Theaters Financial Report December 2012

Transcription

1 Theaters Financial Report December 2012 City of Tacoma Public Assembly Facilities Performing Arts Center Prepared by: Michele Tuong

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3 Table of Contents Management s Discussion and Analysis..3 Financial Statements....9 Notification These financial statements are annual, unaudited reports prepared primarily for the use of management. Immaterial differences may occur due to rounding. 1

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5 Management s Discussion and Analysis 3

6 City of Tacoma Public Assembly Facilities Performing Arts Center December 31, 2012 Management s Discussion and Analysis The Performing Arts theater group is composed of two funds: 1) an operating fund, Fund 4190 Oper, which includes the Performing Arts Center Operating Fund, the Rialto Theater Fund, the Broadway Theater District Fund, and the Pantages Theater Remodel Fund; and 2) a restricted fund, Fund 4190 Panta, which includes the Pantages Investment Fund. Financial Highlights Net operating expense for the year ended December 31, 2012 is $1.0 million compared to $1.1 million for the same period in The current operating fund cash balance is ($179,000) compared to $184,000 a year ago. The 2012 deficit is offset by a due from other funds of $578,000. Assets totaled $21.0 million at December 31, 2012 and $20.0 million at December 31, Financial Analysis Condensed Consolidated Comparative Statements of Net Position December 31, Increase (Decrease) Current and other noncurrent assets $ 696,145 $ 982,134 $ (285,989) Restricted assets 4,517,326 4,502,710 14,616 Capital assets 15,785,850 14,640,926 1,144,924 Total assets $ 20,999,321 $ 20,125,770 $ 873,551 Current liabilities $ 797,700 $ 623,442 $ 174,258 Non current liabilities 382,500 1,092,000 (709,500) Total liabilities 1,180,200 1,715,442 (535,242) Invested in capital assets net of related debt 15,507,350 14,083,926 1,423,424 Restricted assets 4,517,326 4,502,710 14,616 Unrestricted (205,555) (176,308) (29,247) Total net position 19,819,121 18,410,328 1,408,793 $ 20,999,321 $ 20,125,770 $ 873,551 4

7 Current assets Resolution authorized additional payments from the City to BCPA in the amount not to exceed $560,000, payable in two equal installments on June 1, 2012 and June 1, 2013, in exchange for annual social events to be provided by the BCPA. Those payments will be applied to the BCPA s outstanding loan obligation to the City. On June 1, 2012, the first payment of $278,500 was completed and the loan balance was reduced to $278,500. Restricted assets The cash and equity in pooled investments is $3.5 million at December 31, 2012 and December 31, Long term investments consist of U.S. Treasury Strips purchased in 2000 for $387,000 and will have a value at maturity, in 2018, of $1.1 million. These investments are restricted to exercise the Pantages Theater purchase option in 2018 or The current balance of unamortized discount on long term investments is $263,000. Capital assets Capital assets, net of accumulated depreciation are $1.1 million more than in Land value increased $587,000 due to a transfer of $587,000 from buildings to the new Rialto land asset. The Rialto land and improvements were initially recorded in buildings. Buildings increased $1.4 million excluding the transfer to land. The projects which constitute the building improvements are: TOTS HVAC/energy upgrade for $391,000 Pantages orchestra pit improvements for $462,000 Pantages box office remodel for $90,000 Pantages catwalk replacement for $99,000 Project management costs for Pantages for $75,000 Pantages elevator rebuild for $61,000 Lighting upgrade for TOTS, Pantages and Rialto for $88,000 TOTS pit cover and platform systems for $41,000 Other miscellaneous projects for $83,000 Accumulated depreciation increased $245,000 after the depreciation recapture on the land transfer. This compares to the increase in 2011 of $506,000. Total liabilities Total liabilities decreased $535,000 from December 31, 2011 to December 31, On June 1, 2012, the first payment of $278,500 was received and the loan balance and deferred account was reduced to $278,500. Additionally, in July 2011 the City s General Fund completed an advance of $535,000 to BCPA. Resolution directed the Theaters Fund to start reducing, in January 2013, the monthly management fee paid to the BCPA until the repayment of the advance is complete at the end of June The reductions will be mostly offset by an increase in the management fee paid to the BCPA. In June 2012, an advance amount of $152,500 was reclassified to current liabilities and the balance of long term liabilities was reduced to $382,500. 5

8 Financial Analysis Condensed Statements of Revenues, Expenses and Changes in Net Position Year to Date December Increase (Decrease) Net operating expense $ (1,000,019) $ (1,125,365) $ 125,346 Nonoperating revenues (expenses) 19, ,469 (213,313) Change in net position: Income (loss) before contributions and transfers (980,863) (892,896) (87,967) Contributions of capital assets 1,407, ,813 1,012,436 Contributions from other funds 3,907 3,907 Contributions from the General Fund 978, , ,500 Change in net position: 1,408, ,917 1,206,876 Total net position beginning 18,410,328 18,208, ,917 Total net position ending $ 19,819,121 $ 18,410,328 $ 1,408,793 Operating expenses For the year ended December 31, 2012, the net operating expense decreased $125,000 compared to the same period in This is mostly due to a decrease of depreciation expense of $260,000 following the transfer of $587,000 from buildings to Rialto Land which does not depreciate. Non operating revenues (expenses) Non operating revenues decreased $213,000 to $19,000. This is primarily due to a decrease of $133,000 in investment earnings and $87,000 in insurance recovery for property damages in Contributions from other funds For the year ended December 31, 2012, the Theaters Fund received $979,000 in General Fund contributions, of which $700,500 is for management fees and expenses and $278,500 is for the first repayment of BCPA loan. In May 2012, the General Fund returned $1,568 to the Theaters Operating Fund and in September 2012, the budget modification Resolution No directed the Third Party Liability Fund to transfer $2,339 back to the Theaters Operating Fund also. Finally, the Theaters Fund received transfers to pay for the Theaters major improvement and replacement costs of structures and systems. As of December 31, 2012, the LTGO Fund contributed $1.4 million which is an increase of $1.0 million from last year. 6

9 Footnotes 1) Investment Fund (Fund 4190 Panta) Restricted Cash Balances On November 1, 1983, the City and Pantages Associates, a limited partnership, entered into a Lease and Leaseback transaction for the Pantages Theater. In this transaction, Pantages Associates was able to remit to its investor s substantial tax advantages and the City received payment for tax credits and deductions that are redundant to a tax exempt entity. The term of the Lease and Leaseback is 35 years with the provision for six five year extensions. The City has the right to repurchase the Pantages in year 35 or in year 45. The City and Pantages Associates exchange payments each June. The early payments were front loaded in favor of the City so that a repurchase option could be established and an escrow (fund balance) established to fund future City payments. Two funds were established to record the purchase lease transactions; Fund 4190 and Fund 4190 Panta to account for the exchange of payments and to segregate the funds for the repurchase of the Pantages Theater. 2) BCPA loan for the Pantages Theater remodel In 2005, the City of Tacoma (City) and the Broadway Center for Performing Arts (BCPA) entered into an agreement for the Pantages Theater remodel. The total cost was estimated to be approximately $5.0 million. The City invested $1.3 million in December The BCPA was to invest the remaining $3.7 million by borrowing $2.5 million from the City and contributing cash of $1.2 million from its capital campaign. The actual cost of the remodel came in under the original amount of $5.0 million and the unspent funds of $334,000 were used to pay down the loan. In addition, interest on the loan ceased July 1, In exchange for services to be provided by BCPA, Resolution authorized additional payments from the City to BCPA in the amount of $560,000, payable in two equal installments of $280,000 on June 1, 2012 and June 1, On June 1, 2012, the first payment of $278,500 was applied to the BCPA s outstanding loan obligation to the City which reduced the balance owed to $278,500. 7

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11 Financial Statements 9

12 City of Tacoma, Washington Public Assembly Facility Performing Arts Center Statements of Net Position (Unaudited) December 31, Increase (Decrease) ASSETS Current assets: Cash and equity in pooled investments $ (178,529) $ 183,552 $ (362,081) Due from other government units 278, ,500 Due from other funds 578, , ,494 Prepaid Insurance 18,030 15,932 2,098 Total current assets 696, ,634 (7,489) Restricted assets: Cash and equity in pooled investments 3,458,175 3,481,277 (23,102) Investments long term 1,109,000 1,109,000 Unamortized discount on investment long term (263,456) (312,497) 49,041 Market rate adjustment (GASB 31) 213, ,930 (11,323) Total restricted assets 4,517,326 4,502,710 14,616 Capital assets: Land 2,086,757 1,500, ,757 Buildings 17,945,982 17,142, ,598 Machinery and equipment 1,382,443 1,382,443 Other improvements 122, ,398 Less accumulated depreciation (5,751,730) (5,506,299) (245,431) Total capital assets, net of accumulated depreciation 15,785,850 14,640,926 1,144,924 Other noncurrent assets 278,500 (278,500) Total assets $ 20,999,321 $ 20,125,770 $ 873,551 LIABILITIES Current liabilities: Accounts payable $ 81,946 $ 59,033 $ 22,913 Advances from other funds 278, ,500 Deferred revenue 278, ,500 Due to other fund 158,754 7, ,345 Total current liabilities 797, , ,258 Non current liabilities: Deferred revenue 278,500 (278,500) Advances from other funds 382, ,500 (431,000) Total noncurrent liabilities 382,500 1,092,000 (709,500) Total liabilities 1,180,200 1,715,442 (535,242) NET POSITION Invested in capital assets net of related debt 15,507,350 14,083,926 1,423,424 Restricted assets 4,517,326 4,502,710 14,616 Unrestricted (205,555) (176,308) (29,247) Total net position 19,819,121 18,410,328 1,408,793 TOTAL LIABILITIES AND NET POSITION $ 20,999,321 $ 20,125,770 $ 873,551 These statements should be read in conjunction with the Notes to Financial Statements contained in the City of Tacoma s appropriate Comprehensive Annual Financial Report (CAFR). 10

13 City of Tacoma, Washington Public Assembly Facilities Performing Arts Center Statements of Revenues, Expenses and Changes in Net Position (Unaudited) OPERATING EXPENSES Month of December Year to Date December Increase (Decrease) Supplies, services and charges $ 97,792 $ (5,452) $ 754,587 $ 1,176,592 $ (422,005) Bad debts expense (557,000) 557,000 Depreciation expense 42,283 51, , ,773 (260,341) Total operating expenses 140,075 46,103 1,000,019 1,125,365 (125,346) Net operating expenses (140,075) (46,103) (1,000,019) (1,125,365) 125,346 NONOPERATING REVENUES (EXPENSES) Investment earnings on cash and pooled investments: Operating Fund (1,419) 2,036 4,078 7,785 (3,707) Restricted Fund (6,048) 122,086 98, ,352 (129,037) Pantages lease/leaseback (83,000) (83,000) Insurance Recoveries 86,775 (86,775) Interest expense (20) (30) (5,560) 5,530 Miscellaneous expense (390) (207) (883) 676 Total nonoperating revenues (expenses) (7,487) 123,732 19, ,469 (213,313) CHANGE IN NET POSITION Net revenue (loss) before contributions and transfers (147,562) 77,629 (980,863) (892,896) (87,967) Contributions of capital assets 622, ,762 1,407, ,813 1,012,436 Contributions from other funds 3,907 3,907 Contributions from the General Fund 58,333 58, , , ,500 Change in net position $ 532,968 $ 285,724 1,408, ,917 1,206,876 Total net position beginning 18,410,328 18,208, ,917 Total net position ending $ 19,819,121 $ 18,410,328 $ 1,408,793 These statements should be read in conjunction with the Notes to Financial Statements contained in the City of Tacoma s appropriate Comprehensive Annual Financial Report (CAFR). 11

14 City of Tacoma, Washington Public Assembly Facilities Performing Arts Center Statements of Cash Flows (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES Year to Date December Increase (Decrease) Payments to suppliers $ (934,921) $ (1,369,162) $ 434,241 Net cash provided (used) by operating activities (934,921) (1,369,162) 434,241 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Contributions from General Fund 978, , ,500 Contributions from other fund 3,907 3,907 Advance from General Fund (431,000) 535,000 (966,000) Net cash provided (used) by noncapital and related financing activities 551,407 1,235,000 (683,593) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Pantages lease/leaseback (83,000) (83,000) Acquitision of capital assets (1,390,563) (308,919) (1,081,644) Contribution of capital assets 1,407, ,813 1,012,436 Interest payable (30) (8,508) 8,478 Net cash provided (used) by capital and related financing activities (66,344) (5,614) (60,730) CASH FLOWS FROM INVESTING ACTIVITIES Investment earnings on cash and pooled investments 102, ,137 (132,744) Investments long term (37,718) (126,592) 88,874 Net cash provided (used) by investing activities 64, ,545 (43,870) Net change cash and cash equivalents (385,183) (31,231) (353,952) Cash and equity in pooled investments beginning 3,664,829 3,696,060 (31,231) Cash and equity in pooled investments ending $ 3,279,646 $ 3,664,829 $ (385,183) These statements should be read in conjunction with the Notes to Financial Statements contained in the City of Tacoma s appropriate Comprehensive Annual Financial Report (CAFR). 12

15 City of Tacoma, Washington Public Assembly Facilities Performing Arts Center Statements of Cash Flows (Unaudited) Year to Date December Increase (Decrease) Reconciliation of cash and equity in pooled investments to balance sheet: Cash and equity in pooled investments in Operating Fund $ (178,529) $ 183,552 $ (362,081) Restricted cash and equity in pooled investments in Investments Fund 3,458,175 3,481,277 (23,102) Total cash and equity in pooled investments $ 3,279,646 $ 3,664,829 $ (385,183) Reconciliation of operating income to net cash provided (used) by operating activities: Operating income (expense) $ (1,000,019) $ (1,125,365) $ 125,346 Adjustments to reconcile operating income to net from operating activities: Depreciation expense 245, ,773 (260,341) Allowance for uncollectible accounts (557,000) 557,000 Due to / due from other funds (201,149) (196,617) (4,532) Prepaid expenses (2,098) (1,806) (292) Change in accounts payable 22,913 5,853 17,060 Total adjustments 65,098 (243,797) 308,895 Net cash provided (used) by operating activities $ (934,921) $ (1,369,162) $ 434,241 Non cash investing, capital, and financing activities: Investments long term $ (37,718) $ (126,592) $ 88,874 These statements should be read in conjunction with the Notes to Financial Statements contained in the City of Tacoma s appropriate Comprehensive Annual Financial Report (CAFR). 13

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20 The City of Tacoma does not discriminate on the basis of disability in any of its programs, activities, or services. To request this information in an alternative format or to request a reasonable accommodation, please contact the City Clerk s Office at (253) TTY or speech to speech users please dial 711 to connect to Washington Relay Services.