And according to Section 507 of the Master Trust Indenture between Rockhurst University and First Bank of Missouri as Master Trustee:

February 7, 2013 Mr. Guy Swanson Vice President for Finance and Administration Rockhurst University 1100 Rockhurst Road Kansas City, Missouri 64110 Dear Mr. Swanson: According to Section 5.7 of the Loan Agreement between the Health and Educational Facilities Authority of the State of Missouri and Rockhurst University (Educational Facilities Refunding Revenue Bonds - Rockhurst University Series 2011A): The Institution (Rockhurst) shall perform or cause to be performed all covenants and agreements required on the part of the Institution under the Bond Indenture, the Master Indenture, and any other Financing Documents, and shall deliver to the Bond Trustee all reports, opinions and other documents required by the Bond Indenture and all other Financing documents to be submitted to the Bond Trustee at the times required by the Bond Indenture, the Master Indenture and all other Financing Documents. And according to Section 507 of the Master Trust Indenture between Rockhurst University and First Bank of Missouri as Master Trustee: The Institution shall operate its facilities on a revenue producing basis and shall charge such rates, fees and charges for its facilities and services and shall exercise such skill and diligence as to provide income from its facilities together with other available funds sufficient for the Institution to maintain the Historical Debt Service Coverage Ratio at not less than 1.20 in each Fiscal Year. If the Historical Debt Service Coverage Ratio, as calculated at the end of any Fiscal Year and set forth in the Accountant s Certificate required by the Master Indenture, is less than 1.20, the Institution shall retain a Consultant within 30 days after the date such Accountant s Certificate is delivered to the Master Trustee to make recommendations with respect to the rates, fees and charges of the Institution and the Institution s methods of operation and other factors affecting its financial condition in order to increase the Historical Debt Service Coverage Ratio for subsequent years to at least 1.20, or to the highest practicable level if (a) such report contains an opinion of such Consultant that federal, state or other applicable governmental laws or regulations placing restrictions and limitations on the rates, fees and charges to be fixed, charged and collected by the Institution have prevented the Institution from generating the Net Income Available for Debt Service during such Fiscal Year in an amount sufficient to cause the Historical Debt Service Coverage Ratio to equal or exceed 1.20 and such report is accompanied by a concurring Opinion of Counsel as to any conclusions of law supporting the opinion of such consultant, and (b) the report of such Consultant indicates that the rates charged by the Institution are such that, in the opinion of the Consultant, the Institution has generated the maximum amount of Net Income Available for Debt Service reasonably practicable given such laws or regulations. The Institution

shall not be required to cause the Consultant s report referred to in the preceding sentence to be prepared more frequently than once every 2 fiscal years if at the end of the first of such 2 fiscal years the Institution proves to the master trustee an opinion of counsel to the effect that applicable laws or regulations underlying the Consultant s report delivered in respect of the previous fiscal year have not changed in any material way. For the fiscal year ended June 30, 2012, Rockhurst University s (the University) Historical Debt Service Coverage Ratio as defined in the Master Trust Indenture was calculated as follows: Consolidated Debt Service Coverage Ratio June 30, 2012 Change in unrestricted net assets from operations $ (2,741,370) + Interest expense 1,927,184 + Depreciation & amortization expense 2,879,755 -Net assets released for capital expenditure (945,998) Adjusted change in unrestricted net assets from operations $ 1,119,571 +Interest expense $ 1,927,184 +Current maturities of long term debt 1,170,000 Debt Service $ 3,097,184 Debt Service Coverage Ratio 0.36 Required Ratio 1.20 Due to the fact that the University s Historical Debt Service Coverage Ratio fell below the required 1.20 level, we have been engaged by the University to act as Consultant and to provide this report to you. Based on our calculations prepared in connection with the University s fiscal year 2012 audit and outlined above, we noted that the consolidated Adjusted Change in Unrestricted Net Assets from Operations was approximately $2,600,000 below the amount needed to meet the required Historical Debt Service Coverage Ratio (Ratio) discussed above. The audited consolidated financial statements of the University include the accounts of the University and its majority owned subsidiary, Rockhurst University Continuing Education Center (RUCEC). The changes in unrestricted net assets from operations of each entity for the years ending June 30, 2012 and 2011 were as follows: Change in Unrestricted Net Assets from Operations Year ending June 30, 2012 Year ending June 30, 2011 Rockhurst University $ 210,227 $ 834,778 RUCEC (2,951,597) 1,007,284 Consolidated Total Change in Unrestricted Net Assets from Operations $(2,741,370) $1,842,062 The primary factor that adversely impacted the Ratio was the negative change in unrestricted net assets from the operations of RUCEC. 2

The following discussion and analysis was provided by the University and RUCEC management: Rockhurst University The decrease of approximately $625,000 in the University s change in unrestricted net assets from operations between the year ending June 30, 2011 and 2012 is primarily due to the following: o o Institutional financial aid (unfunded student tuition discount) was approximately 5% higher during the year ending June 30, 2012 than in the previous year, which offset the increase in tuition price. The University defines unfunded aid as any financial aid provided to students that is not funded through gifts, endowment earnings or federal and state sources. Typically, the University does not discount graduate tuition. Total net tuition revenue only increased by 1% over the year ending June 30, 2011 due to the higher financial aid expenses, coupled with a lower freshman enrollment during the Fall 2011 (only 326 students in Fall 2011 freshman cohort compared to 371 students during Fall 2010). The tuition price increase, as approved by the University Board of Trustees, for the 2011-2012 academic year was 5%. There was also a significant decrease in unrestricted private gifts and grants during the year ended June 30, 2012. This was primarily due to the University s continued focus on fundraising efforts related to a new academic building. To date, approximately $22 million in cash and pledges has been raised for this new academic building, which has decreased the amount of unrestricted gifts and grants provided by donors. The University has a goal of raising $25 million for the new academic building to cover estimated construction costs. The University s management hopes to break ground on the new academic building in March 2014, but only if the fundraising gap is met by that time. Once the fundraising for the new academic building is complete, University management plans to re-focus their fundraising efforts on the development of unrestricted gifts and grants. o University related unrestricted operating expenses increased approximately 4%, during the year ending June 30, 2012. This is primarily due to an increase in funded student aid, tuition remissions, and student services (admissions and retention) costs. However, the increases in Admissions costs were intentional through increased mailings, travel to and development of new recruitment territories, and advertising activities targeted toward successful recruiting for the Fall 2012 freshman class. As a result of these activities, the University increased the Fall 2012 freshman cohort to 449 students, which was an increase of approximately 38% over the prior year and a record freshman class. In order to improve the University s operating performance over the next two years, management intends to or has already implemented the following: o A continued focus on increasing the University s undergraduate enrollment. As described above, new recruiting practices resulted in a record freshman class of 449 in Fall 2012 versus 326 in Fall 2011. Management has estimated that this increase in Fall 2012 enrollment will increase net undergraduate tuition revenue by approximately $1,600,000 in fiscal year 2013. Additionally, auxiliary revenues are projected to increase by approximately $600,000 due to the higher number of students living on campus and utilizing the food services. Looking ahead, management has conservatively budgeted the Fall 2013 freshman class at 400, and their hope is to sustain or exceed that for Fall 2014. Management believes that such sustained enrollment figures, coupled with continued strong retention, would increase net undergraduate tuition revenue by at least $1,500,000 annually. According to the most recent enrollment reports, the first time college/freshmen numbers for Fall of 2013 are running ahead of last year s record year on applications, admits and deposits. 3

o o Rockhurst is adding men s and women s lacrosse and women s cross country to the varsity sport offerings. Recruiting has already started for these teams, and the first seasons will commence during the Fall of 2013. The University s Athletic Director believes these teams will add approximately 55-75 new undergraduate students. Considering the potential athletic scholarship packages awarded to student athletes, management has conservatively projected that these additional students would further increase net undergraduate tuition revenues by approximately $500,000 in fiscal 2014. At the December 2012 Board of Trustees meeting, the University s Planning and Budgeting Committee s (UPBC) proposed tuition and fee rates for the 2013-14 academic year were approved. The approved increase for tuition was 5%, along with 3-5% increases for campus housing and meal plans. o There are no departmental operating budget increases reflected in the draft budget for 2013-14 prepared by management. However, the University will likely be adding 1-2 new faculty members in the College of Arts & Sciences due to the increasing undergraduate enrollments noted above. The UPBC also hopes to be able to grant a modest 3% compensation increase for faculty and staff that would be effective in October 2013, contingent on final Fall 2013 enrollment numbers. Management estimates these items will increase the University s salary expenses by approximately $600,000. Management believes they remain below market in their current wage rates in certain areas; however, the University s Human Resource department will be completing a salary study in January and February of 2013. Salaries and benefits are currently the largest component of the University s operating budget. o o o o Rockhurst has partnered with the University of Missouri-Kansas City to offer an engineering, computing and information technology program. The program began in Fall of 2012, and is projected to add at least 25 full time undergraduate students next academic year, with continued growth projected in subsequent year. Management estimates this will increase the University s revenue by approximately $250,000. In December of 2012, Rockhurst opened its University District Medical Care facility. The clinic is housed in the commercial space of the new mixed-use parking garage and will serve Rockhurst students, faculty and staff, as well as the surrounding community. Management estimates the clinic will generate approximately $55,000 in lease income a year. In October 2012, the University completed its request for re-accreditation by the North Central Association of the Higher Learning Commission (HLC). In January 2013, the University received confirmation from the HLC that re-accreditation had been granted. The University will move to the HLC s new Pathways model for continuing accreditation, which involves an annual update rather than one review in a 10 year period. The annual Pathways requirements will be incorporated into the University s annual Planning, Budgeting, & Accountability cycles, which address both strategic planning and the operating budget. In the spring of 2013, University management, the UPBC and the Board of Trustees will finalize and formally adopt the University s 2013-2017 Strategic Plan, which is currently in its final stages of development. Some of the key components of this strategic plan focus on the following areas to improve overall results from operations: Enhancement of existing academic programs including obtaining additional research and development funding Focus on diversity and multiculturalism programming and an expansion of the study abroad program 4

Expansion of summer programming for academics, athletics and conference services Endowment growth through fundraising Pursuit of naming opportunities for schools/programs/facilities Focus renovation of facilities to capitalize on growth areas at graduate and undergraduate levels Utilize endowment spending policy to focus on endowment growth Enhance student recruitment and retention programs Rockhurst University Continuing Education Center (RUCEC) As documented above, RUCEC experienced a significant operating loss during the year ended June 30, 2012. This loss was driven primarily by the sluggish US economy, as well as continued modification of RUCEC s business model in response to the fact that the seminar industry is so rapidly changing due to technology. RUCEC is focused on emphasizing its STAR 12 program, which is a one year membership for unlimited on-line training classes. Additionally, RUCEC has been faced with capital scarcity, postal service instability, increasing postage costs, industry oversaturation of scheduled programs and changing customer training preferences. More specifically, in 2012, RUCEC s revenues remained flat, and their operating expenses were approximately $2.7 million or 6.5% higher than in the previous year. The increase in expenses relates to the changing business model and related investments in RUCEC, in order to help ensure the future strength of RUCEC specifically, software updates and content development (both live and web based). There were also significant one-time costs, including approximately $390,000 related to a change in certain contract terms, and an unexpected tax audit that resulted in expenses amounting to approximately $150,000. In response to the poor operating results in Fiscal 2012, RUCEC s management has implemented several initiatives to improve financial performance, including the following: o Executed a new office space lease which will reduce rent expense approximately $120,000 annually o Decreased advertising mailings, which should equate to a $240,000 reduction in webinar cost and an additional $240,000 per year reduction in database cost per management s estimates o Elimination of a senior executive position and reorganization of executive staff to be more cost effective. Management has estimated this change will result in a reduction of expenses amounting to approximately $500,000 Exhibit 9, attached, is the RUCEC income statement for the six months ending December 31, 2012, at which point YTD net income was $62,431. Management has estimated that RUCEC will generate income of approximately $925,000 for the fiscal year ended June 30, 2013, based on the actual results through December 31, 2012. Consultant Recommendations The recommendations that follow are intended to address the matters noted above and to provide other suggestions for enhancing revenues and controlling costs for both the University and RUCEC. The objective is to achieve a positive change in unrestricted nets assets from operations in Fiscal 2013 and beyond in order to achieve compliance with the Historical Debt Service Coverage Ratio. Some of the recommendations could be achieved in the months ahead; others could contribute to longer term operational improvements. Some recommendations are based on steps the University is considering taking or has begun implementing since the end of the fiscal year June 30, 2012. We were not engaged for the purpose of incorporating any estimates for any potential future changes to the University s framework into this report and, as a result, have not incorporated such changes into this report. 5

Rockhurst University Tuition, fees, scholarships and discounts These should be matters of continuous review. While there are competitive limits the University faces in its traditional undergraduate programs, some increase in tuition and fees remain necessary. Private institutions are closely monitoring their tuition costs and rates of increase in recognition of their students ability to pay, in conjunction with the institutions competitive position and ability to balance financial operations. A review of recent enrollment statistics shows an increase in enrollment head count; however it is important that as the head count increases management closely monitors the tuition discount rates. We recommend that management focuses on achieving approximately 3-5% increase in the net tuition fees on an annual basis. The University s unfunded financial aid and related discount rate over the last five years is as follows: 2012 2011 2010 2009 2008 Institutional Financial Aid $21,397,542 $20,352,455 $19,900,732 $19,092,553 $17,642,687 Unfunded Tuition Discount Rate** 41.2% 40.6% 39.5% 39.8% 39.9% **The University does not discount the graduate tuition. The above unfunded tuition discount rate was calculated based on total tuition revenue in order to be consistent with the audited financial statement presentation. Since the unfunded tuition discount rate continues to grow, management should focus on reducing unfunded scholarships to affordable, yet competitive levels of gross tuition. Endowed scholarships should be aggressively sought and used to provide additional, but funded, discounts to be competitive. Per Fitch Ratings 2013 Outlook for U.S. Colleges and Universities, there has been a heightened focus on costs associated with attending private universities. The higher than historic growth rate in tuition has garnered the attention of many constituencies to the point that the ability to exercise this pricing flexibility is becoming somewhat hampered. Nonetheless, overall tuition levels are expected to continue to rise. However, the growth rate is not expected to be at the level experienced in recent years. Fall 2012 tuition levels have increased an average of 4.2% for private institutions. Management should continue to fine tune their recruitment strategies with a greater emphasis on retention. Management should also continue to look for ways of improving diversity of its revenue stream by placing more focus on international recruitment and the implementation of more online programming. The University should also continue to review its current program offerings in order to be more attractive to the current workforce and placing a greater emphasis on students ability to gain employment upon graduation. 6

Private gifts Private gifts are an important source of funds to the University. During the year ended June 30, 2010, the University received a $10 million pledged gift from a donor that is being paid over five years. As of December 31, 2012, $6 million of this pledge has been collected as scheduled, with $2 million due in FY14 and FY15, respectively. Payments on this pledge are reflected in the changes in unrestricted net assets as they are collected. Pledges of this size are rare for the University; however it is important that the University continue to pursue new unrestricted gifts to help improve overall operations. We suggest the University try to achieve a 5% - 10% increase in unrestricted private gifts received annually. We also suggest the University continue to increase their alumni participation. It was noted that alumni participation increased from 10.5% to 12.9% in 2012. Short-term debt and cash outflows for property and equipment At June 30 th short-term debt levels and cash outflows for property and equipment for the five years then ended are presented as follows: 2012 2011 2010 2009 2008 Short term debt outstanding at June 30, $8,336,539 $5,209,659 $5,538,073 $6,433,148 $5,895,332 Cash outflows for property and equipment $8,112,234 $4,512,194 $3,169,907 $3,639,165 $3,459,661 The University has consistently relied on short term debt during periods of slower tuition collections in order to fund operational needs. This short term financing has been in the form of a line of credit agreement and participation in the Missouri Health and Educational Facilities Revenue Anticipation Notes Program. The use of short term debt to fund operations during slower periods of tuition collections is a common remedy used by most smaller private institutions. The levels of short term debt outstanding at year end have been fairly consistent over the last four years until 2012. At June 30, 2012, outstanding short term borrowings increased approximately $3,000,000. During the year ended June 30, 2012, we also noted cash outflows for the acquisition of property and equipment increased by about $3.6 million as a result of the completion of a new parking garage, which was bond financed. During 2012 and 2011, the University incurred interest expense related to short term debt of approximately $223,000 and $195,000. We recommend that management take measures to reduce the University s reliance on short term debt to fund operations and closely monitor overall spending related to unfunded capital projects. Substantial savings in interest cost will result if the University can develop internal reserves to fund operations during months where cash inflows are needed. As noted earlier, the next significant capital project for the University is the building of the new academic building. This construction is not projected to start until fiscal year 2014 and is anticipated to be fully funded by donors. Auxiliary activities Housing, athletics and cafeteria plan revenues for the year ending June 30, 2012 decreased by approximately $181,000 from the prior year while auxiliary salaries remained flat. Auxiliary repairs and non-capitalized purchases also increased approximately $170,000 during 2012. As undergraduate enrollment increases and retention remains strong, the University should focus on opportunities to grow auxiliary revenues by continuing to encourage the utilization of campus housing and meal plans. For the 7

year ending June 30, 2012, campus housing occupancy rate was approximately 85%. This occupancy rate increased to approximately 90% for the Fall 2012 semester due to the enrollment of a large freshman class, and is projected to increase slightly if planned undergraduate enrollment growth is achieved. Some other available campus space could be specifically designed to generate revenue from special events and conferences. If this growth does not occur management should focus on reducing overall salaries and operating costs related to auxiliary activities. Other expenses and losses It is important that management continues to closely monitor remaining expenses and continue to find opportunities to reduce overall expenses. Instructional expenses made up approximately 32% of the University s expenses during the year ended June 30, 2012 which was consistent with 2011. The University Board of Trustees approved a salary pool increase of 3% for the 2012-2013 academic year, which was the first salary increase since July 1, 2010. Recruiting and retaining quality faculty remains critical to the operations of the University. We suggest the University utilize the compensation study that it is conducting in the Spring of 2013 to develop a multi-year compensation plan to determine the best utilization of its budgeted salary costs. This plan should address opportunities to increase class sizes and uses of adjunct faculty. This plan should also focus on utilizing salaries from the more profitable courses and consideration of expanding on-line courses to reach more students. Institution support expenses made up approximately 20% of the University s expenses during the year ended June 30, 2012. The main increase in this expense category for 2012 related to tuition remissions which increased approximately $324,000. Management expects tuition remission costs will remain consistent or slightly increase as faculty, staff, and their dependents continue to heavily utilize the tuition benefit programs that are provided by the University. Student services expenses made up approximately 12% of total expenses for 2012. The main increase in this expense category for 2012 related to recruiting expenses which increased approximately $270,000 and as discussed above was due to increased mailing, travel and advertising activities in the Admissions area. Management expects these costs to remain flat or decrease slightly in Fiscal 2013. Rockhurst University Continuing Education Center It is important that RUCEC continue to decrease the number of available on site training days to decrease overall operating costs. RUCEC should continue to move toward more electronic or on-line training which is more cost effective than traditional methods. The seminar industry also continues to see an increased demand related to on line courses, which management believes will help increase RUCEC s share of the seminar market. To help reduce cost it is important that RUCEC continue to decrease the direct mail advertising, which historically has been their largest expense, and move toward more usage of electronic advertising methods. As the seminar industry continues to shift, RUCEC should focus its growth on their STAR 12 program which will likely increase customer loyalty. RUCEC should also work to improve its balance sheet strength and specifically to restore its negative equity/net assets to a positive position. In addition, RUCEC should evolve and execute their Business Plan, and prepare for staff transition as they move toward more on-line training. 8

Conclusion Universities face numerous challenges in today s economy, with budgetary shortfalls as a result of less private gifts, pressure to control tuition increases, shortages of qualified professors and other cost pressures. The University faces all of these challenges along with working to improve net revenues available for debt service. While several steps have already been implemented, we recommend the University and RUCEC continue to explore avenues of increasing revenues and controlling expenses. It is imperative that the University and RUCEC continue to focus on operating more efficiently and improving liquidity position. University management must be proactive by implementing the recommendations outlined in this report and continuing to focus on other areas that will allow for the continued fulfillment of the University s mission. If we may be of further assistance in this process, or if we can provide further information concerning any of the recommendations covered in this report please contact Joe Herting at 816.701.0252 or at jherting@bkd.com. During the course of preparing this report, we relied on information provided by the University. We have not audited or verified the accuracy of all the information provided to us. We also relied on information available from other public sources. We also make no assurance that the recommendations made above will adequately produce a positive change in the Historical Debt Service Coverage Ratio for the year ended June 30, 2013 or any future period. This report is intended for the use of the University, the Board of Trustees, the Health and Educational Facilities Authority of the State of Missouri and First Bank of Missouri and should not be provided to or used by any other party. 9

June 30, 2012 June 30, 2011 Dollar Percent Unrestricted Unrestricted Change Change Revenues, Gains and Other Support Student tuition and fees, gross $ 51,915,705 $ 50,546,891 $ 1,368,814 2.71% Less institutional financial aid 21,397,542 20,352,455 1,045,087 5.13% Student tuition and fees, net 30,518,163 30,194,436 323,727 1.07% Cumulative investment return designated for current operations 2,206,000 2,490,000 (284,000) -11.41% Grants and contracts 502,416 473,558 28,858 6.09% Private gifts, net 2,707,507 3,502,014 (794,507) -22.69% Auxiliary enterprises 6,682,384 6,897,917 (215,533) -3.12% Other 1,363,139 1,094,679 268,460 24.52% Change in donor restriction - - - Net assets released from restrictions 2,895,114 888,957 2,006,157 225.68% 46,874,723 45,541,561 1,333,162 2.93% Seminar related activities 41,199,641 42,461,816 (1,262,175) -2.97% Total revenues, gains and other support 88,074,364 88,003,377 70,987 0.08% Expenses and Losses University related Instructional 15,091,767 14,863,174 228,593 1.54% Institutional support 9,360,985 9,068,938 292,047 3.22% Sponsored programs 241,583 204,172 37,411 18.32% Student aid 2,290,536 1,937,630 352,906 18.21% Academic support 5,667,821 5,124,591 543,230 10.60% Student services 5,692,602 5,181,059 511,543 9.87% Auxiliary enterprises 8,319,202 8,327,219 (8,017) -0.10% Provision for uncollectible contributions receivable - - Total University related 46,664,496 44,706,783 1,957,713 4.38% Seminar related activities Direct advertising 12,917,130 11,699,709 1,217,421 10.41% Cost of revenues 18,498,548 17,479,517 1,019,031 5.83% Administrative and operating 12,735,560 12,275,306 460,254 3.75% Total Seminar related 44,151,238 41,454,532 2,696,706 6.51% Total expenses and losses 90,815,734 86,161,315 4,654,419 5.40% Change in Net Assets From Operations (2,741,370) 1,842,062 (4,583,432) -248.82%

Analysis of Unrestricted Revenue (000's) Seminar Related Activities Net Tuition & Fees $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $- $31,000 $30,500 $30,000 $29,500 $29,000 $28,500 $28,000 Auxiliary Income Net Assets Released from Restriction $7,000 $6,800 $6,600 $6,400 $6,200 $6,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $- $5,000 $4,000 $3,000 $2,000 $1,000 $- Pledges & Contributions (UR) $4,150 $4,100 $4,050 $4,000 $3,950 $3,900 $3,850 Other Income

Student Tuition, Fee, Scholarships (000's) $47,932 $19,093 $19,901 $20,352 $21,398 $28,840 $30,426 $30,194 $50,326 $50,547 $51,916 $30,518 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $- Gross Revenue Less: Financial Aid Net Tuition & Fees

Analysis of Expenses (000's) Seminar Related Activities Instruction $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $- $15,200 $15,000 $14,800 $14,600 $14,400 $14,200 $14,000 $13,800 Institutional Support Auxiliary $9,600 $8,600 $9,400 $8,400 $9,200 $8,200 $9,000 $8,000 $8,800 $7,800 $8,600 $7,600 $5,800 $5,600 $5,400 $5,200 $5,000 $4,800 $4,600 $4,400 Student Services $8,500 $8,000 $7,500 $7,000 $6,500 $6,000 Other Expenses

Debt Service Ratio 2.5x 2.3x 2.1x 2.0x 1.5x 1.2x 1.2x 1.2x 1.2x 1.0x 0.5x 0.5x 0.4x 0.0x Debt Service Coverage Debt Service Required

Rockhurst University Financial Covenant Calculations Projected FYE 6/30/2013 d. Consolidated Historical Debt Service Coverage Ratio per MTI Change in Unrestricted Net Assets from Operations $ 4,454,101 + Interest Expense $ 2,720,000 +Depreciation & Amortization Expense $ 2,700,000 -Net Assets Released for Capital Expenditure $ (500,000) Net Income Available for Debt Service $ 9,374,101 + Interest Expense $ 2,720,000 + Current Maturities of Long Term Debt $ 1,591,250 Debt Service Requirements for LT Indebtedness $ 4,311,250 Historical Debt Service Coverage Ratio 2.17 Required Ratio 1.20 Pass

Rockhurst University and Subsidiary PROJECTED FOR FYE JUNE 30, 2013 CONSOLIDATED STATEMENTS OF ACTIVITIES Unrestricted Temporarily Restricted Permanently Restricted Projected 6/30/2013 REVENUES, GAINS & OTHER SUPPORT: Student tuition & fees, gross $ 57,962,767 $ 57,962,767 Less institutional financial aid 25,206,416 25,206,416 Student tuition & fees, net 32,756,351 32,756,351 Private gifts 4,500,000 1,200,000 300,000 6,000,000 Grants and contracts: Federal 2,100,000 2,100,000 Other 95,000 95,000 Other Income 1,300,000 1,300,000 Auxiliary Enterprises 7,400,000 7,400,000 Investment return designated for current operations 2,047,000 2,047,000 Net Assets Released from Restrictions 1,500,000 (1,500,000) 51,698,351 (300,000) 300,000 51,698,351 RUCEC Seminar Related Activities 39,352,188 39,352,188 TOTAL REVENUES, GAINS & OTHER SUPPORT 91,050,539 (300,000) 300,000 91,050,539 EXPENSES AND LOSSES: Student Aid: Scholarship Expense $ 1,700,000 $ 1,700,000 Federal Grant Expense 2,100,000 2,100,000 Tuition Remission 1,300,000 1,300,000 Instructional 12,417,518 12,417,518 Academic Support 4,404,549 4,404,549 Institutional Support 7,100,000 7,100,000 Student Services 4,793,716 4,793,716 Sponsored Programs 288,860 288,860 Auxiliary Enterprises 5,407,249 5,407,249 Interest expense 2,720,000 2,720,000 Depreciation expense 2,700,000 2,700,000 Plant Operations & Maintenance 4,200,000 4,200,000 49,131,892 49,131,892 RUCEC Seminar Related Activities: Direct marketing costs 9,604,233 9,604,233 Cost of revenues 15,903,631 15,903,631 Admin and operating costs 11,956,682 11,956,682 37,464,546 37,464,546 TOTAL EXPENSES AND LOSSES 86,596,438 86,596,438 CHANGE IN NET ASSETS FROM OPERATIONS $ 4,454,101 $ (300,000) $ 300,000 $ 4,454,101

Rockhurst University and Subsidiary CONSOLIDATED BALANCE SHEETS Last Year YTD - 12/31/2011 This Year YTD- 12/31/2012 ASSETS: Cash and cash equivalents $ 2,644,217 $ 2,338,454 Accounts receivable, net 27,963,131 25,384,594 Inventories 508,879 394,892 Prepaid expenses 2,378,092 1,710,972 Marketable securities 33,389,344 36,238,182 Other investments 2,634,385 2,537,778 Other assets 1,977,790 2,062,664 Notes receivable, net 2,370,253 2,414,386 Property and equipment, net 66,933,135 69,504,063 Restricted cash and cash equivalents 3,504,447 1,728,880 Contributions receivable, net 8,405,795 7,805,320 TOTAL ASSETS $ 152,709,467 $ 152,120,190 LIABILITIES AND NET ASSETS: LIABILITIES: Accounts payable $ 826,878 $ 804,373 Accrued expenses 3,407,375 3,030,143 Annuities payable 21,300 15,354 Deferred revenue 5,683,772 1,616,111 Line of credit 2,232,079 2,157,244 Notes payable 4,900,000 4,500,000 Bonds payable 43,702,598 43,397,749 Deposits held for others 308,805 371,996 Federal contribution to loan program 1,699,400 1,693,167 Asset retirement obligation 749,180 784,219 Interest rate swap agreements 5,204,593 5,068,840 TOTAL LIABILITIES $ 68,735,980 $ 63,439,196 NET ASSETS: Unrestricted $ 40,913,256 $ 43,705,684 Unrestricted - non-controlling interest (121,342) (779,562) Temporarily restricted 12,667,215 14,832,639 Permanently restricted 30,514,358 30,922,232 TOTAL NET ASSETS 83,973,487 88,680,994 TOTAL LIABILITIES AND NET ASSETS $ 152,709,467 $ 152,120,190

PROJECTION INCOME STATEMENT December, 2012 Actual 07/31/12 Actual 08/31/12 Actual 09/30/12 Actual 10/31/12 Actual 11/30/12 Actual 12/31/12 Projected 01/31/13 Projected 02/28/13 Projected 03/31/13 Projected 04/30/13 Projected 05/31/13 Projected 06/30/13 Projected This Year Actual Last Year Public Seminars 773,546 802,546 999,556 1,147,797 1,040,281 770,110 654,213 774,607 1,184,994 1,309,681 1,059,214 974,465 11,491,010 15,295,529 Onsite Seminars 610,987 763,749 752,978 958,746 800,953 525,268 544,000 800,000 960,000 960,000 976,000 880,000 9,532,681 9,370,391 Star12 1,114,521 1,108,178 1,113,885 1,125,763 1,095,853 1,074,644 1,113,830 1,171,282 1,210,866 1,237,722 1,256,017 1,257,608 13,880,169 11,926,979 Product 255,744 270,760 263,131 292,193 243,044 191,728 193,045 221,466 311,003 341,845 286,866 266,319 3,137,144 3,966,962 Other 13,739 68,839 57,527 76,665 44,839 50,821 56,000 56,000 56,049 56,000 56,026 56,029 648,534 673,956 Total Revenues 2,768,539 3,014,073 3,187,078 3,601,165 3,224,970 2,612,571 2,561,088 3,023,356 3,722,912 3,905,248 3,634,123 3,434,421 38,689,544 41,233,817 Brochures 483,833 568,623 605,646 749,089 629,397 530,732 516,553 499,197 665,674 680,122 688,396 596,409 7,213,671 10,778,064 Fax 33,476 38,090 36,006 40,793 41,044 27,672 35,222 37,379 45,465 49,366 45,621 41,513 471,647 592,478 Email 41,550 46,172 54,587 50,684 57,961 68,065 62,000 65,500 65,500 57,500 57,500 57,500 684,519 519,513 Catalog/Letters 44,867 58,864 60,225 55,997 132,914 71,683 69,750 49,000 49,000 99,750 59,750 59,750 811,550 685,077 Search Engine 38,924 48,663 49,623 49,829 50,000 41,547 53,342 57,571 64,283 71,987 65,681 60,470 651,920 387,297 Direct Marketing Costs 642,650 760,411 806,086 946,392 911,316 739,699 736,867 708,647 889,921 958,726 916,947 815,642 9,833,304 12,962,429 Marketing Yield 2,125,889 2,253,662 2,380,991 2,654,772 2,313,654 1,872,872 1,824,221 2,314,709 2,832,990 2,946,523 2,717,176 2,618,779 28,856,238 28,271,388 Cost of Sales 1,191,051 1,235,206 1,215,133 1,450,214 1,301,447 1,060,486 1,060,304 1,236,962 1,527,176 1,616,690 1,514,671 1,399,494 15,808,834 18,474,635 Gross Margin/Contribution 934,838 1,018,456 1,165,858 1,204,558 1,012,207 812,386 763,918 1,077,747 1,305,814 1,329,833 1,202,506 1,219,284 13,047,405 9,796,754 Operating Costs Labor 723,966 726,715 660,681 775,046 733,198 726,361 798,850 706,171 723,854 737,128 760,851 661,458 8,734,279 8,887,465 Operating 147,850 166,528 153,167 175,069 168,119 173,278 169,081 172,881 174,081 172,176 167,376 170,376 2,009,982 2,117,348 Outsourced Development 68,181 74,255 80,240 84,811 58,182 58,611 59,538 57,869 58,799 53,799 53,799 55,036 763,120 829,465 Faculty/Trainer Related 5,832 9,223 24,840 6,923 6,495 6,331 6,100 6,100 6,100 6,100 6,100 6,100 96,244 120,940 Administrative 34,921 36,890 44,690 65,764 42,377 48,489 34,088 30,963 31,463 59,088 55,963 34,588 519,284 793,120 Total Operating 980,750 1,013,610 963,618 1,107,614 1,008,370 1,013,070 1,067,657 973,985 994,297 1,028,291 1,044,089 927,558 12,122,909 12,748,337 Operating Performance (45,912) 4,847 202,241 96,944 3,837 (200,684) (303,740) 103,762 311,517 301,542 158,417 291,726 924,497 (2,951,584) Other Revenues (Costs ) Interest - - - 1,158 - - - - - - - - 1,158 (19) Net Income (45,912) 4,847 202,241 98,102 3,837 (200,684) (303,740) 103,762 311,517 301,542 158,417 291,726 925,655 (2,951,602) Projection Income Statement