YELLOWSTONE PARK FOUNDATION, INC. Financial Statements. June 30, 2012 and (With Independent Auditors Report Thereon)

Transcription

1 Financial Statements June 30, 2012 and 2011 (With Independent Auditors Report Thereon)

2 KPMG LLP Suite N 27 th Street Billings, MT Independent Auditors' Report Board of Directors Yellowstone Park Foundation, Inc.: We have audited the accompanying statements of financial position of Yellowstone Park Foundation, Inc. as of June 30, 2012 and 2011, and the related statements of activities, functional expenses and cash flows for the years then ended. These financial statements are the responsibility of the Foundation s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Foundation s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide 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 Yellowstone Park Foundation, Inc. as of June 30, 2012 and 2011, and the changes in its net assets and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles. September 18, 2012 KPMG LLP is a Delaware limited liability partnership, the U.S. member firm of KPMG International Cooperative ( KPMG International ), a Swiss entity

3 Statements of Financial Position June 30, 2012 and 2011 Assets Current assets: Cash and cash equivalents $ 5,964,734 4,716,501 Certificates of deposit 1,400,000, 000 3,573,806, Investments 2,039, ,910 Unconditional promises to give, net of allowance for losses 879,503 1,292,047 Accrued interest receivable 6,514 5, Inventory 39,522 41,438 Prepaid expenses 7,857 71,207 Total current assets 10,337,822 10,216,419 Property and equipment: Furniture, fixtures and equipment 183, ,267 Less accumulated depreciation (103,001) 001) (95,515) 515) Net property and equipment 80,282 62,752 Long-term investments 37,151 37,151 Endowment investments 10,345 10,442 Unconditional promises to give, net of current portion 1,372,437 1,485,330 Liabilities and Net Assets $ 11,838,037 11,812,094 Current liabilities: Accounts payable $ 29,822 42,970 Accrued expenses 37,829 30, Total current liabilities 67, ,005 Nt Net assets: Unrestricted 3,692,049 3,692,047 Temporarily restricted 8,069,361 8,038, Permanently restricted 8,976 8,976 Total net assets 11,770,386, 11,739,089, $ 11,838,037 11,812,094 See accompanying notes to financial statements.

4 Statement of factivities i i Year Ended d June 30, 2012 Temporarily Permanently Unrestricted Restricted Restricted Total Support: Contributions ti $ 2,473, ,195,077 5,668, Other support 205, ,935 Net assets released from restrictions: Satisfaction of program restrictions 3,163,782 (3,163,782) Total support 5,843,200 31,295 5,874, Expenses: Program expenses: Aid to National Park Service 4,019,252 4,019,252 Education and Outreach 591, , Supporting services: Management and general 524, ,552 Fund-raising 735, ,805 Total expenses 5,870, ,870, Other income: Interest income 27,608 27,608 27,608 27,608 Increase in net assets 2 31,295 31,297 Nt Net assets, beginning i of period id 3,692,047 8,038, ,976 11,739,089 Net assets, end of period $ 3,692,049 8,069,361 8,976 11,770,386 See accompanying notes to financial statements.

5 Statement of factivities i i Year Ended d June 30, 2011 Temporarily Permanently Unrestricted Restricted Restricted Total Support: Contributions ti $ 1,960,328 3,133, ,093,428 Other support 202, ,461 Net assets released from restrictions: Satisfaction of program restrictions 2,997,410 (2,997,410) Total support 5,160, ,690 5,295,889 Expenses: Program expenses: Aid to National Park Service 3,444,776 3,444,776 Education and Outreach 366, , Supporting services: Management and general 434, ,608 Fund-raising 556, , Total expenses 4,802,562 4,802,562 Other income: Interest income 39,163 39,163 39,163 39,163 Increase in net assets 396, , ,490 Nt Net assets, beginning i of period id 3,295, ,902,376 8,976 11,206,599 Net assets, end of period $ 3,692,047 8,038, ,976 11,739,089 See accompanying notes to financial statements.

6 Statements of Functional Expenses Total Total Program Management Program Management Total Expense and General Fund-raising Total Expense and General Fund-raising Salaries $ 682, , , , , , , ,365 Employee benefits 192,865 61,717 47,811 83, ,720 46,904 38,839 87,977 Total salaries and benefits 875, , , , , , , ,342 Aid to National Park Service 4,019,252 4,019,252 3,444,776 3,444,776 Direct mail and acquisition mailings 221, , , ,475 Professional services 162,618 65,083 86,609 10, ,631 67,369 52,761 2,501 Publications and communications 114,897 57,207 52,050 5,640 69,091 28,584 38,474 2,033 Events and functions 92,425 45,570 46,855 30,785 10,401 20,384 Travel 84,452 46,167 9,270 29,015 27,294 7,378 6,105 13,811 Occupancy and insurance 73,292 23,452 24,920 24,920 56,597 15,281 41,316 Information technology 71,046 31,741 39,305 55,954 15,108 40,846 Office expenses 60,981 21,981 21,647 17,353 52,856 14,555 15,730 22,571 Bank fees 28,404 9,089 19,315 20,986 5,666 15,320 Training and meetings 21,556 9,295 5,781 6,480 16,934 4,572 9,075 3,287 Donor stewardship 14,528 1,659 12,869 35,964 9,710 2,083 24,171 Miscellaneous 4,833 1,546 3,287 2,363 1,317 1,046 Vehicle 3,229 3,229 2,512 2,512 Total expenses before depreciation 5,848,685 4,610, , ,805 4,789,609 3,807, , ,575 Depreciation 22,121 22,121 12,953 3,497 9,456 Total expenses $ 5,870,806 4,610, , ,805 4,802,562 3,811, , ,575 See accompanying notes to financial statements.

7 Statements of Cash Flows Cash flows from operating activities: Increase in net assets $ 31, ,490 Adjustments to reconcile increase in net assets to net cash provided by (used in) operating activities: ities: Depreciation 22,121 12,953 Net unrealized loss on investments 3,714 4, Net unrealized loss (gain) on endowment investments 97 (5) Contributed property and equipment (14,050) Changes in: Unconditional promises to give 525,437 (1,107,213) Accrued interest receivable (1,004) 5,007 Inventory 1,916 (3,099) Prepaid expenses 63, (26,995) Accounts py payable (13,148) 148) (71,445) Accrued expenses 7, (6,555) Net cash provided by (used in) operating activities 641,574 (674,498) 498) Cash flows from investing activities: Purchases of certificates t of deposit (1,400,000) 000) (1,051,916) Proceeds from maturities of certificates of deposit 3,573,806 2,893,072 Purchases of investments (1,527,496) (520,324) Acquisitions of property p and equipment (39,651) (5,141) Net cash provided by investing activities 606,659 1,315,691, Cash flows from financing activities - Repayment of long-term debt (123,396) 396) Increase in cash and cash equivalents 1,248, , Cash and cash equivalents, beginning i of period 4,716,501 4,198,704 Cash and cash equivalents, end of period $ 5,964,734, 4,716,501, Supplemental l disclosure of cash flow information: i Cash paid during the year for interest $ 1,229 See accompanying notes to financial statements.

8 (1) Nature of Activities and Significant Accounting Policies (a) Nature of Operations Yellowstone Park Foundation, Inc. (the Foundation) is a non-profit organization, which supports projects and programs that protect, preserve, and enhance Yellowstone National Park (Yellowstone). The purpose of the Foundation is to increase understanding of the history and natural systems of Yellowstone, and enrich the human experience that is Yellowstone. The Foundation accomplishes this purpose by, among other activities, soliciting donations of money, goods and services, from individuals, corporations, and foundations, to fund important projects in Yellowstone which enhance the capacity of the National Park Service in the following categories: Cultural Treasures Greenest Park Wildlife, Wonders, and Wilderness Ranger Heritage Visitor Experience Tomorrow s Stewards Open Support (b) (c) (d) Cash and Cash Equivalents The Foundation considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. There are no cash equivalents as of June 30, 2012 or Certificates of Deposit Certificates of deposit are reported at fair value. The fair value of certificates of deposit is based on market prices for comparable assets. The certificates of deposit held as of June 30, 2012 mature within one year. The Foundation held certificates of deposit bearing interest rates ranging between 0.25% and 0.45% as of June 30, Investments Investments consist of mutual funds, corporate debt, and U.S. agency securities, which are reported at fair value. The fair value of mutual funds, U.S. agency securities and certain corporate debt is based on market prices which are readily available. The fair value of other corporate debt is generally obtained from third party pricing services for comparable assets or through the use of valuation methodologies using observable market inputs. Investment income or loss (including realized and unrealized gains and losses on investments, interest, and dividends) is included in the statement of activities as increases or decreases to unrestricted net assets unless their use is restricted by explicit donor stipulation or law. Long-term investments consist of non-public equity securities that do not have a readily determinable fair market value. These securities are recorded at cost and evaluated for impairment when there is an indication the carrying amount of the long-term investments may not be recoverable.

9 Endowment investments are held in a money market account and recorded at fair value. Interest earned on the endowment investments is unrestricted in accordance with donor instruction. (e) Unconditional Promises to Give Unconditional promises to give that are expected to be collected within one year are recorded at their net realizable value. Unconditional promises to give that are expected to be collected in future years are recorded at the present value of estimated future cash flows. The discounts on those amounts are computed using a risk adjusted interest rate applicable at the time the promise is received. Amortization of the discount is included in contribution revenue. Conditional promises to give are not included as support until such time as the conditions are substantially met. An allowance for losses on unconditional promises to give is provided based on management s assessment of collectibility. (f) (g) (h) (i) Inventories Inventories consist of t-shirts, hats, note cards, brochures, books and videos given as premiums and educational information about park projects, and is valued at their cost. Cost is determined by the first-in, first-out method. Property and Equipment Property and equipment is recorded at cost when purchased. Donated property and equipment is recorded as support at the estimated fair value at the time of donation. Such donations are reported as unrestricted unless the donor has restricted the donated assets to a specific purpose. Assets donated with explicit restrictions regarding their use and contributions of cash that must be used to acquire property and equipment are reported as restricted support. Absent donor stipulations regarding how long those donated assets must be maintained, the Foundation reports expirations of donor restrictions when the donated or acquired assets are placed in service as instructed by the donor. The Foundation reclassifies temporarily restricted net assets to unrestricted net assets at that time. Property and equipment are depreciated using the straight-line method over their estimated useful lives, generally 3 7 years. Income Tax Status The Foundation is a not-for-profit organization that is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code. The Foundation has also been classified as an entity that is not a private foundation within the meaning of Section 509(a) and qualifies for deductible contributions as provided in Section 170(b)(1)(A)(vi). Recognition of Donor Restricted Contributions 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. All other donorrestricted support is reported as an increase in temporarily or permanently restricted net assets depending on the nature of the restriction. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. 2

10 (j) (k) (l) (m) Program Expenses The Foundation records program expenses when the expense is incurred. In-Kind Support The Foundation records various types of in-kind support including advertising, graphic design, web site upkeep and design, airline tickets, lodging and professional fees. Contributed professional services are recognized if the services received (a) create or enhance long-lived assets or (b) require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation. Functional Expenses Expenses are charged directly to program, management and general, or fund-raising categories based on specific identification and have been summarized on a functional basis in the statements of activities. Indirect expenses have been allocated based on resources dedicated to programs. Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the allowance for losses on unconditional promises to give, discounts on promises to give that are expected to be received in future years, the fair value of investments, and the value of in-kind contributions. (2) Promises to Give Unconditional promises to give at the dates presented are as follows: Receivables due in less than one year $ 929,503 1,342,047 Less allowance for losses (50,000) (50,000) Current portion 879,503 1,292,047 Receivables due in one to five years 1,398,555 1,532,828 Less discounts to present value (26,118) (47,498) Non-current portion 1,372,437 1,485,330 Unconditional promises to give, net $ 2,251,940 2,777,377 Unconditional promises to give due in more than one year at the dates presented are recorded at their present value discounted at rates between 1.94% and 4.82% for There were no unconditional promises to give received during 2012 that were discounted. 3

11 (3) Investments Investments by investment type at June 30 consist of the following: Mutual funds $ 1,037, ,910 Corporate debt 701,722 U.S. agency securities 300,693 $ 2,039, ,910 Investment income and gains and losses on investments included in other support on the statement of activities for the years ended June 30 consist of the following: Unrealized loss on investments $ (3,714) (4,414) Dividend income 21,809 20,324 $ 18,095 15,910 (4) Temporarily Restricted Net Assets Temporarily restricted net assets are available at the dates presented for the following purposes: Haynes Photo Shop $ 1,284, ,000 General Wolf Recovery 1,067,633 1,147,592 Canon Projects 1,035,906 1,095,469 Trails Fund Initiative 693, ,271 Open Support 541, ,000 Old Faithful Visitor Education Center 452, ,211 Toyota Education 442,131 Wildlife and Wonders 411, ,470 Technology Advancements 337, ,093 Yellowstone Youth Conservation Corps 198, ,159 Archive Fund Initiative 175, ,621 Ranger Fund 174, ,746 Benefits Sharing (National Park Foundation) 128, ,205 YES! Initiative total 112, ,386 Discover Expedition: Yellowstone 88, ,392 Capacity Building 85,000 Other Wildlife Projects 77,283 80,255 Online Roving Rangers 75,160 75,160 4

12 (continued from previous page) Wildlife & Visitor Safety Project $ 69,539 Fisheries Fund Initiative 55,437 82,135 US Mint 52,774 47,761 Mercer Fund 47,871 37,978 ParKids (Katie Rhoads) 34,110 34,110 Destination Yellowstone! 31,465 Outdoor Exhibits at Mammoth Hot Springs 28,000 28,000 Wolf Recovery Development 26,834 26,834 Visitor Experience 24,629 28,687 Fly Fishing Volunteers II 24,260 40,312 Tomorrow Stewards 23,569 22,240 Bear Projects 23,112 19,548 MATBI 22,935 Mollie Beattie Program 22,335 22,335 Raptor Initiative 22,026 10,517 Climate Challenge 21,500 Interpret the Old Faithful Historic District 13,140 13,140 Canister Recycling 12,378 12,626 Native Fish Conservation 10,050 VIP Handbook 10,000 10,000 Canon Expedition into Yellowstone 9,667 10,000 Partners in Preservation Stanford and MSU 9,217 10,797 Hayden Valley Bison Waysides 7,729 15,500 Druid Road Management 6,528 20,380 Stop Aquatic Invaders 5,000 4,547 Grand Canyon Legacy Program 2,500 27,500 Other smaller projects 71,225 24,700 Yellowstone Escape 374,160 Native American Cross Cultural Exchange 170,292 Old Faithful Visitor Education Center Landscape 127,937 All Taxa Biodiversity 78,977 No Child Left Inside 60,028 Gibbons Falls Wayside Exhibit 21,675 Durward Allen Research 11,965 Wolf Predation Study 9,189 Donner Site Archeological Excavation 7,166 $ 8,069,361 8,038,066 5

13 (5) Permanently Restricted Net Assets Permanently restricted net assets as of June 30, 2012 and 2011 represent a permanent endowment established as a result of the Montana Charitable Endowment tax credit. Interest earned on the endowment is used to fund current operations to support the Foundation s mission and is considered unrestricted when earned. The Board of Directors of the Foundation has interpreted the laws that underlie the Foundation s net asset classification of donor-restricted endowment funds as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the Foundation classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The permanent remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the Foundation if there are donor imposed restrictions on the use of those net assets. The Foundation has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor-restricted funds that the Foundation must hold in perpetuity or for a donor-specified period. To satisfy its long-term rate-of-return objectives, the Foundation relies on a total return strategy in which investment returns are achieved through current yield (interest). The Foundation has a policy of appropriating earnings on the endowment assets when earned as there are no donor imposed restrictions on the use of the earnings. (6) Contributions Contributions consist of the following revenue sources: Corporate Gifts $ 2,426,924 1,058,036 Individual Gifts 2,009,814 1,657,281 Board and Council Members 1,053,320 1,488,087 Foundation Gifts 172, ,024 Public Support 6,000 6,000 $ 5,668,560 5,093,428 Public support was received from the U.S. Forest Service and the National Fish and Wildlife Foundation in 2012 and

14 (7) Donated Services and Materials The Foundation recorded donated services and materials as follows: Professional services $ 1,051, ,158 Supplies and equipment 183,923 42,489 Special event costs 18,624 29,691 Airline tickets, lodging and food 6,013 1,892 $ 1,260, ,230 Donated services and materials are included in contributions and expenses in the statement of activities and are allocated between management and general, fund-raising and aid to National Park Service. (8) Related Parties Board members made contributions totaling $710,471 and $1,247,322, respectively, for the years ended June 30, 2012 and Some of these contributions are in the form of a pledge. Pledges receivable from board members were $806,000 and $1,029,955 at June 30, 2012 and 2011, respectively, and are included in unconditional promises to give on the statements of financial position. (9) Retirement Plan The Foundation sponsors a Section 403(b) salary reduction plan that covers all full-time employees who are at least 21 years old. Employees may contribute up to $16,500 annually for both 2012 and Each eligible employee may elect to have amounts deducted from their gross wages to contribute to the plan. The Foundation matched 100% of these contributions with the maximum contribution equaling 8% of the employee s gross wages for the years ended June 30, 2012 and The total employer contribution to the plan was $46,244 and $36,824 for the years ended June 30, 2012 and 2011, respectively, and is allocated between management and general, fund-raising and aid to National Park Service. (10) Lease Commitment The Foundation entered into a commitment to lease office space in Bozeman, Montana expiring in June The schedule of operating lease commitments for the remainder of the lease for the years ending June 30 is as follows: 2013 $ 58, , ,779 $ 176,337 The total rent expense for the years ending June 30, 2012 and 2011 was $53,811 and $40,684, respectively, and is allocated between management and general, fund-raising and aid to National Park Service. 7

15 (11) Net Assets Released From Restrictions The Foundation s program disbursements satisfied donor restrictions which resulted in the following release from restrictions for the periods presented: Visitor Experience $ 446,673 9,532 Canon Eyes on Yellowstone 364, ,282 General Wolf Recovery 342, ,420 Sustainability Initiative 301,178 57,579 Old Faithful Visitor Education Center 279,789 1,332,786 Yellowstone Youth Conservative Corps 271, ,000 Trails Restoration 211, ,000 Ranger Fund Initiative 198,474 66,600 Yellowstone Escape 99,465 24,949 Wildlife & Visitor Safety Project 97,128 Raptor Initiative 75,503 Fisheries Fund Initiative 65,937 91,245 Toyota Education 56,422 Wildlife Health Study 46,124 25,289 Expedition Yellowstone 36,806 Wolf Interpretation 35,786 69,882 Haynes Photo Shop 29,504 Emergency Response Vehicle Outfitting 28,897 YCC Facility Improvements 26,000 Artist Point Railing Work 25,000 Bear General 16,241 3,894 Bear Safe Campground 16,241 1,211 Fly Fishing Volunteers 15,692 12,023 Destination Yellowstone 14,146 Native Fish Conservation 12,759 Archive Fund Initiative 10,468 29,309 US Mint Coin Program 8,389 4,883 Hayden Valley Bison Waysides 7,771 Monitoring for White-Nose Syndrome in Bats 6,227 Stop Aquatic Invaders 5,547 62,257 Native American Cross-Culture Exchange Program 5,262 1,725 Superintendent s Project Fund 3,242 2,713 Peregrine Falcon Study 2,762 24,976 Mercer Fund 45,000 Design Charrettes 33,825 Wolf Predation Study 9,189 Interpret the Old Faithful Historic District 8,860 Lamar Valley Wolf Interpreters 6,673 8

16 (continued from previous page) Druid Road Management $ 4,985 Canister Recycling 4,740 Aquatic Plant Inventory 3,587 South Livingston Mather Fund 1,999 Campground & Landscape Restoration 1,394 Benefits Sharing (National Park Foundation) 1,238 Partners in Preservation Stanford 648 Donner Site Archeological Excavation 572 Wolf Recovery Development 145 $ 3,163,782 2,997,410 (12) Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants and also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The fair value hierarchy distinguishes among three levels of inputs that may be utilized when measuring fair value: Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. This includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data. Level 3 Inputs are unobservable for the asset or liability. Unobservable inputs reflect the reporting entity s own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The classification of each financial asset or liability within the above hierarchy is determined based on the lowest level input that is significant to the fair value measurement. 9

17 Financial assets measured at fair value on a recurring basis at June 30, 2012 and 2011 consisted of the following: Fair Value Measurements Total Level 1 Level 2 Level : Certificates of deposit $ 1,400,000 1,400,000 Investments: Mutual funds: Fixed income debt securities 536, ,694 Corporate debt securities 250, ,847 Mortgage-backed securities 125, ,248 U.S. Government bonds 124, ,488 Total mutual funds 1,037,277 1,037,277 Corporate debt 701, ,722 U.S. agency securities 300, ,693 Total investments 2,039,692 1,337, ,722 $ 3,439,692 1,337,970 2,101, : Certificates of deposit $ 3,573,806 3,573,806 Investments: Mutual fund: Fixed income debt securities 515, ,910 $ 4,089, ,910 3,573,806 (13) Subsequent Events The Foundation has updated their evaluation of conditions and events existing that would require subsequent event disclosure through the financial statement issuance date of September 18,