Credit Rating Agency Presentation FINAL25

					                                 $17,645,000*

                           Montana State University
                      Facilities Refunding Revenue Bonds
                                   Series 2003




                              Ratings Presentation


* Subject to change
Table of Contents

                Topic                                                                  Presenter
Section I:     MSU Overview and Vision                                       President Geoffrey Gamble
Section II:    Academic & Research Programs                        Provost David Dooley, VP Tom McCoy
Section III:   Enrollment Trends and Student Profile                                  VP Allen Yarnell
Section IV:    State Economy and Financial Overview                             Acting VP Craig Roloff
Section V:     Foundation Overview and Scholarship Campaign             Executive Director Dave Gibson
Section VI:    Presentation of Pledged Revenues               Treasurer Tom Gibson, Director Tom Stump
Section VII:   Refunding Plan of Finance                                        Underwriter Ron Kaiser
Montana State University Organization


                              Montana State University Campuses
                                    Organizational Chart

                                              Geoffrey Gamble
                                                 President


  Great Falls       Montana State    Montana State       Montana State       Montana            Extension
   College of        University-      University-         University-       Agricultural         Service
  Technology          Northern         Bozeman              Billings     Experiment Station


                                                           College of                           Fire Service
                                                          Technology                          Training School




          Four campuses located throughout Montana: Bozeman, Billings, Great Falls, and Havre

          In 2002, the fall enrollment headcount on a combined basis for all four campuses was
           17,785 resident and 3,342 nonresident students




                                                                                                      Page 1
Current Administration


                                             Montana State University - Bozeman
                                                    Organizational Chart

                                                              Geoffrey Gamble
                                                                 President


         Allen Yarnell                Tom McCoy                  Craig Roloff        David M. Dooley          Jeffrey Jacobsen
     VP for Student Affairs   VP for Research, Creativity,   VP for Administration   Provost and VP of   Interim Dean of Agriculture
                                & Technology Transfer         & Finance (Acting)      Academic Affairs    & Director of Agricultural
                                                                                                             Experiment Station




            President Geoffrey Gamble has served Montana State University as President since
             2000. He has been involved with higher education in various capacities including
             faculty member, Department Chairman, Provost, and Senior Vice President at
             universities around the country. He most recently served as Provost and Senior Vice
             President of the University of Vermont.

            The senior leadership team that supports President Gamble is an efficient and
             accomplished group. These leaders are diverse in their areas of study and average 16
             years of service at Montana State University.



                                                                                                                               Page 2
Institutional Profile



  Founded in 1893 as the Agricultural College of the State of Montana as a land-grant
   college

  Renamed Montana State University in 1965 by the Legislature for enormous
   advancements in scientific and humanistic research

  Routinely listed by U.S. News and World Report as one of America’s “best buys” for
   undergraduate education

  Four campuses located throughout Montana: Bozeman, Billings, Great Falls, and
   Havre.




                                                                                    Page 3
Other Montana State University Highlights



  MSU has released more than 20 crop varieties to the public in the last 10 years

  With $66.3 million in research expenditures in fiscal year 2002, MSU is ranked by the
   National Science Foundation as one of the top 100 research universities in the country

  MSU is one of five universities designated by NASA to participate in the MARS
   Exploration Program

  MSU student-athletes have ranked first in total Academic All-Big Sky Conference
   selections since 1976




                                                                                     Page 4
MSU’s Vision

  Vision:

      Montana State University will be the university of choice for those seeking a
       student-centered learning environment distinguished by innovation and discovery
       in a Rocky Mountain setting.

  Overarching priority expressed as Student Access and Student Success

      MSU strives to achieve this priority through: Recruitment, Retention, and Quality
       Enhancements

  Strategies and tactics for achieving Vision

      Establish permanent links between planning and budgeting efforts

      Identify specific, institutional priorities in line with a long range plan

      Develop strategic initiatives to achieve priorities

      Regularly assess the outcome of MSU’s investments

                                                                                    Page 5
University Planning, Budget, & Analysis Committee


  UPBAC is a 21-member group consisting of representatives from all sectors of the
   University and the public community

  Charged with important responsibilities of:
      Setting strategic priorities

      Establishing key performance indicators

      Soliciting budget proposals from departments around MSU

      Preparing preliminary budget proposal for discussion with the campus and community

      Creation and proposal of a balanced budget which reflects MSU’s mission, goals, obligations,
       strategic initiatives and constituent priorities

  Primary challenge for UPBAC for fiscal year 04/05 is to continue to enhance MSU’s
   high level of educational quality, while maintaining affordable access for Montana
   students



                                                                                            Page 6
Degree Programs MSU-Bozeman



  The curricula offered at the University is organized into seven colleges: Agriculture,
   Education, Health and Human Development, Engineering, Letters and Sciences, Arts
   and Architecture, and the College of Graduate Studies. The largest of these colleges is
   the College of Letters and Sciences.

  At the Bozeman campus there are:

       46 bachelor’s degrees that cover 122 different areas of study

       37 master’s degrees available

       Doctorate degrees in 12 fields

  The University’s research programs serve the dual purpose of instructional services to
   students at all levels of studies and contributing to solve local and national problems in
   fields such as agriculture, bioremediation, neurosystems, natural resource management,
   electro-optics, and thermal biology.

                                                                                       Page 7
Academics


      Recent enhancements to academic or academic support programs
           Freshman seminars – 60% of entering MSU freshman participate in
            small-enrollment seminar classes that focus on college transition issues
            and the development of critical thinking skills. MSU is expanding this
            program to engage all entering freshman
           Capstone Courses – All graduating seniors complete a summative
            capstone course for their major
           Undergraduate Research Experiences – More than 300 students a year
            participate in cutting edge research opportunities
           Library Renovation – After a three year renovation, the MSU-Bozeman
            Renne Library won the Montana Library of the Year award
           Web-Based Learning/Teaching Tools – MSU serves hundreds of on-line
            students yearly and is further enhancing the technical skills of faculty in
            on-line course development and delivery
           Core Curriculum – MSU has committed to a significant re-structuring of
            its general education core curriculum to improve students’ educational
            experience
                                                                                          Page 8
Research Trends

                                                                               Montana State University
                                                                                 Bozeman Campus
                                                                                Grants and Contracts

                                                70.0


                                                60.0
            Grants and Contracts ($ Millions)




                                                50.0


                                                40.0


                                                30.0


                                                20.0


                                                10.0


                                                 0.0
                                                   1991   1992   1993   1994    1995    1996     1997   1998   1999   2000   2001   2002
                                                                                         Fiscal Year


       Strong trend in growth of grant and contract activity
       Outstanding Research Program
                                               Top scientists doing cutting-edge research in many areas of science and
                                                agriculture
       Continuing State support for research at MSU

                                                                                                                                           Page 9
Research Funding by Sources


              Grants & Contracts Expenditures for FY 2002                                 Grants and Contracts Activity by Federal Source - FY 2002

                                                                                                                 Department of Education (2.1%)
                                                                                                                          $1,061,194
                                                                                                                                        Department of the Interior (3.8%)
     Private (15%) $9,944,914                                                                                                                    $1,882,125
                                                                           Other Federal (18.5%) $9,194,415
                                                                                                                                                      Health and Human Development
                                                                                                                                                            (17.1%) $8,508,799
      State (10%)
      $6,629,943
                                                                Federal Highw ays (3.7%) $1,840,825
                                                                   Environmental Protection Agency
                                                                          (2.9%) $1,425,532

                                                                   Department of Commerce (2.2%)                                                         U.S. Department of Agriculture
                                                                            $1,096,388                                                                        (11.0%) $5,469,912


                                                Federal (75%)
                                                                    National Science Foundation (17.7%)                                              Department of Defense (7.6%)
                                                 $49,724,568
                                                                                 $8,806,433                                                                  $3,771,780

                                                                                                                                           Department of Energy (1.8%)
                                                                                                               National Aeronautics and Space      $874,837
                                                                                                              Administration (11.6%) $5,792,328




     The Federal Funding that MSU receives comes from a large and diverse
      pool of Federal Agencies


                                                                                                                                                                                Page 10
Key Awards and Indirect Cost Revenues

        History of Indirect Cost Revenues Collected by MSU

$12,000,000
                                                                                                   Listing of Large Multi-Year Awards
$10,000,000                                                                                  Funding Agency               Duration      Award Amount
                                                                                      Dept. of Transportation         10/1/98 - 9/30/04   $10,686,900
 $8,000,000                                                                           National Science Foundation      2/1/01 - 7/31/04    $9,000,000




                                                                        $10,392,602
                                                                                      National Science Foundation     10/1/01 - 9/30/03    $4,500,642




                                                          $9,511,545
                                            $8,748,153
 $6,000,000                                                                           National Institutes of Health   9/30/01 - 8/31/03    $3,999,986
                              $7,433,859
                $6,881,762




                                                                                      National Science Foundation      6/9/99 - 7/31/03    $2,941,300
 $4,000,000                                                                           Dept. of Interior (BLM)         4/1/00 - 12/31/04    $1,800,000
                                                                                      USDA                            9/15/00 - 9/30/03    $1,800,000
 $2,000,000                                                                           National Institutes of Health    6/1/03 - 5/31/04    $1,682,157
                                                                                      National Institutes of Health    4/1/97 - 3/31/04    $1,580,644
        $0                                                                            Dept. of Commerce               10/1/01 - 9/30/04    $1,522,610
               FY '98        FY '99        FY '00        FY '01        FY '02




          In five years Indirect Cost Revenues have increased by 51%
          There are six different agencies represented within the ten largest multi-
           year awards




                                                                                                                                            Page 11
MSU Enrollment Profile


                             Headcount for All Four MSU Campuses Combined
       25,000


       20,000


       15,000


       10,000


        5,000


                0

                    1992   1993   1994   1995     1996     1997      1998       1999   2000   2001   2002



                                                Resident          Nonresident




     MSU has seen a steady increase in the number of enrolled students over
      the past 10 years


                                                                                                            Page 12
MSU – Bozeman Enrollment Profile



     The Bozeman campus has seven colleges that serve both undergraduate
      and graduate students



        Student FTE By College 2002-03
                               Arts and
                             Architecture
                                                               Student FTE by College 2002-2003
                                 14%
                                                                          Undergrad     Grad       Total
           Engineering                Business           Agriculture             717          83       801
              11%                        7%
                                                    Arts and Architecture      1,047         484     1,531
                                        Agriculture       Business               686          40       726
                                            7%      Education, Health &
                                    Nursing             Human Dvlmt            1,038         193     1,231
   Letters and                                           Engineering           1,074         114     1,189
                                       3%
    Sciences                Education,
                                                    Letters and Sciences       4,682         269     4,951
       47%                   Health &
                              Human                        Nursing               324          24       348
                            Development
                               11%

                                                                                               Page 13
MSU- Bozeman Enrollment Trends


                                Ten Year Enrollment History by Headcount

                  12,000


                  11,500


                  11,000


                  10,500


                  10,000
                           1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002




     MSU- Bozeman has seen a steady increase in the number of enrolled
      students over the past ten years
     Fall 2002 new nonresident freshman enrollment was 8.5% higher than in
      Fall 1998



                                                                                    Page 14
Student Profile

MSU excellence is reflected in the outstanding student body

  Ranked as eighth in the country for universities with the most students who have
   received the prestigious Goldwater Scholarship, given for excellence in math and
   science

  College of Engineering students have a 95% pass rate on the Fundamentals of
   Engineering exam, compared to 83% nationally

  College of Business is among 10% of programs nationwide that are fully AACSB
   accredited

      Accounting students place among the top 10 schools in the nation for passing all
       parts of the CPA exam in one sitting

  College of Nursing boasts a 94% pass rate on the national licensing exam, compared to
   80% nationally



                                                                                   Page 15
Admissions and Student Quality

              MSU- Bozeman New Freshman Trends
4500
4000
3500                                                                   The fall to spring semester freshman
3000                                                                    retention rate at MSU- Bozeman
2500
2000                                                                    averages 89% over the past 10 years
1500                                                                    and has stayed consistent throughout
1000
 500
   0
       1998       1999           2000        2001    2002

                    Applicants   Admits   Enrolled



                                                                              MSU-Bozeman Transfer Trends
                                                            1600

      Consistency in the number of                         1400
                                                            1200
       transfer student applicants and                      1000
       enrollments over the last five                        800
                                                             600
       years                                                 400
                                                             200
                                                               0
                                                                       1998    1999          2000        2001     2002

                                                                                Applicants   Admits   Enrolled


                                                                                                                 Page 16
MSU- Bozeman 2002 Student Demographics

                                                                                # Students from Top 5 Other Home States


                    Fall 2002 Enrollment Highlights                                        202
                                                                                                                              356
                                                                                                    Alaska
                     11,934 students enrolled                                                                    Washington
              10,396 (87.1%) undergraduate students                       248   Colorado

       1,538 (12.9%) graduate & post-baccalaureate students                                      Minnesota
                                                                                                                 Wyoming
           2,648 non-traditional (25 and older) students

                                                                                                                              309
                                                                                           284
           Top 5 Feeder Counties for Enrolled Students

3000

2500
                                                                                                           Fall 2002
2000                                                                                                 New Freshman Averages
1500
                                                                                                  ACT – Composite 23.1
1000                                                                                              SAT – Combined 1098
                                                                                                  High School GPA - 3.29
 500
                                                                                             High School Rank – 65th percentile
  0
         Gallatin      Yellowstone   Cascade   Lewis & Clark   Flathead
                                                                               The national average for the ACT and
                                                                                SAT is 20.8 and 1020 respectively

                                                                                                                                  Page 17
MSU- Bozeman Student Services


      Exemplary student services programs
          Orientation, retention, and mentoring programs
          Recent $1.5 million bookstore renovation of the entire physical setting to
           modernize the operation
          Residence life/family housing programs
          Career Placement




                                                                                   Page 18
Financial Aid Profile

                               MSU- Bozeman FAFSA Financial Aid

                  14000
                  12000
                  10000
                  8000
                  6000
                  4000
                  2000
                     0
                          1999-2000     2000-2001       2001-2002      2002-2003

                             FAFSAs Received   Awards Issued   Awards Accepted




       Returned to the Federal Family Education Loan Program (FFELP) for the
        2003-2004 academic year as a strategic initiative to contribute $29 million of
        loan activity to the Montana lending industry.
       Initiated electronic promissory notes for the 2002-2003 academic year to
        provide ease of processing to students.
       Initiated web enabled electronic award notification process for the 2003-2004
        award year. Montana State University is the only school within the Montana
        University System to have this functionality.

                                                                                    Page 19
State Economy & Support for Higher Education


      The 2003 Montana Legislature struggled with a sagging national economy, a
       fourth year of drought and decreased income and capital gains tax revenues
      Montana State University funded at $25 million below “present law need” for
       fiscal year 2004/2005 Biennium
      The Board of Regents approved modest cuts and a 12% increase in tuition for
       each year of the biennium to remove the gap created by the shortage of state
       funds                State Support for the MUS, 1980-2003
                                              (Total height represents all state support)
               $140,000,000



               $120,000,000



               $100,000,000



                $80,000,000




                $60,000,000



                $40,000,000



                $20,000,000
                                                                                                                                                                          Millage
                                                                                                                                                                          General Fund

                        $0
                              1980

                                     1981

                                            1982

                                                   1983

                                                          1984

                                                                 1985

                                                                        1986

                                                                               1987

                                                                                      1988

                                                                                             1989

                                                                                                    1990

                                                                                                           1991

                                                                                                                  1992

                                                                                                                         1993

                                                                                                                                1994

                                                                                                                                       1995

                                                                                                                                              1996

                                                                                                                                                     1997

                                                                                                                                                            1998

                                                                                                                                                                   1999

                                                                                                                                                                          2000

                                                                                                                                                                                 2001

                                                                                                                                                                                        2002

                                                                                                                                                                                               2003
                                                                                                                                                                                                      Page 20
Revenue Trends


                             State Funding as % of Total Revenues

                   35%

                   30%

                   25%

                   20%
                   15%

                   10%

                   5%

                   0%
                         1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002




       Over the past decade, state funding for MSU’s educational units has decreased
        from 37% to 18% of total revenues
       Result has been less dependency of State appropriations and a broader
        diversification of support for the MSU system


                                                                                  Page 21
MSU and Other Regional Universities

                     FY2000 STATE APPROPRIATIONS & TOTAL REVENUES PER STUDENT FTE
                       FOR RESEARCH / DOCTORAL UNIVERSITIES IN NEIGHBORING STATES

                                                                                                         FY2000                 FY2003
                                                                                                       Per Capita          Res. Undergrad
                             State                   Approp $ / FTE            Total $ / FTE            Income             Tuition & Fees*
                    Idaho                                 $8,767.29                 $12,752.91           $17,484.00                $3,055.00
                    Nevada                                $8,519.77                 $12,232.77           $21,580.00                $2,490.00
                    New Mexico                           $10,531.63                 $13,621.94           $17,067.00                $3,192.00
                    North Dakota                          $6,470.43                 $10,510.52           $18,072.00                $3,584.00
                    Oregon                                $6,052.11                 $11,636.04           $20,794.00                $4,086.00
                    South Dakota                          $6,795.83                 $10,500.44           $18,650.00                $3,853.00
                    Utah                                  $8,671.79                 $12,364.28           $17,701.00                $3,112.00
                    Washington                            $9,773.21                 $16,496.93           $23,879.00                $4,543.00
                    Wyoming                               $9,974.74                 $13,832.55           $19,336.00                $2,997.00



                    Totals and Average                       $8,467.82               $13,091.56           $19,395.89                 $3,434.67




                    Montana (MSU & UM)                       $4,102.17                $8,446.03           $18,115.00                 $3,996.00




                    Montana % of Average                 48.44%                  64.52%                 93.40%                 116.34%

                    *These rates are for full-time resident, undergraduate students. Nonresidents and graduate students usually pay higher rates


      Montana’s appropriated level of state funding per student is just 48% of the Western
       states average
      However, MSU is still able to provide a competitive tuition rate to students due to the
       efficiency and budgeting of the University
      MSU’s unparalleled effectiveness results in a rate of total expenditures per student that
       is only 64% of the regional average
                                                                                                                                                   Page 22
 State Funding and Tuition

                               MSU Bozeman Campus
             45.00
             40.00
             35.00                                                             Tuition income now accounts for
                                                                              significantly more of MSU’s total revenue
$ Millions




             30.00
             25.00
             20.00
             15.00                                                             MSU– Bozeman’s tuition and fees are still
             10.00                        State Gen Fund           Tuitio n   comparable to other institutions
              5.00
              0.00
                     1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

                                             Year

                      Out of state tuition compares                                 2002-03 Nonresident Undergraduate Tuition
                       favorably to other institutions in the
                       West                                                         Montana State University            $11,444
                              Out-of-state applications 300
                               ahead of last year                                   University of Colorado at Boulder    18,910
                                                                                    University of Oregon                 15,357
                              Aggressive out-of-state                              Colorado State University            12,705
                               marketing effort                                     Washington State University          12,644
                                                                                    Oregon State University              14,898



                                                                                                                                  Page 23
MSU Revenues by Source, Fiscal Year 2002

                                      System Revenue By Source

                          Sales & Services     State Appropriations
                                8%                    18%
                                                                      Contributed Capital 2%
            Private Grants & Contracts
                       7%                               Investment Income
                                                           & Gains 1%
           Indirect Cost Recoveries
                                                                                       Gifts
                     5%
                                                                                       2%

                 Federal Grants &
                    Contracts
                      21%
                                                        Auxiliaries
                                                          13%              State Grants & Contracts
                                    Tuition & Fees                                   3%
                                                              Land Grant Income
                                         20%                        0%




      MSU has become less dependent on state appropriations over last decade
      System revenue by source is highly diversified



                                                                                                      Page 24
MSU’s Expenses by Source, Fiscal Year 2002

                               System Expenses By Classification

                                                 Supplies             Communication
                    Financial Aid     Depreciation
                                                   8%                     1%
                         4%               7%            Contracted
                                                                                      Rent
                        Maintenance                       Svcs
                                                                                      1%
                            3%                             9%
                                                          Utilities
                         Benefits                           2%                               Travel
                          12%
                                                                                              2%




                                                                                         Interest
                                    Compensation              Other                         2%
                                       46%                     2%        Cost of Sales
                                                                              1%




         A significant portion of expenses relate to employee compensation and
          benefits ($120.4 million, or 58%), primarily in the instruction, research,
          auxiliary and academic support areas.
         Although currently a small percentage of total expenses, utility costs are more
          volatile than other expense components.

                                                                                                      Page 25
Other Financial Initiatives


  Scholarship and Stipend Reserves

      The Board of Regents created a new policy allowing campuses to transfer fiscal
       year general operation savings into reserve accounts for future use as student
       scholarships and stipends

  IT Infrastructure Fee

      A permanent student fee for all MSU campuses is solely dedicated to the
       maintenance and enhancement of IT infrastructure

  Debt Planning and Management Committee

      MSU’s Financial Advisor worked with a campus committee to develop a Debt
       Planning and Management Model which enables the University to record, analyze,
       project and model current and potential debt service obligations, major
       maintenance requirements, as well as needed or desired new capital projects



                                                                                  Page 26
Long Range Planning Priorities




                                 Page 27
MSU Foundation Overview


                                                                             Total Assets                                                                                                       MSU Foundation
                       80
                                                                                                                                                                            Independent 501-c-3 dedicated




                                                                                                                                             76.14
                                                                                                                                75.37
                       70




                                                                                                                   70.26
                       60                                                                                                                                                    to the support of MSU
                                                                                                      57.89
       $ in Millions




                                                                                      52.18
                       50

                                                                                                                                                                       
                                                                    47.42




                       40                                                                                                                                                    Endowment investment returns
                                                  38.45




                                                                                                                                                                             have ranked in NACUBO’s top
                                 35.30




                       30

                       20
                       10
                                                                                                                                                                             25th percentile or above for past
                        0                                                                                                                                                    ten years
                               1995              1996             1997              1998          1999           2000         2001         2002
                                                                                          Years



                                                          Managed Investment Pool                                                                                                               Growth in Endowments
                       60.00                                                                                                                                           45




                                                                                                                                                                                                                                                       42.42
                                                                                                                                                                       40




                                                                                                                                                                                                                                             40.55
                       50.00
                                                                                                                                               50.84
                                                                                                                                   49.10




                                                                                                                                                                       35
                                                                                                                      48.09




                                                                                                                                                                                                                                   33.86
  $ in Millions




                       40.00                                                                                                                                           30
                                                                                                         40.49




                                                                                                                                                       $ in Millions   25
                                                                                          34.33




                       30.00




                                                                                                                                                                                                                         24.47
                                                                            28.70




                                                                                                                                                                                                             22.54
                                                                                                                                                                       20




                                                                                                                                                                                                   21.60
                       20.00                                                                                                                                           15




                                                                                                                                                                                        16.70
                                                          20.23
                                         18.14




                                                                                                                                                                              14.23
                                                                                                                                                                       10
                       10.00
                                                                                                                                                                        5
                        0.00                                                                                                                                            0
                                1995              1996             1997              1998          1999           2000        2001         2002                             1995      1996       1997      1998      1999        2000      2001      2002
                                                                                              Years                                                                                                              Years




                                                                                                                                                                                                                                                      Page 28
MSU Foundation Overview

                                                 Contribution Revenue
                         14

                         12




                                                                                                12.09
                         10




                                                                                                                 10.41
   $ in Millions




                                                                                                                                              8.94*
                         8

                                                                                                                                                                   
                                                   7.43




                         6                                                                                                                                             The Foundation employs thirteen




                                                                                                                                  5.50
                                                                                                                                                                       development officers and
                                                                  5.00



                         4
                                                                                                                                                                       fundraising professionals
                                                                                  3.63
                                        3.00
                                2.61




                         2

                         0
                              1995     1996      1997            1998           1999        2000            2001           2002           2003
                                                                                                                                                                      Works cooperatively with the
                                                                                Years                                                                 *estimated
                                                                                                                                                                       MSU Alumni Association
                                                                                                                                                                       maintaining a database of friends
                                         MSU Support & Scholarships
                                                                                                                                                                       of MSU
                         6
                                                                                                          5.70




                         5
                                                          4.21




                         4
         $ in Millions




                                                                                                                                           3.85
                                                                                                                           3.76
                                                                                         3.58




                         3
                                                                         2.69
                                          2.42
                                2.36




                         2

                         1

                         0
                              1995      1996      1997             1998             1999                2000             2001            2002
                                                                           Years                                                                                                                   Page 29
MSU Foundation

                                “Putting Students First” Scholarship Campaign
                       “…our endowed scholarship campaign is critical to…enabling us to keep our best
                                and brightest in Montana.” –Dr. Geoffrey Gamble, President


              The current scholarship campaign is 78% of the way towards the $18 million goal
              Benefactor level contributions are                                                         MSU Foundation Scholarship Campaign
                                                                                           Donor Level                             Gifts           # of Donors
               already 162% of the stated goal                                             Benefactor
                                                                                                                            Actual         Goal
                                                                                                          1M and greater $ 11,388,794 $ 7,000,000
                                                                                                                                                   Actual Goal
                                                                                                                                                        6    4
                                                                                           Founder        500K to 1M                -    4,000,000      0    4
                                                                                           Leadership     100K to 500K        920,393    2,500,000      5    8
                                                                                           Patron         25K to 100K         695,103    2,250,000     16   40
                                                                                           Sustainer      10K to 25K          601,291    1,250,000     42   50
                                                                                           Advocate       5K to 10K           120,583      500,000     20   65
                                                                                           Partner        1K to 5K            191,488      500,000     99
                                                                                           Other          less than 1K        109,821            -   1276
                                                 MSUF Scholarship Campaign                 Total                          $14,027,473 $18,000,000
                                                    Gifts by Donor Level




  Goal




 Actual



          $0            $4,000,000          $8,000,000            $12,000,000          $16,000,000               $20,000,000

                   Benefactor    Founder   Leadership    Patron    Sustainer    Advocate     Partner     Other
                                                                                                                                                      Page 30
Trends in Pledged Revenues and Coverage
                                  Historical Net Pledged Revenues and Debt Service Coverage
                                                   Fiscal Years Ended June 30
                                                                 1998        1999          2000        2001         2002
                Student Housing System Facilities Revenues
                (Bozeman only):
                  Residence Halls and Dining Services        $12,248,262 $12,498,435     $13,179,279 $13,727,659 $13,236,454
                  Family Housing                                2,693,222   2,773,282      2,896,014   2,902,591   3,037,910
                  Debt Service Grant                               56,742      44,099         31,414      31,414      15,707
                Total:                                       $14,998,226 $15,315,816     $16,106,707 $16,661,664 $16,290,071
                Student Housing System Facilities Operation
                and Maintenance Expenses (Bozeman only):
                  Residence Halls and Dining Services           7,947,125   8,253,461      8,649,385   8,850,043   9,964,800
                  Family Housing                                1,551,331   1,663,172      1,759,906   1,793,232   1,841,158
                  General & Administrative Expenses               896,927     997,074      1,050,253   1,189,365   1,007,642
                Total:                                       $10,395,383 $10,913,707     $11,459,544 $11,832,640 $12,813,600
                Net Student Housing System Facilities
                Pledged Revenues (Bozeman only)               $ 4,602,843 $ 4,402,109    $ 4,647,163 $ 4,829,024 $ 3,476,471
                  Other Revenue Facilities Net Pledged
                  Revenues (Bozeman)                            1,194,688     231,000      1,273,646   1,137,196   1,300,116
                  Facilities Net Pledged Revenues (Billings
                  and Northern)                                  -524,654    -282,893       -206,304    -299,859    -598,581
                  Student Fee Revenues                          3,338,757   4,434,577      4,845,740   4,858,908   4,862,825
                  Land Grant Income                             1,162,651   1,247,098      1,291,423   1,455,956   1,467,092
                Investment Income                               2,561,222   1,917,852      1,621,252   1,681,772     692,737
                  Events Receipts                                        0    852,116      1,033,724     714,149   1,111,660
                  Museum Lease Income                             300,000     300,000        300,000     300,000     300,000
                  Miscellaneous Expenses                          -46,537    -116,458        -80,931     -83,948    -114,844
                Total Net Pledged Revenues                   $12,588,970 $12,985,401     $14,725,713 $14,593,198 $12,497,476
                  Actual Debt Service for Outstanding Bonds $ 6,468,273 $ 8,061,845      $ 8,078,703 $ 8,283,359 $ 8,261,906
                  Debt Service Coverage Ratio of Net Pledged
                  Revenues to Outstanding Bonds                     1.95 x      1.61 x        1.82 x      1.76 x      1.51 x
                  General & Administrative Expenses
                  Addition Adjustment to Net Pledged
                  Revenues                                     $ 896,927 $ 997,074       $ 1,050,253 $ 1,189,365 $ 1,007,642
                Net Pledged Revenues as Adjusted for
                Addition of General and Administrative
                Expenses                                     $13,485,897 $13,982,475     $15,775,966 $15,782,563 $13,505,118
                Debt Service Coverage Ratio of Adjusted Net
                Pledged Revenues to Outstanding Bonds               2.08 x      1.73 x        1.95 x      1.91 x      1.63 x
                                                                                                                               Page 31
Trends in Pledged Revenues and Coverage

      Bozeman’s net student housing system revenues have returned to normal level
                                   6




                   $ in Millions




                                                                                                                                                   5.600*
                                                                                                           4.829
                                   4




                                                                                       4.647
                                                         4.602




                                                                     4.402




                                                                                                                               3.476
                                   2

                                   0
                                                       1998      1999          2000                    2001                  2002                2003
                                                                                               Years                                                        *estimated

               FY 2002 net was down $1.4 million due to a multiple year bad debt
                write off, timing issues and major maintenance expenses
               FY 2003 unaudited estimated net revenues indicate a strong bounce
                back

      Other Pledged Revenue Facilities (Bozeman & Billings Parking, Billings &
       Northern Food Services minus Billings & Northern leases) are historically stable
       and recently growing
                                                        2,000
                                                                                                                                        598
                                       $ in Millions




                                                        1,500     524                              206              300
                                                                              283



                                                                                                                                         1,300
                                                                                                   1,274




                                                        1,000
                                                                                                                     1,137
                                                                               1,053
                                                                   982




                                                          500
                                                           -
                                                                 1998        1999                2000              2001                2002
                                                                                                                                                                         Page 32
                                                                                                Years
Trends in Pledged Revenues and Coverage (cont.)

      Pledged Student Fee revenues are fairly constant after the added fee pledged for
       bonds sold in 1998
                                                                  5




                                                                                                                                                                4.863
                                                                                                                                           4.859
                                                                                                                      4.846
                                       $ in Millions




                                                                                                    4.435
                                                                  4
                                                                  3




                                                                               3.339
                                                                  2
                                                                  1
                                                                  0
                                                                             1998                 1999              2000                 2001                 2002
                                                                                                                    Years

      Land Grant Income has grown slightly
                                                                       1.5




                                                                                                                                              1.456




                                                                                                                                                                  1.467
                                                       $ in Millions




                                                                                                                              1.291
                                                                                                            1.247
                                                                                          1.163
                                                                        1

                                                                       0.5

                                                                        0
                                                                                1998                1999              2000                2001                2002
                                                                                                                     Years

      Investment income declined after Series D 1996 and Series E&F 1998 bond
       proceeds were expended; in recent years low interest rates have depressed
       investment earnings
                                                 3.000
                       $ in Millions




                                                                                       2.561




                                                 2.000
                                                                                                            1.918




                                                                                                                                 1.621




                                                                                                                                                      1.682




                                                 1.000
                                                                                                                                                                          .693
                                                 0.000
                                                                              1998                  1999                2000                  2001                  2002         Page 33
                                                                                                                      Years
Trends in Pledged Revenues and Coverage (cont.)


      Debt Service coverage with and without Billings & Northern Housing
       system losses

                                    3
                    $ in Millions




                                                2.21
                                    2
                                         2.13




                                                                              2.00
                                                               1.91



                                                                       1.98




                                                                                              1.98
                                                        1.87




                                                                                       1.94




                                                                                                                1.78
                                    2




                                                                                                         1.71
                                                                                                                               With Losses
                                    1                                                                                          Without Losses
                                    1
                                    0
                                         1998           1999           2000            2001              2002
                                                                       Years


      Annual debt service requirements, all campuses

                                    10
             $ in Millions




                                     8
                                                                                                 8.283




                                                                                                                       8.262
                                                               8.062




                                                                               8.079




                                     6
                                                6.468




                                     4
                                     2
                                     0
                                         1998            1999            2000             2001              2002
                                                                        Years                                                                   Page 34
Resident Hall Occupancy Rates



                                    Resident Hall Occupancy
                                     1998        1999      2000   2001*   2002
             Bozeman Campus
               Available Capacity    3277       3261      3261    1909    1909
               Occupancy             2583       2566      2653    1844    1823
               Percent Occupancy     79%        79%       81%     97%     95%
             Billings Campus
               Available Capacity     740        784        784    784     784
               Occupancy              467        496        496    470     506
               Percent Occupancy     63%        63%        63%    60%     65%
             Northern Campus
               Available Capacity     368        368        368    224     224
               Occupancy              170        196        183    135     127
               Percent Occupancy     46%        53%        50%    60%     57%




       In fiscal year 2001, the capacity measurement changed from beds
        available to rooms available. This change was done to account for the
        high demand for use of a double room as a single room. Students who
        choose this option pay a surcharge.

                                                                                 Page 35
Student Fees

                                    Student Fee Net Pledged Revenues Collected
                                             Fiscal Year Ending June 30th
                                                    1998       1999       2000       2001       2002
               Bozeman Campus
                 Student Building Fees           $ 935,963 $ 948,448 $1,017,367 $1,089,349 $1,010,701
                  Health and PE Fees                329,217    334,070    363,582    384,721    372,904
                  Fieldhouse Fees                   141,932    144,008    155,823    166,427    161,317
                  Student Athletic Fees             578,661    587,146    582,501    583,950    595,212
                       Totals                    $1,985,773 $2,013,672 $2,119,273 $2,224,447 $2,140,134
               Billings Campus
                               d
                   Student Buil ing Fees         $ 704,359 $ 650,841   $ 713,249 $ 724,788 $ 744,493
                   Student Union Building Fees     247,237   240,493     269,118    281,999    293,048
                        Totals                   $ 951,596 $ 891,334   $ 982,367 $1,006,787 $1,037,541

               Northern Campus
                  Student Building Fees          $ 335,322 $ 335,078   $ 331,060 $ 330,052   $ 320,571
                  Student Union Building Fees       66,066    75,096      76,734    73,689      92,287
                       Totals                    $ 401,388 $ 410,174   $ 407,794 $ 403,741   $ 412,858




      Student Building Fees and other student fees on the Bozeman Campus, the
       Billings Campus and the Northern Campus are established by the University
       and approved annually by the Board.
      MSU has seen growth in student fees collected at the Bozeman, Billings, and
       Northern campuses during the past 5 years


                                                                                                          Page 36
Pledged Fund Balances

      Pledged Fund Balances have shown increases




      Total Pledged Fund Balances as a percentage of Outstanding Debt is strong

                                  1998      1999      2000      2001      2002
         Total Pledged Fund Bal    10.896    12.181    14.738    18.208    16.360
         Outstanding Bond Debt    104.037   100.767    95.172    93.557    89.567
         Percentage                10.5%     12.1%     15.5%     19.5%     18.3%


                No new debt is planned prior to FY 2006
                Fund balances are expected to remain healthy even with some
                 additional R&R expenditures
                                                                                    Page 37
Residence Life


       Varying Living/Learning Environments
           Wellness, outdoor pursuits, alcohol free, community involvement,
            and limited visitation floors to suit students’ needs
       Freshman Interest Groups
           Groups available through the residence halls including Business,
            Education, Engineering, Social Science and Humanities, and
            Architecture
       Dining Hall Operations
           Unlimited daily food on seven and five day meal plan options
           Open 7:00 am to 7:00 pm with extended hours to accommodate
            athletes
           Additionally, students can use Flex funds that can be spent in
            other venues across campus for food, laundry, and vending
            services



                                                                               Page 38
Family & Graduate Housing


       Continued renovation at MSU-Bozeman
           92 units have been renovated over the past five years
       MSU stays abreast of the larger community to assure that family and
        graduate housing options are desirable and appropriately priced
       Examples of programs to enhance the community at MSU-Bozeman
           Shakespeare in the Park
           Harmony on the Horizon
           Week of Welcome




                                                                              Page 39
Overall Debt Profile - Bozeman

                                                          Montana State University (Bozeman)
                                                         Outstanding Debt Service Requirements
                      8,000,000

                      7,000,000     non-callable / technology

                      6,000,000
                                                          100% refundable 11/15/08
       Debt Service




                      5,000,000
                                                                       100% refundable
                      4,000,000                                           11/15/06

                      3,000,000
                                    non-callable
                      2,000,000                             82% refundable 11/15/03,
                                                            Except 2007-2011 non call CABS
                      1,000,000

                           -
                                  2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
                                                                            6/30 Fiscal Year
                                                   Series A 1987        Series A 1993          Series B 1996
                                                   Series D 1996        Series E 1998          Series F 1998




                        All MSU campuses have been diligent in structuring new debt to maintain
                         level total debt service


                                                                                                                                   Page 40
Overall Debt Profile - Billings

                                                            Montana State University (Billings)
                                                          Outstanding Debt Service Requirements

                         1,600,000

                         1,400,000
                                           non-callable / technology
                         1,200,000
          Debt Service




                         1,000,000

                          800,000

                          600,000
                                                       100% refundable 11/15/06
                          400,000

                          200,000

                              -
                                    02


                                           04


                                                  06


                                                         08


                                                                10


                                                                       12


                                                                              14


                                                                                     16


                                                                                            18


                                                                                                   20


                                                                                                          22


                                                                                                                 24


                                                                                                                        26


                                                                                                                               28


                                                                                                                                      30


                                                                                                                                             32
                                  20


                                         20


                                                20


                                                       20


                                                              20


                                                                     20


                                                                            20


                                                                                   20


                                                                                          20


                                                                                                 20


                                                                                                        20


                                                                                                               20


                                                                                                                      20


                                                                                                                             20


                                                                                                                                    20


                                                                                                                                           20
                                                                                    6/30 Fiscal Year


                                                       Series D 1996                        Series F 1998




                                                                                                                                                  Page 41
Overall Debt Profile - Northern

                                                            Montana State University (Northern)
                                                           Outstanding Debt Service Requirements


                     350,000

                     300,000
                                           non-callable
                     250,000
      Debt Service




                     200,000
                                                  100% refundable 11/15/04
                     150,000

                     100,000

                      50,000

                         -
                               02


                                      04


                                             06


                                                    08


                                                            10


                                                                   12


                                                                          14


                                                                                 16


                                                                                        18


                                                                                               20


                                                                                                      22


                                                                                                             24


                                                                                                                    26


                                                                                                                           28


                                                                                                                                  30


                                                                                                                                         32
                             20


                                    20


                                           20


                                                  20


                                                          20


                                                                 20


                                                                        20


                                                                               20


                                                                                      20


                                                                                             20


                                                                                                    20


                                                                                                           20


                                                                                                                  20


                                                                                                                         20


                                                                                                                                20


                                                                                                                                       20
                                                                                6/30 Fiscal Year


                                                    Series C 1994                        Series F 1998




                                                                                                                                              Page 42
Refunding Savings Summary

                                                                                                                  SAVINGS
                                 SAVINGS
                                                                                    THE BOARD OF REGENTS - MONTANA STATE UNIVERSITY
   THE BOARD OF REGENTS - MONTANA STATE UNIVERSITY
                                                                                          Current Refunding of 1993A (Bozeman Campus)
         Portion that Refunds 1994C (Northern Campus)
                                                                                                               Prior    Refunding
                              Prior    Refunding                                         Date           Debt Service   Debt Service            Savings
         Date          Debt Service   Debt Service        Savings
                                                                                      05/15/2004          920,748.75      818,810.51        101,938.24
      05/15/2004         101,595.00     88,228.30       13,366.70                     05/15/2005          886,235.00      745,931.26        140,303.74
      05/15/2005         101,595.00     79,437.50       22,157.50                     05/15/2006          852,987.50      708,481.26        144,506.24
      05/15/2006         237,745.00    217,337.50       20,407.50                     05/15/2007          811,338.75      666,781.26        144,557.49
      05/15/2007         239,695.00    218,787.50       20,907.50                     05/15/2008          795,982.50      655,581.26        140,401.24
      05/15/2008         240,935.00    220,137.50       20,797.50                     05/15/2009          795,982.50      654,481.26        141,501.24
      05/15/2009         241,487.50    221,387.50       20,100.00                     05/15/2010          795,982.50      653,312.51        142,669.99
      05/15/2010         241,200.00    217,350.00       23,850.00                     05/15/2011          795,982.50      652,006.26        143,976.24
      05/15/2011         240,100.00    217,775.00       22,325.00                     05/15/2012          795,982.50      655,493.76        140,488.74
      05/15/2012         238,400.00    217,587.50       20,812.50                     05/15/2013        3,579,607.50    3,438,196.88        141,410.62
      05/15/2013         240,950.00    221,818.75       19,131.25                     05/15/2014        3,578,232.50    3,437,175.00        141,057.50
      05/15/2014         237,750.00    215,650.00       22,100.00                     05/15/2015        3,578,568.75    3,434,812.50        143,756.25
      05/15/2015         103,000.00     81,250.00       21,750.00                     05/15/2016        3,580,075.00    3,437,250.00        142,825.00
                                                                                      05/15/2017        3,578,122.50    3,433,750.00        144,372.50
                       2,464,452.50   2,216,747.05     247,705.45
                                                                                                       25,345,828.75   23,392,063.72      1,953,765.03

                             Savings Summary
                                                                                                              Savings Summary
     Savings PV date                                 08/20/2003
     Savings PV rate                                 3.283417%                        Savings PV date                                    08/20/2003
     PV of savings from cash flow                    202,747.27                       Savings PV rate                                    3.283417%
     Plus: Refunding funds on hand                       (928.13)                     PV of savings from cash flow                     1,560,826.02
                                                                                      Plus: Refunding funds on hand                         4,112.45
     Net PV Savings                                  201,819.14
                                                                                      Net PV Savings                                   1,564,938.47



                                                     Total present value savings of $1,766,800
                                                     Present value saving ratio of 9.91%

                                                                                                                                                       Page 43

				
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