBuilding Complete 35Years 2021 2056

UTRioGrandeValley Sodexo DiningServices Complete 12Years 2011 2023

UTSanAntonio Follett Bookstore UnderConstruction 15years 2023 2038

UTSanAntonio Aramark DiningServices Complete 15Years 2020 2035

25. SubsequentEvents

OnSeptember1,2023,StephenF.AustinStateUniversity(SFASU)becameaninstitutionwithintheSystempursuantto

legislation enacted by the 88th Texas Legislature.  Prior to that date, SFASU was an independent public university

withintheStateofTexasandwasseparatelyincludedintheAnnualComprehensiveFinancialReportoftheState.

OnSeptember20,2023,theU.T.SystemBoardofRegentsissued$41,000,000inRFSTaxableCommercialPaperNotes,

SeriesBtofinanceavarietyofcapitalprojectsatvariousU.T.Systeminstitutions.OnSeptember21,2023,theU.T.

SystemBoard of Regentsretired $56,897,000of RFSTaxableCommercial PaperNotes,Series B. Subsequent tothis

issuanceandretirement,theSystemhad$568,101,000ofRFSTaxableCommercialPaperNotes,SeriesBoutstanding.

FromOctober2,2023,throughOctober6,2023,theU.T.SystemBoardofRegentsretired$71,000,000ofoutstanding

PUFTaxableCommercialPaperNotes,SeriesB.Subsequenttotheseretirements,theSystemhad$190,000,000ofPUF

TaxableCommercialPaperNotes,SeriesBoutstanding.

OnNovember1,2023,theU.T.SystemBoardofRegentsissued$50,000,000inRFSTaxableCommercialPaperNotes,

SeriesBtofinanceavarietyofcapitalprojectsatvariousU.T.Systeminstitutions.OnNovember2,2023,theU.T.

System Board of Regents retired $75,000,000 of outstanding RFS Taxable Commercial Paper Notes, Series B.

Subsequenttothisissuanceandretirement,the System had $543,101,000 of RFS Taxable Commercial Paper Notes,

SeriesBoutstanding.

OnNovember28,2023,theU.T.SystemBoardofRegentsissued$250,000,000inRFSTax-ExemptCommercialPaper

Notes,SeriesAto financeavarietyof capitalprojectsandequipmentpurchasesatvariousU.T.Systeminstitutions.

Subsequent to this issuance, the System had $1,000,763,000 of RFS Tax-Exempt Commercial Paper Notes, Series A

outstanding.

OnDecember5,2023,theU.T.SystemBoardofRegentsissued$200,000,000inPUFTax-ExemptCommercialPaper

Notes,SeriesAto financeavarietyof capitalprojectsandequipmentpurchasesatvariousU.T.Systeminstitutions.

Subsequent to this issuance, the System had $945,300,000 of PUF Tax-Exempt Commercial Paper Notes, Series A

outstanding.

26. UpcomingAccountingPronouncements

Otherthanthe portionof thisstatementimplemented in2022and2023,the remainderofGASB StatementNo.99,

Omnibus 2022, is effective in 2024. The requirements related to financial guarantees and the classification and

reportingofderivativeinstrumentswithinthescopeofStatement53areeffective2024.TheSystemisevaluatingthe

effectthattheremainderofStatement99willhaveonitsfinancialstatements.

141

GASB Statement No. 100, Accounting Changes and Error Corrections—an amendment of GASB Statement No. 62,

effective2024,enhancesaccountingandfinancialreportingrequirementsforaccountingchangesanderrorcorrections

to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or

assessingaccountability.TheSystemisevaluatingtheeffectthatStatement100willhaveonitsfinancialstatements.

GASBStatementNo.101,CompensatedAbsences,effective2025,updatestherecognitionandmeasurementguidance

for compensated absences by aligning the recognition and measurement guidance under a unified model and by

amendingcertainpreviouslyrequireddisclosures.TheSystemisevaluatingtheeffectthatStatement101willhaveon

itsfinancialstatements.

142

REQUIREDSUPPLEMENTARYINFORMATION

143

THEUNIVERSITYOFTEXASSYSTEM

REQUIREDSUPPLEMENTARYINFORMATION

SCHEDULEOFTHESYSTEM’SPROPORTIONATESHAREOFCHANGES

INTHEEMPLOYERTOTALOPEBLIABILITYANDRELATEDRATIOS

December31,2022

2022 2021 2020 2019 2018 2017 2016

TotalOPEBLiability

ServiceCost $ 877,350,009  708,022,293  572,677,209  471,785,731  548,093,347  569,296,804  584,209,916

Interest  321,938,242  266,654,173  286,398,460  442,516,885  394,480,742  426,298,831  384,344,675

ChangesofBenefitTerms

 (52,783,790)  —  —  —  —  —  —

DifferencesBetweenExpectedandActual

Experience

 —  160,861,824  —  (89,235,022)  —  (136,662,956)  —

ChangesofAssumptionsorOtherInputs  (7,704,380,357)  1,780,677,623  1,269,349,798  478,407,758  (1,429,460,396)  (781,692,644)  (299,449,010)

BenefitPayments(Employer)  (206,219,478)  (181,252,716)  (153,657,997)  (152,076,995)  (153,396,451)  (137,157,472)  (147,648,350)

NetChangeinTotalOPEBLiability  (6,764,095,374)  2,734,963,197  1,974,767,470  1,151,398,357  (640,282,758)  (59,917,437)  521,457,231

TotalOPEBLiability–Beginning  14,695,594,306  11,931,417,814  9,683,463,315 *  10,355,785,546  10,717,111,345  10,777,028,782  10,255,571,551

ChangesinProportionateShare  158,235,423  29,213,295  273,187,029  41,561,977  278,956,959  —  —

TotalOPEBLiability–Ending $ 8,089,734,355  14,695,594,306  11,931,417,814  11,548,745,880  10,355,785,546  10,717,111,345  10,777,028,782

*InFY2022,theBeginningTotalOPEBLiabilityforthemeasurementyearendedDecember31,2020wasrestatedtocorrectdemographicdataerrorsandassumptionsrelatedtoassumed

ratesofparticipationbyeligibleterminatedemployees.MeasurementyearspriortoDecember31,2020havenotbeenrestatedforthecorrectionoftheerror.

144

NotestoSchedule:

Thisscheduleisintendedtopresenttenyearsofinformation.OnlysevenyearsofinformationispresentedduetoGASBStatementNo.75beingimplementedinfiscalyear2018.Additionalyearswillbe

displayedastheybecomeavailable.

Informationispresentedusingmeasurementdatewhichprecedesthefiscalyearendbyeightmonths.

Noassetsareaccumulatedinatrustthatmeetsthecriteriainparagraph4ofGASBStatementNo.75topayrelatedbenefits.

Changesinbenefitterms

From2021to2022,thefollowingarereflectedaschangesinbenefitterms:

-IncreasesinretireecostsharingforretireesforwhomMedicareisnotprimary

-AnincreaseintheemployerfundedlifeinsurancecoverageforretireeswhodonotoptoutofEGIPhealthcoverageuponretirement

Changesinassumptionsorotherinputs:

From2021to2022,thefollowingarereflectedaschangesinassumptionsorotherinputs:

-Assumedexpenses,assumedpercapitahealthbenefitcostsandassumedhealthbenefitcosttrendshavebeenupdatedtoreflectincreasesinretireecostsharinginUTSelectandtheimplementation

ofUTCare,afullyinsuredMedicareAdvantagePlanforretireesforwhomMedicareisprimary,effectiveJanuary1,2023.ThisdecreasedtheTotalOPEBLiabilitybyapproximately$4.4billion.

Changesinthediscountrate(seetablebelow).ThisdecreasedtheTotalOPEBLiabilitybyapproximately$4.9billion.

From2020to2021,thefollowingarereflectedaschangesinassumptionsorotherinputs:

-Adjustmentstoassumptionsforexpenses,assumedpercapitahealthbenefitcostsandassumedtrendforhealthbenefitcostsandretireecontributions.

Thefollowingarethediscountratesusedineachperiod:

2022 3.72%

2021 2.06%

2020 2.12%

2019 2.74%

2018 4.10%

2017 3.44%

2016 3.78%

145

THEUNIVERSITYOFTEXASSYSTEM

REQUIREDSUPPLEMENTARYINFORMATION

OTHERPOSTEMPLOYMENTBENEFITSPLAN

August31,2023

ScheduleoftheSystem’sProportionateShareoftheTotalOPEBLiability

asoftheDecember31MeasurementDate

2022 2021 2020 2019 2018 2017 2016

System’sProportionoftheTotalOPEB

Liability 82.8178338% 81.9355890% 81.7354650% 79.4928364% 79.1750747% 77.1664987% 77.1664987%

System’sProportionateShareoftheTotal

OPEBLiability $ 8,089,734,355  14,695,594,306  11,931,417,814  11,548,745,880  10,355,785,546  10,717,111,345  10,777,028,782

State’sProportionateShareoftheTotal

OPEBLiabilityRelatedtoSystem  1,678,372,322  3,239,950,544  2,666,184,108  2,979,287,588  2,723,817,586  3,171,184,120  3,188,913,639

TotalOPEBLiabilityRelatedtoSystem $ 9,768,106,677  17,935,544,850  14,597,601,922  14,528,033,468  13,079,603,132  13,888,295,465  13,965,942,421

System’sCoveredPayroll $ 9,812,399,798  9,457,441,724  6,791,262,006  6,425,556,183  6,062,198,170  5,820,998,450  5,987,051,307

System’sProportionateShareoftheTotal

OPEBLiabilityasaPercentageofits

CoveredPayroll 82.44% 155.39% 175.69% 179.73% 170.83% 184.11% 180.01%

PlanFiduciaryNetPositionasaPercentage

oftheTotalOPEBLiability 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

OnlysevenyearsofinformationispresentedduetoGASBStatement75beingimplementedinfiscalyear2018.Additionalyearswillbedisplayedastheybecomeavailable.

146

THEUNIVERSITYOFTEXASSYSTEM

REQUIREDSUPPLEMENTARYINFORMATION

TEACHERRETIREMENTSYSTEMPENSIONPLAN

August31,2023

ScheduleoftheSystem’sProportionateShareoftheNetPensionLiability

asoftheAugust31MeasurementDate

2022 2021 2020 2019 2018 2017 2016 2015 2014

System’s

Proportionof

theNetPension

Liability 9.4987114% 9.0342804% 8.9723873% 8.6902629% 8.9377185% 8.2879633% 8.2932305% 7.7646311% 8.6199871%

System’s

Proportionate

ShareoftheNet

PensionLiability $ 5,639,140,669  2,300,711,499  4,805,427,562  4,517,470,315  4,919,537,167  2,650,044,162  3,133,888,495  2,744,693,745  2,302,987,541

State’s

Proportionate

ShareoftheNet

PensionLiability

Relatedto

System  2,209,241,002  729,928,272  1,587,993,294  1,898,921,776  1,355,571,593  894,941,498  893,178,321  786,436,009  892,687,939

TotalNetPension

LiabilityRelated

toSystem $ 7,848,381,671  3,030,639,771  6,393,420,856  6,416,392,091  6,275,108,760  3,544,985,660  4,027,066,816  3,531,129,754  3,195,675,480

System’sCovered

Payroll $ 6,783,241,812  6,196,286,308  5,942,147,682  5,435,527,295  5,106,576,133  4,891,473,913  4,635,793,582  4,472,632,860  4,018,776,650

System’s

Proportionate

ShareoftheNet

PensionLiability

asaPercentage

ofitsCovered

Payroll 83.13% 37.13% 80.87% 83.11% 96.34% 54.18% 67.60% 61.37% 57.31%

PlanFiduciaryNet

Positionasa

Percentageof

theTotal

PensionLiability 75.62% 88.79% 75.54% 75.24% 73.74% 82.17% 78.00% 78.43% 83.25%

147

ScheduleoftheSystem’sContributionsasofAugust31

2023 2022 2021 2020 2019 2018 2017 2016 2015

Statutorily

Required

Contributions $ 601,660,709  525,701,240  464,721,473  445,661,076  369,615,856  347,247,177  332,620,226  315,233,963  304,139,034

Contributionsin

Relationtothe

Statutorily

Required

Contributions $ 514,850,265  439,933,274  381,611,428  366,510,043  302,294,698  282,808,370  262,734,718  262,370,366  244,723,301

Contribution

Deficiency

(Excess) $ 86,810,444  85,767,966  83,110,045  79,151,033  67,321,158  64,438,807  69,885,508  52,863,597  59,415,733

System’sCovered

Payroll $ 7,592,051,434  6,783,241,812  6,196,286,308  5,942,147,682  5,435,527,295  5,106,576,133  4,891,473,913  4,635,793,582  4,472,632,860

Contributionsasa

Percentageof

CoveredPayroll 6.78% 6.49% 6.16% 6.17% 5.56% 5.54% 5.37% 5.66% 5.47%

ContributionsbytheStateofTexasonbehalfoftheSystemsubstantiallyresolvethecontributiondeficiency.

OnlynineyearsofinformationispresentedduetoGASBStatement68beingimplementedinfiscalyear2015.Additionalyearswillbedisplayedastheybecomeavailable.

148



THEUNIVERSITYOFTEXASSYSTEM

REQUIREDSUPPLEMENTARYINFORMATION

SCHEDULEOFM.D.ANDERSON’SPRSSRP/RBPPENSIONLIABILITY

ASOFTHESEPTEMBER1MEASUREMENTDATE

2022 2021 2020 2019

1.TotalPensionLiability

ServiceCost $ 40,513,997  37,988,952  32,367,864

Interest  22,719,060  22,898,554  28,255,880

ChangesofAssumptionsorOtherInputs  (140,590,003)  5,813,235  71,349,543

BenefitPayments(Employer)  (49,856,011)  (47,005,635)  (49,249,256)

NetChangeinTotalPensionLiability  (127,212,957)  19,695,106  82,724,031

TotalPensionLiability-Beginning  1,046,052,341  1,026,357,235  943,633,204

TotalPensionLiability-Ending $ 918,839,384  1,046,052,341  1,026,357,235  943,633,204

2.Covered-EmployeePayroll $ 575,070,266  549,500,639  520,630,549  506,351,431

3.TotalPensionLiabilityasaPercentageof

Covered-EmployeePayroll 159.78% 190.36% 197.14% 186.36%

OnlyfouryearsofinformationispresentedduetoGASBStatementNo.97beingimplementedinfiscalyear2022.Additionalyearswillbedisplayedastheybecomeavailable.Noassetsareaccumulatedinatrust

thatmeetsthecriteriainparagraph4ofGASBStatementNo.68topayrelatedbenefits.

149