SHAKESPEARE FESTIVAL ST. LOUIS

Transcription

1 SHAKESPEARE FESTIVAL ST. LOUIS FINANCIAL STATEMENTS SEPTEMBER 30, 2012 (With comparative totals from 2011)

2 SHAKESPEARE FESTIVAL ST. LOUIS SEPTEMBER 30, 2012 CONTENTS INDEPENDENT AUDITORS' REPORT 1 Page FINANCIAL STATEMENTS Statements of Financial Position 2 Statement of Activities 3 Statements of Cash Flows 4 Notes to Financial Statements SUPPLEMENTARY INFORMATION Independent Auditors' Report on Supplementary Information 12 Schedule of Functional Expenses 13

3 BERGMAN SCHRAIER&CO. A PROFESSIONAL CORPORATION CERTIFIED PUBLIC ACCOUNTANTS 9666 Olive Blvd., Suite 710 St. Louis, Missouri (314) e (800) FAX (314) INDEPENDENT AUDITORS' REPORT To the Board of Directors Shakespeare Festival St. Louis We have audited the accompanying statement of financial position of Shakespeare Festival St. Louis (the Festival), a not-for-profit organization, as of September 30, 2012, and the related statements of activities and cash flows for the year then ended. These financial statements are the responsibility of the Festival's management. Our responsibility is to express an opinion on these financial statements based on our audit. The prior year summarized comparative information has been derived from the Festival's September 30, 2011 financial statements and, in our report dated December 19, 2011, we expressed an unqualified opinion on those financial statements. 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall fmancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Shakespeare Festival St. Louis as of September 30, 2012, and the changes in its net assets and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. St. Louis, Missouri December 7, Members of the American Institute of Certified Public Accountants, the Missouri Society of Certified Public Accountants, and the Private Company Practice Section of the American Institute of Certified Public Accountants.

4 SHAKESPEARE FESTIVAL ST. LOUIS STATEMENTS OF FINANCIAL POSITION SEPTEMBER 30, 2012 AND 2011 ASSETS CURRENT ASSETS Cash and equivalents $ 184,418 $ 139,866 Accounts receivable 4,434 28,866 Promises to give - current 328, ,384 Inventory 4,469 - Prepaid expenses 16,063 17,802 Deposits 6,383 6,383 Total Current Assets 544, ,301 PROMISES TO GIVE - LONG-TERM 90,602 47,228 EQUIPMENT AND IMPROVEMENTS, NET 558, ,475 TOTAL ASSETS $ 1,193,694 $ 1,103,004 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable $ 21,658 $ 14,174 Accrued expenses 1,953 4,085 Deferred revenue 2,787 Total Current Liabilities 23,611 21,046 PROMISSORY NOTE 51,420 NET ASSETS Unrestricted: Undesignated 260, ,944 Board designated 11,500 Total unrestricted 272, ,944 Temporarily restricted 898, ,594 Total Net Assets 1,170,083 1,030,538 TOTAL LIABILITIES AND NET ASSETS $ 1,193,694 $ 1,103,004 The accompanying notes should be read in conjunction with the financial statements

5 SHAKESPEARE FESTIVAL ST. LOUIS STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2012 (With comparative totals for 2011) Unrestricted Temporarily Restricted Total PUBLIC SUPPORT AND REVENUE Contributions: Individuals $ 421,929 $ 11,411 $ 433,340 $ 346,479 Corporations and foundations 436, , , ,626 Fundraisers, (net of expenses of $91,405 and $42,614 in 2012 and 2011, respectively) 151, ,235 87,281 In-kind contributions 72,209 72,209 35,695 Capital campaign 26,114 26,114 8,863 Grants: Arts and Education Council of Greater St. Louis 20,050 20,050 20,050 St. Louis Regional Arts Commission ,400 Missouri State Council on the Arts 24,344 24,344 29,940 Revenue: Festival 56,537 56,537 50,528 Education 119, , ,117 Other 1,963 1,963 1,782 Total Public Support and Revenue 1,281, ,869 1,602,905 1,199,761 Net assets released from restrictions 199,421 (199,421) TOTAL PUBLIC SUPPORT AND REVENUE 1,480, ,448 1,602,905 1,199,761 EXPENSES Program services: Festival production 805, , ,974 Education production 319, , ,009 Supporting services: Management and general 135, , ,967 Fundraising 202, , ,887 Total Expenses 1,463,360 1,463,360 1,302,837 CHANGE IN NET ASSETS 17, , ,545 (103,076) NET ASSETS Beginning of year 254, ,594 1,030,538 1,133,614 End of year $ 272,041 $ 898,042 $ 1,170,083 $ 1,030,538 The accompanying notes should be read in conjunction with the financial statements

6 SHAKESPEARE FESTIVAL ST. LOUIS STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2012 AND OPERATING ACTIVITIES Change in net assets $ 139,545 $ (103,076) Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation 45,682 49,187 (Increase) Decrease in operating assets: Accounts receivable 24,432 (28,866) Promises to give (110,400) 120,493 Inventory (4,469) Prepaid expenses 1, Deposits (4,708) Increase (Decrease) in operating liabilities: Accounts payable 7,484 (5,969) Accrued expenses (2,132) 2,016 Deferred revenue (2,787) 1,115 Net Cash Provided by Operating Activities 99,094 30,835 INVESTING ACTIVITY Acquisition of equipment and improvements (3,122) (25,191) FINANCING ACTIVITY Promissory note, net change (51,420) (120,000) CASH AND EQUIVALENTS Net increase (decrease) 44,552 (114,356) Beginning of year 139, ,222 End of year $ 184,418 $ 139,866 SUPPLEMENTAL INFORMATION Interest paid 650 $ 4,697 The accompanying notes should be read in conjunction with the financial statements

7 SHAKESPEARE FESTIVAL ST. LOUIS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2012 AND NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Activities The Shakespeare Festival St. Louis (the "Festival"), a not-for-profit corporation, produces a free spring Shakespeare Festival in Shakespeare Glen, Forest Park. The Festival presents a scheduled season of performances and various educational activities at the Shakespeare Festival, area schools and community venues throughout the year. The Festival's support and revenue is comprised of contributions from corporations, individuals, foundations, grants from government agencies, special event revenues, concession and souvenir sales at the Festival, education program revenue and investment income. Summary of Significant Accounting Policies The following summary of significant accounting policies of the Festival is presented to assist in the understanding of the Organization's financial statements. The financial statements and notes are representations of the Festival's management, who are responsible for their integrity and objectivity. Comparative Totals The financial statements include certain prior year summarized comparative information in total not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Festival's financial statements for the year ended September 30, 2011, from which the summarized information was derived. Basis of Accounting The financial statements of the Festival are prepared on the accrual basis of accounting. Estimates and Assumptions The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that may affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Cash and Equivalents Cash and equivalents include all cash balances and highly liquid investments with an initial maturity of three months or less. Concentrations of Risk The Festival places its temporary cash investments with high credit quality financial institutions. At times such investments may be in excess of the Federal Deposit Insurance Corporation (FDIC) insurance limit. The Festival does not believe it is exposed to any significant credit risk on cash and equivalents. 5

8 Accounts Receivable and Promises to Give The Festival states accounts receivable at the amount management expects to collect from individual balances outstanding at year-end. Legally enforceable promises to give are recorded as receivable in the year made. Accounts receivable and promises to give are considered by management to be fully collectible and, accordingly, no allowances for doubtful accounts are considered necessary as of September 30, Inventory Inventory consists of merchandise for resale and is stated at the lower of cost, using the first-in, first-out (FIFO) method, or market. Equipment and Improvements The Festival capitalizes all expenditures in excess of $500 for equipment and improvements at cost. Depreciation and amortization are recorded on a straight-line basis over the estimated useful lives of the assets ranging from three to twenty-five years. Routine repairs and maintenance are expensed as incurred. Revenue Recognition The Festival reports revenues as increases in unrestricted net assets unless the use of the related assets is limited by donor-imposed restrictions and reports expenses as decreases in unrestricted net assets. Unconditional promises to give are recognized in the period in which the pledge is made. The Festival records temporarily restricted contributions whose restrictions are met in the period received as changes in unrestricted net assets. Campaign pledges for capital needs are recognized as temporarily restricted revenues in the period in which the pledge is received and are released from restrictions over the useful lives of the assets. Net Asset Classifications The financial statements are prepared to focus on the Festival as a whole and to present balances and transactions according to the existence or absence of donor-imposed restrictions. This is accomplished by classifying beginning net assets and current year transactions into three classes of net assets: unrestricted, temporarily restricted, or permanently restricted. Unrestricted net assets "Unrestricted" means those resources over which the Board of Directors has discretionary control. Designated amounts represent those resources the Board has set aside for a particular purpose. Unrestricted net assets are not subject to donorimposed stipulations. Support that is restricted by the donor is reported as an increase in unrestricted net assets if the restriction expires in the reporting period in which the support is recognized. 6

9 Temporarily restricted net assets This category represents net assets subject to donor-imposed stipulations that may or may not be met by actions of the Festival and/or the passage of time. After the donor-imposed time or purpose restriction is satisfied, the Festival reclassifies temporarily restricted net assets to unrestricted net assets and reports them within the statement of activity as net assets released from restrictions. Permanently restricted net assets These assets represent contributions subject to donor-imposed stipulations requiring that they be maintained permanently by the Festival. Generally, the donors of these assets permit the Festival to use all or part of the income earned on related investments for specific purposes. The Festival did not have permanently restricted net assets at September 30, 2012 and In-kind Contributions The Festival records various types of in-kind support, including services, rent and other tangible assets. GAAP requires recognition of professional services received if those services create or enhance long-lived assets or require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation. A substantial number of volunteers have donated a significant amount of time to the Festival's program services and fundraising campaigns. Such donated services have not been recorded at September 30, 2012 because they do not meet the criteria for recognition as the services contributed do not create or enhance nonfinancial assets or require specialized skills to provide. Contributions of tangible assets are recognized at fair value when received. The amounts reflected in the accompanying financial statements as in-kind support axe offset by like amounts included in expenses or assets. Program Services Festival Production The Festival produces an annual spring Shakespeare Festival held in Shakespeare Glen, Forest Park, in St. Louis, Missouri. Education Programs The Festival provides education programs, educational pre-performance Green Shows and a community outreach program to broaden the audience for Shakespeare in particular and theater in general for the greater metropolitan St. Louis area including Illinois. Functional Allocation of Expenses The costs of providing various programs and other activities have been summarized on a functional basis in the schedule of functional expenses. Accordingly, certain costs have been allocated among the program services, management and general and fundraising. Costs common to several functions are allocated based on periodic time and expense studies. Marketing Costs The Festival expenses marketing costs as incurred. Total marketing costs charged against income amounted to $36,497 in 2012 and $36,609 in

10 Federal Income Tax Status The Internal Revenue Service issued a determination ruling exempting the Festival from Federal income taxes under Section 501(c)(3) of the Internal Revenue Code. The Internal Revenue Service does not consider the Festival a private foundation; therefore, income from certain unrelated business activities not directly related to its exempt purpose, if any, is subject to income tax. The Festival believes it has appropriate support for any tax positions taken, and as such, does not have any uncertain tax positions that are material to the financial statements. The Festival's federal Exempt Organization Business Returns are subject to examination by the IRS for the statutory period. Reclassification Certain amounts in the 2011 financial statements have been reclassified to conform to the 2012 presentation. Subsequent Events As required by the Subsequent Events Topic of the FASB Accounting Standards Codification the Festival has evaluated subsequent events through December 7, 2012, the date which the financial statements were available to be issued. 2. PROMISES TO GIVE Pledges are recorded after being discounted to the anticipated net present value of the future cash flows. The Festival used a discount rate of.84% and 1.63% for 2012 and 2011, respectively. Promises to give consist of unconditional contributions collectible as follows: Less than one year $ 328,410 $ 261,384 One to five years 92,130 48, , ,241 Unamortized discount (1,528) (1,629) Total Promises to Give $ 419,012 $ 308, CONDITIONAL PROMISE TO GIVE During 2012, a donor promised Shakespeare $25,000 a year for four years if the Board meets specific fundraising goals each of the four years. The Board was successful and Shakespeare recognized $25,000 during the year ended September 30, The remaining $75,000 is conditional on the Board meeting its future annual fundraising goals and, therefore, has not been recorded.

11 EQUIPMENT AND IMPROVEMENTS Computer equipment $ 55,633 $ 52,512 Production equipment 39,561 39,561 Leasehold improvements 6,195 6,195 Site improvements 609, ,451 Site equipment 42,044 42, , ,763 Less accumulated depreciation and amortization 193, ,288 Net Book Value $ 558,915 $ 601, PROMISSORY NOTE The Festival converted its line of credit to a promissory note on October 9, Interest is payable monthly at the bank's index rate, subject to a minimum rate of 4%. Interest expense totaled $650 and $4,697 in 2012 and 2011, respectively. The promissory note, secured by substantially all the assets of the Festival, matured and was paid in full during LETTER OF CREDIT The Festival establishes at certain times during the year, a letter of credit (with a bank) which guarantees payment of certain union benefits. No amounts had been drawn with respect to the $21,230 and $18,900 letters for the years ended September 30, 2012 or The Festival's cash accounts at the related bank secure the letters. 7. LINE OF CREDIT The Festival opened a $50,000 line of credit (with a bank) during No amounts had been drawn against this line as of September 30, The Festival's cash and cash equivalents held at the same bank secure the line. 8. BOARD DESIGNATED NET ASSETS During 2012, the Board designated $11,500 to create an Innovation Capital Fund. The purpose of the Innovation Capital Fund is to provide upfront, time-limited funding for new programmatic or organizational strategies that promise to deepen the audience experience, reach populations not currently attending the Festival, explore community issues and expand business practices. The Fund will be governed by an oversight committee of the Festival Board. 9

12 TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets are subject to the following donor-imposed restrictions: Purpose restricted - for capital projects $ 599,824 $ 664,271 Purpose restricted - programs 50,000 52,510 Time restricted 248,218 58,813 Total Temporarily Restricted Net Assets $ 898,042 $ 775,594 Net assets released from donor-imposed restrictions: Purpose restricted - for capital projects $ 70,561 $ 81,465 Purpose restricted - programs 52,510 Time restricted 76, ,323 Net Assets Released from Restriction $ 199,421 $ 228, IN-KIND CONTRIBUTIONS Computer support $ 10,600 $ Food/drink 5,148 Graphic design 53,726 35,695 Other 2,735 Total In-Kind Contributions $ 72,209 $ 35, PENSION PLANS The Festival contributes to four union-sponsored pension plans covering employees; including actors, stage managers, stagehands and others. Contributions, based on a percentage of compensation, totaled $12,383 and $8,943 for 2012 and 2011, respectively. 12. COMMITMENTS On April 15, 2011, the Festival moved to a new location and entered into a three year lease for office and storage space at $2,083 per month, which expires March 31, The lease may be renewed for two additional periods of one year. Rent expense for 2012 and 2011 totaled $24,996 and $27,148, respectively

13 Future minimum lease payments: Year Amount 2013 $ 24, ,498 Total $ 37,494

14 SUPPLEMENTARY INFORMATION

15 BERGMAN SCHRAIER&CO. A PROFESSIONAL CORPORATION CERTIFIED PUBLIC ACCOUNTANTS 9666 Olive Blvd., Suite 710 St. Louis, Missouri (314) (800) FAX (314) INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION To the Board of Directors Shakespeare Festival St. Louis We have audited the financials statements of Shakespeare Festival St. Louis as of and for the year ended September 30, 2012, and have issued our report thereon dated December 7, Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The schedule of functional expenses, which is the responsibility of management, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we do not express an opinion or provide any assurance on it. St. Louis, Missouri December 7, Members of the American hist tute of Certified Public Accountants, the Missouri Society of Certified Public Accountants, and the Private Company Practice Section of the American Institute of Certified Public Accountants.

16 SHAKESPEARE FESTIVAL ST. LOUIS SCHEDULE OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED SEPTEMBER 30, 2012 (With comparative totals for 2011) Program Services Supporting Services Total Festival Production Education Programs Total Program Services Management and General Fund Raising Total Supporting Services Salaries $ 298,463 $ 170,734 $ 469,197 $ 36,206 $ 119,117 $ 155,323 $ 624,520 $ 538,908 Payroll taxes and benefits 90,053 48, ,472 6,932 22,807 29, , ,196 Total Salaries and Related Expenses 388, , ,669 43, , , , ,104 Advertising, public relations and publications 32,288 4,209 36,497 36,497 36,609 Depreciation 35,282 1,158 36,440 6,617 2,625 9,242 45,682 49,187 Fundraising - 32,560 32,560 32,560 16,506 Insurance 2,200-2,200 17,703 17,703 19,903 16,001 Office supplies 14,090 3,126 17,216 14,090 14,090 31,306 41,897 Production - lights and sound 57,815 1,415 59,230 59,230 52,803 Production - set, props and costumes 53,928 4,133 58,061 58,061 55,425 Production - site 48,728-48,728 48,728 44,262 Production - travel, housing and meals 43,531 13,835 57,366 57,366 55,867 Contracted services 82,480 41, ,065 36,750 36, , ,748 Rent and utilities 13, ,678 13,978 13,978 28,656 29,300 Capital campaign expenditures 16,527 15,935 32,462 2,548 3,282 5,830 38,292 29,736 Interest expense ,697 Subtotal 789, ,249 1,094, , , ,865 1,410,477 1,267,142 In-kind expenses 16,201 14,031 30, ,251 22,651 52,883 35,695 Total Expenses $ 805,564 $ 319,280 $ 1,124,844 $ 135,874 $ 202,642 $ 338,516 $1,463,360 $ 1,302,837 The accompanying independent auditors' report on supplementary information should be read in conjunction with the supplementary schedule