2. Penn State University Capital Plan Update Board of Trustees Technical Presentation September 2015

3. Capital Plan Update  Sightlines Facilities Metrics  Planning Assumptions and Strategic Drivers  E&G Projects  E&G Funding Program  Self-Supporting Units  Self-Supporting Units Funding Program 3

4. UP and Surveyed Commonwealth Campuses Age Profile 4 Buildings Under 10 Little work. “Honeymoon” period. Low Risk Buildings 10 to 25 Short life-cycle needs; primarily space renewal. Medium Risk Buildings 25 to 50 Major envelope and mechanical life cycles come due. Higher Risk Buildings over 50 Life cycles of major building components are past due. Failures are possible. Highest risk 68% 59% 43%

5. Program Space Across Campuses Great Valley ShenangoDuBoisWilkes-BarreMont AltoFayetteNew KensingtonBeaverGreater AlleghenyHazletonErie Lehigh Valley SchuylkillHarrisburgBerksBrandywine Worthington Scranton AltoonaAbington 5

6. Planning Assumptions and Strategic Drivers 6 Focus on: Renewal and Replacement versus New Balance University Park with Commonwealth Campuses

7. Planning Assumptions and Strategic Drivers Balance Project Types: Whole Building Renewal / Replacement Yields a like-new facility; most expensive renewal System Renewal Infrastructure IT Systems New Construction 7

8. For whole building renewal / replacement and new, focus on: Underinvested core and/or strong programs Campuses with growth potential System renewals, focus on: Worst problems Need to keep all facilities working, security and safety Some demolition 8 Planning Assumptions and Strategic Drivers

9. Funding SourceE&GGift Self-SupportedTotalOriginal Plan Challenge Units20152013 Capital Plan Reserves$ 914M$ 26M-$ 940M$ 940M Borrowing:750M750M Education and General *191M34M- Self-Supported Units-525M Unit Reserves/Other **267M80M837M1,184M666M State Capital200M40M-240M200M Major Maintenance167M--167M185M Total$ 1.74B$ 0.18B$ 1.36B$ 3.28B$ 2.74B * Borrowing - subject to Board of Trustees approval and/or tuition concerns ** Other could include Gifts, Student Facilities Fees, Unit Funds, etc. Five-Year Plan Summary ∆ $ 540M

10. 10 Education and General Auxiliary and Business Services Intercollegiate Athletics Hershey Allocation Distribution by Unit (in millions) Other Penn State Health

11. E&G: Allocations by Project Type (in millions) 11

12. Self-Supporting Units: Allocations by Project Type (in millions) 12

13. 13 University Park Commonwealth Campuses Balance of E&G Projects

14. Life of a Penn State Project 14 PDRB Members: President, Provost, Senior VP Finance & Business, AVP OPP, AVP/Controller, Budget Office, Student Project Decision Review Board (PDRB) Gate Decisions: Proceed, Hold, Cancel 0 12 4 3

15. E&G Projects University Park Projects New Buildings and Additions:BOT (9/2013)UpdateStatus Chemical and Biomedical Engineering Building$ 140.0$ 148.8D New Social Sciences Building (Anthropology and Sociology) *20.080.0 Data Center69.057.9C Agricultural and Biological Engineering Building44.041.4D Intramural Building Addition - Phase II31.330.0O Intramural Building Addition - Phase III26.0D Recital Hall and Music Building I Renovation22.1 Pattee Library - Knowledge Commons -- Phase VII (Atrium)11.0 Farm Services Building2.0 Mushroom Research Facility Relocation Storage6.02.0D Classroom/Class Lab Building51.3 421.2 * Includes Unsubstantiated Gift Funding 15

16. E&G Projects University Park Projects Renewals and Renovations:BOT (9/2013)UpdateStatus College of Engineering - Capital Renewal -- Phase I *$ 110.0 Hosler Building Renewal **46.059.8 Steidle Building Renewal52.0 50.6C Burrowes Building Renewal37.8C Whitmore Laboratory Renovation - First Floor and Second Floor32.9 31.7C Henning Building Renewal30.028.6 Mueller Laboratory Renovation18.020.7C Deike Building - Geosciences Laboratories15.0D Greenberg Indoor Sports Complex - Swing Space2.010.3C (Morgan Academic Support Center under Intercollegiate Athletics at $7.2M) Agricultural Digester8.07.5D Recreation Buildings - Access Modifications7.5 D Research Unit A - Swing Space2.07.4C McCoy Natatorium (Elevator, HVAC, and Switchgear)7.06.0C Various Renewals and Renovations < $5.0M7.611.5 404.4 * Includes Unsubstantiated Gift Funding and Unsubstantiated Additional State Allocation ** Includes Unsubstantiated Gift Funding 16

17. E&G Projects University Park Projects Information Technology and Research Equipment:BOT (9/2013)UpdateStatus Student Systems Replacement  LionPATH (CAPEX)$ 66.4$ 64.6C  LionPATH (OPEX)31.631.4C  Enrollment Management and Scheduling System (Series 25, CollegeNET)2.0  Admissions Prospect Management and Curriculum Audit System1.1  Technology Support Building Fit-Out2.0O ($4.0M Total; Remainder of Project under Real Estate at $2.0M) Human Resources Information System60.0  Human Resources Information System (CAPEX)18.0  Human Resources Information System (OPEX)37.3  Other o Non-Financial Research Compliance Systems (CATS)6.3 o Maximo (Asset Management)2.2 o Financial System7.9 Learning Management System Replacement30.2 Research Equipment9.8 212.8 17

18. E&G Projects University Park Projects Infrastructure:BOT (9/2013)UpdateStatus Water Treatment Plant and Distribution System *$ 42.5$ 61.6D Waste Water Treatment Plant Renewal38.0 Chilled Water Infrastructure Expansion (additional 3,000 ton)21.014.0 Security Network Upgrades6.3C Building Access Modifications6.0C University Drive and Services Road5.37.4D Various Infrastructure Projects < $5.0M21.720.0 153.3 Real Estate: Technology Support Building15.0  Purchase11.9O  LionPATH Fit-Out (Phase I)2.0O ($4.0M Total; Remainder of Project under Information Technology and Research Equipment at $2.0M)  Remainder of Technology Support Building Fit-Out (Phase II)13.0C 26.9 180.2 * Includes prior funding 18

19. E&G Projects University Park Projects System Upgrades:BOT (9/2013)Update%/Status HVAC (Mechanical)$ 19.8$ 20.988%/C Roofing Upgrades20.019.168%/C HVAC (Piping)18.013.338%/C Envelope (Exterior)5.888%/C Safety (Laboratory Recirculation)27.95.659%/C Safety (Fall Protection)7.71.0100%/C Various System Upgrade Projects < $5.0M10.77.276%/C Major Initiatives9.553%/C Program Contingencies5.238%/C Materials Research Laboratory12.8C ($25.1M Total; Prior - $12.3M) 100.4 Major Maintenance: Major Maintenance Program140.0127.4 127.4 227.8 19

20. E&G Projects Commonwealth Campus Projects New Buildings and Additions:BOT (9/2013)UpdateStatus Academic Building - Abington$ 45.0 Student Enrichment Center - Harrisburg27.029.5C Student Union (and Dining Hall) - Brandywine10.08.6D ($18.6M Total; Dining Hall under Auxiliary and Business Services at $10.0M) Maintenance Building - Lehigh Valley1.5 84.6 Renewals and Renovations: Adler Athletic Complex Renewal (and Addition) - Altoona *19.222.9D Luerssen Building Renewal - Berks *13.015.3C Kostos Building Renewal - Hazleton14.015.0D Ruhl Student Community Center Renewal (and Addition) - York10.513.4D Baker Engineering and Sciences Building Renewal - Beaver8.09.5C Woodland Building Renewal - Phase I -- Abington7.0O 83.1 167.7 * Includes prior funding 20

21. E&G Projects Commonwealth Campus Projects Renewals and Renovations, continued:BOT (9/2013)Update%/Status Beaver Community Center Renewal (and Addition) - Berks$ 6.0 Library Renewal (and Knowledge Commons) - Hazleton5.5 Student Community Center - Dining Hall Renovation -- Schuylkill5.0 Woodland Building Renewal - Phase II -- Abington3.6 Swing Space - Revolving Funds1.00.4 Struthers Family Career Services Center - Wilkes-Barre0.2O 20.7 Infrastructure: Security9.011.0100%/C Roads and Utilities7.511.194%/C Parking5.53.569%/C Various Infrastructure Projects < $5.0M10.65.531%/C 31.1 Real Estate: Knowledge Park - Building 7 -- Erie18.316.5C 16.5 68.3 21

22. E&G Projects Commonwealth Campus Projects System Upgrades:BOT (9/2013)Update%/Status HVAC (Mechanical)$ 12.2$ 12.067%/C Envelope (Exterior) and Roofing Upgrades9.012.388%/C Interior Upgrades6.24.941%/C Various System Upgrade Projects < $5.0M10.68.074%/C 37.2 Major Maintenance: Major Maintenance Program45.039.4 39.4 76.6 22

23. E&G Projects All Locations BOT (9/2013)UpdateStatus Wireless Infrastructure$ 8.5C Real Estate Purchases8.0  Odd Fellows Property Purchase - Harrisburg5.6  Technology Center Building - Condominiums 2 and 42.6  Raytheon Property Purchase2.0  2185 Sandy Drive Property Purchase2.0  Davis Property Purchase - Brandywine1.2O  To Be Determined3.4 DGS Program Support6.0 Funding Program Contingencies76.750.1 81.4 23

24. E&G Funding Program TotalAllocatedBalance ● Balance Sheet Cash - UFR $ 540.0$ 540.0$ 0.0 - PFI 240.0240.00.0 - ITU 160.0160.00.0 ● DGS 240.0 *240.0 *0.0 ● Borrowing - EGB 225.0225.00.0 ● Major Maintenance 166.8166.80.0 ● Gift 97.2 **97.2 **0.0 ● Other 194.5 ***194.5 ***0.0 Total $ 1.86B$ 1.86B$ 0.0 Note: Does not reflect Energy Savings Program - $55.0M * Includes Unsubstantiated Additional State Allocation ** Includes Unsubstantiated Gift Funding *** Includes $9.5M of Unit Reserves (Hershey) for Data Center (University Park) 24

25. Matching Gift Challenge Approved Projects Total CostGift - Requirement College of Engineering - Capital Renewal -- Phase I$ 110.0 * New Social Sciences Building (Anthropology and Sociology)80.0 Hosler Building Renewal59.8 * Also contingent on an Funds Available for Gift-Matching Funding ProgramFunds Available EGB34.0 UFR25.8 Total$ 59.8 $ 30.0 20.0 30.0 additional $40.0M state allocation $ 80.0

26. Self-Supporting Units: Auxiliary & Business Services University Park Projects Housing and Food Services:BOT (9/2013)UpdateStatus East Halls Renovation and Pollock Halls Renovation (2 Buildings per Year)$ 150.0 ▪ East Halls Renovation - Phase 1a -- New Residence Hall and Stuart Hall64.1D ▪ East Halls Renovation - Phase 1b -- Brumbaugh Hall and Tener Hall54.1 ▪ East Halls Renovation - Phase 1c -- Pinchot Hall and Sproul Hall55.0 Deferred Maintenance79.070.7 North Halls - New Residence Hall (309 Beds)30.2D Findlay Dining Commons Renovation20.023.8D Housing and Food Service Building - Bakery and Warehouse Expansion12.915.5C Residence Halls - Wireless Installation(s)6.5 Waring Dining Commons - Air Conditioning3.55.0 Residence Halls - Security Upgrades and Technology Upgrades3.6 South Halls Renovation - FF&E6.03.5 North Halls - New Residence Hall -- FF&E0.9 Chilled Water Distribution20.0 New Housing - 150 Beds15.0 332.9 26

27. Self-Supporting Units: Auxiliary & Business Services Commonwealth Campus Projects Housing and Food Services:BOT (9/2013)UpdateStatus Student Apartments (402 Beds) - Abington$ 40.0$ 49.2D New Residence Hall (258 Beds) - Brandywine25.030.5D Trippe Hall (250 Beds) - Erie25.0 Dining Hall (and Student Union) - Brandywine6.010.0D ($18.6M Total; Student Union under E&G at $8.6M) Utility Upgrades - Brandywine2.8D Residence Halls - Security Upgrades and Technology Upgrades0.6 Housing Infrastructure - Brandywine2.5 Bruno's Café Renovation - Erie2.0 Village Residence Complex - Bathroom(s) Renovation -- Berks2.0 118.1 451.0 27

28. Self-Supporting Units: Auxiliary & Business Services Bryce Jordan Center:BOT (9/2013)UpdateStatus Various Renovations and Upgrades$ 5.5 5.5 Hospitality Services (Nittany Lion Inn and Penn Stater): Deferred Maintenance and Various Renovations and Upgrades11.4 11.4 Parking: Deferred Maintenance and Stadium West Expansion7.5C 7.5 University Park Airport: Various Equipment Purchases and Small Construction16.716.9 Airport Infrastructure and Site Improvements13.3C 30.2 54.6 28

29. Self-Supporting Units: Hershey BOT (9/2013)UpdateStatus HMC - Capital Reinvestments from Operations$ 300.0 COM - Capital Reinvestments from Operations35.0 HMC/COM - Capital Reinvestments from Operations ▪ Ongoing Information Technology Projects130.0 ▪ Ongoing Facilities Renewals104.0 ▪ Other Medical Equipment60.0 ▪ 30 Hope Drive Administration Building Purchase57.0 ▪ Property Acquisition and Clinic Construction in Hershey Area and Eastern Market41.0 ▪ Cardiology, Radiology, and Surgery Equipment30.0 ▪ Penn State Health Growth via Capital Commitments26.0 ▪ Emergency Department Expansion22.0 ▪ Combined Heat and Power Plant19.1 ▪ Research and Education Building and Structured Parking (Pre-Construction)14.0 ▪ Women's Health Quality-Oriented Refurbishments12.8 ▪ Regional Clinics and Facilities Development8.8 ▪ College of Medicine Library Renovation4.6 ▪ Primary and Urgent Care Facility with Administrative Space (Pre-Construction)3.0 University Technology Center30.054.0C Leased Sites - Fit-Outs for Clinics7.5 Academic Support Building Addition32.0 586.3 29

30. Self-Supporting Units: Intercollegiate Athletics BOT (9/2013)UpdateStatus Annual Major Maintenance$ 11.5$ 21.6 Lasch Football Building - Equipment Room and Locker Room Renovation *12.0D Beaver Stadium - Replace Scoreboards10.0O Lacrosse Field Upgrades *8.4D Morgan Academic Support Center7.2D (Greenberg Indoor Sports Complex - Swing Space under E&G at $10.3M) 59.2 * Includes Unsubstantiated Gift Funding 30

31. Funding Source Auxiliary Unit:SSBReservesOther Auxiliary and Business Services $ 242.9 $ 233.7$ 35.0 ­ Housing and Food Services 242.9209.32.0 ­ Bryce Jordan Center -5.5- ­ Hospitality Services -11.4- ­ Parking -7.5- ­ University Park Airport --32.2 Intercollegiate Athletics30.116.912.2 Hershey22.5168.6 *373.0 Penn State Health150.0 Other79.6 Total$ 525.0$ 419.2$ 417.4 * Does not include $9.5M of Unit Reserves (Hershey) for Data Center (University Park) 31 Self-Supporting Units Funding Program

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