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: Independent Auditors Report The Board of Trustees Yosemite Foundation We have audited the accompanying consolidated financial statements of Yosemite Foundation (dba Yosemite Conservancy), a California not-for-profit corporation, and its subsidiary, which comprise the statement of financial position as of December 31, 2013 and December 31, 2012, and the related consolidated statements of activities, functional expenses, changes in net assets and cash flows for the years then ended, and the related notes to the consolidated financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to error or fraud. Auditors Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Yosemite Foundation and its subsidiary as of December 31, 2013 and December 31, 2012, and the changes in net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Certified Public Accountants San Francisco, California March 27,

4 ASSETS December 31, 2013 December 31, 2012 CURRENT: Cash and cash equivalents $ 9,806,052 $ 9,634,199 Pledges receivable, net 481,504 1,301,333 Other receivables, net 368, ,582 Investments, at fair value 5,696,821 5,386,274 Inventory, net 738, ,284 Prepaid expenses and other current assets 132, ,420 TOTAL CURRENT ASSETS 17,223,644 17,400,092 PROPERTY AND EQUIPMENT, net 177, ,230 OTHER ASSETS: Pledges receivable, net 907, ,194 Deposits 14,500 14,500 Land held for future use 764, ,200 Charitable remainder trusts 340, ,579 Charitable gift annuities 183,214 - TOTAL ASSETS $ 19,610,987 $ 19,340,795 LIABILITIES AND NET ASSETS YOSEMITE FOUNDATION CONSOLIDATED STATEMENT OF FINANCIAL POSITION CURRENT: Accounts payable $ 142,394 $ 297,153 Accrued liabilities 350, ,327 Deferred rent 115, ,832 Grants payable to Yosemite National Park 852, ,030 TOTAL LIABILITIES (ALL CURRENT) 1,460,718 1,331,342 NET ASSETS: Unrestricted 12,830,645 12,751,315 Temporarily restricted 4,305,915 4,244,429 Permanently restricted 1,013,709 1,013,709 TOTAL NET ASSETS 18,150,269 18,009,453 $ 19,610,987 $ 19,340,795 - See notes to consolidated financial statements. 3

5 CONSOLIDATED STATEMENT OF ACTIVITIES For the Year Ended December 31, 2013 Temporarily Permanently Unrestricted Restricted Restricted Total SUPPORT AND REVENUE: Individual contributions $ 6,764,229 $ 1,765,936 $ - $ 8,530,165 Corporations 128,190 70, ,540 Foundations 105, , ,337 Special events and other sources 191, ,340-1,088,433 Cause-related contributions 281, ,309-1,103,662 Total contributions 7,469,902 3,920,235-11,390,137 Retail and publishing, net 1,099,725 15,693-1,115,418 Program services fees 648,432 1, ,557 Total program revenues 1,748,157 16,818-1,764,975 Investment income 263,119 50, ,504 Gain on disposal of assets 14,130-14,130 Other revenue 6, ,863 Total revenue 9,502,171 3,987,438-13,489,609 Net assets released from restrictions 3,925,952 (3,925,952) - - TOTAL SUPPORT AND REVENUE 13,428,123 61,486-13,489,609 EXPENSES: Program expenses: Project grants 5,463, ,463,226 Project administration 1,076, ,076,976 Retail and publishing 1,189, ,189,296 Visitor services and programs 2,040, ,040,812 Total program expenses 9,770, ,770,310 Supporting services: Administrative expenses 698, ,513 Fundraising expenses 2,879, ,879,970 Total supporting services 3,578, ,578,483 TOTAL EXPENSES 13,348, ,348,793 INCREASE IN NET ASSETS 79,330 61, ,816 NET ASSETS, beginning of year 12,751,315 4,244,429 1,013,709 18,009,453 NET ASSETS, end of year $ 12,830,645 $ 4,305,915 $ 1,013,709 $ 18,150,269 See notes to consolidated financial statements. 4

6 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 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. 5

7 CONSOLIDATED STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED DECEMBER 31, 2013 Program Services Supporting Services Project Visitor Grants Retail and Services (inc. admin.) Publishing and Programs Total Administration Fundraising Total Total Salaries and benefits $ 830,841 $ 754,818 $ 611,207 $ 2,196,866 $ 539,810 $ 763,462 $ 1,303,272 $ 3,500,138 Rent and occupancy 99,844 19,711 36, ,599 14,864 34,490 49, ,953 Telephone voice and data 7,976 11,837 13,489 33,302 9,707 8,522 18,229 51,531 Office supplies, dues and subscriptions 6,042 32,503 25,656 64,201 9,869 22,839 32,708 96,909 Depreciation 11,257 48,644 6,686 66,587 17,624 10,550 28,174 94,761 Equipment lease 1,917 4,826 15,458 22,201 3,656 2,365 6,021 28,222 Equipment repair and maintenance 1,650 2,781 2,450 6,881 1,352 39,063 40,415 47,296 Equipment non-amortized 707 5,520 7,710 13, ,681 4,188 18,125 Printing and postage 16,267 21, , ,490 7,273 1,204,665 1,211,938 1,435,428 Bank charges 2,486 50,884 16,792 70,162 1,612 67,982 69, ,756 Events, catering and rentals 10,617 2, , ,384 54, , , ,181 Insurance 23,534 4,866 7,156 35,556 3,369 7,985 11,354 46,910 Investment advisor fees ,666-2,666 2,666 Marketing promotions - 13, , ,192-57,087 57, ,279 Premiums ,874 13,874 5,100 42,254 47,354 61,228 Service charges and fees 1,388 4,493 1,019 6, ,315 44,254 51,154 Taxes licenses and registrations ,991 10,329 10,393 Travel and meals 8,265 14,605 97, ,178 18,320 38,703 57, ,201 Professional services 54, , , ,568 6, , , ,624 Project commitments and aid to NPS 5,463, ,463, ,463,226 Sales fulfillment - 38,329-38, ,329 Bad debt ,333 23,333 23,333 Miscellaneous - 2,058 10,755 12, ,150 Total expenses $ 6,540,202 $ 1,189,296 $ 2,040,812 $ 9,770,310 $ 698,513 $ 2,879,970 $ 3,578,483 $ 13,348,793 See notes to consolidated financial statements. 6

8 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. 7

9 CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS Contributions Released December 31, and Fund from December 31, 2012 Transfers Restriction 2013 UNRESTRICTED NET ASSETS: Available for operations $ 4,923,025 $ 7,024,260 $ 9,368,878 $ 2,578,407 Yosemite legacy fund 1,948,984 1,239,911 2,294 3,186,601 Board designated project reserve 1,716, ,000-1,972,000 Mariposa Grove unrestricted fund 2,384,306 1,000,000 51,669 3,332,637 Board designated emergency reserve 1,779,000 (18,000) - 1,761,000 TOTAL UNRESTRICTED NET ASSETS 12,751,315 9,502,171 9,422,841 12,830,645 TEMPORARILY RESTRICTED NET ASSETS: Cultural and Historic Preservation Projects 35,000 8,100 43,100 - Habitat Restoration Projects 148,664 (85,185) 53,479 10,000 Scientific Research Projects - 8,000 8,000 - Trail Repair & Access Projects 701,498 1,197,847 1,108, ,431 Visitor Services & Education Projects 142, , , ,149 Wildlife Management Projects 5,000 45,025 50,025 - Visitor Programs & Services 45,792 30,143 15,516 60,419 Donor Restricted & Pass-through Gifts 204, , , ,588 Mariposa Grove Fund 2,861,900 1,540,998 1,304,514 3,098,384 Giant Sequoias - Bank of America Check Series 16,685 (16,685) - - License Plate Proceeds 82,932 (45,988) - 36,944 TOTAL TEMPORARILY RESTRICTED NET ASSETS 4,244,429 3,987,438 3,925,952 4,305,915 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 $ 18,009,453 $ 13,489,609 $ 13,348,793 $ 18,150,269 See notes to consolidated financial statements. 8

10 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. 9

11 CONSOLIDATED STATEMENT OF CASH FLOWS Year Ended Year Ended December 31, 2013 December 31, 2012 CASH FLOWS FROM OPERATING ACTIVITIES: Increase in net assets $ 140,816 $ 2,622,759 Adjustments to reconcile increase in net assets to net cash provided (used) by operating activities: Depreciation expense $ 94,761 $ 105,472 Change in value of charitable remainder trust (20,134) (17,004) Gain on disposal of assets (14,130) - Unrealized (appreciation) depreciation of investments (280,194) (319,497) Realized (gain) loss on sale of investments (297) (766) Decrease (increase) in: Pledges receivable 513,611 (1,561,705) Other receivables (85,871) 36,624 Inventory (53,215) (62,235) Other assets (21,895) 5,181 Charitable gift annuities (183,214) Increase (decrease) in: Accounts payable (154,759) 148,801 Accrued liabilities 70,207 (75,526) Deferred rent 9,423 55,832 Grants payable to Yosemite National Park 204,505 78,798 (1,151,539) (2,836,362) NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 219,614 (213,603) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (33,737) (28,636) Proceeds from disposal of assets 16, ,000 Proceeds from sale of marketable securities 2,671 15,434,740 Purchases of marketable securities (32,727) (10,640,001) NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (47,761) 4,916,103 CASH FLOWS FROM FINANCING ACTIVITIES: - - NET INCREASE IN CASH 171,853 4,702,500 CASH, beginning of year 9,634,199 4,931,699 CASH, end of year $ 9,806,052 $ 9,634,199 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, merged. The merger brought together two great nonprofits dedicated to providing for Yosemite s future. The combination of the organizations, rechristened Yosemite Conservancy, has resulted in more trails repaired, educational programs, wildlife programs, volunteer efforts and wilderness protection. 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 the Conservancy has funded over 500 grants with $81 million for projects that preserve, protect, and enhance Yosemite National Park. In 2013, the Conservancy through the generous donations of individuals, corporations, and foundations was able to provide over $10.2 million in support to Yosemite National Park. The signature project for 2013 was Youth in Yosemite and Yosemite Conservancy 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. 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 11

13 Note 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued): Park programs (continued): contact with travel providers. In addition, the Conservancy supports Arts in Yosemite Park through operation of the Yosemite Art 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 420,000 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. 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. 12

14 Note 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued): Contributions (continued): 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 $76,480 and $120,270 during the years ended December 31, 2013 and December 31, 2012, 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, 2013, the Conservancy had over 255 volunteers who donated approximately 15,700 volunteer hours. For the year ending December 31, 2012, the Conservancy had over 380 volunteers who donated approximately 18,100 volunteer hours. 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, 2013 and 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 maturing in one to five years, and another discount rate for longer term maturities. For pledges maturing 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. 13

15 Note 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued): 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. 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 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. Level 2 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. 14

16 Note 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued): Fair value (continued): 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. Charitable gift annuities: Valued based on the present value of future cash flow. 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 Board of Trustees reviews and comments on the annual grant recommendations from the Grant Review Committee at their September Board meeting. The Grant Review Committee will then review comments from the Board and submits final grant recommendations to the Board for action in January. Approval of the grants for the year will be at a special meeting of the Board of Trustees or the Executive Committee during the first week of January to ensure that grants are expensed in the year they are approved by the Board. 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. 15

17 Note 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued): 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, 2013, 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. Yosemite Conservancy is relying on its taxexempt status and its adherence to all applicable laws and regulations to preserve that status. The organization s tax returns are generally subject to examination by federal and state taxing authorities for three and four years respectively. 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 27, 2014, 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. 16

18 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, 2013 December 31, 2012 Cost Fair Value Cost Fair Value Money market funds $ 4,367,450 $ 4,367,450 $ 4,367,446 $ 4,367,446 Equity securities 1,030,184 1,329, ,835 1,018,828 Totals $ 5,397,634 $ 5,696,821 $ 5,367,281 $ 5,386,274 Investment income shown on the statement of activities consists of the following: Year Ended December 31, Interest income $ 291 $ 32,886 Dividend income 32,722 80,824 Unrealized appreciation (depreciation) in fair value 280, ,497 Realized gains (losses) on sales of investments Totals $ 313,504 $ 433,973 Note 5. PLEDGES RECEIVABLE: Pledges receivable are comprised of the following: December 31, Pledges receivable $ 1,423,752 $ 1,948,333 Less allowance for uncollectible amounts (29,000) (39,000) Less present value discount (using rates ranging from 0.22% to 3.1%) (5,836) (6,806) Totals $ 1,388,916 $ 1,902,527 Classified as: Current $ 481,504 $ 1,301,333 Long-term 907, ,194 Totals $ 1,388,916 $ 1,902,527 17

19 Note 5. PLEDGES RECEIVABLE (Continued): As of December 31, 2013, 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 $ 491,504 One to five years 922,248 Thereafter 10,000 Total $ 1,423,752 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 $ 186,779 $ 191,060 Funds held at NPS 46,800 - Other receivables 73,948 30,553 Accrued dollar-a-night guest donations 60,926 60,969 Totals $ 368,453 $ 282,582 Note 7. PROPERTY AND EQUIPMENT: Property and equipment and accumulated depreciation consist of the following: December 31, Furniture and equipment $ 441,370 $ 419,139 Leasehold improvements 72,455 60,949 Vehicles 43,150 67, , ,992 Less accumulated depreciation 379, ,762 Totals $ 177,304 $ 240,230 18

20 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: December 31, 2013 Total amount of designation at fair value as of December 31, 2013 $ 400,000 Projected term of the trust based on actuarial tables 6.25 years Projected growth rate net of payments to income beneficiaries 0.00% Discount rate 2.6% Present value at December 31, 2013 $ 340,713 December 31, 2012 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 Note 10. CHARITABLE GIFT ANNUITIES: The Organization has been named as the beneficiary of four charitable gift annuities. The income beneficiaries are entitled to a payment each quarter calculated from 5.4% to 8.4% of the fair market value of the assets as of the date of contribution. 19

21 Note 10. CHARITABLE GIFT ANNUITIES (Continued): The contracts are stated at present value of the projected balance of the contracts at termination, net of the amounts due to the income beneficiaries over the term of the contracts. Changes in the calculated net present value are reported in the statement of activities annually. December 31, 2013 Present value $ 183,214 Market value $ 221,563 Projected term of the contract based on actuarial tables 4.33 to years Projected growth rate net of payments to income beneficiaries 0.00% Risk-free discount rate 1.4% to 2.4% Note 11. ACCRUED LIABILITIES: Accrued expenses consist of the following: December 31, Accrued salaries and benefits $ 86,390 $ 78,349 Accrued vacations 170, ,592 Accrued royalties 18,083 16,016 Other accrued liabilities 75,239 52,370 Total accrued liabilities $ 350,534 $ 280,327 Note 12. FAIR VALUE: The following table sets forth by the Conservancy s assets at fair value as of December 31, 2013 and December 31, 2012: Assets at Fair Value as of December 31, 2013 Level 1 Level 2 Level 3 Total Available for sale securities $ 1,329,371 $ - $ - $ 1,329,371 Charitable remainder trust , ,713 Charitable gift annuities 183, ,214 Assets at fair value $ 1,329,371 $ - $ 523,927 1,853,298 Money market funds 4,367,450 $ 6,220,748 20

22 Note 12. FAIR VALUE (Continued): 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 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 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, 2013 and December 31, December 31, Balance, beginning of year $ 320,579 $ 303,575 Contributions received 210,000 - Realized gain - - Unrealized gain (loss) (6,652) 17,004 Balance, end of year $ 523,927 $ 320,579 Note 13. UNRESTRICTED NET ASSETS: Unrestricted net assets as of December 31, 2013 are $12,830,645 of which $1,972,000 is board designated as a project reserve and $1,761,000 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 $8,353,645 in unrestricted net assets available for operations and further grant commitments. See Note 14 for details on the endowment. On January 3, 2014, the Conservancy s board of trustees has committed the Conservancy to $3,819,251 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. 21

23 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, 2013 Temporarily Permanently Unrestricted Restricted Restricted Totals Trail repair endowment $ 263,111 $ 892,918 $ 1,156,029 Search and rescue endowment $ - $ 255 $ 120,791 $ 121,046 Totals $ - $ 263,366 $ 1,013,709 $ 1,277,075 Endowment Net Asset Composition as of December 31, 2012 Temporarily Permanently Unrestricted Restricted Restricted Totals Trail repair endowment $ 262,672 $ 892,918 $ 1,155,590 Search and rescue endowment $ - $ 14,027 $ 120,791 $ 134,818 Totals $ - $ 276,699 $ 1,013,709 $ 1,290,408 22

24 Note 14. ENDOWMENT (Continued): Net changes in endowment funds for the year ended December 31, 2013 were as follows: Temporarily Permanently Unrestricted Restricted Restricted Totals Beginning balance $ - $ 276,699 $ 1,013,709 $ 1,290,408 Investment return - 50,011-50,011 Contributions Appropriations - (63,344) - (63,344) Ending balance $ - $ 263,366 $ 1,013,709 $ 1,277,075 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 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 2012 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 board-designated endowment may be used for operations and/or project grants. The appropriations made from the board-designated endowment were $0 and $104,000 for the years ended December 31, 2013 and 2012, 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 $63,344 and $52,100 for the years ended December 31, 2013 and December 31, 2012, respectively. 23

25 Note 15. GRANT 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, 2013 and December 31, 2012 the total grants were $5,459,526 and $4,454,467, respectively. These project commitments funded over 57 individual projects and programs in 2013 and fall under the following seven major categories: ** December 31, Cultural and historic preservation $ 227,699 $ 105,336 Habitat restoration 732,395 1,015,047 Scientific research 91,402 37,063 Trail repair and access 1,536,997 1,338,560 Visitor services and education 2,330,187 1,614,390 Wildlife management 283,831 58,940 Donor restricted and other park programs 265, ,425 Grant refunds ** (5,070) (56,294) Total project grants $ 5,463,226 $ 4,454,467 Grant 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 $147,820 and $141,764 for the years ended December 31, 2013 and 2012, respectively. Note 17. ALLOCATION OF COSTS: During the years ended December 31, 2013, and December 31, 2012, The Yosemite Conservancy incurred costs of $1,724,679 and $1,110,051, 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 $ 984,159 $ 613,062 Donor Education 740, ,989 Totals $ 1,724,679 $ 1,110,051 24

26 Note 18. 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, 2014 $ 173, , , , ,353 Thereafter 555,048 $ 1,463,321 Rental expense including month-to-month leases for certain equipment and for facilities for years ended December 31, 2013 and December 31, 2012 was $195,880 and $187,398, respectively. 25