YOSEMITE FOUNDATION. (A California Not-for-Profit Corporation) dba YOSEMITE CONSERVANCY. And Its Subsidiary CONSOLIDATED FINANCIAL STATEMENTS

Transcription

1 (A California Not-for-Profit Corporation) CONSOLIDATED FINANCIAL STATEMENTS

2 TABLE OF CONTENTS Independent auditors' report 2 Consolidated statement of financial position 3 Consolidated statement of activities 4-5 Consolidated statement of functional expenses 6-7 Consolidated statement of changes in net assets 8-9 Consolidated statement of cash flows 10 Notes to consolidated financial statements

3 RINA accountancy corporation 100 Montgomery St., Suite 2075, San Francisco, CA phone: fax: RINA.CPA web:

4 ASSETS December 31, 2012 December 31, 2011 CURRENT: Cash and cash equivalents $ 9,634,199 $ 4,931,699 Pledges receivable 1,301, ,233 Other receivables, net 282, ,206 Investments, at fair value 5,386,274 9,860,750 Inventory, net 685, ,049 Real estate held for sale, at fair value - 150,000 Prepaid expenses and other current assets 110, ,601 TOTAL CURRENT ASSETS 17,400,092 16,333,538 PROPERTY AND EQUIPMENT, net 240, ,066 OTHER ASSETS: Pledges receivable, net of current portion 601,194 7,589 Deposits 14,500 14,500 Land held for future use 764, ,200 Charitable remainder trusts, at present value 320, ,575 TOTAL ASSETS $ 19,340,795 $ 17,740,468 LIABILITIES AND NET ASSETS YOSEMITE FOUNDATION CONSOLIDATED STATEMENT OF FINANCIAL POSITION CURRENT: Accounts payable $ 297,153 $ 148,352 Accrued liabilities 280, ,853 Deferred rent 105,832 50,000 Grants payable to Yosemite National Park 648,030 1,735,794 TOTAL CURRENT LIABILITIES 1,331,342 2,289,999 LONG-TERM: Grants payable to Yosemite National Park, net of current portion - 63,775 TOTAL LIABILITIES 1,331,342 2,353,774 NET ASSETS: Unrestricted 12,751,315 10,431,178 Temporarily restricted 4,244,429 3,941,807 Permanently restricted 1,013,709 1,013,709 TOTAL NET ASSETS 18,009,453 15,386,694 $ 19,340,795 $ 17,740,468 See notes to consolidated financial statements. 3

5 CONSOLIDATED STATEMENT OF ACTIVITIES For the Year Ended December 31, 2012 Temporarily Permanently Unrestricted Restricted Restricted Total SUPPORT AND REVENUE: Individual contributions $ 6,424,616 $ 3,026,213 $ - $ 9,450,829 Corporations 153, , ,443 Foundations 97, , ,496 Special events and other sources 302,573 35, ,573 Cause-related contributions 280, ,292-1,117,822 Total contributions 7,259,308 4,787,855-12,047,163 Retail and publishing, net 977,376 14, ,257 Program services fees 606,586 1, ,761 Total program revenues 1,583,962 16,056-1,600,018 Investment income 362,960 71, ,973 Other revenue 5, ,366 Total revenue 9,211,596 4,874,924-14,086,520 Net assets released from restrictions 4,572,302 (4,572,302) - - TOTAL SUPPORT AND REVENUE 13,783, ,622-14,086,520 EXPENSES: Program expenses: Project grants 4,454, ,454,467 Project administration 977, ,672 Retail and publishing 1,068, ,068,329 Visitor services and programs 1,910, ,910,464 Total program expenses 8,410, ,410,932 Supporting services: Administrative expenses 670, ,810 Fundraising expenses 2,382, ,382,019 Total supporting services 3,052, ,052,829 TOTAL EXPENSES 11,463, ,463,761 INCREASE (DECREASE) IN NET ASSETS 2,320, ,622-2,622,759 NET ASSETS, beginning of year 10,431,178 3,941,807 1,013,709 15,386,694 NET ASSETS, end of year $ 12,751,315 $ 4,244,429 $ 1,013,709 $ 18,009,453 See notes to consolidated financial statements. 4

6 CONSOLIDATED STATEMENT OF ACTIVITIES For the Year Ended December 31, 2011 Temporarily Permanently Unrestricted Restricted Restricted Total SUPPORT AND REVENUE: Individual contributions $ 8,265,772 $ 1,063,024 $ 10,000 $ 9,338,796 Corporations 102,218 13, ,068 Foundations 99, , ,468 Special events and other sources 169,099 43, ,242 Cause-related contributions 295, ,701-1,150,026 Total contributions 8,931,854 2,416,746 10,000 11,358,600 Retail and publishing, net 890,698 10, ,264 Program services fees 510, ,572 Total program revenues 1,401,270 10,566-1,411,836 Investment income 68,328 16,497-84,825 Other revenue 10, ,861 Total revenue 10,412,313 2,443,809 10,000 12,866,122 Net assets released from restrictions 4,913,271 (4,913,271) - - TOTAL SUPPORT AND REVENUE 15,325,584 (2,469,462) 10,000 12,866,122 EXPENSES: Program expenses: Project grants 5,565, ,565,057 Project administration 920, ,886 Retail and publishing 927, ,835 Visitor services and programs 1,507, ,507,842 Total program expenses 8,921, ,921,620 Supporting services: Administrative expenses 602, ,321 Fundraising expenses 2,067, ,067,707 Total supporting services 2,670, ,670,028 TOTAL EXPENSES 11,591, ,591,648 INCREASE (DECREASE) IN NET ASSETS 3,733,936 (2,469,462) 10,000 1,274,474 NET ASSETS, beginning of year 6,697,242 6,411,269 1,003,709 14,112,220 NET ASSETS, end of year $ 10,431,178 $ 3,941,807 $ 1,013,709 $ 15,386,694 See notes to consolidated financial statements. 5

7 CONSOLIDATED STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED DECEMBER 31, 2012 Program Services Supporting Services Project Visitor Grants Retail and Services (inc. admin.) Publishing and Programs Total Administration Fundraising Total Total Salaries and benefits $ 732,566 $ 709,887 $ 650,281 $ 2,092,734 $ 498,713 $ 695,682 $ 1,194,395 $ 3,287,129 Rent and occupancy 96,843 21,516 28, ,199 13,531 34,295 47, ,025 Telephone voice and data 7,004 15,957 12,432 35,393 11,722 9,145 20,867 56,260 Office supplies, dues and subscriptions 5,037 22,445 24,743 52,225 12,118 23,119 35,237 87,462 Depreciation 10,928 56,991 9,408 77,327 17,890 10,255 28, ,472 Equipment lease 1,925 2,906 12,887 17,718 4,863 2,070 6,933 24,651 Equipment repair and maintenance 1, , ,647 33,509 35,136 Equipment non-amortized 474 4,029 9,061 13,564 1,427 1,654 3,081 16,645 Printing and postage 11,124 24, , ,253 19, , ,058 1,042,311 Bank charges 3,428 44,730 11,802 59,960 2,364 61,825 64, ,149 Events, catering and rentals - 1, , ,712 20,801 12,244 33, ,757 Insurance 22,354 4,704 6,265 33,323 3,186 9,390 12,576 45,899 Investment advisor fees 4, , ,448 1,905 7,621 Marketing promotions - 5, , , ,500 4, ,730 Premiums ,109 13,109 4,079 25,206 29,285 42,394 Service charges and fees 993 4,927 1,073 6, ,454 29,375 36,368 Taxes licenses and registrations 4, ,859-14,016 14,016 18,875 Travel and meals 4,830 11,628 71,072 87,530 48,424 37,099 85, ,053 Professional services 69, , , ,193 9, , , ,592 Project commitments and aid to NPS 4,454, ,454, ,454,467 Sales fulfillment - 25,780-25, ,780 Bad debt ,400 25,400 25,400 Miscellaneous ,149 15, ,585 Total expenses $ 5,432,139 $ 1,068,329 $ 1,910,464 $ 8,410,932 $ 670,810 $ 2,382,019 $ 3,052,829 $ 11,463,761 See notes to consolidated financial statements. 6

8 CONSOLIDATED STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED DECEMBER 31, 2011 Program Services Supporting Services Project Visitor Grants Retail and Services (inc. admin.) Publishing and Programs Total Administration Fundraising Total Total Salaries and benefits $ 645,795 $ 536,974 $ 454,724 $ 1,637,493 $ 416,459 $ 614,089 $ 1,030,548 $ 2,668,041 Rent and occupancy 87,629 17,650 24, ,677 12,000 30,413 42, ,090 Telephone voice and data 6,963 14,640 9,731 31,334 10,071 8,460 18,531 49,865 Office supplies, dues and subscriptions 5,438 35,048 23,782 64,268 12,587 14,856 27,443 91,711 Depreciation 12,076 90,711 19, ,411 28,450 12,344 40, ,205 Equipment lease 2,361 4,397 9,136 15,894 6,208 2,619 8,827 24,721 Equipment repair and maintenance 2,009 1,797 2,437 6,243 1,740 45,853 47,593 53,836 Equipment non-amortized 2,038 2,100 8,388 12,526 4,641 3,667 8,308 20,834 Printing and postage 6,053 3, , ,574 5, , , ,311 Bank charges 7,021 37,248 11,002 55,271 4,624 59,852 64, ,747 Events, catering and rentals 5, ,659 79,661 28,191 2,892 31, ,744 Insurance 19,892 7,274 8,313 35,479 4,360 8,482 12,842 48,321 Investment advisor fees 6, ,371 9, ,367 3,115 12,461 Marketing promotions , , ,495 3, ,680 Premiums ,831 16, ,452 12,116 28,933 Service charges and fees 1,046 7,616 7,561 16,223 11,741 34,735 46,476 62,699 Taxes licenses and registrations 8, ,750 (24) 11,700 11,676 20,426 Travel and meals 19,078 9,992 69,523 98,593 31,177 42,826 74, ,596 Professional services 80, , , ,501 19, , , ,416 Project commitments and aid to NPS 5,565, ,565, ,565,057 Sales fulfillment - 28,890-28, ,890 Miscellaneous 402 1,321 (1,229) 494 3, ,570 5,064 Total expenses $ 6,485,943 $ 927,835 $ 1,507,842 $ 8,921,620 $ 602,321 $ 2,067,707 $ 2,670,028 $ 11,591,648 See notes to consolidated financial statements. 7

9 CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS Contributions Released December 31, and Fund from December 31, 2011 Transfers Restriction 2012 UNRESTRICTED NET ASSETS: Available for operations $ 3,292,124 $ 8,277,666 $ 6,646,765 $ 4,923,025 Yosemite legacy fund - 2,052, ,000 1,948,984 Board designated project reserve - 1,716,000-1,716,000 Mariposa Grove unrestricted fund - 2,525, ,694 2,384,306 Quasi Endowment (Board designated) 6,222,054 (6,222,054) - - Board designated emergency reserve 917, ,000-1,779,000 TOTAL UNRESTRICTED NET ASSETS 10,431,178 9,211,596 6,891,459 12,751,315 TEMPORARILY RESTRICTED NET ASSETS: Cultural and Historic Preservation Projects - 35,000-35,000 Habitat Restoration Projects 360, , , ,664 Scientific Research Projects - 35,000 35,000 - Trail Repair & Access Projects 1,406, ,706 1,699, ,498 Visitor Services & Education Projects 162, , , ,757 Wildlife Management Projects 22,419 73,000 90,419 5,000 Visitor Programs & Services 105,225 25,226 84,659 45,792 Donor Restricted & Pass-through Gifts 321,259 27, , ,201 Mariposa Grove Fund - 4,442,653 1,580,753 2,861,900 Giant Sequoias - Bank of America Check Series 111,637 (94,952) - 16,685 License Plate Proceeds 1,148,443 (1,065,511) - 82,932 Charitable Remainder Trusts, at present value 303,575 (303,575) - - TOTAL TEMPORARILY RESTRICTED NET ASSETS 3,941,807 4,874,924 4,572,302 4,244,429 PERMANENTLY RESTRICTED NET ASSETS: The Kornei Trail Repair/Wilderness Restoration Fund 892, ,918 The Margaret Lesher Search & Rescue Fund 120, ,791 TOTAL PERMANENTLY RESTRICTED NET ASSETS 1,013, ,013,709 TOTAL NET ASSETS $ 15,386,694 $ 14,086,520 $ 11,463,761 $ 18,009,453 See notes to consolidated financial statements. 8

10 CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS Contributions Released December 31, and Fund from December 31, 2010 Transfers Restriction 2011 UNRESTRICTED NET ASSETS: Available for operations $ 3,618,715 $ 6,351,786 $ 6,678,377 $ 3,292,124 Quasi Endowment (Board designated) 2,421,027 3,801,027-6,222,054 Reserve 657, , ,000 TOTAL UNRESTRICTED NET ASSETS 6,697,242 10,412,313 6,678,377 10,431,178 TEMPORARILY RESTRICTED NET ASSETS: Cultural and Historic Preservation Projects ,000 90,250 - Habitat Restoration Projects 444, , , ,900 Scientific Research Projects - 30,000 30,000 - Trail Repair & Access Projects 3,934, ,565 3,443,225 1,406,067 Visitor Services & Education Projects 183, , , ,282 Wildlife Management Projects - 140, ,391 22,419 Visitor Programs & Services 156,772 23,916 75, ,225 Donor Restricted & Pass-through Gifts 221, , , ,259 Giant Sequoias - Bank of America Check Series 91,270 20, ,637 License Plate Proceeds 1,085,209 63,234-1,148,443 Charitable Remainder Trusts, at present value 293,593 9, ,575 TOTAL TEMPORARILY RESTRICTED NET ASSETS 6,411,269 2,443,809 4,913,271 3,941,807 PERMANENTLY RESTRICTED NET ASSETS: The Kornei Trail Repair/Wilderness Restoration Fund 882,918 10, ,918 The Margaret Lesher Search & Rescue Fund 120, ,791 TOTAL PERMANENTLY RESTRICTED NET ASSETS 1,003,709 10,000-1,013,709 TOTAL NET ASSETS $ 14,112,220 $ 12,866,122 $ 11,591,648 $ 15,386,694 See notes to consolidated financial statements. 9

11 CONSOLIDATED STATEMENT OF CASH FLOWS Year Ended Year Ended December 31, 2012 December 31, 2011 CASH FLOWS FROM OPERATING ACTIVITIES: Increase in net assets $ 2,622,759 $ 1,274,474 Adjustments to reconcile increase in net assets to net cash provided (used) by operating activities: Contributions permanently restricted $ - $ (10,000) Depreciation expense 105, ,205 Change in value of charitable remainder trust (17,004) (9,982) Sale of artwork and photography - 2,246 Unrealized (appreciation) depreciation of investments (319,497) 179,085 Unrealized depreciation of real estate held for sale - 75,000 Realized (gain) loss on sale of investments (766) (2,460) Decrease (increase) in: Pledges receivable (1,561,705) (80,187) Other receivables 36,624 (100,119) Inventory (62,235) (26,838) Deposits - (14,500) Other assets 5,181 6,979 Increase (decrease) in: Accounts payable 148, ,112 Accrued liabilities (75,526) 184,455 Deferred rent 55,832 50,000 Grants payable to Yosemite National Park (1,151,539) (2,836,362) (846,974) (321,978) NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (213,603) 952,496 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (28,636) (118,291) Proceeds from sale of real estate investment 150,000 - Proceeds from sale of marketable securities 15,434,740 10,453,407 Purchases of marketable securities (10,640,001) (7,993,546) NET CASH PROVIDED BY INVESTING ACTIVITIES 4,916,103 2,341,570 CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on long term debt - (6,608) Contributions permanently restricted - 10,000 NET CASH PROVIDED BY FINANCING ACTIVITIES - 3,392 NET INCREASE IN CASH 4,702,500 3,297,458 CASH, beginning of year 4,931,699 1,634,241 CASH, end of year $ 9,634,199 $ 4,931,699 See notes to consolidated financial statements. 10

12 Note 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Nature of business: Yosemite Foundation, doing business as Yosemite Conservancy (the Conservancy), which was incorporated on January 11, 1988, is a California not-for-profit public benefit corporation organized to raise funds through donations and various fund raising activities for the purpose of providing financial assistance to the National Park Service and other organizations and individuals dedicated to the general preservation of Yosemite National Park and the enhancement of the visitor experience. On January 1, 2010, the Foundation and the Yosemite Association (the Association), two of Yosemite National Park s major nonprofit groups, announced they were forming a unified nonprofit that will make it even easier to support projects and programs that preserve park resources and enrich the visitor experience. The merger brought together two great nonprofits dedicated to providing for Yosemite s future. The combined organizations, rechristened Yosemite Conservancy, should result in more trails repaired, educational programs, wildlife programs, volunteer efforts and wilderness protection. For years, the Association and the Foundation have shared a common goal of helping to preserve Yosemite, along with providing educational opportunities, through complementary programs. The Yosemite Conservancy will continue this great tradition. Its subsidiary, YF Real Estate Holdings, LLC, holds real estate and land held for future use. Park enhancements: Every year, Yosemite Conservancy provides grants to Yosemite National Park based on the highest priority needs of the park. These projects include essential funding for trail repair, habitat restoration, cultural and historic restoration, wildlife management, scientific research, visitor services and more. To date we have completed over 500 projects through $79 million in funding for projects that preserve, protect, and enhance Yosemite National Park. In 2012, the Conservancy through the generous donations of individuals, corporations, and foundations was able to grant over $4.5 million to the Yosemite National Park to fund more than 57 projects. There were two signature projects for 2012, Youth in Yosemite and Tenaya Lake East Beach restoration. The Youth in Yosemite project provided over $1 million in funding for programs that offer opportunities for youth of all ages to participate in the Yosemite experience and to help encourage future stewards of Yosemite and all national parks. The Tenaya Lake East Beach restoration project rerouted trails away from sensitive wetlands areas and restored shoreline vegetation with the goal of returning this wetland area to its natural state and enhancing the visitor experience. 11

13 Note 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued): Retail and publishing: This program represents sales conducted at visitor center bookstores, information centers, wilderness centers, an online store, and to wholesale vendors. In addition to the sales of maps, DVD's, Native American handcrafts, and other educational and inspirational materials related to Yosemite National Park and the Sierra Nevada, the Conservancy publishes and sells books and other literature that educates, connects, and inspires the public to visit their National Parks and lands. The financial statements reflect Retail and publishing revenues net of cost of goods sold and donor discounts. Park programs: The Conservancy aims to support the preservation and education roles of the National Park Service mission through a diverse portfolio of public educational programs. This program is designed to enhance the Yosemite experience with over 100 interpretive and educational programs in geology, botany, natural and cultural history, photography, backpacking, and the arts. The Conservancy also conducts educational field programs on a custom basis and by contact with travel providers. In addition, the Conservancy supports Arts in Yosemite Park through operation of the Yosemite Art and Education Center and active support of Yosemite Theater programs and the Parsons Memorial Lodge Summer Series. The Conservancy also helps inspire and train the next generation of stewards through internships, Junior Ranger, and other programs, as well as helps sustain the internship program with UC Merced. The Wilderness operations program assists the National Park Service in educating Yosemite backcountry visitors by managing the wilderness reservation system, issuing permits, sponsoring the bear canister rental program, operating the Ostrander Ski Hut, selling interpretive and orientation materials, and providing visitors with the opportunity for an enjoyable and respectful wilderness experience. The Volunteer program provides a corps of volunteers which support Yosemite National Park through numerous week-long natural resource restoration projects and a month-long visitor information program that improves the experience of more than 453,000 Yosemite visitors annually. Principles of consolidation: The accompanying consolidated financial statements include the accounts of the Conservancy and its subsidiary, after the elimination of intercompany accounts and transactions. 12

14 Note 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued): Financial statement presentation: Professional accounting standards require that the Conservancy report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. A description of the three net asset categories follows: Unrestricted net assets: The portion of net assets that is not restricted by donor imposed stipulations and includes Board-designated fund. Temporarily restricted net assets: The portion of net assets whose use by the Conservancy is limited by donor imposed stipulations that either will be fulfilled or expire by passage of time. Permanently restricted net assets: The portion of net assets held in perpetuity by donor imposed stipulations. Investment income is available for donor stipulated purposes and is included in temporarily restricted net assets. Contributions: Generous support from individual and businesses in the community, received through donations, grants and bequests makes it possible for the Conservancy to provide quality programs. In accordance with professional accounting standards, contributions and grants received are recorded as unrestricted, temporarily restricted, or permanently restricted support depending on the existence and/or nature of any donor restrictions. Temporarily restricted contributions are reclassified to unrestricted net assets upon the fulfillment of a purpose restriction or expiration of a time restriction. Donated materials, supplies and services: Donations of services or products are recorded as support at their estimated fair value. Donated services were valued at $120,270 and $34,000 during the years ended December 31, 2012 and December 31, 2011, respectively. The Conservancy receives a substantial amount of services donated by individuals who assist with general activities, staffing facilities, restorative work and other services in support of the National Park Service. No amounts have been reflected in the financial statements for those services, for they do not meet the criteria for recognition under professional accounting standards. For the year ending December 31, 2012, the Conservancy had over 380 volunteers who donated approximately 18,106 volunteer hours. 13

15 Note 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued): Donated materials, supplies and services (Continued): The National Park Service provides the Conservancy, at no cost, space at various locations. In return, the Conservancy provides the project commitments, volunteer hours, and other beneficial services in support of the National Park Service mission and projects. The estimated value of these contributions for donated space was not determinable and thus is not reflected in the financial statements as of December 31, Pledges receivable: Contributions are recognized when the donor makes a promise to give to the Conservancy that is, in substance, unconditional. Unconditional promises to give that are expected to be collected within one year are recorded at net realizable value. Unconditional promises to give that are expected to be collected thereafter, if any, are recorded at the present value of their estimated future cash flows. The Conservancy discounts its long-term outstanding pledges to reflect the present value of the future cash flows. This is calculated using a discount rate and the number of years until maturity. The Conservancy utilizes two risk-free interest rates for discounting, one for pledges maturating in one to five years, and another discount rate for longer term maturities. For pledges maturating in one to five years the risk-free interest rate will be determine by the three year average of the 1-year U.S. Treasury bond rate. For long term pledges the risk-free interest rate will be determine by the three year average of the 10-year U.S. Treasury bond. Amortization of the discounts is included in contribution revenue. Allowance for uncollectible pledges receivable: The balance in the allowance for uncollectible pledges receivable is based on management s analysis of unpaid pledges receivable. In management s judgment, the amount is adequate to provide for losses after giving consideration to past experience, current economic conditions, and other factors deserving current recognition. It is the conservancy s policy to charge off uncollectible pledges receivable when management determines the receivable will not be collected. Investments: The Conservancy reports investments in marketable securities with readily determinable fair values and all investments in debt securities at their fair values in the statement of financial position. The Conservancy has chosen to report money market funds held as part of the investment accounts as investments. Unrealized gains and losses are included in the change in net assets. Realized gains and losses on sales of securities are determined on the specificidentification method. The Conservancy invests in various investments. Investments are exposed to various risks, such as interest rate, market and credit risk. Due to the level of risk associated with certain investment, it is at least reasonably possible that changes in the value of investments will occur in the near term and that such changes could materially affect the amounts reported in the statement of financial position. 14

16 Note 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued): Bequests: The Conservancy may be named as a beneficiary in wills and trusts. Proceeds from estates and trusts are not recognized until the passing of the donor, as it is not always certain that the Conservancy will remain the named beneficiary Fair value: Professional accounting standards establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under professional accounting standards are described as follows: Level 1 Level 2 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Conservancy has the ability to access. Inputs to the valuation methodology include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. Following is a description of the valuation methodologies used for assets measured at fair value. Equity, securities, debt securities, and U.S. government securities: Valued at the closing price reported on the active market on which the individual securities are traded. Real estate: Valued based on the estimated quoted prices for similar assets in active market. Charitable remainder trusts: Valued based on the present value of future cash flow. 15

17 Note 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued): Fair value (continued): The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Conservancy believes its valuation methods are appropriate and consistent with other participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. Inventories: Inventories are stated at the lower of cost or market value. The cost is determined by the average cost. Depreciation: The Conservancy computes depreciation on its property and equipment using the straight-line method of accounting over useful lives ranging from 3 to 7 years. Grants payable: The Conservancy records the commitment of the Board of Trustees on January 1st in the year a project is expected to begin. Grants are made on a project basis which may be multi year, and are typically recognized as one year grants. Multiple year grants are shown as short and long term as appropriate. Income tax status: The Conservancy is a not-for-profit organization, exempt from income tax under Section 501(c)(3) of the U.S. Internal Revenue Code and the applicable code section of the State of California Revenue and Taxation Code. The Conservancy recognizes the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a more-likely-thannot threshold, the amount recognized in the financial statements is the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. As of December 31, 2012, the Conservancy has had no uncertain tax positions. The Conservancy recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense. Income tax returns for the year prior to 2008 are no longer subject to examination by tax authorities. Yosemite Conservancy is relying on its tax-exempt status and its adherence to all applicable laws and regulations to preserve that status. 16

18 Note 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued): Reclassification: Certain reclassifications have been made to the balances in the accompanying financial statements to conform to the 2012 presentation. Presentation of sales taxes: The Conservancy collects sales taxes from customers and is responsible for remitting the entire amount collected to the State. The Conservancy s accounting policy is to record sales tax collected as a liability in accordance with generally accepted accounting principles. Subsequent events: Management has evaluated subsequent events through March 26, 2013, the date the financial statements were available for issue. Note 2. Note 3. NATURE OF ESTIMATES: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and disclosures. Accordingly, actual results could differ from those estimates. CONCENTRATIONS OF CREDIT RISK: Financial instrument that potentially subject the Conservancy to concentration of credit risk consists principally of cash and cash equivalents, receivables, and marketable securities. The Conservancy places its cash with high credit quality financial institutions. At times, the account balances may exceed the institution s federally insured limits. The Conservancy has not experienced any losses in such accounts. Receivables are from various contributors throughout the United States. Marketable securities were held by brokerage firms in amounts exceeding the guaranteed amounts of the Securities Investor Protection Corporation. 17

19 Note 4. INVESTMENTS: Investment managers have been retained to manage the investment portfolio based on guidelines established by the Conservancy s Board of Trustees. Investments, stated at fair value, are comprised of the following: December 31, 2012 December 31, 2011 Cost Fair Value Cost Fair Value Money market funds $ 4,367,446 $ 4,367,446 $ 75,095 $ 75,095 Debt securities - - 7,440,382 7,327,140 Equity securities 1,026,892 1,018,828 2,672,823 2,458,515 Totals $ 5,394,338 $ 5,386,274 $ 10,188,300 $ 9,860,750 Investment income shown on the Statement of Activities consists of the following: Year Ended December 31, Interest income $ 32,886 $ 41,046 Dividend income 80, ,404 Unrealized appreciation (depreciation) in fair value 319,497 (179,085) Realized gains (losses) on sales of investments 766 2,460 Totals $ 433,973 $ 84,825 18

20 Note 5. PLEDGES RECEIVABLE: Pledges receivable are comprised of the following: December 31, Pledges receivable $ 1,948,333 $ 350,233 Less allowance for uncollectible amounts (39,000) (7,000) Less present value discount (using a rates ranging from.18% to 3.2%) (6,806) (2,411) Totals $ 1,902,527 $ 340,822 Classified as: Current $ 1,301,333 $ 333,233 Long-term 601,194 7,589 Totals $ 1,902,527 $ 340,822 As of December 31, 2012, pledges receivable, before allowance for uncollectible amounts and present value discounts, are expected to be received as follows: Temporarily Restricted Until Future Periods Less than one year $ 1,328,333 One to five years 610,000 Thereafter 10,000 Total $ 1,948,333 Note 6. OTHER RECEIVABLES: Other receivables are comprised of the following: December 31, Amount due from California Department of Motor Vehicles for License Plate Program $ 191,060 $ 193,975 Other receivables 30,553 41,322 Accrued dollar-a-night guest donations 60,969 80,365 Accrued interest - 3,544 Totals $ 282,582 $ 319,206 19

21 Note 7. PROPERTY AND EQUIPMENT: Property and equipment and accumulated depreciation consist of the following: December 31, Furniture and equipment $ 419,139 $ 453,154 Leasehold improvements 60,949 76,673 Vehicles 67,904 67, , ,731 Less accumulated depreciation 307, ,665 Totals $ 240,230 $ 317,066 Note 8. Note 9. LAND HELD FOR FUTURE USE: In November 2009, the Conservancy purchased two parcels totaling 11 acres in Mariposa for potential Park visitor services. The parcels are held in the subsidiary YF Real Estate Holdings, LLC. Each parcel was acquired through bargain purchases resulting in non-cash contributions of $520,448 being recognized in Potential ideas for the land include a visitor center, museum, environmental learning center or other similar use. There are no immediate plans to develop the site. The Conservancy would like the National Park Service to eventually own the land. CHARITABLE REMAINDER TRUSTS: The Conservancy has been named as a designated recipient of a portion of a charitable remainder trust. The Conservancy is to receive $400,000 to be used for the Mariposa Grove Restoration Project. The value of the Trust is reported based on the present value of the future cash receipts. Changes in the calculated net present value are reported in the statement of activities annually. The key assumptions used in the net present value calculations are as follows: Total amount of designation at fair value as of December 31, 2012 $ 400,000 Projected term of the trust based on actuarial tables 7.25 years Projected growth rate net of payments to income beneficiaries 0.00% Discount rate 3.10% Present value at December 31, 2012 $ 320,579 20

22 Note 10. ACCRUED LIABILITIES: Accrued expenses consist of the following: December 31, Accrued salaries and benefits $ 78,349 $ 45,789 Accrued vacations 133, ,938 Accrued royalties 16,016 20,681 Other accrued liabilities 52, ,445 Total accrued liabilities $ 280,327 $ 355,853 Note 11. FAIR VALUE: The following table sets forth by the Conservancy s assets at fair value as of December 31, 2012 and December 31, 2011: Assets at Fair Value as of December 31, 2012 Level 1 Level 2 Level 3 Total Available for sale securities $ 1,018,828 $ - $ - $ 1,018,828 Real estate Charitable remainder trust , ,579 Assets at fair value $ 1,018,828 $ - $ 320,579 1,339,407 Money market funds 4,367,446 $ 5,706,853 Assets at Fair Value as of December 31, 2011 Level 1 Level 2 Level 3 Total Available for sale securities $ 9,785,655 $ - $ - $ 9,785,655 Real estate - 150, ,000 Charitable remainder trust , ,575 Assets at fair value $ 9,785,655 $ 150,000 $ 303,575 10,239,230 Money market funds 75,095 $ 10,314,325 21

23 Note 11. FAIR VALUE (Continued): Level 3 Assets Activity: The following table sets forth a summary of changes in the fair value of the Conservancy s level 3 assets for the years ended December 31, 2012 and December 31, December 31, Balance, beginning of year $ 303,575 $ 293,593 Received in cash - - Realized gain - - Unrealized gain 17,004 9,982 Balance, end of year $ 320,579 $ 303,575 Note 12. UNRESTRICTED NET ASSETS: Unrestricted net assets as of December 31, 2012 are $12,751,315 of which $1,716,000 is board designated as a project reserve and $1,779,000 is board designated as a reserve. The reserve is an emergency reserve set-aside for operations for use in the event of an emergency. This leaves $9,256,315 in unrestricted net assets available for operations and further grant commitments. See Note 14 for details on the endowment. As of January 1, 2013, the Conservancy s board of trustees has committed the Conservancy to $5,903,811 in new grants payable to Park projects. The Conservancy is committed to funding these projects to carry out its mission to provide a margin of excellence for Yosemite that would not otherwise be attainable from Federal funding. The Conservancy enters into each calendar year with the expectation that through donor appeals and requests for special funding the Conservancy will be able to fulfill its obligation to pay these grants. Note 13. TEMPORARILY RESTRICTED NET ASSETS: Temporarily restricted net assets are comprised of the following: December 31, Contributions restricted for project support $ 4,198,637 $ 3,836,582 Contributions restricted for park programs 45, ,225 Totals $ 4,244,429 $ 3,941,807 22

24 Note 14. ENDOWMENT: On May 16, 2012 the Board of Trustees passed a resolution to eliminate the board-designated endowment fund and in its place create four specific board-designated funds: Yosemite Legacy Fund to hold unrestricted bequests and other gifts that are allocated by the board annually in the budget process to specific projects, programs, or campaigns Emergency Reserve to hold six months of fixed expenses less recurring cause- related revenue Project Reserve to hold 50% of new annual grants payable Mariposa Grove Unrestricted Fund to hold board-designated funds for future use for Mariposa Grove projects The Conservancy s endowment now consist of two donor-restricted endowment funds classified and reported as permanently restricted net assets. The permanently restricted endowment funds have a long-term investment objective of growth and are invested 100% in the US Equity Fund held at Capital Group Private Client Services. The four specific unrestricted board-designated funds have a short-term investment objective of capital preservation and are currently invested in cash held at City National Bank and in money market funds held at Capital Group Private Client Services. Endowment Net Asset Composition as of December 31, 2012 Temporarily Permanently Unrestricted Restricted Restricted Totals Donor restricted endowment funds $ - $ 276,699 $ 1,013,709 $ 1,290,408 Totals $ - $ 276,699 $ 1,013,709 $ 1,290,408 Endowment Net Asset Composition as of December 31, 2011 Temporarily Permanently Unrestricted Restricted Restricted Totals Donor restricted endowment funds $ - $ 257,786 $ 1,013,709 $ 1,271,495 Board-designated endowment funds 6,222, ,222,054 Totals $ 6,222,054 $ 257,786 $ 1,013,709 $ 7,493,549 23

25 Note 14. ENDOWMENT (Continued): YOSEMITE FOUNDATION Net changes in endowment funds for the year ended December 31, 2012 were as follows: Temporarily Permanently Unrestricted Restricted Restricted Totals Beginning balance $ 6,222,054 $ 257,786 $ 1,013,709 $ 7,493,549 Investment return - 71,013-71,013 Contributions Appropriations (104,000) (52,100) - (156,100) Transfer out (6,118,054) - - (6,118,054) Ending balance $ - $ 276,699 $ 1,013,709 $ 1,290,408 Net changes in endowment funds for the year ended December 31, 2011 were as follows: Temporarily Permanently Unrestricted Restricted Restricted Totals Beginning balance $ 2,421,027 $ 301,288 $ 1,003,709 $ 3,726,024 Investment return 30,638 16,498-47,136 Contributions 3,876,389-10,000 3,886,389 Appropriations (106,000) (60,000) - (166,000) Ending balance $ 6,222,054 $ 257,786 $ 1,013,709 $ 7,493,549 The Conservancy invests endowment funds in a diversified portfolio of stocks and bonds, which is managed by professional money managers. The portfolio's targeted weighting is approximately 50% to 75% stocks and 25% to 50% bonds. It seeks a rate of return equal to the respective benchmarks for each asset class. Prior to the change in May the Board made appropriations of endowed funds to meet its operating needs. As long as the board-designated endowment funds remain at $1 million or more, an amount equal to 4% of the previous three year s rolling average of the fair market value of the boarddesignated endowment may be used for operations and/or project grants. The appropriations made from the board-designated endowment were $104,000 and $106,000 for the years ended December 31, 2012 and 2011, respectively. Investment income earned on permanently restricted net assets is included in temporary restricted net assets available for donor stipulated purposes. For endowments with donor-restricted funds, the board distribution will be an amount equal to 4% of the previous three year s rolling average of the fair market value of the donor-restricted endowment funds and will be used for donor stipulated purposes. The appropriation made from the donorrestricted endowment was $52,100 and $60,000 for the years ended December 31, 2012 and 2011, respectively. 24

26 Note 15. PROJECT COMMITMENT AND AID TO NPS: Every year the Conservancy makes project grants to the National Park Service to fund projects and programs within the Yosemite National Park which would not otherwise be completed without private funding. These project grants help protect the Yosemite s natural resources and enhance the visitor experience. For the years ending December 31, 2012 and December 31, 2011 the total grants were $4,454,467 and $5,565,057, respectively. These project commitments funded over 57 individual projects and programs in 2012 and fall under the following seven major categories: December 31, Cultural and historic preservation $ 105,336 $ 51,528 Habitat restoration 1,015,047 1,037,872 Scientific research 37, ,140 Trail repair and access 1,338,560 2,280,699 Visitor services and education 1,614,390 2,601,634 Wildlife management 58,940 18,900 Donor restricted and other park programs 341, ,076 Prior year s project refunds ** (56,294) (794,792) Total project grants $ 4,454,467 $ 5,565,057 ** Prior year s project refunds represent project funds that could not be spent due to unforeseen circumstances or due to the project(s) being completed under budget. These funds are returned to the Conservancy in order that they can be re-granted for other park projects and or programs. Note 16. RETIREMENT PLAN: The Conservancy has a defined contribution retirement plan for all employees meeting certain eligibility requirements. Annual contributions as a percent of annual wages are determined by the Board of Trustees, currently 7%. Eligible employees have the option to make elective contributions to the plan up to the maximum amount allowed by the Internal Revenue Code. The Conservancy contributed $141,764 and $118,178 for the years ended December 31, 2012 and 2011, respectively. 25

27 Note 17. ALLOCATION OF COSTS: During the years ended December 31, 2012, and December 31, 2011, The Yosemite Conservancy incurred costs of $1,110,051 and $756,010, respectively, for informational materials and activities that included fundraising appeals. These costs have been allocated to the following functional expense categories: Year Ended December 31, Fundraising $ 613,062 $ 410,478 Donor Education 496, ,532 Totals $ 1,110,051 $ 756,010 Note 19. LEASE COMMITMENTS: The Conservancy s San Francisco office lease expires October The El Portal office and warehouse facilities as well as the various retail operations within Yosemite are donated to the Conservancy from the National Park Service at no costs. The Conservancy rents several pieces of equipment under operating leases that expire in The Conservancy s future minimum lease payments including the office space and office equipment are approximately as follows: Year Ending December 31, 2013 $ 166, , , , ,016 Thereafter 745,401 $ 1,629,356 Rental expense including month-to-month leases for certain equipment and for facilities for years ended December 31, 2012 and December 31, 2011 was $187,398 and $162,716, respectively. 26