YOUNG MEN S CHRISTIAN ASSOCIATION OF NORTHWEST FLORIDA, INC. & YOUNG MEN S CHRISTIAN ASSOCIATION OF PENSACOLA, INC.

Transcription

1 OF NORTHWEST FLORIDA, INC. & YOUNG MEN S CHRISTIAN ASSOCIATION OF PENSACOLA, INC. COMBINED FINANCIAL STATEMENTS

2 OF NORTHWEST FLORIDA, INC. & YOUNG MEN S CHRISTIAN ASSOCIATION OF PENSACOLA, INC. TABLE OF CONTENTS INDEPENDENT AUDITORS REPORT 1 COMBINED FINANCIAL STATEMENTS Combined Statements of Financial Position 3 Combined Statements of Activities and Changes in Net Assets 4 Combined Statements of Cash Flows 5 Notes to the Combined Financial Statements 6 SUPPLEMENTARY INFORMATION Combining Schedule of Financial Position 15 Combining Schedule of Activities and Changes in Net Assets 16 Schedule of Functional Expenses 17

3 316 South Baylen Street, Suite 300 Pensacola, FL warrenaverett.com To the Boards of Directors Young Men s Christian Association of Northwest Florida, Inc. & Young Men s Christian Association of Pensacola, Inc. INDEPENDENT AUDITORS REPORT We have audited the accompanying combined financial statements of Young Men s Christian Association of Northwest Florida, Inc. (a nonprofit organization) and Young Men s Christian Association of Pensacola, Inc. (a nonprofit organization), which are collectively referred to as the YMCA and comprise the combined statements of financial position as of June 30, 2016 and June 30, 2015, and the related combined statements of activities and cash flows for the years then ended, and the related notes to the combined financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these combined 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 financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these combined 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 combined financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the combined 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 combined 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 combined financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 1

4 Opinion In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of the YMCA as of June 30, 2016 and June 30, 2015, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matter Our audit was conducted for the purpose of forming an opinion on the combined financial statements as a whole. The combining schedule of financial position, combining schedule of activities and changes in net assets, and schedule of functional expenses are presented for purposes of additional analysis and are not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the combined financial statements as a whole. Pensacola, Florida November 28,

5 COMBINED STATEMENTS OF FINANCIAL POSITION ASSETS CURRENT ASSETS Cash and cash equivalents $ 5,279,699 $ 3,744,708 Investments 666, ,449 Accounts receivable 8,852 36,209 Unconditional promises to give - current, net 677, ,554 Interest receivable 12,611 12,611 Prepaid expenses 64,278 21,476 Total current assets 6,709,032 5,120,007 PROPERTY AND EQUIPMENT, NET 13,054,974 5,543,710 OTHER ASSETS Restricted cash 1,166,191 6,640,433 Unconditional promises to give - long-term, net 1,188,705 1,516,367 Note receivable 5,044,350 5,044,350 Total other assets 7,399,246 13,201,150 TOTAL ASSETS $ 27,163,252 $ 23,864,867 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable $ 951,730 $ 75,940 Accrued liabilities 122, ,009 Retainage payable 365,001 - Current maturities of long-term debt 26, ,288 Deferred revenue 90,364 86,940 Total current liabilities 1,556,325 1,087,177 LONG-TERM LIABILITIES, LESS CURRENT MATURITIES AND DEBT ISSUANCE COSTS 9,704,662 7,906,192 TOTAL LIABILITIES 11,260,987 8,993,369 NET ASSETS Unrestricted net assets 12,455,170 9,820,184 Temporarily restricted net assets 2,424,095 4,028,314 Permanently restricted assets 1,023,000 1,023,000 Total net assets 15,902,265 14,871,498 TOTAL LIABILITIES AND NET ASSETS $ 27,163,252 $ 23,864,867 See notes to financial statements. 3

6 COMBINED STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEARS ENDED Temporarily Permanently 2016 Temporarily Permanently 2015 Unrestricted Restricted Restricted Total Unrestricted Restricted Restricted Total SUPPORT AND REVENUE Program fees $ 1,525,244 $ - $ - $ 1,525,244 $ 1,487,498 $ - $ - $ 1,487,498 Membership fees 2,040, ,040,785 1,893, ,893,085 Contributions 263, , , ,448 4,028,314-4,284,762 Grants revenue 55, ,596 30, ,750 United Way contributions - 71,988-71,988-70,635-70,635 Special events 51, ,118 48, ,269 Rental income 36, ,790 39, ,668 Investment income, net 60, ,284 69, ,698 Gain/loss on disposal 4, , Other 24, ,242 16, ,497 Net assets released from restriction - Satisfaction of program restrictions 2,287,214 (2,287,214) ,635 (70,635) - - Total revenues, gains, and net assets released from restrictions 6,349,186 (1,604,219) - 4,744,967 3,912,548 4,028,314-7,940,862 Distributions to national YMCA (57,157) - - (57,157) (59,193) - - (59,193) Net revenues, gains, and net assets released from restrictions 6,292,029 (1,604,219) - 4,687,810 3,853,355 4,028,314-7,881,669 EXPENSES Program services 2,797, ,797,617 2,964, ,964,314 Fundraising 135, , , ,203 General & administrative services 723, , , ,399 Total expenses 3,657, ,657,043 3,650, ,650,916 INCREASE IN NET ASSETS 2,634,986 (1,604,219) - 1,030, ,439 4,028,314-4,230,753 NET ASSETS, BEGINNING OF YEAR 9,820,184 4,028,314 1,023,000 14,871,498 9,617,745-1,023,000 10,640,745 NET ASSETS, END OF YEAR $ 12,455,170 $ 2,424,095 $ 1,023,000 $ 15,902,265 $ 9,820,184 $ 4,028,314 $ 1,023,000 $ 14,871,498 See notes to financial statements. 4

7 COMBINED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED CASH FLOWS FROM OPERATING ACTIVITIES Increase in net assets $ 1,030,767 $ 4,230,753 Adjustments to reconcile change in net assets to net cash from operating activities: Depreciation and amortization 279, ,367 Unrealized (gain)/loss on investments (8,814) (9,316) Uncollectible accounts - (51,284) Changes in operating assets and liabilities: Decrease (increase) in operating assets - Accounts receivable 27,357 (6,325) Promises to give 297,887 (2,059,192) Prepaid expenses (42,802) 19,216 Increase (decrease) in operating liabilities - Accounts payable 875,790 (10,257) Accrued liabilities (2,054) (34,341) Retainage payable 365,001 - Deferred revenues 3,424 (5,802) Net cash from operating activities 2,825,968 2,351,819 CASH FLOWS FROM INVESTING ACTIVITIES Purchase/Construction of property and equipment (7,779,842) (1,016,339) Net cash used in investing activities (7,779,842) (1,016,339) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from notes payable 1,040,000 - Payments on debt (25,377) (40,650) Net cash from (used in) financing activities 1,014,623 (40,650) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (3,939,251) 1,294,830 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 10,385,141 9,090,311 CASH AND CASH EQUIVALENTS, END OF YEAR $ 6,445,890 $ 10,385,141 SUPPLEMENTAL DISCLOSURES OF NON-CASH FLOW AND FINANCING INFORMATION Cash paid during the year for interest $ 180,815 $ 179,560 See notes to financial statements. 5

8 NOTES TO THE COMBINED FINANCIAL STATEMENTS 1. DESCRIPTION OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The combined financial statements include the operations of the Young Men s Christian Association of Northwest Florida, Inc., ( the Y-Northwest ), and the Young Men s Christian Association of Pensacola, Inc., ( the Y-Pensacola ). The combined entities are collectively referred to as the YMCA in these financial statements. A summary of the YMCA s significant accounting policies consistently applied in the preparation of the accompanying financial statements follows: Description of Organization The Y-Northwest is a nonprofit organization whose mission is to put Christian principles into practice through programs that build a healthy spirit, mind and body for all. The Y-Northwest operates two branches (Northwest Pensacola, and the Betty J. Pullum Family YMCA in Navarre) in its two-county service area, plus 12 afterschool sites throughout Escambia County. The Y-Pensacola is a nonprofit organization incorporated in 2014 to operate the existing Downtown Pensacola facility and construct a new facility in Downtown Pensacola. Both the Y-Northwest and the Y-Pensacola are committed to strengthening communities in Escambia and Santa Rosa counties through programs focused on: Youth Development Nurturing the potential of every child and teen through these programs including before and after-school child care, summer day camps, youth sports, aquatics, preschool and leadership development. Healthy Living - Improving the nation s health and well-being through programs which promote health and wellness, recreation, family strengthening, sports and fitness, spiritual development, and community building for adults and families. Social Responsibility- Giving back and providing support to our neighbors through programs including volunteerism; the free shower program for homeless and transient individuals; Halloween at the YMCA, a community outreach event held for children with special needs; community education; and various outreach programming with non-profit agencies throughout Escambia and Santa Rosa County. Basis of Combination These financial statements of the YMCA include the combined operations of the Y-Northwest and the Y-Pensacola. All material balances and transactions between the combined entities have been eliminated. Basis of Accounting The YMCA follows standards of accounting and financial reporting prescribed for nonprofit organizations using the accrual basis of accounting. 6

9 NOTES TO THE COMBINED FINANCIAL STATEMENTS 1. DESCRIPTION OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED Basis of Accounting Continued Program and membership fees are recognized as services are performed or by the passage of time. Membership fees and program fees collected in advance are recorded as deferred revenues and recognized in the month services are available to the member. Contributions are recognized when donors make promises to give to the YMCA that are, in substance, unconditional. Donorrestricted contributions are reported as increases in temporarily or permanently restricted net assets depending on the nature of the restrictions. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. Expenses are recognized when incurred. Basis of Presentation Net assets and revenues, expenses, gains, and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the YMCA and changes therein are classified and reported as follows: Unrestricted net assets are not restricted by donors or the donor-imposed restrictions have expired. Board designated or appropriated amounts are reported as unrestricted net assets since the Board has the authority to change or withdraw such designations or appropriations. Temporarily restricted net assets contain donor-imposed restrictions that require the YMCA to use or expend the assets as specified. The restrictions are satisfied either by the passage of time or by actions of the YMCA. Permanently restricted net assets contain donor-imposed restrictions requiring the resources be maintained permanently, but generally allowing the YMCA to use or expend part or all of the income derived from the donated assets for either specified or unspecified purposes. Use of Estimates The preparation of combined financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported and information disclosed in the financial statements. Actual results could differ from those estimates. Cash and Cash Equivalents For purposes of the combined statement of cash flows, the YMCA considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The YMCA maintains cash balances in several financial institutions. FDIC provides insurance for all accounts up to certain limits. At June 30, 2016 and 2015, the YMCA had uninsured cash balances exceeding these limits. The YMCA has not experienced any losses on its cash balances as related to the FDIC insurance limits. 7

10 NOTES TO THE COMBINED FINANCIAL STATEMENTS 1. DESCRIPTION OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED Restricted Cash Restricted cash represents funds held in accounts under restrictive disbursement agreements related to requirements of the New Market Tax Credit financing transaction described in Note 6, and other construction agreements. The restricted cash is for the construction of the new Downtown Pensacola YMCA facility. Cash in restricted accounts totaled $1,166,191 and $6,640,433 at June 30, 2016 and 2015, respectively. Investments Investments consist of stocks and mutual funds and are reported at Level 1 fair value, which is based on quoted market prices in active markets. Unrealized gains and losses are reported in the Statement of Activities. Note Receivable The note receivable totaling $5,044,350 at June 30, 2016 and 2015, is reported at its outstanding balance and is considered to be fully collectible. Accordingly, no allowance for doubtful accounts has been provided. In making that determination, management evaluated the financial condition of the borrower, the estimated value of the underlying collateral, and the economic conditions. Interest on the note receivable is recognized over the term of the note receivable. Property and Equipment Land, buildings and improvements, office furniture, equipment, and vehicles are recorded at cost. Donated assets are recorded at fair value on the date of the gift. Assets with a cost of $5,000 or more and a useful life exceeding one year are capitalized. Interest associated with construction of the cost of the Downtown YMCA is capitalized. Buildings and improvements, office furniture, equipment, and vehicles are depreciated using the straight-line method over their estimated useful lives as follows: Buildings and improvements Office furniture and equipment Vehicles 5-40 years 3-15 years 5 years Donated Services Donated supplies and equipment are recorded at their estimated fair value as of the date of the receipt. Donated Services of Volunteers Many volunteers and corporations have donated significant amounts of time and services to the YMCA s fundraising campaign, policy-making boards, and program operations. However, such contributed services do not meet the criteria for recognition of contributed services contained in accounting principles generally accepted in the United States of America and, accordingly, are not reflected in the accompanying financial statements. 8

11 NOTES TO THE COMBINED FINANCIAL STATEMENTS 1. DESCRIPTION OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED Fundraising Expenses All expenses associated with fundraising activities are expensed as incurred. Allocation of Expenses The costs of providing the various programs and supporting activities of the YMCA are itemized in the Statement of Functional Expenses and summarized on a functional basis in the Statement of Activities. Accordingly, certain costs have been allocated among program, fundraising, and administrative activities. Income Taxes The Internal Revenue Service has determined the Y-Northwest and the Y-Pensacola to be exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code. Accordingly, no provision for federal or state income taxes has been recorded. The YMCA is not aware of any uncertain tax positions that would require disclosure or accrual in accordance with generally accepted accounting principles. Change in Accounting Principle Effective June 30, 2016, the YMCA elected to change its method of presentation relating to debt issuance costs in accordance with FASB ASU Prior to the election date, the YMCA s policy was to present these debt issuance costs as an other asset on the balance sheet, net of accumulated amortization. Beginning June 30, 2016, the Company has presented these fees as a direct deduction to the related note payable. Reclassifications Certain prior period financial statement amounts have been reclassified to conform to current period presentation. Events Occurring After Reporting Date The YMCA has evaluated events and transactions that occurred between June 30, 2016 and November 28, 2016, which is the date that the financial statements were available to be issued, for possible recognition or disclosure in the financial statements. 2. INVESTMENTS The YMCA s investments at June 30, 2016 and 2015, totaled $666,263 and $657,449, respectively, and consisted of mutual funds. 9

12 NOTES TO THE COMBINED FINANCIAL STATEMENTS 3. UNCONDITIONAL PROMISES TO GIVE The YMCA had unconditional promises to give representing the following at June 30: Capital campaign $ 1,928,827 $ 2,228,840 Unrestricted 40,232 75,642 Total unconditional promise to give $ 1,969,059 $ 2,304,482 Receivable in less than one year $ 696,962 $ 668,422 Receivable in one to five years 1,272,097 1,636,060 Total unconditional promise to give 1,969,059 2,304,482 Less: Discounts to net present value (65,764) (94,656) Less: Allowances for uncollected promises (37,261) (45,905) Net unconditional promises to give $ 1,866,034 $ 2,163,921 Receivable in less than one year, net $ 677,329 $ 647,554 Receivable in one to five years, net 1,188,705 1,516,367 Net unconditional promises to give $ 1,866,034 $ 2,163,921 Unconditional promises to give are discounted at a rate of 2.35%. A 2% allowance for uncollectible pledges has been provided for outstanding pledges from the Downtown Capital Campaign. 4. PROPERTY AND EQUIPMENT Property and equipment at June 30 consists of the following: Land $ 1,234,484 $ 1,234,484 Construction in progress 8,735,670 1,034,710 Buildings and improvements 4,393,043 4,368,709 Office furniture and equipment 765, ,036 Vehicles 57,689 57,689 15,186,470 7,406,628 Less accumulated depreciation (2,131,496) (1,862,918) $ 13,054,974 $ 5,543,710 Additions include $307,040 and $153,520 in capitalized interest on the construction of the new facility for the years ended June 30, 2016 and 2015, respectively. 10

13 NOTES TO THE COMBINED FINANCIAL STATEMENTS 5. LONG-TERM DEBT Note payable with BB&T; monthly payments of $4,617 including interest at a fixed rate of 3.5%, unpaid principal and interest due and payable on October 3, Secured by the assignment of the lease and rents due of the Navarre location. $ 773,911 $ 799,288 Note payable with the Bank of Pensacola (Senior Lender); up to the sum of $6M for construction of the new facility at an interest rate of 2.35%. Interest due quarterly and principal payments due annually at an amount determined by the YMCA; entire unpaid balance due September Secured by a first priority lien and security interest in the downtown property and assignment of future leases and rents. 1,040,000 - New Market Tax Credit Loans - See Note 6 8,245,000 8,245,000 Less debt issuance costs (327,974) (338,808) Long-term debt, less debt issuance costs $ 9,730,937 $ 8,705,480 Current maturities of long term debt (26,275) (799,288) Long-term debt, less current maturities and debt issuance costs $ 9,704,662 $ 7,906,192 Principal payments under debt obligations for each of the five years ending June 30 th are as follows: 2017 $ 26, , , , ,942,063 Thereafter 7,155,428 Less debt issuance costs $ (327,974) 9,730,937 11

14 NOTES TO THE COMBINED FINANCIAL STATEMENTS 6. NEW MARKET TAX CREDIT TRANSACTION During 2014, the YMCA restructured operations and entered into transactions in order to make additional funds available through the New Markets Tax Credit (NMTC) Program. The additional funds are being utilized to partially finance the construction of a new downtown YMCA facility. As a part of the restructuring, the new 501 (c) (3) entity named Young Men s Christian Association of Pensacola, Inc., was created and operations previously conducted at the Y-Northwest downtown location were transferred to the Y-Pensacola entity. The NMTC Program permits taxpayers to claim a credit against Federal, and sometimes State, income taxes for Qualified Equity Investments (QEIs) in designated Community Development Entities (CDEs). These CDEs must use substantially all (85%) of the proceeds to make Qualified Low-Income Community Investments (QLICIs). The investor is provided with a tax credit, which is claimed over a seven-year period. The federal credit is equal to 5% of the QEI over the first three years and 6% annually for the final four years, resulting in a total credit amount of 39%. On February 14, 2014, the Y-Northwest loaned $5,044,350 (the UDF Fund Note) to UDF/USBCDC Florida Fund XXVI, LLC (the UDF Fund). The UDF Fund also received equity from a tax credit investor and then made a QEI in Urban Development Fund XXVI, LLC (the CDE), of which the UDF Fund owns 99.99%. The remaining.01% is owned by Urban Development Fund, LLC. The CDE made three loans in the amount of $5,044,350 (Note A), $1,524,747 (Note B), and $1,675,903 (Note C) to Y-Pensacola, the Qualified Active Low-Income Community Business (the QALICB). The UDF Fund Note requires interest to be paid to Y-Northwest at 1.0% per annum quarterly, with quarterly principal payments commencing January 10, Final maturity is October As security, the UDF Fund pledged its % interest in the CDE. Notes A, B, and C require interest to be paid quarterly by Y-Pensacola to the CDE at a rate of 1.862% per annum, with quarterly principal payments commencing January 1, Final maturity is October Prepayments of principal are not allowed during the seven year tax compliance period, except that on August 23, 2019, a mandatory principal payment of $600,000 is required on the Note C Loan. The Y-Pensacola pledged substantially all of its assets as collateral for Notes A, B, and C. The Lender has a lien and security interest in the collateral, junior to the lien on and security interest of the Senior Lender. In connection with making the UDF Fund Note loan, Y-Northwest entered into put and call agreements with the two owners of 99.99% and.01% of the UDF Fund. The agreement allows the owners to put their combined 100% interest in the UDF Fund to Y-Northwest at the end of the seven-year tax credit investment period. If the owners exercise these puts, the Y-Northwest will pay a purchase price of $1,000, plus any transfer or closing costs, to each owner. In the event the puts are not exercised, the Y-Northwest can exercise call options to purchase the ownership interests in the UDF Fund at amounts equal to the fair value of those ownership interests, as determined by an independent appraiser. No amounts have been recorded in these financial statements related to these put and call options. 12

15 NOTES TO THE COMBINED FINANCIAL STATEMENTS 6. NEW MARKET TAX CREDIT TRANSACTION CONTINUED Notes receivable and notes payable at June 30, 2016 and 2015 consisted of the following: Note Receivable Maturity Date Interest Rate UDF Fund $ 5,044,350 10/1/ % Note Payable Maturity Date Interest Rate Loan A $ 5,044,350 10/1/ % Loan B 1,524,747 10/1/ % Loan C 1,675,903 10/1/ % Total Notes Payable $ 8,245, RETIREMENT PLAN The YMCA participates in the YMCA Retirement Fund, a 401(a) defined contribution plan. To be eligible to participate in the plan, employees must be 21 years old and must have completed 1,000 hours of service for two 12-month periods. These two years do not have to be consecutive, and an employee becomes fully vested upon enrollment. The YMCA contributes 7% and each participating employee contributes 5% of the employee s salary to the Plan. Total retirement expense for the years ending June 30, 2016 and 2015 were approximately $61,000 and $47,000, respectively. 8. UNRESTRICTED NET ASSETS The Board of Directors has designated approximately $1,441,000 of the YMCA s unrestricted net assets for future acquisitions, maintenance of property and equipment, and for the payment of the NMTC termination fee due in September RESTRICTED NET ASSETS Temporarily restricted net assets are restricted by the donor for specific purposes or are available for subsequent periods. As of June 30, 2016, $2,424,095 is restricted for the remaining construction of the new Downtown facility. Permanently restricted net assets of $1,023,000 as of June 2016 and 2015 consists of a land contribution with donor-imposed restrictions that the land may not be used for any purpose other than for YMCA facilities and activities, or community or health and wellness facilities to promote fitness, wellness, recreation, personal improvement and family relationships. 13

16 NOTES TO THE COMBINED FINANCIAL STATEMENTS 10. RELATED PARTY TRANSACTIONS During fiscal year 2016 and 2015, the YMCA paid approximately $222,000 and $155,000, respectively, for services provided by companies whose employees serve on the YMCA s board of directors. 11. COMMITMENTS The YMCA has commitments for the design, oversight and construction of a new facility in Downtown Pensacola totaling approximately $9,400,000, exclusive of owner directed purchases. At June 30, 2016, fees paid to date on these contracts totaled approximately $5,900,000 and are included as a portion of the construction in progress on this new facility. 12. SUBSEQUENT EVENT On October 6, 2016, real property in Myrtle Grove was sold to an outside party at a contract sales price of $152,

17 SUPPLEMENTARY INFORMATION

18 COMBINING SCHEDULE OF FINANCIAL POSITION JUNE 30, 2016 ASSETS NWFL Pensacola Elimination Total CURRENT ASSETS Cash and cash equivalents $ 3,803,669 $ 1,476,030 $ - $ 5,279,699 Investments 666, ,263 Accounts receivable 8, ,852 Unconditional promises to give - current, net 677, ,329 Interest receivable 12, ,611 Intercompany receivable 186, ,541 (361,906) - Prepaid expenses 64,278-64,278 Total current assets 5,419,367 1,651,571 (361,906) 6,709,032 PROPERTY AND EQUIPMENT, NET 3,016,223 10,434,909 (396,158) 13,054,974 OTHER ASSETS Restricted cash - 1,166,191-1,166,191 Unconditional promises to give - long-term, net 1,188, ,188,705 Note receivable 5,044, ,044,350 Total other assets 6,233,055 1,166,191-7,399,246 TOTAL ASSETS $ 14,668,645 $ 13,252,671 $ (758,064) $ 27,163,252 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable $ 49,410 $ 902,320 $ - $ 951,730 Accrued liabilities 94,742 28, ,955 Retainage payable - 365, ,001 Intercompany payable 175, ,365 (361,906) - Current maturities of long-term debt 26, ,275 Deferred revenue 69,233 21,131-90,364 Total current liabilities 415,201 1,503,030 (361,906) 1,556,325 LONG-TERM LIABILITIES, LESS CURRENT MATURITIES AND DEBT ISSUANCE COSTS 747,636 8,957,026-9,704,662 TOTAL LIABILITIES 1,162,837 10,460,056 (361,906) 11,260,987 NET ASSETS Unrestricted net assets 10,058,713 2,792,615 (396,158) 12,455,170 Temporarily restricted net assets 2,424, ,424,095 Permanently restricted assets 1,023, ,023,000 Total net assets 13,505,808 2,792,615 (396,158) 15,902,265 TOTAL LIABILITIES AND NET ASSETS $ 14,668,645 $ 13,252,671 $ (758,064) $ 27,163,252 See independent auditors report. 15

19 COMBINING SCHEDULE OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEAR ENDED JUNE 30, 2016 Northwest Florida Pensacola Temporarily Permanently Temporarily Permanently Unrestricted Restricted Restricted Total Unrestricted Restricted Restricted Total Elimination Total SUPPORT AND REVENUE Program fees $ 1,461,843 $ - $ - $ 1,461,843 $ 63,401 $ - $ - $ 63,401 $ - $ 1,525,244 Membership fees 959, ,518 1,081, ,081,267-2,040,785 Contributions 136, , , , , ,322 Grants revenue 55, , ,596 United Way contributions - 71,740-71, ,988 Special events 51, , ,118 Rental income 32, ,690 4, ,100-36,790 Investment income, net 60, , ,284 Gain/Loss on disposal 1, ,765 2, ,833-4,598 Other 19, ,147 5, ,095-24,242 Management fee 199, , (199,155) - Net assets released from restriction - Satisfaction of use restrictions 2,286,966 (2,286,966) (248) Total support and other revenue 5,264,346 (1,604,219) - 3,660,127 1,283, ,283,995 (199,155) 4,744,967 Transfers in ,165, ,165,232 (1,165,232) - Distributions to national YMCA (38,105) - - (38,105) (19,052) - - (19,052) - (57,157) Net revenues, gains, other support 5,226,241 (1,604,219) - 3,622,022 2,430, ,430,175 (1,364,387) 4,687,810 EXPENSES Program services 2,099, ,099, , ,472 (152,353) 2,797,617 Fundraising 101, ,779 41, ,229 (7,386) 135,622 General & administrative services 543, , , ,036 (39,416) 723,804 Total functional expenses 2,744, ,744,461 1,111, ,111,737 (199,155) 3,657,043 Transfers Out 1,165, ,165, (1,165,232) - Total expenses 3,909, ,909,693 1,111, ,111,737 (1,364,387) 3,657,043 CHANGE IN NET ASSETS 1,316,548 (1,604,219) - (287,671) 1,318, ,318,438-1,030,767 NET ASSETS, BEGINNING OF YEAR 8,742,165 4,028,314 1,023,000 13,793,479 1,474, ,474,177 (396,158) 14,871,498 NET ASSETS, END OF YEAR $ 10,058,713 $ 2,424,095 $ 1,023,000 $ 13,505,808 $ 2,792,615 $ - $ - $ 2,792,615 $ (396,158) $ 15,902,265 See independent auditors report. 16

20 SCHEDULE OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED JUNE 30, 2016 General & Program Administrative Services Fundraising Services Total Expenses Salaries and wages $ 1,349,201 $ 65,560 $ 365,804 $ 1,780,565 Employee benefits 73,508 7,784 64, ,557 Payroll taxes 156,185 10,778 41, ,899 Contract services 63,426 2,884 17,562 83,873 Total personnel costs 1,642,320 87, ,568 2,218,894 Supplies 176,723 14,586 23, ,342 Telephone 11, ,448 17,230 Postage 1,615-2,085 3,700 Occupancy 337,207-30, ,831 Equipment costs 22,215-1,315 23,530 Advertising 6,024 29,837 15,622 51,483 Travel & employee expenses 29, ,190 31,790 Conferences and training 32,757-20,199 52,956 Membership dues ,371 5,774 Financing costs 84,870 3, ,225 Insurance 71,985-1,694 73,679 Licenses, taxes and fees 11, ,525 Professional services 81, , ,412 Miscellaneous expense 9,963-5,589 15,552 World Service support Equipment purchases 1, ,208 Depreciation 276,511-2, ,412 Total other expenses 1,155,297 48, ,236 1,438,149 Total expenses $ 2,797,617 $ 135,622 $ 723,804 $ 3,657,043 See independent auditors report. 17