TIM TEBOW FOUNDATION, INC. AND SUBSIDIARY

Transcription

1 TIM TEBOW FOUNDATION, INC. AND SUBSIDIARY Consolidated Financial Statements With Independent Auditors Report

2 Table of Contents Independent Auditors Report 1 Consolidated Financial Statements Consolidated Statement of Financial Position 3 Consolidated Statement of Activities 4 Consolidated Statement of Cash Flows 5 Notes to Consolidated Financial Statements 6 Page

3 INDEPENDENT AUDITORS REPORT Board of Directors Tim Tebow Foundation, Inc. and Subsidiary Jacksonville, Florida We have audited the accompanying consolidated financial statements of Tim Tebow Foundation, Inc. and Subsidiary, which comprise the consolidated statement of financial position as of, and the related consolidated statements of activities and cash flows for the year then ended, and the related notes to the consolidated financial statements. Management s Responsibility for the Consolidated 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 fraud or error. 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 Lakes Parkway, Suite 130 Lawrenceville, GA capincrouse.com

4 Board of Directors Tim Tebow Foundation, Inc. and Subsidiary Jacksonville, Florida Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Tim Tebow Foundation, Inc. and Subsidiary as of, and the changes in its net assets and cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Lawrenceville, Georgia May 26,

5 Consolidated Statement of Financial Position ASSETS: Current Assets: Cash and cash equivalents $ 622,209 Investments 4,072,365 Accounts receivable 23,690 Inventory 67,714 Prepaid expenses 607,682 5,393,660 Non-current Assets: Property and equipment net Held by the Tim Tebow Foundation, Inc. 65,281 Held by FHL, LLC 5,657,868 5,723,149 Total Assets $ 11,116,809 LIABILITIES AND NET ASSETS: Current Liabilities: Accounts payable $ 75,468 Accrued expenses 13,178 Grants payable 33, ,687 Net assets: Unrestricted: Undesignated 5,255,818 Investment in property and equipment 5,723,149 10,978,967 Temporarily Restricted 16,155 10,995,122 Total Liabilities and Net Assets $ 11,116,809 See notes to consolidated financial statements -3-

6 Consolidated Statement of Activities Year Ended Temporarily Unrestricted Restricted Total SUPPORT AND REVENUE: Contributions $ 1,854,114 $ 54,592 $ 1,908,706 Non-recurring contributions for long-term purposes - 5,017,145 5,017,145 Contributed securities 769, ,927 Other noncash contributions 339, , ,633 Golf tournament contributions and income 1,501,753-1,501,753 Investment income 171, ,926 Product sales net 18,177-18,177 Other income 19,589-19,589 Total Support and Revenue 4,674,679 5,401,177 10,075,856 RECLASSIFICATIONS: Net assets released from restrictions 5,856,943 (5,856,943) - EXPENSES: Program services 3,420,639-3,420,639 Supporting activities: Management and general 354, ,588 Fund-raising 1,068,937-1,068,937 1,423,525-1,423,525 Total Expenses 4,844,164-4,844,164 Change in Net Assets 5,687,458 (455,766) 5,231,692 Net Assets, Beginning of Year 5,291, ,921 5,763,430 Net Assets, End of Year $ 10,978,967 $ 16,155 $ 10,995,122 See notes to consolidated financial statements -4-

7 Consolidated Statement of Cash Flows Year Ended CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets $ 5,231,692 Adjustments to reconcile change in net assets to net cash provided (used) by operating activities: Noncash gifts of securities and property (1,099,367) Contributions for long-term purposes (5,017,145) Unrealized and realized gains (31,248) Depreciation 39,256 Changes in operating assets and liabilities: Accounts receivable (23,485) Inventory (2,694) Prepaid expenses (553,234) Accounts payable (49,787) Accrued expenses (19,565) Grants payable 15,521 Net Cash Used by Operating Activities (1,510,056) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of investments (2,038,539) Sales of investments 3,614,865 Purchases of property and equipment (5,347,500) Net Cash Used by Investing Activities (3,771,174) CASH FLOWS FROM FINANCING ACTIVITIES: Contributions for long-term purposes 5,017,145 Net Cash Provided by Financing Activities 5,017,145 Net Change in Cash and Cash Equivalents (264,085) Cash and Cash Equivalents, Beginning of Year 886,294 Cash and Cash Equivalents, End of Year $ 622,209 SUPPLEMENTAL DISCLOSURES: Noncash gifts of services, goods, and rent $ 339,193 Noncash gifts of securities and property $ 1,099,367 See notes to consolidated financial statements -5-

8 Notes to Consolidated Financial Statements 1. NATURE OF ORGANIZATION: The Tim Tebow Foundation, Inc. (The Foundation) exists to bring Faith, Hope, and Love to those needing a brighter day in their darkest hour of need. The Foundation utilizes the public platform that God has blessed Tim Tebow with to inspire and make a difference in peoples lives throughout the world. The Foundation accomplishes this mission through the W15H program, Timmy s Playroom, Tebow CURE Hospital, Orphan Care program, Adoption Aid, Team Tebow, and Night to Shine. The Foundation is incorporated in Georgia and is an organization exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code (the Code) whereby only unrelated business income, as defined by Section 512(a)(1) of the Code, is subject to federal income tax. Furthermore, the Foundation is recognized by the IRS as a publically supported organization that is not a private foundation under Section 509(a)(2) of the Code. FHL, LLC (FHL) is organized in the state of Florida as a wholly owned subsidiary of The Foundation. FHL was organized for the purpose of holding, maintaining, and operating real property that was purchased with donor restricted funds or contributed to the consolidated entity in the state of Pennsylvania. FHL is part of the consolidated entity presented in these consolidated financial statements. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The consolidated financial statements have been prepared on the accrual basis. The significant accounting policies followed are described below to enhance the usefulness of the consolidated financial statements to the reader. PRINCIPLES OF CONSOLIDATION These consolidated financial statements include the accounts of the Foundation and FHL (collectively referred to as TTF). All significant intercompany transactions and balances have been eliminated from these consolidated statements. ESTIMATES The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS Cash and cash equivalents include checking and merchant accounts as well as petty cash. TTF maintains its checking accounts in bank deposit accounts, which at times may exceed insurance limits. TTF has not experienced any losses in such accounts. INVESTMENTS Investments in equity securities with readily determinable fair values, certificates of deposits traded in active markets, and all debt securities are recorded at fair value. Realized and unrealized gains and losses are reported in the consolidated statement of activities as investment income. -6-

9 Notes to Consolidated Financial Statements 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued: INVENTORY Inventory is valued at the lower of cost or market. There is no reserve for obsolescence recorded at December 31, 2016, as all inventory is considered sellable at lower of cost or market value. Shipping and handling costs are included in cost of sales. PREPAID EXPENSES Prepaid expenses consist primarily of event deposits and amounts paid to a supplier related to event favors that will be gifted to participants of Night to Shine occurring in PROPERTY AND EQUIPMENT Property and equipment are capitalized at estimated historic cost or, if donated, at fair value at the date of the gift. TTF capitalizes all property and equipment with a cost or value exceeding $500. Depreciation is calculated using the straight-line method over estimated useful lives, ranging from 3-39 years. NET ASSETS Unrestricted net assets are currently available for ministry purposes under the direction of the board or resources invested in property and equipment. Temporarily restricted net assets are stipulated by donors for use within TTF s mission or with time restriction. Temporarily restricted net asset balances as of, pertain to contributions restricted for use within TTF's Tebow CURE Hospital program. PUBLIC SUPPORT, RECLASSIFICATIONS, AND EXPENSES Revenue is recognized when earned. Support is recognized when contributions are made, which may be when cash is received, unconditional promises are made, or ownership of other assets are transferred. Related costs are expensed in the year incurred. Gifts of cash and other assets are reported as restricted support if they are received with donor stipulations that limit the use of the donated amounts. When a stipulated time restriction ends or purpose restriction is satisfied, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the consolidated statement of activities as net assets released from restrictions. Restricted support and investment income received and used by TTF within the same year are shown as unrestricted contributions or income. The costs of providing the various program services and supporting activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the program services and supporting activities benefited. Joint costs were incurred during the year ended, related to printed materials, postage, graphic design, fulfillment, photography, videography, and website expenses. The total of these expenses was $40,378, and they were allocated as follows: $12,368 to program expenses, $23,460 to management and general expenses, and $4,550 to fund-raising expenses. -7-

10 Notes to Consolidated Financial Statements 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued: NONCASH CONTRIBUTIONS AND CONTRIBUTED SERVICES Noncash gifts include contributed real property, securities, services, rent, and goods. They are recognized at fair value at the date they are given. Services, rent, and goods are expensed at the time the services are rendered, rent is used, or goods are placed into service or sold. Contributed securities are either sold or held at the discretion of the investment manager. Contributed services are recognized for those that improve or enhance property and equipment or for those that require specialized skills (as contribution services and expense in the consolidated statement of activities) at the fair value of the services received. During the year ended, services contributed to TTF were $177,260. ADVERTISING EXPENSES TTF uses advertising to communicate the needs it has to the general public. Advertising costs are expensed as incurred. Advertising expense for the year ended, was $82,369. UNCERTAIN TAX POSITIONS The financial statement effects of a tax position taken or expected to be taken are recognized in the consolidated financial statements when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. Interest and penalties, if any, are included in expenses in the consolidated statement of activities. As of, TTF has analyzed its tax positions and believes that all are more likely than not to be sustained upon examination. 3. INVESTMENTS: Investments at fair value as of, consist of: Cash and cash equivalents (at cost) $ 166,442 Certificates of deposit 357,584 Corporate bonds 2,133,744 Mutual funds 1,413,823 Common stocks 772 $ 4,072,365 Investment income for the year ended, consists of: Interest and dividends $ 140,678 Net unrealized and realized gains 31,248 $ 171,926 Investment management fees paid to outside managers and custodians for investments totaled $12,002 for the year ended. These fees are included in investment income on the statement of activities. -8-

11 Notes to Consolidated Financial Statements 4. PROPERTY AND EQUIPMENT NET: Property and equipment net at, consists of: Land $ 5,291,010 Building and improvements 356,817 Furniture and fixtures 85,478 Vehicles and machinery 87,513 Website and developed software 59,549 5,880,367 Less accumulated depreciation (157,218) $ 5,723, FAIR VALUE MEASUREMENTS: Accounting Standards Codification (ASC) Topic 820, Fair Value Measurements and Disclosure, establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels: Level 1 inputs consist of unadjusted quoted prices in active markets for identical assets and have the highest priority, Level 2 inputs consist of observable inputs other than quoted prices for identical assets, and Level 3 inputs have the lowest priority. TTF uses appropriate valuation techniques based on the available inputs to measure the fair value of its investments. When available, TTF measures fair value using Level 1 inputs because they generally provide the most reliable evidence of fair value. Level 3 inputs are only used when Level 1 or Level 2 inputs were not available. The carrying value of TTF s financial instruments are estimated to approximate fair value. Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis and recognized in the accompanying consolidated statements of financial position. Certificates of deposit The fair values of the certificates of deposit are based on either quoted market prices or discounted future cash flow models. Corporate bonds The fair value of corporate bonds are estimated using quoted market prices, if available, otherwise recently executed transactions and market price quotations are used. Mutual funds and common stocks The fair values are based on quoted market prices. -9-

12 Notes to Consolidated Financial Statements 5. FAIR VALUE MEASUREMENTS, continued: The following table present the fair value measurements of assets recognized in the accompanying balance sheet measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurement fall: Fair Value Level 1 Level 2 Level 3 Investments: Certificates of deposits $ 357,584 $ 101,491 $ 256,093 $ - Corporate bonds: A 60,545 60, A- 316, , BBB+ 527, , BBB 441, , BBB- 373, , BB+ 152, , BB 51,813 51, BB- 155, , B- 53,021 53, Mutual funds: Fixed income 393, , Preferred securities 63,499 63, Hedge funds 130, , Index 42,816 42, Balanced 316, , Value 348, , Growth 118, , Technology common stock ,905,923 3,649, ,093 - Reconciling items at cost: Cash and cash equivalents 166,442 $ 4,072,

13 Notes to Consolidated Financial Statements 6. RETIREMENT BENEFITS: TTF sponsors a 403(b) plan whereby employees can contribute to their individual retirement account. TTF does not contribute to this plan. TTF also sponsors a 457 plan for executive level employees. For the year ended, TTF contributed $1,800 to this plan. 7. LEASE: TTF leases office space at a substantial discount. TTF records a non-cash gift for the value of the lease that is a discount to them. There is no signed agreement for the lease, and TTF remains in the building at the pleasure of the landlord. The amount paid in insurance and taxes by TTF for the year ended, was $28, COMMITMENTS: Prior to, TTF had committed $716,250 in grants to churches related to the Night to Shine program. These amounts are not included in these consolidated financial statements as the churches had not met all of the conditions necessary to receive the grants. The amount shown above was paid out to the churches in early DONOR AND REVENUE CONCENTRATIONS: During the year ended, TTF received a number of significant contributions from two related donors for the acquisition of property in Pennsylvania. Contributions from this donor equated to approximately 60% of total contributions for the year. Furthermore, the contributions above combined with the income and contributions from TTF s annual golf tournament fundraiser represented approximately 65% of total revenue for the year ended. 10.RELATED PARTY TRANSACTIONS: TTF donates the use of part of its leased office space to another non-profit organization whose mission is related to orphan care and evangelism and whose president serves on TTF s board of directors. The value of the donated office space during the year ended, was $11,000. TTF also made a $200,000 grant to this organization during the year ended. 11.SUBSEQUENT EVENTS: Subsequent events have been evaluated through the report date, which represents the date the consolidated financial statements were available to be issued. Subsequent events after that date have not been evaluated. -11-