526(%2:/23(5$7,1*&203$1<
$&20321(1781,72)7+(
&,7<2)3$6$'(1$&$/,)251,$
<($5(1'('-81( %$6,&),1$1&,$/67$7(0(176
Attachment D
526(%2:/23(5$7,1*&203$1<
$&20321(1781,72)7+(&,7<2)3$6$'(1$&$/,)251,$
%DVLF)LQDQFLDO6WDWHPHQWV
<HDU(QGHG-XQH
THIS PAGE INTENTIONALLY LEFT BLANK
ROSE BOWL OPERATING COMPANY
(A COMPONENT UNIT OF THE CITY OF PASADENA, CALIFORNIA)
Basic Financial Statements
Year Ended June 30, 2023
Table of Contents
Page
FINANCIAL SECTION
Independent Auditors’ Report ............................................................................................................................. 1
Management's Discussion and Analysis ................................................................................................................... 5
BASIC FINANCIAL STATEMENTS
Statement of Net Position ................................................................................................................................... 24
Statement of Revenues, Expenses, and Changes in Net Position .............................................................. 25
Statement of Cash Flows ............................................................................................................................. 26
Notes to the Basic Financial Statements ...................................................................................................... 27
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Proportionate Share of the Net Pension Liability .......................................................................... 52
Schedule of Plan Contributions .................................................................................................................... 54
OTHER REPORT
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ............................................................................... 57
THIS PAGE INTENTIONALLY LEFT BLANK
1611 E. Fourth Street, Suite 200
Santa Ana, CA 92701
(714) 569-1000
203 N. Brea Blvd, Suite 203
Brea, CA 92821
(714) 672-0022
21 Waterway Avenue, Suite 30089
The Woodlands, TX 77380
(936) 828-4587
2151 River Plaza Dr., Suite 150
Sacramento, CA 95833
(916) 503-9691
24422 Avenida de la Carlota, Suite 275
Laguna Hills, CA 92653
(949) 829-8299
www.lslcpas.com
,1'(3(1'(17$8',7256¶5(3257
7RWKH%RDUGRI'LUHFWRUV
5RVH%RZO2SHUDWLQJ&RPSDQ\
3DVDGHQD&DOLIRUQLD
5HSRUWRQWKH$XGLWRIWKH)LQDQFLDO6WDWHPHQWV
Opinion
:HKDYHDXGLWHGWKHDFFRPSDQ\LQJILQDQFLDOVWDWHPHQWVRIHDFKPDMRUIXQGRI5RVH%RZO2SHUDWLQJ&RPSDQ\
WKH ³&RPSDQ\´
D FRPSRQHQW XQLW RI WKH &LW\ RI 3DVDGHQD &DOLIRUQLD DV RI DQG IRU WKH \HDU HQGHG -XQHDQGWKHUHODWHGQRWHVWRWKHILQDQFLDOVWDWHPHQWVZKLFKFROOHFWLYHO\FRPSULVHWKH&RPSDQ\¶VEDVLF ILQDQFLDOVWDWHPHQWVDVOLVWHGLQWKHWDEOHRIFRQWHQWV
,Q RXU RSLQLRQ WKH ILQDQFLDO VWDWHPHQWV UHIHUUHG WR DERYH SUHVHQW IDLUO\ LQ DOO PDWHULDO UHVSHFWV WKH UHVSHFWLYH ILQDQFLDOSRVLWLRQRIHDFKPDMRUIXQGRIWKH&RPSDQ\DVRI-XQHDQGWKHUHVSHFWLYHFKDQJHVLQILQDQFLDO SRVLWLRQ DQG FDVK IORZV WKHUHRI DV OLVWHG LQ WKH WDEOH RI FRQWHQWV IRU WKH \HDU WKHQ HQGHG LQ DFFRUGDQFH ZLWK DFFRXQWLQJSULQFLSOHVJHQHUDOO\DFFHSWHGLQWKH8QLWHG6WDWHVRI$PHULFD
Basis for Opinion
:HFRQGXFWHGRXUDXGLWLQDFFRUGDQFHZLWKDXGLWLQJVWDQGDUGVJHQHUDOO\DFFHSWHGLQWKH8QLWHG6WDWHVRI$PHULFD DQG WKH VWDQGDUGV DSSOLFDEOH WR ILQDQFLDO DXGLWV FRQWDLQHG LQ Government Auditing Standards LVVXHG E\ WKH &RPSWUROOHU*HQHUDORIWKH8QLWHG6WDWHV2XUUHVSRQVLELOLWLHV XQGHUWKRVHVWDQGDUGVDUHIXUWKHUGHVFULEHGLQWKH $XGLWRU¶V 5HVSRQVLELOLWLHV IRU WKH $XGLW RI WKH )LQDQFLDO 6WDWHPHQWV VHFWLRQ RI RXU UHSRUW :H DUH UHTXLUHG WR EH LQGHSHQGHQWRIWKH&RPSDQ\DQGWRPHHWRXURWKHUHWKLFDOUHVSRQVLELOLWLHVLQDFFRUGDQFHZLWKWKHUHOHYDQWHWKLFDO UHTXLUHPHQWVUHODWLQJWRRXUDXGLW:HEHOLHYHWKDWWKHDXGLWHYLGHQFHZHKDYHREWDLQHGLVVXIILFLHQWDQGDSSURSULDWH WRSURYLGHDEDVLVIRURXUDXGLWRSLQLRQ
Emphasis of Matter
Change in Accounting Principle
$V GHVFULEHG LQ 1RWH WR WKH ILQDQFLDO VWDWHPHQWV LQ WKH &RPSDQ\ DGRSWHG QHZ DFFRXQWLQJ JXLGDQFH *$6%6WDWHPHQW1R
Subscription Based Information Technology Arrangements 2XURSLQLRQLVQRWPRGLILHG ZLWKUHVSHFWWRWKLVPDWWHU
Component Unit Reporting
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
7RWKH%RDUGRI'LUHFWRUV
5RVH%RZO2SHUDWLQJ&RPSDQ\
3DVDGHQD&DOLIRUQLD
Responsibilities of Management for the Financial Statements 0DQDJHPHQWLVUHVSRQVLEOHIRUWKHSUHSDUDWLRQDQGIDLUSUHVHQWDWLRQRIWKHILQDQFLDOVWDWHPHQWVLQDFFRUGDQFHZLWK DFFRXQWLQJSULQFLSOHVJHQHUDOO\DFFHSWHGLQWKH8QLWHG6WDWHVRI$PHULFDDQGIRUWKHGHVLJQLPSOHPHQWDWLRQDQG PDLQWHQDQFHRILQWHUQDOFRQWUROUHOHYDQWWRWKHSUHSDUDWLRQDQGIDLUSUHVHQWDWLRQRIILQDQFLDOVWDWHPHQWVWKDWDUHIUHH IURPPDWHULDOPLVVWDWHPHQWZKHWKHUGXHWRIUDXGRUHUURU
,QSUHSDULQJWKHILQDQFLDOVWDWHPHQWVPDQDJHPHQWLVUHTXLUHGWRHYDOXDWHZKHWKHUWKHUHDUHFRQGLWLRQVRUHYHQWV FRQVLGHUHGLQWKHDJJUHJDWHWKDWUDLVHVXEVWDQWLDOGRXEWDERXWWKH&RPSDQ\¶VDELOLW\WRFRQWLQXHDVDJRLQJFRQFHUQ IRUWZHOYHPRQWKVEH\RQGWKHILQDQFLDOVWDWHPHQWGDWHLQFOXGLQ JDQ\FXUUHQWO\NQRZQLQIRUPDWLRQWKDWPD\UDLVH VXEVWDQWLDOGRXEWVKRUWO\WKHUHDIWHU
Auditor’s Responsibilities for the Audit of the Financial Statements 2XUREMHFWLYHVDUHWRREWDLQUHDVRQDEOHDVVXUDQFHDERXWZKHWKHUWKHILQDQFLDOVWDWHPHQWVDVDZKROHDUHIUHHIURP PDWHULDOPLVVWDWHPHQWZKHWKHUGXHWRIUDXGRUHUURUDQGWRLV VXHDQDXGLWRU¶VUHSRUWWKDWLQFOXGHVRXURSLQLRQV 5HDVRQDEOH DVVXUDQFH LV D KLJK OHYHO RI DVVXUDQFH EXW LV QRW DE VROXWH DVVXUDQFH DQG WKHUHIRUH LV QRW D JXDUDQWHH WKDW DQ DXGLW FRQGXFWHG LQ DFFRUGDQFH ZLWK JHQHUDOO\ DFFHSWHG DXGLWLQJ VWDQGDUGV DQG Government Auditing StandardsZLOODOZD\VGHWHFWDPDWHULDOPLVVWDWHPHQWZKHQLWH[LVWV7KHULVNRIQRWGHWHFWLQJ D PDWHULDO PLVVWDWHPHQW UHVXOWLQJ IURP IUDXG LV KLJKHU WKDQ IRU RQH UHVXOWLQJ IURP HUURU DV IUDXG PD\ LQYROYH FROOXVLRQIRUJHU\LQWHQWLRQDORPLVVLRQVPLVUHSUHVHQWDWLRQVRUWKHRYHUULGHRILQWHUQDOFRQWURO0LVVWDWHPHQWVDUH FRQVLGHUHGPDWHULDOLIWKHUHLVDVXEVWDQWLDOOLNHOLKRRGWKDW LQGLYLGXDOO\RULQDJJUHJDWHWKH\ZRXOGLQIOXHQFHWKH MXGJPHQWPDGHE\DUHDVRQDEOHXVHUEDVHGRQWKHILQDQFLDOVWDWHPHQWV
,Q SHUIRUPLQJ DQ DXGLW LQ DFFRUGDQFH ZLWK JHQHUDOO\ DFFHSWHG DX GLWLQJ VWDQGDUGV DQG Government Auditing StandardsZH
x ([HUFLVHSURIHVVLRQDOMXGJPHQWDQGPDLQWDLQSURIHVVLRQDOVNHSW LFLVPWKURXJKRXWWKHDXGLW
x ,GHQWLI\DQGDVVHVVWKHULVNVRIPDWHULDOPLVVWDWHPHQWRIWKH ILQDQFLDOVWDWHPHQWVZKHWKHUGXHWRIUDXGRUHUURU DQGGHVLJQDQGSHUIRUPDXGLWSURFHGXUHVUHVSRQVLYHWRWKRVHULVNV6XFKSURFHGXUHVLQFOXGHH[DPLQLQJRQD WHVWEDVLVHYLGHQFHUHJDUGLQJWKHDPRXQWVDQGGLVFORVXUHVLQWKHILQDQFLDOVWDWHPHQWV
x 2EWDLQDQXQGHUVWDQGLQJRILQWHUQDOFRQWUROUHOHYDQWWRWKHDX GLWLQRUGHUWRGHVLJQDXGLWSURFHGXUHVWKDWDUH DSSURSULDWHLQWKHFLUFXPVWDQFHVEXWQRWIRUWKHSXUSRVHRIH[ SUHVVLQJDQRSLQLRQRQWKHHIIHFWLYHQHVVRIWKH &RPSDQ\¶VLQWHUQDOFRQWURO$FFRUGLQJO\QRVXFKRSLQLRQLVH[SUHVVHG
x (YDOXDWH WKH DSSURSULDWHQHVV RI DFFRXQWLQJ SROLFLHV XVHG DQG W KH UHDVRQDEOHQHVV RI VLJQLILFDQW DFFRXQWLQJ HVWLPDWHVPDGHE\PDQDJHPHQWDVZHOODVHYDOXDWHWKHRYHUDOOSUHVHQWDWLRQRIWKHILQDQFLDOVWDWHPHQWV
x &RQFOXGH ZKHWKHU LQ RXU MXGJPHQW WKHUH DUH FRQGLWLRQV RU HYHQWV FRQVLGHUHG LQ WKH DJJUHJDWH WKDW UDLVH VXEVWDQWLDOGRXEWDERXWWKH&RPSDQ\¶VDELOLW\WRFRQWLQXHDVDJRLQJFRQFHUQIRUDUHDVRQDEOHSHULRGRIWLPH
:HDUHUHTXLUHGWRFRPPXQLFDWHZLWKWKRVHFKDUJHGZLWKJRYHUQDQFHUHJDUGLQJDPRQJRWKHUPDWWHUVWKHSODQQHG VFRSHDQGWLPLQJRIWKHDXGLWVLJQLILFDQWDXGLWILQGLQJVDQGFHUWDLQLQWHUQDOFRQWUROUHODWHGPDWWHUVWKDWZHLGHQWLILHG GXULQJWKHDXGLW
2
7RWKH%RDUGRI'LUHFWRUV
5RVH%RZO2SHUDWLQJ&RPSDQ\
3DVDGHQD&DOLIRUQLD
Required Supplementary Information
$FFRXQWLQJSULQFLSOHVJHQHUDOO\DFFHSWHGLQWKH8QLWHG6WDWHVRI$PHULFDUHTXLUHWKDWWKHPDQDJHPHQW¶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¶VUHVSRQVHVWRRXULQTXLULHVWKHEDVLFILQDQFLDOVWDWHPHQWVDQGRWKHUNQRZOHGJH ZH REWDLQHG GXULQJ RXU DXGLW RI WKH EDVLF ILQDQFLDO VWDWHPHQWV :H GR QRW H[SUHVV DQ RSLQLRQ RU SURYLGH DQ\ DVVXUDQFHRQWKHLQIRUPDWLRQEHFDXVHWKHOLPLWHGSURFHGXUHVGRQRWSURYLGHXVZLWKVXIILFLHQWHYLGHQFHWRH[SUHVV DQRSLQLRQRUSURYLGHDQ\DVVXUDQFH
2WKHU5HSRUWLQJ5HTXLUHGE\Government Auditing Standards
,QDFFRUGDQFHZLWKGovernment Auditing StandardsZHKDYHDOVRLVVXHGRXUUHSRUWGDWHG1RYHPEHURQ RXUFRQVLGHUDWLRQRIWKH&RPSDQ\¶VLQWHUQDOFRQWURORYHUILQDQFLDOUHSRUWLQJDQGRQRXUWHVWVRILWVFRPSOLDQFHZLWK FHUWDLQSURYLVLRQVRIODZVUHJXODWLRQVFRQWUDFWVDQGJUDQWD JUHHPHQWVDQGRWKHUPDWWHUV7KHSXUSRVHRIWKDW UHSRUWLVVROHO\WRGHVFULEHWKHVFRSHRIRXUWHVWLQJRILQWHUQ DOFRQWURORYHUILQDQFLDOUHSRUWLQJDQGFRPSOLDQFHDQG WKHUHVXOWVRIWKDWWHVWLQJDQGQRWWRSURYLGHDQRSLQLRQRQWKHHIIHFWLYHQHVVRIWKH&RPSDQ\¶VLQWHUQDOFRQWURORYHU ILQDQFLDO UHSRUWLQJ RU RQ FRPSOLDQFH 7KDW UHSRUW LV DQ LQWHJUDO SDUW RI DQ DXGLW SHUIRUPHG LQ DFFRUGDQFH ZLWK Government Auditing Standards LQ FRQVLGHULQJ WKH &RPSDQ\¶V LQWHUQDO FRQWURO RYHU ILQDQFLDO U HSRUWLQJ DQG FRPSOLDQFH
%UHD&DOLIRUQLD
1RYHPEHU
3 THIS PAGE INTENTIONALLY LEFT BLANK
4 ROSE BOWL OPERATING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
TABLE OF CONTENTS
I. OVERVIEW OF THE FI NANCIAL STATEMENTS
II. EXECUTIVE SUMMARY
III. FINANCIAL STATEMENTS
IV. FINANCIAL ANALYSIS
a. Statistical and Net Event Income Comparison
b. Net Event and Operati ons Income Comparison
c. Expense Comparison
d. Other Non-Operating Revenue
e. Balance Sheet Highlights
The objective of management’s discussion and analysis is to help readers of the Rose Bowl Operating Company’s (“RBOC”) financial statements be tter understand the financial p osition and operating activities for the fiscal year ended June 30, 2023 (FY 2023), with selected comparative information. This discussion should be read in conjunction with the financial statements. Unless otherwise indicated, years (2022, 2023) in this discussion refer to the fiscal year ended June 30.
I. OVERVIEW OF THE FI NANCIAL STATEMENTS
This discussion and analysis serves as an introduction to the RBOC’s basic financial statements. The RBOC’s financial statements consist of two components: 1) fund financ ial statements and 2) notes to the financial statements.
BASIC FINANCIAL STATEMENTS
The statement of net position presents information on all the RBOC’s assets and deferred outflows of resources, liabilities and deferred inflows, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the fin ancial position of the RBOC is improving or deteriorating.
The statement of revenues, expenses, and changes in net position presents information showing how the RBOC’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows.
The statement of cash flows presents information on the cash inflows and outflows of cash during the fiscal year, directly attributing cash flows to types of sources and uses an d reconciling those cash flows to the changes in net position for the fiscal year.
The basic financial statements can be found on pages 24-26 of this report.
NOTES TO THE BASIC FINANCIAL STATEMENTS
The notes provide additional information that is essential to a full understanding of the data provided in the financial statements. The notes to the financial statements can be found on pages 27-49 of this report.
5 ROSE BOWL OPERATING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
II. EXECUTIVE SUMMARY (STADIUM AND GOLF COURSE)
In FY 2023, Stadium and Golf Course key areas impacting events, operations and net income are highlighted below:
The RBOC is working to address the increasing demands for capi tal, events, golf complex maximization and continuing full contributions towards debt service.
Legacy Connections continues successful donor fundraising efforts and focusing on State and Federal grant applications.
Music Festival agreement renewal and renegotiation with AEG (f or a 5-year partnership) had a successful second year; yielding $1.3 million beyond the guaranteed $3 million annually.
Flea market net event income reaches a 10-year high (2 nd year in a row) due to marketing efforts and the new 5-year agreement, that commenced FY 2022.
Enterprise events continue to grow and outperform net event income expectations, while displacement events increase.
Golf operations continues generating strong revenues with the highest complex net income in the past five years due to higher average daily rate and event displacem ent income due to the increased number of events.
Events and demands for capita l projects created increased staffing demands that the RBOC has continuously been challenged with managing. Full time Employees at FY 2023 Year End was 34 on a budget of 38. Event staffing has especially been a challenge to fulfill with the increased events volume. Overall expenditures have increased in areas of security, janitorial, public safety, rentals, and event productions (plumbing, electrical, etc.) due to the labor market demands.
Two main factors have resulted in increased investment earning s. FY 2022 fair market valuation reduction to the debt service reserve fund did not reoccur in FY 2023; and the increased earnings in FY 2023 have been based on the City of Pasadena’s California Asset Management Program (CAMP) investments program for most of the RBOC’s investments effective October 2022.
Reduction in Non-Operating revenues is primarily due to no Legacy Connections transfer, delay in grant funding payments, and no City of Pasadena contribution toward debt service. 6 ROSE BOWL OPERATING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
III. FINANCIAL STATEMENTS
ROSE BOWL OPERATING COMPANY
STATEMENT OF REVENUES, EX PENSES, AND CHANGE IN NET POSITION - FULL ACCRUAL YEAR ENDING JUNE 30, 2023
PRELIMINARY YEAR-END CLOSE, PENDING FINANCIAL AUDIT
Rose Bowl Golf Course 2023 2022 Variance
Operating Revenues:
Green fees and other golf revenues - $ 6,570,865$ 6,570,865 $ 6,830,452 $ (259,587) $ Golf displacement - 1,180,918 1,180,918 765,084 415,834 Advertising 3,395,930 - 3,395,930 3,303,689 92,242 Facility rentals and parking revenues 24,538,851 148,804 24,687,655 16,627,155 8,060,500 Concessions 3,443,299 - 3,443,299 2,493,772 949,527 Pro shop - 186,901 186,901 127,246 59,655 Restaurant * - 2,383,989 2,383,989 379,412 2,004,577 Admission tax 1,016,866 - 1,016,866 376,772 640,094 Cost recoveries 9,546,503 - 9,546,503 7,946,944 1,599,559 Total operating revenues 41,941,449 10,471,477 52,412,926 38,850,526 13,562,400
Operating Expenses:
Salaries and benefits (Overhead) (4,325,575) (264,371) (4,589,946) (4,557,748) (32,197) Annual PERS Valuation Adj (111,533) (7,140) (118,673) 362,187 (480,860) General and administrative (4,889,751) (709,100) (5,598,851) (5,825,249) 226,398 Depreciation (11,202,189) (686,223) (11,888,412) (12,454,402) 565,990 Capital Preventative Maint.Expense (1,292,889) (301,720) (1,594,609) (1,363,220) (231,389) Events and parking expenses (23,452,983) (123,305) (23,576,288) (16,316,426) (7,259,862) Green fees and other golf expenses - (4,425,419) (4,425,419) (4,622,862) 197,443 Restaurant Expenses * - (2,216,440) (2,216,440) - (2,216,440) Total Operating Expenses (45,274,920) (8,733,718) (54,008,638) (44,777,720) (9,230,917) Operating Income (Loss) (3,333,471) 1,737,759 (1,595,712) (5,927,194) 4,331,482 Nonoperating Revenues (Expenses):
Investment gain 620,492 16,055 636,547 (3,997,109) 4,633,657 Interest expense (12,236,402) - (12,236,402) (12,275,424) 39,022 Other nonoperating revenues 4,582,158 3,316 4,585,474 24,433,621 (19,848,147) Total Nonoperating Revenues
(Expens es ) (7,033,752) 19,371 (7,014,380) 8,161,088 (15,175,469) Changes in Net Position (10,367,223) 1,757,130 (8,610,092) 2,233,894 (10,843,987) Net Position:
Beginning of Year (31,021,103) 19,910,681 (11,110,422) (13,344,316) 2,233,894 End of Year (41,388,326)$ 21,667,811$ (19,720,514)$ (11,110,422)$ (8,610,092)$
* 2023 Golf Restaurant Revenue / Expenses reported as Gross, as Golf Food and Beverage contract changed to Management agreement.
Combined Totals
7 ROSE BOWL OPERATING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
III. FINANCIAL STATEMENTS (CONTINUED)
ROSE BOWL OPERATING CO.
STATEMENT OF NET POSITION - FULL ACCRUAL
YEAR ENDING JUNE 30, 2023
Rose Bowl Golf Course 2023 2022 Variance
Assets:
Current assets:
Cash and investments 17,986,050 $ 17,365,729 $ 35,351,779 $ 36,112,298 $ ( 760,519)$ Accounts receivable, net of allowance 5,141,259 143,890 5, 285,149 5,961,352 ( 676,202) Lease Receivable 234,836 - 234,836 225,789 9,047 Inventory 56,684 259,069 315,753 122,897 192,856 Prepaid items 224,137 - 224,137 347,573 ( 123,436) Total Current Assets 23,642,966 17,768,688 41, 411,654 42,769,909 (1, 358,255) Noncurrent assets:
Due from Stadium - 353,949 353,949 - 353,949 Due from City of Pasadena 422,335 - 422,335 438,830 (16,495) Cash and investments restricted 10,633,043 - 10, 633,043 11,188,835 ( 555,792) Lease Receivable 244,205 - 244,205 479,042 ( 234,837) Capital assets:
Construction in progress - 203 203 970 (767) Other capital assets, net 143,371,734 5,595,479 148, 967,213 155,450,983 (6, 483,770) Total Noncurrent Assets 154,671,317 5,949,631 160,620,948 167,558,660 (6,937,712) Total Assets 178,314,283 23,718,319 202,032,603 210,328,569 (8,295,966) Deferred outflows of Resources:
Deferred refunding charge 1,396,004 - 1,396,004 1,776,732 (380,728) Outflows related to net pension liability 1,719,512 60,901 1,780,413 888,259 892,154 Total Deferred Outflows of Resources 3,115,516 60,901 3,176,417 2,664,991 511,426 Liabilities:
Current:
Accounts payable and other liabilities 3,783,173 1,193,859 4,977,032 6,003,963 (1,026,931) Accrued salaries and benefits 491,220 51,368 542,588 640,588 (98,000) Interest payable 3,076,339 - 3,076,339 3,110,530 (34,191) Due to Golf Course 353,949 - 353,949 - 353,949 Due to City of Pasadena 1,528,539 - 1,528,539 1,532,654 (4,115) Deposits 2,417,164 - 2,417,164 377,285 2,039,879 Unearned revenues 5,005,430 185,527 5,190,957 4,298,319 892,638 Current portion of advance 100,000 - 100,000 100,000 - Current portion compensated absences 167,040 6,086 173,126 185,287 (12,161) Current portion of long-term debt 5,185,893 51,769 5,237,662 4,485,617 752,045 Total Current Liabilities 22,108,747 1,488,609 23,597,356 20,734,243 2,863,113 Noncurrent:
Long-term advance 400,000 - 400,000 500,000 (100,000) Compensated absences 88,271 10,454 98,725 39,244 59,481 Long-term debt 196,290,172 465,918 196,756,090 199,532,435 (2,776,345) Net pension liability 3,406,173 120,238 3,526,411 1,390,048 2,136,363 Total Noncurrent Liabilities 200,184,616 596,610 200,781,226 201,461,727 (680,501) Total Liabilities 222,293,363 2,085,219 224,378,582 222,195,969 2,182,613 Deferred Inflows of Resources:
Deferred inflow related to Leasor 463,049 - 463,049 - 463,049 Deferred inflow related to
net pension liability 61,713 26,190 87,903 1,213,439 (1,125,536) Total Deferred inflows of Resources 524,762 26,190 550,952 1,213,439 (662,487) Net position:
Net investment in capital assets (29,223,333) 5,077,996 (24,145,337) (16,001,852) (8,143,485) Restricted for debt service 10,633,043 - 10,633,043 11,188,835 (555,792) Unrestricted (22,798,036) 16,589,815 (6,208,221) (6,297,404) 89,183 Total Net Position (41,388,326)$ 21,667,811$ (19,720,515)$ (11,110,421)$ (8,610,094)$ Totals
8 ROSE BOWL OPERATING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
Trend line represents high and current point.
IV. FINANCIAL ANALYSIS
A. Statistical and Fiscal Trends
During FY 2023 the Rose Bowl stadium hosted 24 displacement events and 12 flea market events with a combined attendance of 819,136, as well as 142 enterprise events includi ng: runs/walks, food truck events, parties, graduations, and filming. The Flea Market set a record annual a ttendance of 212,616 during FY 2023.
UCLA Football is starting to experience increases in per game a ttendance, while Americafest decreased in attendance.
ROSE BOWL OPERATING COMPANY
EVENT STATISTICS: EVENT MIX
YEAR ENDING JUNE 30, 2023
Major/Displacement
Major * Trend line
Event Event Type 2018 2019 2020 2021 2022 2023
1 U C L A 676478
2 R o s e B o w l G a m e 111011
3 M u s i c F e s t i v a l 20105 1 0
4 C o n c e r t s 551002
5 S o c c e r M a t c h e s 221002
6 A m e r i c a f e s t 4 t h o f J u l y C e l e b r a t i o n 111011 Total Major/Displacement 17 16 11 4 14 24
Flea Market 12 12 9 3 12 12
Number of Enterprise Events 191 178 125 111 132 142
* 2020: 9 months of operation and 2021: 4 UCLA games No Fans due to COVID
ROSE BOWL OPERATING COMPANY
EVENT STATISTICS: EVENT ATTENDANCE
YEAR ENDING JUNE 30, 2023
Major/Displacement
Major *T r e n d l i n e
Event Event Type 2018 2019 2020 2021 2022 2023
1 UCLA 248,134 251,486 137,860 - 227,500 153,063 2 Rose Bowl Game 80,072 84,313 69,814 - 78,345 75,284 3 Music Festival 36,735 - 25,092 - 108,884 224,644 4 Concerts 265,212 264,342 55,534 - - 16,853 5 Soccer Matches 109,053 111,252 34,019 - - 126,037 6 Americafest 4th of July
Celebration 20,606 17,744 17,924 - 14,569 10,639 Total Major/Displacement 759,812 729,137 340,243 - 429,298 606,520 Flea Market 151,749 153,585 126,674 60,176 209,616 212,616 Total Attendance 911,561 882,722 466,917 60,176 638,914 819,136 * 2020: 9 months of operation and 2021: 4 UCLA games No Fans due to COVID 9 ROSE BOWL OPERATING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
Trend line represents high and current point.
IV. FINANCIAL ANALYSIS (CONTINUED)
Stadium / Golf Complex Net Event Income Comparison:
Stadium and Golf net event income for FY 2023 was $18.5 million , close to the FY 2018 high net event income of $18.8 million. Highlights include - Football net event income is $9.2 million made up of UCLA $4.0 million - lower than prior years due to UCLA’s opponent schedule, and Rose Bowl Game $5.2 million, which is a 5-year high in net event income. The new Music Festival contract, in the second year of the 5-year contract, set a 5-year record of $4.3 million in net event income, or $1.3 million beyond the minimum threshold due to events’ successful financial performance. Other Major events (2 soccer matches, and 2 concerts) had a combined $2.1 million net event income, while Americafest had a net event loss of $467,000 in part due to the lower attendance and labor costs.
Enterprise events net income during FY 2023 was approximately $1.7 million $66,000 higher than FY 2022; which is a success given the reductions of available event days due to the 10 additional displacement events. The average per enterprise event net income was approximately $12,300, which is less than the FY 2022 amount of $14,500.
The Flea Market operated for the full year with net event income of $1.7 million, increasing the per event net income to $145,000, or $43,000 higher than the prior 5-year average, d ue to increased attendance and contracted RBOC share.
ROSE BOWL OPERATING COMPANY
NET EVENTS INCOME COMPARISON
YEAR ENDING JUNE 30, 2023 *
Summary Net Event Income 2018 2019 2020 2021 2022 2023 Trend line Stadium 18,807,422 $ 15,951,579 $ 14,724,361 $ 3,666,040 $ 14,314,999 $ 18,488,455 $ Golf - 154,399 61,638 2,407 261,179 25,496 Combined Net Event Income: 18,807,422$ 16,105,978$ 14,785,999$ 3,668,447$ 14,576,177$ 18,513,951$ *
Major/Dis placement Events - Fis cal Year: 2018 2019 2020 2021 2022 2023 Event Count 17 16 11 4 14 24
1. UCLA 5,113,153$ 4,429,625$ 4,346,696$ 635,891$ 4,752,393$ 3,982,199$
2. Rose Bowl Game (i) 5,001,444 4,950,473 4,439,981 690,739 5,064,791 5,223,832
3. Music Festiv al 2,227,803 - 2,845,446 - 1,378,330 4,335,027
4. Concerts 3,142,485 3,497,195 856,401 - - 854,683
5. Soccer 645,256 837,639 297,691 - - 1,233,319
6. Americafest July 4th Celebration (52,104) (170,869) (168,665) - - (467,987)
7. Other/Event Reconciliations/Development - (205,238) (46,639) 70,844 (113,777) (136,883) Total Major/Displacement Events Net Income 16,078,037 13,338,825 12,570,911 1,397,474 11,081,737 15,024,190 Enterprise Ev ents
1. Stadium 1,617,250 1,554,854 1,286,037 1,973,262 1,657,630 1,723,749
2. Golf Complex - 154,399 61,638 2,407 261,179 25,496 Total Enterprise Ev ents Net Income: 1,617,250 1,709,253 1,347,675 1,975,669 1,918,809 1,749,246 Flea Market 1,112,135 1,057,900 867,413 295,304 1,575,632 1,740,516 Total Net Ev ent Income: 18,807,422$ 16,105,978$ 14,785,999$ 3,668,447$ 14,576,177$ 18,513,951$ (i) Rose Bowl Game 2021 final payment during FY2023 is in non-operating revenues as it is for prior year event.
Average Net Event Income (by Event Type)
Displacement Event 945,767$ 833,677$ 1,142,810$ 349,369$ 791,553$ 626,008$ Enterprise Events 8,467 9,603 10,781 17,799 14,536 12,319 Flea Market 92,678 88,158 96,379 98,435 131,303 145,043 * 2020: 9 months of operation and 2021: 4 UCLA games No Fans due to COVID 10 ROSE BOWL OPERATING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
Trend line represents high and current point.
IV. FINANCIAL ANALYSIS (CONTINUED)
Golf Complex Key Statistics:
As high the demand for golf continues, the Brookside Golf Compl ex continues efforts to balance demand, course availability (given the increased displacement events), pricing, and reinvestment in course health, renovation, and future business concepts. Below are key statistics utilized to manage the golf course financial performance:
Total golf rounds of 135,000 generated a gross course revenue of $6.6 million. Total Revenues per Round was $48.62, increased from $43.13 in FY 2022.
A rounds per day average of 473 is consistent with the past 2 years.
Playable days were a low of 286 days due to 24 displacement ev ents days (which displaces golf several days in event load in-out etc).
Golf Complex Net Income (made up of the below operating units) totals a 5-year high of $2.7 million for FY 2023; with key drivers from Golf Course, Displacement/Parking, and Go lf Enterprise Events. Other significant revenue streams include Displacement/Parking revenues and Pro Shop reve nues. Displacement/Parking revenues are driven by the increased number of displacement events and Pro S hop revenues are driven by increased lessons and RBOC taking over the Pro Shop operation.
ROSE BOWL OPERATING COMPANY
GOLF COURSE STATISTICS / GROSS GOLF REVENUES
YEAR ENDING JUNE 30, 2023
*
Key Statistics 2018 2019 2020 2021 2022 2023 Trend line Rounds 143,246 135,945 117,204 179,280 158,559 135,144 Playable Days 339 321 278 353 327 286
Rounds/Day 423 423 422 508 485 473 Av erage Per Round 27.27 $ 27.01 $ 30.12 $ 35.24 $ 38.30 $ 42.66 $ Average Range Fees Per Round 4.84 4.43 4.68 4.56 4.83 5.96 Total Revenue Per Round 32.11 31.44 34.80 39.80 43.13 48.62 Gross Golf Revenues (in millions) 4.70 4.30 4.10 7.10 6.80 6.57
* 2020 has 9 months of operations and 3 months of fixed costs with no revenues due to COVID
ROSE BOWL OPERATING COMPANY
GOLF COMPLEX NET INCOME
YEAR ENDING JUNE 30, 2023
*
Fiscal Year 2018 2019 2020 2021 2022 2023 Trend line
Golf Course 1,339,124 $ 988,898$ 812,838$ 2,487,962$ 2,207,591$ 2,145,446$ Restaurant 490,856 449,091 310,978 188,677 379,412 167,549 Displacement / Parking - 436,438 289,714 - 765,084 1,180,918 Enterprise Ev ents - 115,484 31,467 2,407 261,179 25,496 Pro shop 17,865 16,338 11,371 32,628 127,246 186,904 Cost recoveries (non-event) 15,000 53,910 61,695 - (144,272) - Other Non-operting Revenues 453,598 156,912 97,010 18,496 (156,341) 16,055 Overhead Expenses (625,285) (787,464) (715,138) (830,476) (932,672) (973,471) Total Complex Net Income: 1,691,158$ 1,429,608$ 899,935$ 1,899,694$ 2,507,227$ 2,748,897$ * 2020 has 9 months of operations and 3 months of fixed costs with no revenues due to COVID 11 ROSE BOWL OPERATING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
IV. FINANCIAL ANALYSIS (CONTINUED)
B. Revenue/Expense, Net Event and Operations Income comparison (Stadium and Golf Complex)
The below chart and associated t able are comparisons of FY 2022 to FY 2023 revenues, expenses, debt service (Net), preventative maintenance expenditure and capital set aside (or designation from operations for preventative maintenance).
Revenues, Expenses, Debt Service (Net), and Preventative Maintenance Fiscal Years 2022 and 2023:
*COVID Impacted.
12 ROSE BOWL OPERATING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
Trend line represents high and current point.
IV. FINANCIAL ANALYSIS (CONTINUED)
Combined Net Event and Operations Income Comparison 5-Years:
Operating analysis excluding Depreciation and Nonoperating Revenues
Stadium
Key changes to Net Event and Operations Income were mainly due to the increased Stadium Net Event Income, less the full year Debt Service. The Net Operating Loss from st adium was $2.3 million after the Rose Bowl assumed the full $12.4 million in debt service (net of federal subsidies and reserves credits)
The FY 2023 Net Event Income is $18.5 million, overhead expenses of $9.3 million and investment gain/interest expense $11.6 million resulted with a Stadium Net Event and Operations loss of $2.3 million.
ROSE BOWL OPERATING COMPANY
STATEMENT OF OPERATING REVENUES, EXPENSES, AND NET OPERATING INCOME(LOSS) YEAR ENDING JUNE 30, 2023
SUMMARY 2018 2019 2020 2021 2022 2023 Trend line
Stadium Net Event and Operations
Income /(Loss) (976,964)$ (3,062,188)$ (5,449,368) $ (3,646,513) $ 2,369,462 $ (2,342,770) $ Golf Net Operations Income /(Loss) 1,691,158 1,429,608 899,935 1,899,719 2,507,230 2,748,894 Combined Stadium and Golf
Net Operating Income/(los s ) 714,194$ (1,632,579)$ (4,549,433) $ (1,746,794) $ 4,876,691 $ 406,124 $ Fiscal 2021 - 2022 City of Pasadena paid full or partial Debt Service (Interest Expense below reflects RBOC Share).
DETAILS
Stadium Net Event and Operations
Income /(Loss)
2018 2019 2020 2021 2022 2023 Trend line
Operating Rev enues / Expenses 38,169,096$ 36,227,585$ 27,935,904$ 8,087,414$ 30,225,641$ 41,941,449$ Events and parking expenses (20,043,593) (20,959,597) (13,214,188) (4,421,388) (15,910,642) (23,452,983) Net Event Income: (1) 18,125,503 15,267,988 14,721,716 3,666,026 14,314,999 18,488,466 Overhead Expens es
Salaries and benefits (3,675,602) (4,259,886) (4,706,761) (3,580,237) (4,289,386) (4,325,575) General and administrative (3,796,689) (3,982,472) (4,225,832) (3,610,074) (5,160,941) (4,889,751) Subtotal Overhead Expenses (7,472,291) (8,242,358) (8,932,593) (7,190,311) (9,450,327) (9,215,326) Net Event and Operations Income 10,653,212 7,025,630 5,789,123 (3,524,285) 4,864,671 9,273,140 Before Non Operating/Capital contributions, Bond subsidies, Depreciation and Annual PERs Valuation Adjust Inv estment Gain /(Loss) (2) (13,661) 2,130,531 863,381 (122,228) 31,596 620,492 Interest/Amortization Expense (3) (11,616,515) (12,218,348) (12,101,872) - (2,526,806) (12,236,402) Investment Gain/Interest Expense (11,630,176) (10,087,817) (11,238,491) (122,228) (2,495,210) (11,615,910) Stadium Net Event and Operations
Income /(Loss) (976,964)$ (3,062,188)$ (5,449,368)$ (3,646,513)$ 2,369,462$ (2,342,770)$ (1) Parking Expenses adjusted into Events and parking revenues/expenses in prior reported years. (2) Net Inv estment Gain/(Loss) adjusted for Fair Market Value $4.0 million FY 2022. (3) City of Pasadena Debt Serv ice Contribution: FY18-20 no City Contirbutions, FY21 $11.5M, FY22 $9.3M, FY23 no Contribution 13 ROSE BOWL OPERATING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
Trend line represents high and current point.
IV. FINANCIAL ANALYSIS (CONTINUED)
Golf Complex
Golf Complex Net Operating Income has a 5-year high of $2.7 mil lion, with key drivers of direct golf course and parking/displacement income.
Significant Year to Year changes:
Effective FY 2023 the restaurant operator contract changed from lease to a management structure, which increased costs due to first-year business start-up costs, reducing net.
Increased Parking/Displacement is due to 10 additional events displacing the golf operations and the golf facility charging the stadium for the golf displacement.
Due to the increased displacemen t events Golf Enterprise Events has a $240,000 reduction in net.
Fair-market valuation on inv estment gain was $16,000, or $172,000 better than the FY 2022 of $156,000 loss.
C. Expense Comparison
The RBOC has 5 key areas of operating expenses: Stadium Overh ead, Event Expenses, Debt Service, Golf Complex Overhead and Golf Course Direct expenses. Many of these expenses have experienced increases due to changes in market demands, driving costs higher than the CPI (Consumer Price Index). Key areas of increases include staffing market costs of retaining industry experienced staff, professional and contracted services in areas such as information technology, business development and legal services.
DETAILS
Golf Net Operations Income /(Loss) 2018 * 2019 2020 2021 2022 2023 Trend line Operating Revenues
Green fees and other golf revenues 4,600,506$ 4,302,350$ 4,131,359$ 7,137,906$ 6,830,452$ 6,570,865$ Green fees and other golf expenses (3,261,382) (3,313,453) (3,318,521) (4,649,944) (4,622,862) (4,425,419) Golf Course Net Income 1,339,124 988,897 812,838 2,487,962 2,207,591 2,145,446 Ancillary Net Income:
Restaurant 490,856 449,089 310,978 188,677 379,412 167,549 Parking/Displacement - 436,438 289,714 - 580,290 1,180,918 Golf Enterprise Events - 115,489 31,467 2,432 261,179 25,496 Pro shop 17,865 16,338 11,371 32,628 127,246 186,901 Cost Recovery (non-event) 15,000 53,910 61,695 - 40,522 - Total Operating Revenues: 1,862,845 2,060,161 1,518,063 2,711,699 3,596,241 1,560,864 Operating Expens es
Salaries and benefits (213,023) (249,380) (226,669) (222,492) (268,362) (264,371) General and administrative (412,262) (538,084) (488,469) (607,984) (664,309) (709,100) Total Overhead Expenses: (625,285) (787,464) (715,138) (830,476) (932,671) (973,471) Before Non Operating/Capital contributions, Depreciation and Annual PERs Valuation Adjustment Investment Gain /(Loss) 453,598 156,912 97,010 18,496 (156,341) 16,055 Golf Net Operations Income /(Loss) 1,691,158$ 1,429,608$ 899,935$ 1,899,719$ 2,507,230$ 2,748,894$ * American Golf Corp contract changed from 2018 lease Agreement to 2019 forward Management Agreement.
Key changes are RBOC retaining Parking/Displacement net. RBOC is also reserving $1 dollar per round for future capital demands. 14 ROSE BOWL OPERATING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
Trend line represents high and current point.
IV. FINANCIAL ANALYSIS (CONTINUED)
Stadium Overhead Expenses:
Stadium total overhead expenditures have maintained the FY 2020 spend rate of $9.1 - $9.3 million with growth of
4.7% since 2018 - based on CPI, contract renegotiations to market rates, and increased demands of events on the RBOC staff.
Salaries and Benefits have a growth rate of 4.6% due to market rate adjustments, promotions, and open full-time positions. Since 2018 salaries and benefits increased $650,000; Salaries increased by $520,000 mainly due to salary COLA, new Full-time employees in Legacy and Event suppor t, promotions, and market rate adjustments.
Benefits increased by $130,000 since FY 2018 with a growth rate of 13.1% due to cost of medical, vision, dental, and CalPERS. There were four fully or partially open budgeted FTE positions during FY 2023.
The General and Administrative (G&A) expenses have increased by $1.1 million or 29% since FY 2018 – with CPI and contract renegotiations on rates for most of the below significant areas:
Utilities: $280,000 (22% increase)
Insurance: $246,000 (160% increase)
Professional Service s (Legal, HR, IT, contracts): $221,000 (34% increase) Premium Seating (increased staffing due to events): $166,000 ( 57% increase) Government Affairs (new Gr ant opportunities): $128,000 Other: Advertising, dues, permits, banking: $38,000 (23% incre ase)
ROSE BOWL OPERATING COMPANY
STADIUM OVERHEAD EXPENSES
YEAR ENDING JUNE 30, 2023
Overhead Expens es :
Stadium * * * Current Yr
Fiscal Year: 2018 2019 2020 2021 2022 2023 % of Trend line Summary Category Expens es Total
Salaries and benefits (Overhead) 3,675,602 $ 4,259,886 $ 4,706,761 $ 3,580,899 $ 4,289,386 $ 4,325,575 $ 46.4% Annual PERs Valuation Adj 286,116 126,626 196,614 244,916 (182,143) 111,533 1.2% General and administrative 3,796,689 3,982,470 4,225,832 3,610,074 5,160,941 4,889,751 52.4% Stadium Total Overhead Expense: 7,758,407$ 8,368,982$ 9,129,207$ 7,435,888$ 9,268,184$ 9,326,859$ STADIUM DETAILS:
Salaries & Benefits
Salaries & Taxes 2,681,735$ 2,959,005$ 3,188,855$ 2,544,660$ 3,063,475$ 3,201,828$ 74% Benefits 993,866 1,300,880 1,517,907 1,036,239 1,225,929 1,123,747 26% Total Salaries & Benefits 3,675,602$ 4,259,886$ 4,706,761$ 3,580,899$ 4,289,403$ 4,325,575$ Annual PERs Valuation Adj 286,116 126,626 196,614 244,916 (182,143) 111,533 15 ROSE BOWL OPERATING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
Trend line represents high and current point.
IV. FINANCIAL ANALYSIS (CONTINUED)
Event Expenses:
The Rose Bowl Stadium experienced some changes to event operations which impacted event expenses. Event mix total cost in FY 2023 was $23.4 million and changes in the FY 2023 event mix have mitigated the increased expenses to reduce the per event average cost. Events, such as concerts, require increased security, public safety, and turf replacements; while Music Festivals and soccer matches generally have lower production costs, reducing event expenses.
Key significant areas of event expenditures continue to be public safety, security, ev ent production costs, parking/neighborhood traffic management and janitorial services. Between FY 2019 and FY 2023, the average expense per displacement event was reduced by $426,000 (7-concerts and soccer matches in FY2019 and 4 in FY 2023). During the same years the average per event expense for Enterprise and Flea Market have increased by $17,000 - $18,000, respectively per event.
ROSE BOWL OPERATING COMPANY
STADIUM OVERHEAD EXPENSES
YEAR ENDING JUNE 30, 2023
Overhead Expens es :
Stadium * * * Current Yr
Fiscal Year: 2018 2019 2020 2021 2022 2023 % of Trend line
STADIUM DETAILS:
General and administrative:
Utilities: Water, gas, power, refuse 1,305,004 $ 1,278,771 $ 1,426,906 $ 1,319,565 $ 1,481,509 $ 1,587,769 $ 32% Professional Serv ices: City Legal, HR, IT, Contract
Negotiation Support, Staff Development 654,948 816,145 825,768 880,712 1,497,174 876,079 18% Professional Services: Government Affairs - - - - 45,000 127,500 3% Contracted Services: Admin Support, Plumbing,
Electrical, Pest Control, Janitorial, Landscaping,
Security, Fleet/Fuel Maintenance, etc..
816,073 891,804 840,755 695,804 802,698 856,179 18% Insurance 154,383 96,387 122,867 205,059 375,740 400,749 8% Premium Seating Sales / Contract Services 289,184 275,283 313,835 193,730 304,298 455,383 9% Operating Leases/Rental Expense: Vehicles, Office
Equipment, Storage, etc.. 165,422 162,113 279,324 122,904 138,237 169,498 3%
Other: Advertising, dues, permits, banking fees. 168,231 218,090 194,915 102,622 297,983 206,255 4% Supplies: Medical, vehicle parts, electrical, plumbing
equipment, general (ie office/postage, reference
materials, communications/conferencing)
243,444 243,878 221,462 89,677 218,302 210,340 4%
Total General and administrative: 3,796,689$ 3,982,470$ 4,225,832$ 3,610,074$ 5,160,941$ 4,889,751$ * 2020: 9 months of operation and 2021: 4 UCLA games No Fans due to COVID ** 2022 Professional services increased by 700K mainly due to Legal Settlement (300K not recurring), revenue opportunity study, business development, staff development training, information technology and concessions consulting. 16 ROSE BOWL OPERATING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
Trend line represents high and current point.
IV. FINANCIAL ANALYSIS (CONTINUED)
Cost recovery as percentage of tot al event expenses is driven by contract event terms of what expenses are included in the license fees. Displacement events expense recovery will vary between the types of event contracts.
For example, Music Festival events have a cost recovery of almo st 100% and events such as concerts, soccer matches and Americafest are closer to 20% to 40%, for an average per displacement event cost recovery of 42%. Effective FY 2023, Enterprise event contracts incl ude an increased License fee to account for recurring costs, therefore Enterprise event s average cost recovery has de creased to 30% from a historical 70%, while net event income has increased by approximately $200,000 since FY 2019. The Flea market events have consistently been in the 65-80% cost range of recovery of total event costs and FY 2023 average 71% of total event costs.
ROSE BOWL OPERATING COMPANY
STADIUM EVENT EXPENSES
YEAR ENDING JUNE 30, 2023
Event Expenses:
Stadium *C Y % of
Fiscal Year: 2018 2019 2020 2021 2022 2023 Total
Category Expenses
PUBLIC SAFETY 3,787,906$ 3,801,844$ 2,313,345$ 173,832$ 3,043,575$ 4,384,098$ 19% EVENT PRODUCTION 2,663,070 2,863,129 1,835,962 2,118,078 2,890,258 3,770,187 16% PARKING 3,233,994 3,466,867 2,173,142 401,140 2,736,246 4,845,744 21% SECURITY 3,810,730 3,963,795 2,388,194 578,521 2,495,189 2,952,586 13% JANITORIAL 2,026,301 2,326,516 1,353,806 346,816 1,406,661 2,287,733 10% CATERING 861,531 853,215 615,555 12,194 719,441 1,151,109 5% RENTALS 858,751 1,004,703 531,274 105,947 675,934 954,945 4% FIELD AND SOD RELATED 1,129,499 964,240 610,247 52,086 575,900 986,988 4% RBOC STAFFING 324,418 425,588 475,189 490,461 466,200 470,115 2% SHUTTLE EXP 489,581 498,567 316,318 - 360,666 765,364 3% PROFESSIONAL CONSULTING 147,647 201,398 152,684 15,599 226,033 480,642 2% PERMITS AND FEES 147,344 154,158 133,220 26,821 130,494 177,744 1% TEMP SUPPORT 165,318 222,679 126,033 68,588 124,595 139,556 1% ADVERTISING 397,502 212,899 189,217 31,304 59,432 86,172 0% Stadium Event Expens es : 20,043,593$ 20,959,597$ 13,214,188$ 4,421,388$ 15,910,624$ 23,452,983$ * 2020: 9 months of operation and 2021: 4 UCLA games No Fans due to COVID
Event Type Expens e Review: Trend line
Displacement Events Expense 18,636,201$ 19,755,237$ 12,202,483$ 924,804$ 13,519,110$ 19,403,060$ Average Per Event Expense 1,096,247 1,234,702 1,109,317 231,201 965,651 808,461 Displacement Events Counts 17 16 11 4 14 24 Enterprise Events Expense 1,407,392$ 1,204,360$ 1,011,705$ 3,416,019$ 1,906,500$ 3,474,402$ Average Per Event Expense 7,369 6,766 8,431 30,775 14,443 24,468 Enterprise Events Counts 191 178 120 111 132 142 Flea Market Events Expense 337,460$ 354,329$ 264,417$ 80,552$ 485,014$ 575,521$ Average Per Event Expense 28,122 29,527 29,380 26,851 40,418 47,960 Flea Market Events 12 12 9 3 12 12 Average per event cos t recovery:
Displacement 331,378$ 271,256$ 411,629$ 125,192$ 434,321$ 337,111$ % of Avg Expenses 30% 22% 37% 54% 45% 42%
Enterprise Events 5,301$ 8,833$ 12,180$ 23,037$ 10,102$ 7,372$ % of Avg Expenses 72% 131% 144% 75% 70% 30%
Flea Market 18,451$ 19,164$ 19,264$ 18,614$ 35,470$ 34,089$ % of Avg Expenses 66% 65% 66% 69% 88% 71%
Cost Recovery:
Displacement 5,633,430$ 4,340,090$ 4,527,918$ 500,768$ 6,080,490$ 8,090,670$ Enterprise Events 1,012,526 1,572,329 1,461,598 2,557,132 1,333,477 1,046,771 Flea Market 221,411 229,968 173,378 55,843 425,639 409,062 Total Cost Recovery: 6,867,366 6,142,387 6,162,895 3,113,743 7,839,607 9,546,503 Cost Recovery % of Expenses 34% 29% 47% 70% 49% 41%
17 ROSE BOWL OPERATING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
IV. FINANCIAL ANALYSIS (CONTINUED)
D. Other Non-Operating Revenue:
Total Other Non-Operating revenue of $4.5 million are mainly re curring sources. Recurring sources include Legacy Connections, federal government subsidies on debt servic e, cell site rental and utilities cost recovery contracted to FY 2025. Year-to-Year differences were mainly due to the FY 2022 Non-Recurring sources not occurring in FY 2023 of $10.0 Legacy Connections landed Shuttered Venue Operators Grant and City of Pasadena net debt contribution was $9.3 million.
ROSE BOWL OPERATING COMPANY
OTHER NONOPERATING REVENUES
YEAR ENDING JUNE 30, 2023
Summary: 2023 2022 Details Ref.
Legacy Connections - $ 700,000$ #1 Recurring Sources 4,585,474 4,475,616 #2-10 Non- Recurring Sources - 19,258,006 #11-12 Total non-operating Revenue
Sources Fiscal 2022 / 2023 4,585,474$ 24,433,622 $
Estimated recurring funds 4.5M to 5.2M annuall y.
Details: 2023 2022 Variance
Sources Bus.Unit 4,585,474 $ 24,433,622 $ (19,848,147) $ Legacy and Recurring:
1 Legacy Connections Stadium - 700,000 (700,000) No FY23 Transfer; Legacy in progress of securing 3 grants totaling $3.7M: State of California $3M w ater line pending budget, Dept of Interior $500K pending drawdown, CA Nonprofit Security Grant $200K pending reimb. 2 ToR - Rose Bowl Game 2021 final payment Stadium 666,667 666,667 - 3 ToR - Contribution Stadium 75,000 75,000 - 4 Music Festiv al per ticket contribution Stadium 224,644 108,884 115,760 5 Concessionaire contribution 3% of revenues Stadium 234,603 170,199 64,404 Golf 3,316 47,572 (44,256)
6 Subisidy from 2010 Bonds Stadium 2,736,642 2,740,792 (4,149) 7 Misc. Non-Operating: Finance Credits Stadium 9,165 6,577 2,588 8 Misc. Non-Operating: Utilities Recovery Stadium 397,245 426,219 (28,974) 9 Misc. Non-Operating: ATM Mach use Stadium 6,668 2,183 4,485 10 Misc. Non-Operating: Cell Site rentals* Stadium 231,524 231,524 - Sub-total Recurring: 4,585,474 5,175,616 (590,142) * 2023 Cell site rentals agreement adjusted for GASB87 (lease considerations) Non- Recurring Sources
11 City of Pasadena Contribution to Bond Debt Stadium - 9,258,005 (9,258,005) 12 Shuttered Venue Operators Grant (SVOG) Stadium - 10,000,000 (10,000,000) Sub-total non recurring: - 19,258,005 (19,258,005) Total Other nonoperating revenue: 4,585,474$ 24,433,622 $ (19,848,147) $ Reference Income Statement: Other nonoperating revenue
18 ROSE BOWL OPERATING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
IV. FINANCIAL ANALYSIS (CONTINUED)
E. Balance Sheet Highlights:
On a full accrual basis, the Net Position decreased by $8.610 million, as outlined by the Statement of Revenue and Expenses (Income Statement) and below Statement of Net Position (Balance Sheet).
Key areas of changes in Assets include cash, accounts receivables, capital and debt related:
CHANGE IN CASH
Total Unrestricted Cash balances at year end decreased by $556,000 mainly due to:
Stadium cash decreased by $2.2 million net of:
$3.7 million less Capital,
$1.9 million less Operating, and
$3.5 million higher event deposits
Golf Complex cash increased by $1.4 million net of
$45,000 less Capital,
$604,000 increased Operating ma inly due to the change in Restaurant operating contract* $837,000 increase Golf Course mainly due to increased rates.
*During FY 2023 the Restaurant contract was changed from Lease agreement to a Management Agreement. This means RBOC is to collect all cash at the restaurant for sales and pay all expenditures directly - versus a lease deal where RBOC would collect from the operator a percentage of sales. American Golf Corp. has managed the restaurant operations since the transition in August 2022.
ROSE BOWL OPERATING CO.
STATEMENT OF NET POSITION SUMMARY (ASSETS - LIABLITIES) YEAR ENDING JUNE 30, 2023
2023 2022 Variance
Assets:
Total Current Assets 41,411,654$ 42,769,909$ (1,358,255)$
Total Noncurrent Assets 160,620,948 167,558,660 (6,937,712) Total Assets 202,032,602$ 210,328,569$ (8,295,967)$ Total Deferred Outflows of Resources 3,176,417 2,664,991 511,426 Liabilities:
Total Current Liabilities 23,597,356$ 20,734,243$ 2,863,113$ Total Noncurrent Liabilities 200,781,226 201,461,727 (680,501) Total Liabilities 224,378,582$ 222,195,969$ 2,182,613 Total Deferred inflows of Resources 550,953 1,213,439 (662,486) Assets Net Liabilities: (19,720,516)$ (11,110,421)$ (8,610,095)$
Totals
19 ROSE BOWL OPERATING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
IV. FINANCIAL ANALYSIS (CONTINUED)
Balance Sheet highlights
CHANGE IN CASH
CHANGE IN ACCOUNTS RECEIVABLE:
Accounts Receivables decreased by $676,000:
Stadium Accounts Receivables are less than the prior year by $472,000 mainly due to events. o Events less by $1.4 million – FY 2022 fourth quarter had more events and associated billing than FY 2023 o Non-Events less by $578,000 - pr ior year Legacy $300,000, Payroll related taxes due $180,000 and Wireless carrier Accounts Receivable $100,000.
o Other Accounts Receivables inc reased by $1.5 million. At year-end there were $1.4 million in subsidies due from the Federal Government and the balance is capital fund due from concessionaire.
Golf Accounts Receivable is less by $204,000 mainly due to:
o Inter-company due from Stadium decreased while increased banqu et deposits for a net decrease of $131,000.
o Capital fund due from concessionaire not recurring in FY 2023.
ROSE BOWL OPERATING CO.
STATEMENT OF NET POSITION SUMMARY (CASH)
YEAR ENDING JUNE 30, 2023
2023 2022 Variance
Cash Summary
Rose Bowl 17,986,050 $ 20, 155,550$ (2,169,500) $ Golf Course 17,365,729 15, 956,749 1,408,980 Cash Summary Total 35,351,779 $ 36, 112,299$ (760,520) $ Cash and investments restricted 10,633,043 11, 188,835 (555,792) Cash Details
Rose Bowl
Capital 11,886,387 $ 15, 620,865$ (3,734,478) $ Operating 2,384,240 4, 314,447 (1,930,207) Events Deposits 3,715,423 220,237 3,495,186 Total 17,986,050$ 20, 155,550$ (2,169,500) $ Golf Complex
Capital 3,597,992 $ 3, 643,515$ (45,524) $ Operating 8,482,640 7, 877,818 604,822 Golf Course 5,263,086 4, 426,164 836,922 Event Deposits 22,011 9,252 12,759 Total 17,365,729$ 15,956,749$ 1,408,980$ Cash and investments restricted 10,633,043$ 11,188,835$ (555,792)$ Totals
20 ROSE BOWL OPERATING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
IV. FINANCIAL ANALYSIS (CONTINUED)
Balance Sheet highlights
CHANGE IN ACCOUNTS RECEIVABLE
CHANGE IN CAPITAL ASSETS:
Capital assets decreased by $6.5 million mainly due to $11.8 mi llion in depreciation offset by changes to construction in progress and ne w assets of $5.3 million ($3.6 m illion in actuals assets, and $1.6 million in Lease Asset adjustments due to GASBs 87 and 96) and Golf Complex increased by $151,000.
ROSE BOWL OPERATING CO.
STATEMENT OF NET POSITION SUMMARY (ACCOUNTS RECEIVABLE) YEAR ENDING JUNE 30, 2023
2023 2022
Accounts Receivable Summary
Rose Bowl 5,141,259 $ 5, 612,763$ (471,504) $ Golf Course 143,890 348,589 (204,699) Accounts Receivable Total 5,285,149 $ 5, 961,352$ (676,202) $ Accounts Receivable Details
Rose Bowl
Events 2,708,575$ 4,098,120$ (1,389,545)$ Non-Events 2,468 580,331 (577,862) Other 2,430,216 934,313 1,495,903 Total 5,141,259$ 5,612,764$ (471,505)$ Allowance for Doubtful Accounts (included in
Rose Bowl Total) (703,687) (381,884) (321,803) Golf Complex
Golf Course 118,992$ 250,416$ (131,423)$ Other 24,898 98,174 (73,276) Total 143,891$ 348,590$ (204,699)$ Totals
CHANGE IN CAPITAL
YEAR ENDING JUNE 30, 2023
Summary:
2023 2022 Variance
Stadium 143,371,734$ 149,320,201$ (5,948,467)$
Golf Course 5,595,479 6,130,782 (535,303) Total Other capital assets, net 148,967,213$ 155,450,983$ (6,483,770)$ Combined Construction in progress 203$ 970$ (767)$ Change in Capital (6,484,537)$
21 ROSE BOWL OPERATING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
IV. FINANCIAL ANALYSIS (CONTINUED)
Balance Sheet highlights
CHANGE IN DEBT
Outstanding debt decreased by $2.0 million during FY 2023 mainly due to principal payments on the 2016 and 2018 Bonds ($4.4 million), one year of the 2016 bond premium amortiz ation ($550,000), one year of the 2018 bond premium amortization ($178,000) net of accreted interest amorti zation (i) of $1.7 million and Lease Liability
GASB 87-96 Adjustments totaling $1.5 million.
Detail:
Stadium
June 30, 2023 June 30, 2022 Variance
Building and improvements 258,808,326 $ 255,258,313 $ 3,550,013 $ Machinery and equipment 18,402,334 18,402,334 - Sub-total 277,210,660 273,660,647 3,550,013
Lease/Subscription Assets (GASB87/96) 1,619,400 56,085 1,563,315 Less accumulated depreciation (135,458,327) (124,396,531) (11,061,795) Total NBV/Other Capital Asset, net 143,371,734 $ 149,320,201 $ (5,948,467) $ GASB87-96 Amortization of Lease/Subscription Assets (140,397)$ (21,553) $ (118,843) Golf Course , ,
Building and improvements 13,883,261$ 13,596,767$ 286,494$ Machinery and equipment 1,634,532 1,770,106 (135,574) Sub-total 15,517,793 15,366,873 150,920
Less accumulated depreciation (9,922,314) (9,236,091) (686,223) Total NBV/Other Capital Asset, net 5,595,479$ 6,130,782$ (535,303)$ Reference: Balance Sheet: Other capital asset, net
Construction in Progress 203$ 970$ (767)$
ROSE BOWL OPERATING COMPANY
CHANGE IN DEBT
YEAR ENDING JUNE 30, 2023
Summary: 2023 2022
Long-Term Debt(Stadium) 194,970,165$ 198,958,988$ (3,988,823)$ Current Portion of Long-Term Debt (Stadium) 4,975,000 4,433,848 541,152 Lease/Subscription Liability (GASB87/96 Adjustment) 1,530,899 55,761 1,475,139 Long-Term Debt(Golf) 465,918 517,687 (51,769) Current Portion of Long-Term Debt (Golf) 51,769 51,769 - Total Debt 201,993,752$ 204,018,052$ (2,024,300)$ 22 ROSE BOWL OPERATING COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
IV. FINANCIAL ANALYSIS (CONTINUED)
Balance Sheet highlights
CHANGE IN DEBT
(i) Accreted Interest is a discount rate on bonds amortized over the life of the 2010 bond.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the RBOC’s finances. Questions concerning any of the information provided in this report, or requests for additional financial information, should be addressed to the RBOC Finance Office ([email protected]) , Rose Bowl Operating Company, 1001 Rose Bowl Dr., Pasadena, California 91103.
Details:
Stadium
June 30, 2023 June 30, 2022 Variance
2010 Revenue Bonds 125,648,265 $ 125,648,265 $ - $ 2016 Revenue Bonds 17,630,000 19,885,000 (2,255,000) 2016 Bond Premium 2,063,260 2,613,463 (550,203) 2018 Bond and Premium 39,635,390 41,968,712 (2,333,322) Accreted Interest 14,968,251 13,277,396 1,690,854 Lease/Subscription Liability (GASB87/96 Adjustment) 1,530,899 55,761 1,475,139 Total Debt Related: 201,476,065 $ 203,448,597 $ (1,972,532) $ Golf Course
* Golf Course Debt Now includes
Long Term Note Due American Golf (15 year schedule) 517,687 569,455 (51,768) Total Debt 201,993,752$ 204,018,052 $ (2,024,299) $ 23 ROSE BOWL OPERATING COMPANY
Statement of Net Position
June 30, 2023
Assets:
Current:
Cash and investments 17,986,050$ 17,365,729 $ 35,351,779$ Accounts receivable, net of allowance of $703,687 for the Rose Bowl 5,141,259 143,890 5,285,149 Lease receivable 234,836 - 234,836 Inventory 56,684 259,069 315,753 Prepaid items 224,137 - 224,137 Total Current Assets 23,642,966 17,768,688 41,411,654 Noncurrent:
Due from City of Pasadena 422,335 - 422,335
Due from Stadium - 353,949 353,949 Cash and investments restricted 10,633,043 - 10,633,043 Lease receivable 244,205 - 244,205 Capital assets:
Construction in progress - 203 203 Other capital assets, net 143,371,734 5,595,479 148,967,213 Total Noncurrent Assets 154,671,317 5,949,631 160,620,948 Total Assets 178,314,283 23,718,319 202,032,602 Deferred Outflows of Resources:
Deferred refunding charge 1,396,004 - 1,396,004 Outflows related to net pension liability 1,719,512 60,901 1,780,413 Total Deferred Outflows of Resources 3,115,516 60,901 3,176,417 Liabilities:
Current:
Accounts payable and other liabilities 3,783,173 1,193,859 4,977,032 Accrued salaries and benefits 491,220 51,368 542,588 Interest payable 3,076,339 - 3,076,339 Due to Golf Course 353,949 - 353,949 Due to City of Pasadena 1,528,539 - 1,528,539 Deposits 2,417,164 - 2,417,164 Unearned revenue 5,005,430 185,527 5,190,957 Current portion of long-term advance 100,000 - 100,000 Current portion compensated absences 167,040 6,086 173,126 Current portion of long-term debt 5,185,893 51,769 5,237,662 Total Current Liabilities 22,108,747 1,488,609 23,597,356 Noncurrent:
Long-term advance 400,000 - 400,000 Compensated absences 88,271 10,454 98,725 Long-term debt, net of current portion 196,290,172 465,918 196,756,090 Net pension liability 3,406,173 120,238 3,526,411 Total Noncurrent Liabilities 200,184,616 596,610 200,781,226 Total Liabilities 222,293,363 2,085,219 224,378,582 Deferred Inflows of Resources:
Inflows related to lessor leases 463,049 - 463,049 Inflows related to net pension liability 61,713 26,190 87,903 Total Deferred Inflows of Resources 524,762 26,190 550,952 Net Position:
Net investment in capital assets (29,223,333) 5,077,996 (24,145,337) Restricted for debt service 10,633,043 - 10,633,043 Unrestricted (22,798,036) 16,589,815 (6,208,221) Total Net Position (41,388,326) $ 21,667,811 $ (19,720,515) $ Rose Bowl Golf Course Total
The accompanying notes are an integral part of these financial statements. 24 ROSE BOWL OPERATING COMPANY
Statement of Revenues, Expenses, and
Changes in Net Position
Year Ended June 30, 2023
Operating Revenues:
Green fees and other golf revenues -$ 6, 570,865$ 6,570,865$ Parking revenue - 1, 180,918 1,180,918 Advertising revenue 3,395,930 - 3,395,930 Facility rentals 24,538,851 148,804 24,687,655 Concessions 3,443,299 - 3,443,299 Pro shop - 186,901 186,901 Restaurant - 2, 383,989 2,383,989 Admission tax 1,016,866 - 1,016,866 Cost recoveries 9,546,503 - 9,546,503 Total Operating Revenues 41,941,449 10,471,477 52,412,926 Operating Expenses:
Salaries and benefits 4,325,572 264,371 4,589,943 Annual PERS valuation adjustment 111,533 7,140 118,673 General and administrative 4,889,751 709,100 5,598,851 Depreciation/amortization 11,202,192 686,223 11,888,415 Capital preventative maintenance 1,292,889 301,720 1,594,609 Events and parking 23,452,983 123,305 23,576,288 Green fee and other golf expenses - 4, 425,419 4,425,419 Restaurant - 2, 216,440 2,216,440 Total Operating Expenses 45,274,920 8, 733,718 54,008,638 Operating Income (Loss) (3,333,471) 1, 737,759 (1,595,712) Nonoperating Revenues (Expenses):
Investment income (loss) 620,492 16,055 636,547 Interest expense (12,236,402) - (12,236,402) Other nonoperating revenues 4,582,158 3,316 4,585,474 Total Nonoperating Revenues (Expenses) (7,033,752) 19,371 (7,014,381) Changes in Net Position (10,367,223) 1, 757,130 (8,610,093) Net Position:
Beginning of Year (31,021,103) 19,910,681 (11,110,422) End of Year (41,388,326)$ 21,667,811$ (19,720,515)$ Rose Bowl TotalGolf Course
The accompanying notes are an integral part of these financial statements. 25 ROSE BOWL OPERATING COMPANY
Statement of Cash Flows
Year Ended June 30, 2023
Cash Flows from Operating Activities:
Cash received from customers 31,266,351$ 473,324 $ 31,739,675 $ Cash paid to employees for services (9,253,482) (985,993) (10,239,475) Cash paid to suppliers for goods and services (24,775,357) 2,182,964 (22,592,393) Other cash receipts 13,959,299 - 13,959,299 Net Cash Provided by Operating Activities 11,196,811 1,670,295 12,867,106 Cash Flows from Non-Capital
Financing Activities:
Contributions 91,146 (78,765) 12,381 Other nonoperating revenues 1,845,739 3,316 1,849,055 Net Cash Provided (Used) by Non-Capital Financing Activities 1,9 36,885 (75,449) 1,861,436 Cash Flows from Capital and Related Financing Activities:
Acquisition of capital assets (3,550,014) (150,153) (3,700,167) Payment on advance (100,000) - (100,000) Interest subsidy on bonds payable 2,736,642 - 2,736,642 Principal payments on long-term debt (4,641,747) (51,768) (4,693,515) Interest payments on long-term debt (10,924,360) - (10,924,360) Net Cash Used in Capital and Related Financing Activities (16,47 9,479) (201,921) (16,681,400) Cash Flows from Investing Activities:
Investment gain (loss) 620,492 16,055 636,547 Net Cash Provided by Investing Activities 620,492 16,055 636,547 Net Increase (Decrease) in Cash and Cash Equivalents (2,725,291) 1,408,980 (1,316,311) Cash and Cash Equivalents at Beginning of Year 31,344,384 15,956,749 47,301,133 Cash and Cash Equivalents at End of Year 28,619,093$ 17,365,729$ 45,984,822$ Cash and investments 17,986,050$ 17,365,729 $ 35,351,779 $ Cash and investments restricted 10,633,043 - 10,633,043 Total reported on Statement of Net Position 28,619,093 17,365,729 45,984,822 Cash and cash equivalents at end of year 28,619,093$ 17,365,729$ 45,984,822$ Operating Income (Loss) (3,333,471)$ 1,737,759 $ (1,595,712) $ Adjustments to Reconcile Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Depreciation/amortization 11,202,192 686,223 11,888,415 (Increase) decrease in accounts receivable 471,504 204,700 676,204 (Increase) decrease in lease receivable 225,790 - 225,790 (Increase) decrease in inventory (56,165) (136,691) (192,856) (Increase) decrease in prepaid assets 120,776 2,660 123,436 (Increase) decrease in deferred outflows related to pension (871,846) (20,308) (892,154) Increase (decrease) in accounts payable and accrued expenses (88,139) (938,794) (1,026,933) Increase (decrease) in accrued salaries and benefits (78,785) (19,215) (98,000) Increase (decrease) in deposits 2,039,879 - 2,039,879 Increase (decrease) in lease liability (32,779) - (32,779) Increase (decrease) in subscription liability (198,968) - (198,968) Increase (decrease) in deferred revenue 772,818 119,820 892,638 Increase (decrease) in compensated absences 40,627 6,692 47,319 Increase (decrease) in net pension liability 2,079,650 56,713 2,136,363 Increase (decrease) in deferred inflows related to pension (1,096,272) (29,264) (1,125,536) Net Cash Provided by Operating Activities 11,196,811$ 1,670,295$ 12,867,106$ Non-Cash Investing, Capital, and Financing Activities:
Purchase of capital assets through lease and subscription-based IT agreement financing (1,703,710) $ - $ (1,703,710)$ Accretion of interest on bonds payable 1,690,855 - 1,690,855 Amortization of deferred charge and bond discounts/premiums 380,728 - 380,728 Rose Bowl TotalGolf Course
Reconciliation of Cash and Investments to Amounts
Reported on the Statement of Net Position:
Reconciliation of Operating Income (Loss) to Net Cash
Provided by Operating Activities:
The accompanying notes are an integral part of these financial statements. 26 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
25*$1,=$7,21$1'6800$ 5<2)6,*1,),&$17$&&2817,1*32/,&,(6
$ %DVLVRI3UHVHQWDWLRQ
7KH5RVH%RZO2SHUDWLQJ&RPSDQ\
WKH&RPSDQ\
ZDVLQFRUSRUDWHG RQ-DQXDU\
DVDOHJDOO\VHSDUDWH
HQWLW\ZLWKWKHSULPDU\SXUSRVHRIUHWXUQLQJHFRQRPLFDQGFLYLFYDOXHWRWKH&LW\RI3DVDGHQD&DOLIRUQLD WKH&LW\
E\PDQDJLQJDZRUOGFODVVVWDGLXPDQGDSURIHVVLRQDOTXDOLW\JROIFRXUVHFRPSOH[%URRNVLGH0XQLFLSDO*ROI&RXUVH
WKH *ROI &RXUVH
LQ D UHVLGHQWLDO RSHQVSDFH HQYLURQPHQW $ I RXUWHHQPHPEHU %RDUG RI 'LUHFWRUV JRYHUQV WKH&RPSDQ\7KH%RDUGRI'LUHFWRUVFRQVLVWVRIWKH&LW\0DQDJH UWZRPHPEHUVIURPWKH&LW\0D\RU¶VRIILFH VHYHQ PHPEHUV DSSRLQWHG E\ WKH &LW\ RQH PHPEHU IURP WKH 3DVDGHQD 7RXUQDPHQW RI 5RVHV )RXQGDWLRQ
D VHSDUDWH QRWIRUSURILW HQWLW\ XQUHODWHG HLWKHU WR WKH &LW\ RU WKH &RPSDQ\ RQH PHPEHU IURP WKH
8QLYHUVLW\RI&DOLIRUQLD/RV$QJHOHV
8&/$
RQHPHPEHUIURPWKHMRLQW&LW\&RXQFLODQGRQHQRQYRWLQJPHPEHU IURPWKH3DVDGHQD&HQWHU2SHUDWLQJ&RPSDQ\7KHVHRSHUDWLRQVFR QVWLWXWHSDUWRIWKHRYHUDOOILQDQFLDOUHSRUWLQJ HQWLW\RIWKH&LW\DQGDUHDFFRXQWHGIRUDVDGLVFUHWHO\SUHVHQWHGFRPSRQHQWXQLWLQWKH&LW\¶V$QQXDO&RPSUHKHQVLYH )LQDQFLDO 5HSRUW FRQVLVWHQW ZLWK DFFRXQWLQJ SULQFLSOHV JHQHUDOO \ DFFHSWHG LQ WKH 8QLWHG 6WDWHV RI $PHULFD 5HYHQXHVDQGH[SHQVHVRIWKH&RPSDQ\LQFOXGHGLUHFWUHYHQXHVDQGH[SHQVHVDQGFHUWDLQDOORFDWLRQVIURPWKH &LW\
% %DVLVRI$FFRXQWLQJ
7KH&RPSDQ\LVDFFRXQWHGIRUDVDQHQWHUSULVHIXQG
SURSULHWDU\ IXQGW\SH
$IXQGLVDQDFFRXQWLQJHQWLW\ZLWKD
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
& &ODVVLILFDWLRQRI5HYHQXHV
Operating revenues FRQVLVWRIFKDUJHVWRFXVWRPHUVIRUVDOHVDQGXVHRIWKHIDFLOLWLHVNonoperating revenues FRQVLVW RILQYHVWPHQWHDUQLQJVDQGRWKHUQRQRSHUDWLQJLQFRPH&DSLWDOF RQWULEXWLRQVFRQVLVWRIFRQWULEXWHGFDSLWDODVVHWV
' &DSLWDO$VVHWV
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
7KHHVWLPDWHGXVHIXOOLYHVRIWKHDVVHWVDUHDVIROORZV
%XLOGLQJDQGLPSURY HPHQWV \HDUV
,PSURY HPHQWVRWKHUWKDQEXLOGLQJ
\HDUV
0DFKLQHU\DQGHTXLSPHQW
\HDUV
( /HDVH6XEVFULSWLRQ$VVHWV
5LJKWWRXVHOHDVHVXEVFULSWLRQDVVHWVDUHUHSRUWHGLQWKHDSSOLFDEOHHQWHUSULVHIXQGFROXPQLQWKHILQDQFLDOVWDWHPHQWV 6XFKDVVHWVDUHUHFRUGHGDWWKHSUHVHQWYDOXHRIWKHOHDVHVXEVFULSWLRQOLDELOLW\LQFOXGLQJH[SHQVHVWRSODFHWKHDVVHW LQWRVHUYLFHDQGDUHDPRUWL]HGRYHUWKHOHVVHURIWKHOHDVHVXEVFULSWLRQWHUPRUWKHDVVHW¶VXVHIXOOLIH 27 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
25*$1,=$7,21$1'6800$ 5<2)6,*1,),&$17$&&2817,1*32/,&,(6 &217,18('
) &DVKDQG,QYHVWPHQWV
)RUWKHSXUSRVHVRIWKHVWDWHPHQWRIFDVKIORZVLQYHVWPHQWVDUHGHILQHGDVVKRUWWHUPKLJKO\OLTXLGLQYHVWPHQWVWKDW DUHERWKUHDGLO\FRQYHUWLEOHWRNQRZQDPRXQWVRIFDVKRUVRQHDUWKHLUPDWXULW\WKDWWKH\SUHVHQWLQVLJQLILFDQWULVNRI FKDQJHVLQYDOXHEHFDXVHRIFKDQJHVLQLQWHUHVWUDWHVDQGKDYHDQRULJLQDOPDWXULW\GDWHRIWKUHHPRQWKVRUOHVV
* ,QYHVWPHQWV
,QYHVWPHQWVDUHUHSRUWHGLQWKHDFFRPSDQ\LQJVWDWHPHQWVDWIDLU YDOXHH[FHSWIRUFHUWDLQFHUWLILFDWHVRIGHSRVLW DQGLQYHVWPHQWFRQWUDFWVWKDWDUHUHSRUWHGDWFRVWEHFDXVHWKH\DUHQRWWUDQVIHUDEOHDQGWKH\KDYHWHUPVWKDWDUH QRW DIIHFWHG E\ FKDQJHV LQ PDUNHW LQWHUHVW UDWHV &KDQJHV LQ IDLU YDOXH WKDW RFFXU GXULQJ WKH ILVFDO \HDU DUH UHFRJQL]HGDV
investment earnings UHSRUWHGIRUWKDWILVFDO\HDU
Investment earnings LQFOXGHVLQWHUHVWHDUQLQJVFKDQ JHVLQIDLUYDOXHDQGDQ\JDLQ VRUORVVHVUHDOL]HGXSRQWKH OLTXLGDWLRQRUVDOHRILQYHVWPHQWV
+ &RPSHQVDWHG$EVHQFHV
2QO\IXOOWLPHHPSOR\HHVDFFUXHYDFDWLRQ9DFDWLRQWLPHLVDFFUXHGWZRWRIRXUZHHNVSHU\HDUGHSHQGLQJRQKRZ ORQJ DQ HPSOR\HH KDV EHHQ ZLWK WKH &RPSDQ\ 7KH &RPSDQ\ DOVR JUDQWV HPSOR\HHV SHUVRQDO SDLG WLPH RII 5HJXODUIXOOWLPHDQGSDUWWLPH
KRXUVSHUZHHNPLQLPXP
HPS OR\HHVDUHHOLJLEOHWRDFFUXHSHUVRQDOWLPHRII
ZLWKSD\)XOOWLPHHPSOR\HHVPD\ DFFUXHXSWRSHUVRQDOGD\V SHUFDOHQGDU\HDU3DUWWLPHHPSOR\HHVZKR ZRUNKRXUVSHUZHHNRUPRUHDUHHOLJLEOHWRDFFUXHSHUVRQDOSDLGWLPHRIIRQDSURUDWDEDVLV,WLVWKH&RPSDQ\¶V SROLF\WRSHUPLWHPSOR\HHVWRDFFXPXODWHHDUQHGEXWXQXVHGYDFDWLRQEHQHILWVIURP\HDUWR\HDUXSWRDPD[LPXP RIWZRWLPHVDIXOOWLPHHPSOR\HH¶VDQQXDOYDFDWLRQDPRXQW3HU VRQDOSDLGWLPHRIILVQRWDFFXPXODWHGIURP\HDU WR\HDU$OODFFXPXODWHGFRPSHQVDWHGDEVHQFHVDUHUHFRUGHGDVDQH[SHQVHDQGDOLDELOLW\DWWKHWLPHWKHEHQHILW LVHDUQHG
, 'HIHUUHG2XWIORZV,QIORZVRI5HVRXUFHV
,Q DGGLWLRQ WR DVVHWV WKH VWDWHPHQW RI ILQDQFLDO SRVLWLRQ ZLOO VRPHWLPHV UHSRUW D VHSDUDWH VHFWLRQ IRU GHIHUUHG RXWIORZV RI UHVRXUFHV 7KLV VHSDUDWH ILQDQFLDO VWDWHPHQW HOHPHQW GHIHUUHG RXWIORZV RI UHVRXUFHV UHSUHVHQWV D FRQVXPSWLRQRIQHWDVVHWVWKDWDSSOLHVWRDIXWXUHSHULRG V
DQGVRZLOOQRWEHUHFRJQL]HGDVDQRXWIORZRIUHVRXUFHV
H[SHQVHH[SHQGLWXUH
XQWLOWKHQ7KH&RPSDQ\KDVWZRLWHPVWKDWTXDOLI\IRUUHSRUWLQJLQWKLVFDWHJRU\
7KH GHIHUUHG RXWIORZV UHODWLQJ WR WKH QHW SHQVLRQ OLDELOLW\ UHSRUWHG LQ WKH VWDWHPHQW RI QHW SRVLWLRQ 7KHVH RXWIORZV DUH WKH UHVXOWV RI FRQWULEXWLRQV PDGH DIWHU WKH PHDVXUHPHQW SHULRG ZKLFK DUH H[SHQVHG LQ WKH IROORZLQJ \HDU WKH QHW GLIIHUHQFH EHWZHHQ SURMHFWHG DQG DFWXDO HDUQLQJV RQ SHQVLRQ SODQ LQYHVWPHQWV GLIIHUHQFHV EHWZHHQ H[SHFWHG DQG DFWXDO H[SHULHQFH DGMXVWPHQWV GXH WR GLIIHUHQFHV LQ SURSRUWLRQV DQG GLIIHUHQFHLQSURSRUWLRQDWHVKDUH
7KH GHIHUUHG FKDUJH RQ UHIXQGLQJ UHVXOWV LQ WKH GLIIHUHQFH L Q WKH FDUU\LQJ YDOXH RI UHIXQGHG GHEW DQG LWV UHDFTXLVLWLRQSULFH7KHDPRXQWLVGHIHUUHGDQGDPRUWL]HGRYHUWKHOLIHRIWKHUHIXQGHGRUUHIXQGLQJGHEW
,Q DGGLWLRQ WR OLDELOLWLHV WKH VWDWHPHQW RI ILQDQFLDO SRVLWLRQ ZLOO VRPHWLPHV UHSRUW D VHSDUDWH VHFWLRQ IRU GHIHUUHG LQIORZV RI UHVRXUFHV 7KLV VHSDUDWH ILQDQFLDO VWDWHPHQW HOHPHQW GHIHUUHG LQIORZV RI UHVRXUFHV UHSUHVHQWV DQ DFTXLVLWLRQRIQHWDVVHWVWKDWDSSOLHVWRDIXWXUHSHULRG V
DQ GVRZLOOQRWEHUHFRJQL]HGDVDQLQIORZRIUHVRXUFHV
UHYHQXH
XQWLOWKDWWLPH7KH&RPSDQ\KDVWZRLWHPVWKDWTXDOLI\IRUUHSRUWLQJLQWKLVFDWHJRU\7KHVHLWHPVUHODWHG WRWKHGHIHUUHGLQIORZVIRUQHWSHQVLRQOLDELOLW\DQGOHDVHVU HSRUWHGLQWKHVWDWHPHQWRIQHWSRVLWLRQIRUEXVLQHVV W\SHDFWLYLWLHV
28 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
25*$1,=$7,21$1'6800$ 5<2)6,*1,),&$17$&&2817,1*32/,&,(6 &217,18('
- 8VHRI(VWLPDWHV
7KH SUHSDUDWLRQ RI ILQDQFLDO VWDWHPHQWV LQ FRQIRUPLW\ ZLWK DFFR XQWLQJ SULQFLSOHV JHQHUDOO\ DFFHSWHG LQ WKH 8QLWHG 6WDWHV RI $PHULFD UHTXLUHV PDQDJHPHQW WR PDNH HVWLPDWHVDQG DVVXPSWLRQV WKDW DIIHFW WKH UHSRUWHG DPRXQWV RI DVVHWV DQG OLDELOLWLHV GLVFORVXUH RI FRQWLQJHQW DVV HWV DQG OLDELOLWLHV DW WKH GDWH RI WKH ILQDQFLDO VWDWHPHQWVDQGWKHUHSRUWHGDPRXQWVRIUHYHQXHVDQGH[SHQVHVGXULQJWKHUHSRUWLQJSHULRG$FWXDOUHVXOWVFRXOG GLIIHUIURPWKRVHHVWLPDWHV
. 1HW3RVLWLRQ
6RPHWLPHVWKH&RPSDQ\ZLOOIXQGRXWOD\VIRUDSDUWLFXODUSXUSRVHIURPERWKUHVWULFWHG HJUHVWULFWHGERQGRUJUDQW
SURFHHGV
DQGXQUHVWULFWHGUHVRXUFHV,QRUGHUWRFDOFXODWHWKH DPRXQWVWRUHSRUWDVUHVWULFWHG±QHWSRVLWLRQDQG XQUHVWULFWHG±QHWSRVLWLRQLQWKHJRYHUQPHQWZLGHDQGSURSULHW DU\IXQGILQDQFLDOVWDWHPHQWVDIORZDVVXPSWLRQ PXVWEHPDGHDERXWWKHRUGHULQZKLFKWKHUHVRXUFHVDUHFRQVLGHUHGWREHDSSOLHG,WLVWKHJRYHUQPHQW¶VSROLF\WR FRQVLGHUUHVWULFWHG±QHWSRVLWLRQWRKDYHEHHQGHSOHWHGEHIRUHXQUHVWULFWHG±QHWSRVLWLRQLVDSSOLHG
/ 1HZ$FFRXQWLQJ3URQRXQFHPHQWV
7KHIROORZLQJ*RYHUQPHQW$FFRXQWLQJ6WDQGDUGV%RDUG
*$6%
SURQ RXQFHPHQWVZHUHHIIHFWLYHIRUDQGRUHDUO\
LPSOHPHQWHGIRUWKHILVFDO\HDUHQGHG-XQH
1. GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements
7KHUHTXLUHPHQWVRIWKLV6WDWHPHQWZLOOLPSURYHILQDQFLDOUHSRUWLQJE\HVWDEOLVKLQJWKHGHILQLWLRQVRI333VDQG$3$V DQGSURYLGLQJXQLIRUPJXLGDQFHRQDFFRXQWLQJDQGILQDQFLDOUHSR UWLQJIRUWUDQVDFWLRQVWKDWPHHWWKRVHGHILQLWLRQV 7KDWXQLIRUPJXLGDQFHZLOOSURYLGHPRUHUHOHYDQWDQGUHOLDEOHL QIRUPDWLRQIRUILQDQFLDOVWDWHPHQWXVHUVDQGFUHDWH JUHDWHUFRQVLVWHQF\LQSUDFWLF H7KLV6WDWHPHQWZLOOHQKDQFHWK HGHFLVLRQXVHIXOQHVVRIDJRYHUQPHQW¶VILQDQFLDO VWDWHPHQWV E\ UHTXLULQJ JRYHUQPHQWV WR UHSRUW DVVHWV DQG OLDELOLWLHV UHODWHG WR 333V FRQVLVWHQWO\ DQG GLVFORVH LPSRUWDQWLQIRUPDWLRQDERXW333WUDQVDFWLRQV7KHUHTXLUHGGLVF ORVXUHVZLOODOORZXVHUVWRXQGHUVWDQGWKHVFDOH DQGLPSRUWDQWDVSHFWVRIDJRYHUQPHQW¶V333VDQGHYDOXDWHDJRYHUQPHQW¶VIXWXUHREOLJDWLRQVDQGDVVHWVUHVXOWLQJ IURP333V
2. GASB Statement No. 96, Subscription-Based Information Technology Arrangements 7KH UHTXLUHPHQWV RI WKLV 6WDWHPHQW ZLOO LPSURYH ILQDQFLDO UHSRUWLQJ E\ HVWDEOLVKLQJ D GHILQLWLRQ IRU 6%,7$V DQG SURYLGLQJXQLIRUPJXLGDQFHIRUDFFRXQWLQJDQGILQDQFLDOUHSRUWL QJIRUWUDQVDFWLRQVWKDWPHHWWKDWGHILQLWLRQ7KDW GHILQLWLRQDQGXQLIRUPJXLGDQFHZLOOUHVXOWLQJUHDWHUFRQVLVWH QF\LQSUDFWLFH(VWDEOLVKLQJWKHFDSLWDOL]DWLRQFULWHULD IRULPSOHPHQWDWLRQFRVWVDOVRZLOOUHGXFHGLYHUVLW\DQGLPSURYHFRPSDUDELOLW\LQILQDQFLDOUHSRUWLQJE\JRYHUQPHQWV 7KLV6WDWHPHQWDOVRZLOOHQKDQFHWKHUHOHYDQFHDQGUHOLDELOLW\ RIDJRYHUQPHQW¶VILQDQFLDOVWDWHPHQWVE\UHTXLULQJ D JRYHUQPHQW WR UHSRUW D VXEVFULSWLRQ DVVHW DQG VXEVFULSWLRQ OL DELOLW\ IRU D 6%,7$ DQG WR GLVFORVH HVVHQWLDO LQIRUPDWLRQDERXWWKHDUUDQJHPHQW7KHGLVFORVXUHVZLOODOORZXVHUVWRXQGHUVWDQGWKHVFDOHDQGLPSRUWDQWDVSHFWV RIDJRYHUQPHQW¶V6%,7$DFWLYLWLHVDQGHYDOXDWHDJRYHUQPHQW¶VREOLJDWLRQVDQGDVVHWVUHVXOWLQJIURP6%,7$V
3. GASB Statement No. 100, Accounting Changes and Error Corrections
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
29 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
&$6+$1',19(670(176
&DVKDQG,QYHVWPHQWVDVRI-XQHDUHFODVVLILHGLQWKHDFFRPSDQ\LQJILQDQFLDOVWDWHPHQWVDVIROORZV
&DVKDQGLQYHVWPHQWVDVRI-XQHFRQVLVWRIWKHIROORZLQJ
,QYHVWPHQWV$XWKRUL]HGE\WKH&DOLIRUQLD*RYHUQPHQW&RGHDQGWKH&RPSDQ\¶V,QYHVWPHQW3ROLF\
7KHWDEOHEHORZLGHQWLILHVWKHLQYHVWPHQWW\SHVWKDWDUHDXWKRUL]HGIRUWKH&RPSDQ\E\WKH&DOLIRUQLD*RYHUQPHQW &RGH DQG WKH &RPSDQ\¶V LQYHVWPHQW SROLF\ 7KH WDEOH DOVR LGHQWL ILHV FHUWDLQ SURYLVLRQV RI WKH &DOLIRUQLD *RYHUQPHQW &RGH
RU WKH &RPSDQ\¶V LQYHVWPHQW SROLF\ LI PRUH UHVWULFWLYH WKDW DGGUHVV LQWHUHVW UDWH ULVN DQG
FRQFHQWUDWLRQRIFUHGLWULVN7KLVWDEOHGRHVQRWDGGUHVVLQYHV WPHQWVRIGHEWSURFHHGVKHOGE\ERQGWUXVWHHVWKDW DUH JRYHUQHG E\ WKH SURYLVLRQV RI GHEW DJUHHPHQWV RI WKH &RPSDQ\UDWKHU WKDQ WKH JHQHUDO SURYLVLRQV RI WKH &DOLIRUQLD*RYHUQPHQW&RGHRUWKH&RPSDQ\¶VLQYHVWPHQWSROLF\
6WDWHPHQWRIQHWSRVLWLRQ
&DVKDQGLQYHVWPHQWV
&DVKDQGLQYHVWPHQWVUHVWULFWHG
7 RWDOFDVKDQGLQY HVWPHQWV
&DVKRQKDQG
'HVSRVLWVZLWKILQDQFLDOLQVWLWXWLRQV
&LW\RI3DVDGHQD,QYHVWPHQW3RRO
7 RWDOFDVKDQGLQYHVWPHQWV
30 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
&$6+$1',19(670(176
&217,18('
%DVHGRQVWDWHODZUHTXLUHPHQWVRULQYHVWPHQWSROLF\UHTXLUHPHQWVZKLFKHYHULVPRUHUHVWULFWLYH
,QYHVWPHQWV$XWKRUL]HGE\'HEW$JUHHPHQWV
,QYHVWPHQWVRIGHEWSURFHHGVKHOGE\ERQGWUXVWHHDUHJRYHUQHGE\SURYLVLRQVRIWKHGHEWDJUHHPHQWVUDWKHUWKDQ WKHJHQHUDOSURYLVLRQVRIWKH&DOLIRUQLD*RYHUQPHQW&RGHRUWKH &RPSDQ\¶VLQYHVWPHQWSROLF\7KHWDEOHEHORZ LGHQWLILHVWKHLQYHVWPHQWW\SHVWKDWDUHDXWKRUL]HGIRULQYHVWP HQWVKHOGE\ERQGWUXVWHH7KHWDEOHDOVRLGHQWLILHV FHUWDLQSURYLVLRQVRIWKHVHGHEWDJUHHPHQWVWKDWDGGUHVVLQWHUH VWUDWHULVNDQGFRQFHQWUDWLRQRIFUHGLWULVN
'LVFORVXUHV5HODWLQJWR,QWHUHVW5DWH5LVN
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
/RFDO$JHQF\%RQGV <HV \HDUV 1RQH 1RQH
867UHDVXU\2EOLJDWLRQV <HV \HDUV 1RQH 1RQH
86$JHQF\6HFXULWLHV <HV \HDUV 1RQH 1RQH
%DQNHUV
$FFHSWDQFHV <HV GD\V
&RPPHUFLDO3DSHU <HV GD\V
1HJRWLDEOH&HUWLILFDWHVRI'HSRVLW <HV \HDUV 1RQH 5HSXUFKDVH$JUHHPHQWV <HV \HDU 1RQH 1RQH
5HYHUVH5HSXUFKDVH$JUHHPHQWV <HV
GD\V 1RQH
0HGLXP7HUP1RWHV <HV \HDUV 1RQH
0XWXDO)XQGV <HV 1$
0RQH\0DUNHW0XWXDO)XQGV <HV 1$
0RUWJDJH3DVV7KURXJK6HFXULWLHV <HV \HDUV 1RQH
&RXQW\3RROHG,QYHVWPHQW)XQGV <HV 1$ 1RQH 1RQH
/RFDO$JHQF\,QYHVWPHQW)XQG <HV 1$ 1RQH 1RQH
-RLQW3RZHU$JHQF\3RROV
RWKHULQYHVWPHQWSRROV
<HV 1$ 1RQH 1RQH
,QYHVWPHQW7\SHV$XWKRUL]HGE\6WDWH/DZ
$XWKRUL]HGE\
,QY HVWPHQW
3ROLF\
0D[ LPXP
0DWXULW\
0D[ LPXP
3HUFHQWDJHRI
3RUWIROLR
0D[ LPXP
,QYHVWPHQWLQ
2QH,VVXHU
0D[LPXP 0LQLPXP
$XWKRUL]HG,QYHVWPHQW7\SH 0DWXULW\ 5DWLQJ
867UHDVXU\2EOLJDWLRQV 1RQH 1$
86$JHQF\6HFXULWLHV 1RQH 1$
6WDWHDQG/RFDO$JHQF\%RQGV 1RQH $D
%DQNHUV
$FFHSWDQFHV GD\V $D
&RPPHUFLDOSDSHU GD\V $D
1HJRWLDEOH&HUWLILFDWHVRI'HSRVLW 1RQH $D
5HSXUFKDVH$JUHHPHQWV 1RQH $D
0RQH\0DUNHW0XWXDO)XQGV 1$ $DD
,QYHVWPHQWV&RQWUDFWV 1RQH $D
31 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
&$6+$1',19(670(176
&217,18('
,QIRUPDWLRQDERXWWKHVHQVLWLYLW\RIWKHIDLUYDOXHVRIWKH&RPSDQ\¶VLQYHVWPHQWV LQFOXGLQJLQYHVWPHQWVKHOGE\
ERQGWUXVWHH
WRPDUNHWLQWHUHVWUDWHIOXFWXDWLRQVLVSURYLGHGE\WKHIROORZLQJWDEOHWKDWVKRZVWKHGLVWULEXWLRQRIWKH &RPSDQ\¶VLQYHVWPHQWVE\PDWXULW\
'LVFORVXUHV5HODWLQJWR&UHGLW5LVN
*HQHUDOO\ FUHGLW ULVN LV WKH ULVN WKDW DQ LVVXHU RI DQ LQYHVWPHQWZLOO QRW IXOILOO LWV REOLJDWLRQWR WKH KROGHU RI WKH LQYHVWPHQW 7KLV LV PHDVXUHG E\ WKH DVVLJQPHQW RI D UDWLQJ E\ D QDWLRQDOO\ UHFRJQL]HG VWDWLVWLFDO UDWLQJ RUJDQL]DWLRQ3UHVHQWHGEHORZLVWKHPLQLPXPUDWLQJUHTXLUHGE\ ZKHUHDSSOLFDEOH
WKH&DOLIRUQLD*RYHUQPHQW&RGH
WKH&RPSDQ\¶VLQYHVWPHQWSROLF\RUGHEWDJUHHPHQWVDQGWKHDF WXDOUDWLQJDVRI\HDUHQGIRUHDFKLQYHVWPHQW W\SH
&XVWRGLDO&UHGLW5LVN
&XVWRGLDOFUHGLWULVNIRU deposits LVWKHULVNWKDWLQWKHHYHQWRIWKHIDLOXUHRIDGHSRVLWRU\ILQDQFLDOLQVWLWXWLRQD JRYHUQPHQWZLOOQRWEHDEOHWRUHFRYHULWVGHSRVLWVRUZLOOQRWEHDEOHWRUHFRYHUFROODWHUDOVHFXULWLHVWKDWDUHLQWKH SRVVHVVLRQRIDQRXWVLGHSDUW\7KHFXVWRGLDOFUHGLWULVNIRU investments LVWKHULVNWKDWLQWKHHYHQWRIWKHIDLOXUH RIWKHFRXQWHUSDUW\
HJEURNHUGHDOHU
WRDWUDQVDFWLRQDJ RYHUQPHQWZLOOQRWEHDEOHWRUHFRYHUWKHYDOXHRILWV LQYHVWPHQWRUFROODWHUDOVHFXULWLHVWKDWDUHLQWKHSRVVHVVLRQ RIDQRWKHUSDUW\7KH&DOLIRUQLD*RYHUQPHQW&RGH DQGWKH&RPSDQ\¶VLQYHVWPHQWSROLF\GRQRWFRQWDLQOHJDORUSRO LF\UHTXLUHPHQWVWKDWZRXOGOLPLWWKHH[SRVXUH WRFXVWRGLDOFUHGLWULVNIRUGHSRVLWVRULQYHVWPHQWVRWKHUWKD QWKHIROORZLQJSURYLVLRQIRUGHSRVLWV 7KH&DOLIRUQLD
*RYHUQPHQW&RGHUHTXLUHVWKDWDILQDQFLDOLQVWLWXWLRQVHFXUHGHSRVLWVPDGHE\VWDWHRUORFDOJRYHUQPHQWDO XQLWV E\ SOHGJLQJ VHFXULWLHV LQ DQ XQGLYLGHG FROODWHUDO SRRO KH OG E\ D GHSRVLWRU\ UHJXODWHG XQGHU VWDWH ODZ
XQOHVVVRZDLYHGE\WKHJRYHUQPHQWDOXQLW
7KHPDUNHWYDOXHRIWKHSOHGJHGVHFXULWLHVLQWKHFROODWHUDOSRROPXVW HTXDODWOHDVW RI WKH WRWDODPRXQWGHSRVLWHGE\ WKHSXEOLF DJHQFLHV&DOLIRUQLD ODZDOVRDOORZV ILQDQFLDO LQVWLWXWLRQVWRVHFXUH&RPSDQ\GHSRVLWVE\SOHGJLQJILUVWWUXVW GHHGPRUWJDJHQRWHVKDYLQJDYDOXHRIRI WKHVHFXUHGSXEOLFGHSRVLWV
)DLU9DOXH+LHUDUFK\
7KH &RPSDQ\ FDWHJRUL]HV LWV IDLU YDOXH PHDVXUHPHQWV ZLWKLQ WKHIDLU YDOXH KLHUDUFK\ HVWDEOLVKHG E\ JHQHUDOO\ DFFHSWHGDFFRXQWLQJSULQFLSOHV7KHKLHUDUFK\LVEDVHGRQWKHY DOXDWLRQLQSXWVXVHGWRPHDVXUHWKHIDLUYDOXHRI WKHDVVHW/HYHOLQSXWVDUHTXRWHGSULFHVLQDFWLYHPDUNHWVIRULGHQWLFDODVVHWV /HYHOLQSXWVDUHTXRWHGSULFHV
IRUVLPLODUDVVHWVLQDFWLYHPDUNHWV
/HYHOLQSXWVDUHVLJQLILFDQWXQREVHUYDEOHLQSXWV
5HPDLQLQJ
0DWXULW\
,QY HVWPHQW7 \SH
0RQWKVRU
/HVV
&LW\RI3DVDGHQD,QYHVWPHQW3RRO
7 RWDO
5DWLQJVDW(QG
RI<HDU
,QY HVWPHQW7 \SH
0LQLPXP
/HJDO
5DWLQJ 1RW5DWHG
&LW\RI3DVDGHQD,QYHVWPHQW3RRO
1$
7 RWDO
32 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
&$6+$1',19(670(176
&217,18('
7KH&RPSDQ\KDVWKHIROORZLQJUHFXUULQJIDLUYDOXHPHDVXUHPHQWVDVRI-XQH
,QYHVWPHQWVLQWKH&LW\LQYHVWPHQWSRRODUHYDOXHGE\WKHXQGHUO\LQJDVVHWVLQWKHLQYHVWPHQWSRRO7KHXQGHUO\LQJ DVVHWV LQFOXGH /RFDO $JHQF\ ,QYHVWPHQW )XQGV PRQH\ PDUNHW IXQGV PXQLFLSDO ERQGV IHGHUDO DJHQF\ LVVXHV WUHDVXU\VHFXULWLHVFRUSRUDWHERQGVDQGVXSUDQDWLRQDODOORIZKLFKDUHOHYHORUEHWWHU 127(
&$3,7$/$66(76
5RVH%RZO
&DSLWDO$VVHWVDFWLYLW\IRUWKH\HDUHQGHG-XQHLVDVIROORZV
'HSUHFLDWLRQDQGDPRUWL]DWLRQH[SHQVHIRUWKH\HDUZDV
/HYHO
7RWDOV
&LW\RI3DVDGHQD,QYHVWPHQW3RRO
7RWDOV
,QYHVWPHQWVE\IDLUYDOXHOHYHO
%DODQFH %DODQFH
-XO\ $GMXVWPHQWV $GGLWLRQV 'HOHWLRQV -XQH %XVLQHVVW\SHDFWLY LWLHV
&DSLWDODVVHWVEHLQJGHSUHFLDWHGDPRUWL]HG
%XLOGLQJV
,PSURY HPHQWVRWKHUWKDQEXLOGLQJV
0DFKLQHU\HTXLSPHQWDQGY HKLFOHV /HDVHDVVHWV
6XEVFULSWLRQDVVHWV 7RWDOFDSLWDODVVHWVEHLQJGHSUHFLDWHGDPRUWL]HG
/HVVDFFXPXODWHGGHSUHFLDWLRQDPRUWL]DWLRQ
%XLOGLQJV
,PSURY HPHQWVRWKHUWKDQEXLOGLQJV
0DFKLQHU\HTXLSPHQWDQGY HKLFOHV
/HDVHDVVHWV
6XEVFULSWLRQDVVHWV
7RWDODFFXPXODWHGGHSUHFLDWLRQDPRUWL]DWLRQ
7RWDOFDSLWDODVVHWVEHLQJGHSUHFLDWHGDPRUWL]HGQHW
7RWDOEXVLQHVVW\SHDFWLY LWLHVFDSLWDODVVHWV
33 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
&$3,7$/$66(76
&217,18('
*ROI&RXUVH
&DSLWDODVVHWDFWLYLW\IRUWKH\HDUHQGHG-XQHLVDVIROORZV
'HSUHFLDWLRQH[SHQVHIRUWKH\HDUZDV
127(
/($6(6$1'68%6&5,37,21%$6(',1)250$7,217(&+12/2*<$5 5$1*(0(176
$ /HDVHV
%DODQFH %DODQFH
-XO\ $GGLWLRQV 'HOHWLRQV -XQH
*RY HUQPHQWDODFWLY LWLHV
&DSLWDODVVHWVQRWEHLQJGHSUHFLDWHG
&RQVWUXFWLRQLQSURJUHVV
7RWDOFDSLWDODVVHWVQRWEHLQJGHSUHFLDWHG
&DSLWDODVVHWVEHLQJGHSUHFLDWHG
%XLOGLQJV ,PSURY HPHQWVRWKHUWKDQEXLOGLQJV
0DFKLQHU\DQGHTXLSPHQW 7RWDOFDSLWDODVVHWVEHLQJGHSUHFLDWHG
/HVVDFFXPXODWHGGHSUHFLDWLRQ
%XLOGLQJV
,PSURY HPHQWVRWKHUWKDQEXLOGLQJV
0DFKLQHU\DQGHTXLSPHQW
7RWDODFFXPXODWHGGHSUHFLDWLRQ
7 RWDOFDSLWDODVVHWVEHLQJGHSUHFLDWHGQHW
7RWDOEXVLQHVVW\SHDFWLY LWLHVFDSLWDODVVHWV
/HDVH$VVHW
9DOXH
$FFXPXODWHG
$PRUWL]DWLRQ
(TXLSPHQW
7RWDO/HDVHV
3ULQFLSDO
3D\PHQWV
,QWHUHVW
3D\PHQWV 7RWDO3D\PHQWV
7RW DO $VRI)LVFDO<HDU(QG
$VVHW&ODVV
)LVFDO<HDU
%XVLQHVV7 \SH$FWLY LWLHV
34 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
/($6(6 $1' 68%6&5,37,21%$6(' ,1)250$7,21 7(&+12/2*< $5 5$1*(0(176
&217,18('
2Q-DQXDU\7KH&RPSDQ\HQWHUHGLQWRDPRQWKOHDVH DV/HVVHHIRUWKHXVHRI)OR:DWHU$QLQLWLDO OHDVHOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI
$VRI-XQHWKHYDOXHRIWKHOHDVHOLDELOLW\LV 7KH&RPSDQ\LVUHTXLUHGWRPDNHPRQWKO\IL[HGSD\PHQWVRI7KHOHDVHKDVDQLQWHUHVWUDWHRI7KH (TXLSPHQWHVWLPDWHGXVHIXOOLIHZDVPRQWKVDVRIWKHFRQWUDF WFRPPHQFHPHQW7KHYDOXHRIWKHULJKWWRXVH DVVHWDVRI-XQHRI
ZLWKDFFXPXODWHGDPRUWL]DW LRQRILVLQFOXGHGZLWK(TXLSPHQWRQWKH /HDVH&ODVVDFWLYLWLHVWDEOH
2Q2FWREHU7KH&RPSDQ\HQWHUHGLQWRDPRQWKOHDVHDV/HVVHHIRUWKHXVHRI5HYHUVH$70.LRVN $QLQLWLDOOHDVHOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI $VRI-XQHWKHYDOXHRIWKHOHDVHOLDELOLW\ LV7KH&RPSDQ\LVUHTXLUHGWRPDNHPRQWKO\IL[HGSD\PHQ WVRI7KHOHDVHKDVDQLQWHUHVWUDWHRI 7KH(TXLSPHQWHVWLPDWHGXVHIXOOLIHZDVPRQWKVDVRI WKHFRQWUDFWFRPPHQFHPHQW7KHYDOXHRIWKH ULJKWWRXVHDVVHWDVRI-XQHRI
ZLWKDFFXPXODWHGDPRUWL]DWLRQRI
LVLQFOXGHGZLWK(TXLSPHQW
RQWKH/HDVH&ODVVDFWLYLWLHVWDEOH7KHOHDVHKDVDOHDVHWHUPLQDWLRQSHQDOW\RI
2Q2FWREHU7KH&RPSDQ\HQWHUHGLQWRDPRQWKOHDVHDV/HVVHHIRUWKHXVHRI5HYHUVH$70$QLQLWLDO OHDVHOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI
$VRI-XQHWKHYDOXHRIWKHOHDVHOLDELOLW\LV 7KH&RPSDQ\LVUHTXLUHGWRPDNHPRQWKO\IL[HGSD\PHQWVRI 7KHOHDVHKDVDQLQWHUHVWUDWHRI 7KH(TXLSPHQWHVWLPDWHGXVHIXOOLIHZDVPRQWKVDVRIWKHFRQWUDFWFRPPHQFHPHQW7KHYDOXHRIWKHULJKWWRXVH DVVHWDVRI-XQHRI
ZLWKDFFXPXODWHGDPRUWL]DW LRQRI
LVLQFOXGHGZLWK(TXLSPHQWRQWKH
/HDVH&ODVVDFWLYLWLHVWDEOH7KHOHDVHKDVDOHDVHWHUPLQDWLRQSHQDOW\RI
2Q-XO\WKH&RPSDQ\HQWHUHGLQWRD
PRQWKOHDVHDV/HVVHHIRUWKHXVHRI.RQLFD0LQROWD;HUR[&RSLHU $QLQLWLDOOHDVHOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI $VRI-XQHWKHYDOXHRIWKHOHDVHOLDELOLW\ LV
7KH&RPSDQ\LVUHTXLUHGWRPDNHPRQWKO\IL[HGSD\PH QWVRI
7KHOHDVHKDVDQLQWHUHVWUDWHRI
7KH(TXLSPHQWHVWLPDWHGXVHIXOOLIHZDV
PRQWKVDVRIWKHFRQWUDFWFRPPHQFHPHQW7KHYDOXHRIWKH ULJKW WR XVH DVVHW DV RI -XQH RI ZLWK DFFXPXODWHG DPRUWL]DWLRQ RI LV LQFOXGHG ZLWK
(TXLSPHQWRQWKH/HDVH&ODVVDFWLYLWLHVWDEOH7KH&RPSDQ\KDVWKHRSWLRQWRSXUFKDVHWKH(TXLSPHQWIRU
% 6XEVFULSWLRQ%DVHG,QIRUPDWLRQ7HFKQRORJ\$UUDQJHPHQWV
7KH&LW\LPSOHPHQWHG*$6%6WDWHPHQW1R
LQWKHILVFDO\HDUHQGHG-XQH7KHSULPDU\REMHFWLYHRI WKLV VWDWHPHQW LV WR HQKDQFH WKH UHOHYDQFH DQG FRQVLVWHQF\ RI LQIRUPDWLRQ DERXW JRYHUQPHQWV VXEVFULSWLRQ
EDVHGLQIRUPDWLRQWHFKQRORJ\DUUDQJHPHQW
6%,7$
DFWLYLWLHV7KLVVWDWHPHQWHVWDEOLVKHVDVLQJOHPRGHOIRU6%,7$ DFFRXQWLQJEDVHGRQWKHSULQFLSOHWKDW6%,7$VDUHILQDQFLQJVRI WKHULJKWWRXVHDQXQGHUO\LQJDVVHW8QGHUWKLV 6WDWHPHQWDVXEVFULEHULVUHTXLUHGWRUHFRJQL]HDVXEVFULSWLRQOLDELOLW\DQGDQLQWDQJLEOHULJKWWRXVHVXEVFULSWLRQ DVVHW)RUDGGLWLRQDOLQIRUPDWLRQUHIHUWRWKHGLVFORVXUHVEHORZ
6XEVFULSWLRQ
$VVHW9DOXH
$FFXP XODWHG
$PRUWL]DWLRQ
6RIWZDUH
7RWDO6XEVFULSWLRQV
3ULQFLSDO
3D\PHQWV
,QWHUHVW
3D\PHQWV 7RWDO3D\PHQWV
7RWDO
$VRI)LVFDO<HDU(QG
$VVHW&ODVV
%XVLQHVV7\SH$FWLYLWLHV
)LVFDO<HDU
35 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
/($6(6 $1' 68%6&5,37,21%$6(' ,1)250$7,21 7(&+12/2*< $5 5$1*(0(176
&217,18('
2Q $XJXVW WKH &RPSDQ\ HQWHUHG LQWR D PRQWK VXEVFULSWLRQ IRU WKH XVH RI $HULDO $UPRU $Q LQLWLDO VXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI$VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQ OLDELOLW\LV7KH&RPSDQ\LVUHTXLUHGWRPDNHDQQXDOIL[ HGSD\PHQWVRI7KHVXEVFULSWLRQKDVDQ LQWHUHVW UDWH RI 7KH YDOXH RI WKH ULJKW WR XVH DVVHW DV RI -XQH RI ZLWK DFFXPXODWHG DPRUWL]DWLRQ RI LV LQFOXGHG ZLWK 6RIWZDUH RQ WKH 6XEVFUL SWLRQ &ODVV DFWLYLWLHV WDEOH 5RVH %RZO KDV H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q$XJXVWWKH&RPSDQ\HQWHUHGLQWRDPRQWKVXEVFULSWLRQIRUWKHXVHRI$('$XWKRULW\$QLQLWLDO VXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI $VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQ
OLDELOLW\LV
7KH&RPSDQ\LVUHTXLUHGWRPDNHDQQXDOIL [HGSD\PHQWVRI7KHVXEVFULSWLRQKDVDQ LQWHUHVW UDWH RI
7KH YDOXH RI WKH ULJKW WR XVH DVVHW DV RI -XQH RI ZLWK DFFXPXODWHG
DPRUWL]DWLRQ RI
LV LQFOXGHG ZLWK 6RIWZDUH RQ WKH 6XEVFUL SWLRQ &ODVV DFWLYLWLHV WDEOH 5RVH %RZO KDV
H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q -DQXDU\ WKH &RPSDQ\ HQWHUHG LQWR D PRQWK VXEVFULSWLRQ IRU WKH XVH RI %DUUDFXGD (0DLO 3URWHFWLRQ$QLQLWLDOVXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI$VRI-XQHWKHYDOXHRI WKH VXEVFULSWLRQ OLDELOLW\ LV 7KH &RPSDQ\ LV UHTXLUHGWR PDNH DQQXDO IL[HG SD\PHQWV RI 7KH
VXEVFULSWLRQKDVDQLQWHUHVWUDWHRI7KHYDOXHRIWKH ULJKWWRXVHDVVHWDVRI-XQHRI ZLWKDFFXPXODWHGDPRUWL]DWLRQRILVLQFOXGHGZLWK6RIWZD UHRQWKH6XEVFULSWLRQ&ODVVDFWLYLWLHVWDEOH7KH &RPSDQ\KDV
H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q $XJXVW
WKH &RPSDQ\ HQWHUHG LQWR D PRQWK VXEVFULSWLRQ IRU WKH XVH RI %HDQZRUNV $Q LQLWLDO VXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI$VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQ OLDELOLW\LV
7KH&RPSDQ\LVUHTXLUHGWRPDNHDQQXDOIL [HGSD\PHQWVRI 7KHVXEVFULSWLRQKDVDQ
LQWHUHVW UDWH RI
7KH YDOXH RI WKH ULJKW WR XVH DVVHW DV RI -XQH RI ZLWK DFFXPXODWHG DPRUWL]DWLRQRILVLQFOXGHGZLWK6RIWZDUHRQWKH6XEVFUL SWLRQ&ODVVDFWLYLWLHVWDEOH7KH&RPSDQ\KDV
H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q 0D\ WKH &RPSDQ\ HQWHUHG LQWR D PRQWK VXEVFULSW LRQ IRU WKH XVH RI 'RFXVLJQ $Q LQLWLDO VXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI $VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQ OLDELOLW\LV7KH&RPSDQ\LVUHTXLUHGWRPDNHDQQXDOIL[HGSD\PHQWVRI 7KHVXEVFULSWLRQKDV
DQLQWHUHVWUDWHRI7KHYDOXHRIWKHULJKWWRXVHDVVHWDVRI-XQHRIZLWKDFFXPXODWHG DPRUWL]DWLRQ RI LV LQFOXGHG ZLWK 6RIWZDUH RQ WKH 6XEVFULSWLRQ &ODVV DFWLYLWLHV WDEOH 7KH &RPSDQ\ KDV
H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q-XO\WKH&RPSDQ\HQWHUHGLQWRDPRQWKVXEVFULSWLRQIRUWKHXVHRI'URSER[$QLQLWLDOVXEVFULSWLRQ OLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI
$VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQOLDELOLW\LV 7KH&RPSDQ\LVUHTXLUHGWRPDNHDQQXDOIL[HGSD\PHQWVRI 7KHVXEVFULSWLRQKDVDQLQWHUHVWUDWHRI
7KH YDOXH RI WKH ULJKW WR XVH DVVHW DV RI-XQH RI ZLWK DFFXPXODWHG DPRUWL]DWLRQ RI
LVLQFOXGHGZLWK6RIWZDUHRQWKH6XEVFULSWLRQ&ODVVDFWLYLWLHVWDEOH7KH&RPSDQ\KDV H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q -XQH WKH &RPSDQ\ HQWHUHG LQWR D PRQWK VXEVFULSWLRQ IRU WKH XVH RI 6DJH )$6 $Q LQLWLDO VXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI $VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQ OLDELOLW\LV7KH&RPSDQ\LVUHTXLUHGWRPDNHDQQXDOIL [HGSD\PHQWVRI7KHVXEVFULSWLRQKDVDQ LQWHUHVW UDWH RI 7KH YDOXH RI WKH ULJKW WR XVH DVVHW DV RI -XQH RI ZLWK DFFXPXODWHG
DPRUWL]DWLRQ RI LV LQFOXGHG ZLWK 6RIWZDUH RQ WKH 6XEVFULSWL RQ &ODVV DFWLYLWLHV WDEOH 7KH &RPSDQ\ KDV
H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
7KHFRPPLWPHQWVVWDWHGEHORZDUHIRUDVXEVFULSWLRQWKDWKDVDFRPPHQFHPHQWGDWHVXEVHTXHQWWRWKHUHSRUWLQJ GDWH2Q2FWREHU7KH&RPSDQ\HQWHUHGLQWRDPRQWKVXEVFULSWLRQIRUWKHXVHRI)RUPVWDFN$QLQLWLDO VXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI$VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQ OLDELOLW\ LV 7KH &RPSDQ\ LV UHTXLUHG WR PDNH PRQWKO\ IL[HG SD\PHQWV RI 7KH VXEVFULSWLRQ KDV
36 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
/($6(6 $1' 68%6&5,37,21%$6(' ,1)250$7,21 7(&+12/2*< $5 5$1*(0(176
&217,18('
DQLQWHUHVWUDWHRI
7KHYDOXHRIWKHULJKWWRXVHDVVH WDVRI-XQHRIZLWKDFFXPXODWHG DPRUWL]DWLRQ RI LV LQFOXGHG ZLWK 6RIWZDUH RQ WKH 6XEVFULSWLRQ &ODVV DFWLYLWLHV WDEOH IRXQG DERYH 7KH &RPSDQ\KDV
H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q'HFHPEHUWKH&RPSDQ\HQWHUHGLQWRDPRQWKVXEVFU LSWLRQIRUWKHXVHRI*R7R0HHWLQJ$QLQLWLDO VXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI $VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQ
OLDELOLW\LV7KH&RPSDQ\LVUHTXLUHGWRPDNHDQQXDOIL[HGSD\PHQWVRI7KHVXEVFULSWLRQKDVDQ LQWHUHVW UDWH RI 7KH YDOXH RI WKH ULJKW WR XVH DVVHW DV RI -XQH RI ZLWK DFFXPXODWHG
DPRUWL]DWLRQ RI LV LQFOXGHG ZLWK 6RIWZDUH RQ WKH 6XEVFULSWLRQ &ODVV DFWLYLWLHV WDEOH IRXQG DERYH 7KH &RPSDQ\KDVH[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q $SULO WKH &RPSDQ\ HQWHUHG LQWR D PRQWK VXEVFULSWLRQ IRU WKH XVH RI 6RIWZDUH $Q LQLWLDO VXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI $VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQ
OLDELOLW\LV7KH&RPSDQ\LVUHTXLUHGWRPDNHDQQXDOIL[HGSD\PHQWVRI7KHVXEVFULSWLRQKDVDQ LQWHUHVWUDWHRI7KHYDOXHRIWKHULJKWWRXVHDVVHWDVRI-XQHRI ZLWKDFFXPXODWHG
DPRUWL]DWLRQ RI LV LQFOXGHG ZLWK 6RIWZDUH RQ WKH 6XEVFULSWLRQ &ODVV DFWLYLWLHV WDEOH IRXQG DERYH 7KH &RPSDQ\KDV
H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q 'HFHPEHU WKH &RPSDQ\ HQWHUHG LQWR D PRQWK VXEVF ULSWLRQ IRU WKH XVH RI +LYH $Q LQLWLDO VXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI $VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQ OLDELOLW\LV7KH&RPSDQ\LVUHTXLUHGWRPDNHPRQWKO\IL[HGSD\PHQWVRI7KHVXEVFULSWLRQKDVDQ LQWHUHVW UDWH RI 7KH YDOXH RI WKH ULJKW WR XVH DVVHW DV RI -XQH RI ZLWK DFFXPXODWHG
DPRUWL]DWLRQ RI LV LQFOXGHG ZLWK 6RIWZDUH RQ WKH 6XEVFULSWLRQ &ODVV DFWLYLWLHV WDEOH IRXQG DERYH 7KH &RPSDQ\KDVH[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q2FWREHUWKH&RPSDQ\HQWHUHGLQWRDPRQWKVXEVFULSWLRQIRUWKHXVHRI,PDJH5HOD\$QLQLWLDO VXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI$VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQ OLDELOLW\LV
7KH&RPSDQ\LVUHTXLUHGWRPDNHDQQXDOIL [HGSD\PHQWVRI7KHVXEVFULSWLRQKDVDQ LQWHUHVW UDWH RI
7KH YDOXH RI WKH ULJKW WR XVH DVVHW DV RI -XQH RI ZLWK DFFXPXODWHG DPRUWL]DWLRQRI
LVLQFOXGHGZLWK6RIWZDUHRQWKH6XEVFULSWLRQ&ODVVDFWLYLWLHVWDEOHIRXQGDERYH7KH&RPSDQ\ KDV
H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q6HSWHPEHUWKH&RPSDQ\HQWHUHGLQWRDPRQWKVXEVFULSWLRQIRUWKHXVHRI/LQNHG,Q1DYLJDWRU$Q LQLWLDOVXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI$VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQ OLDELOLW\LV7KH&RPSDQ\LVUHTXLUHGWRPDNHPRQWKO\I L[HGSD\PHQWVRI7KHVXEVFULSWLRQKDVDQ LQWHUHVW UDWH RI 7KH YDOXH RI WKH ULJKW WR XVH DVVHW DV RI -XQH RI ZLWK DFFXPXODWHG DPRUWL]DWLRQ RI
LV LQFOXGHG ZLWK 6RIWZDUH RQ WKH 6XEVFUL SWLRQ &ODVV DFWLYLWLHV WDEOH IRXQG DERYH 7KH&RPSDQ\KDVH[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q -DQXDU\ WKH &RPSDQ\ HQWHUHG LQWR D PRQWK VXEVFULSWLRQ IRU WKH XVH RI 0DLOFKLPS $Q LQLWLDO VXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI
$VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQ
OLDELOLW\LV
7KH&RPSDQ\LVUHTXLUHGWRPDNHPRQWKO\I L[HGSD\PHQWVRI7KHVXEVFULSWLRQKDVDQ LQWHUHVW UDWH RI 7KH YDOXH RI WKH ULJKW WR XVH DVVHW DV RI -XQH RI
ZLWK DFFXPXODWHG
DPRUWL]DWLRQ RI LV LQFOXGHG ZLWK 6RIWZDUH RQ WKH 6XEVFULSWLRQ &ODVV DFWLYLWLHV WDEOH IRXQG DERYH 7KH &RPSDQ\KDV
H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q-DQXDU\WKH&RPSDQ\HQWHUHGLQWRDPRQWKVXEVFULSWLRQIRUWKHXVHRI0LUR$QLQLWLDOVXEVFULSWLRQ OLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI$VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQOLDELOLW\LV 7KH &RPSDQ\ LV UHTXLUHG WR PDNH DQQXDO IL[HG SD\PHQWV RI 7KH VXEVFULSWLRQ KDV DQ LQWHUHVW UDWH RI 7KH YDOXH RI WKH ULJKW WR XVH DVVHW DV RI-XQH RI ZLWK DFFXPXODWHG DPRUWL]DWLRQ RI LV LQFOXGHG ZLWK 6RIWZDUH RQ WKH 6XEVFULSWLRQ &ODVV DFWL YLWLHV WDEOH IRXQG DERYH 7KH &RPSDQ\ KDV H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
37 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
/($6(6 $1' 68%6&5,37,21%$6(' ,1)250$7,21 7(&+12/2*< $5 5$1*(0(176
&217,18('
2Q-XO\WKH&RPSDQ\HQWHUHGLQWRDPRQWKVXEVFULSW LRQIRUWKHXVHRI5DFNVSDFH 0LFURVRIW2IILFH
$Q LQLWLDO VXEVFULSWLRQ OLDELOLW\ ZDV UHFRUGHG LQ WKH DPRXQW RI $V RI -XQH WKH YDOXH RI WKH VXEVFULSWLRQ OLDELOLW\ LV
7KH &RPSDQ\ LV UHTXLUHG WR PDNH PRQWKO\ IL[HG SD\PHQWV RI 7KH
VXEVFULSWLRQKDVDQLQWHUHVWUDWHRI
7KHYDOXHRIWKHULJKWWRXVHDVVHWDVRI-XQHRI ZLWKDFFXPXODWHGDPRUWL]DWLRQRILVLQFOXGHGZLWK6RIWZDUHRQWKH6XEVFULSWLRQ&ODVVDFWLYLWLHVWDEOHIRXQG DERYH7KH&RPSDQ\KDV
H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q-XQH7KH&RPSDQ\HQWHUHGLQWRDPRQWKVXEVFULSWLRQIRUWKHXVHRI6DJH&ORXG$QLQLWLDO VXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI $VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQ OLDELOLW\LV
7KH&RPSDQ\LVUHTXLUHGWRPDNHDQQXDOIL[HGSD\PHQWVRI7KHVXEVFULSWLRQKDVDQ LQWHUHVWUDWHRI7KHYDOXHRIWKHULJKWWRXVHDVVHWDVRI-XQHRIZLWKDFFXPXODWHG DPRUWL]DWLRQ RI LV LQFOXGHG ZLWK 6RIWZDUH RQ WKH 6XEVFULSWLRQ &ODVV DFWLYLWLHV WDEOH 7KH &RPSDQ\ KDV
H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q 0D\ 7KH &RPSDQ\ HQWHUHG LQWR D PRQWK VXEVFULSWL RQ IRU WKH XVH RI 6DOHVIRUFH $Q LQLWLDO VXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI $VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQ
OLDELOLW\LV7KH&RPSDQ\LVUHTXLUHGWRPDNHDQQXDOIL [HGSD\PHQWVRI7KHVXEVFULSWLRQKDVDQ LQWHUHVW UDWH RI 7KH YDOXH RI WKH ULJKW WR XVH DVVHW DV RI -XQH RI ZLWK DFFXPXODWHG
DPRUWL]DWLRQ RI LV LQFOXGHG ZLWK 6RIWZDUH RQ WKH 6XEVFULSWLRQ &ODVV DFWLYLWLHV WDEOH 7KH &RPSDQ\ KDV H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q$SULO7KH&RPSDQ\HQWHUHGLQWRDPRQWKVXEVFULSWLRQIRUWKHXVHRI6\PDQWHF(QGSRLQW$QLQLWLDO VXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI$VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQ OLDELOLW\LV
7KH&RPSDQ\LVUHTXLUHGWRPDNHDQQXDOIL[ HGSD\PHQWVRI7KHVXEVFULSWLRQKDVDQ LQWHUHVW UDWH RI 7KH YDOXH RI WKH ULJKW WR XVH DVVHW DV RI -XQH RI ZLWK DFFXPXODWHG DPRUWL]DWLRQ RI LV LQFOXGHG ZLWK 6RIWZDUH RQ WKH 6XEVFULSWLRQ &ODVV DFWLYLWLHV WDEOH 7KH &RPSDQ\ KDV
H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q -XO\ 7KH &RPSDQ\ HQWHUHG LQWR D PRQWK VXEVFULSWLRQ IRU WKH XVH RI 9HQXH2SV $Q LQLWLDO VXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI$VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQ OLDELOLW\LV7KH&RPSDQ\LVUHTXLUHGWRPDNHDQQXDOIL[HGSD\PHQWVRI7KHVXEVFULSWLRQKDVDQ LQWHUHVWUDWHRI
7KHYDOXHRIWKHULJKWWRXVHDVVHWDVRI-XQHRIZLWKDFFXPXODWHG DPRUWL]DWLRQ RI LV LQFOXGHG ZLWK 6RIWZDUH RQ WKH 6XEVFULSWLRQ &ODVV DFWLYLWLHV WDEOH 7KH &RPSDQ\ KDV
H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q6HSWHPEHU
7KH&RPSDQ\HQWHUHGLQWRDPRQWKVXE VFULSWLRQIRUWKHXVHRI:HDWKHU'71$Q LQLWLDOVXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI$VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQ OLDELOLW\LV
7KH&RPSDQ\LVUHTXLUHGWRPDNHDQQXDOIL[HGSD\PHQWVRI7KHVXEVFULSWLRQKDVDQ LQWHUHVW UDWH RI
7KH YDOXH RI WKH ULJKW WR XVH DVVHW DV RI -XQH RI ZLWK DFFXPXODWHG DPRUWL]DWLRQ RI
LV LQFOXGHG ZLWK 6RIWZDUH RQ WKH 6XEVFULSWLRQ &ODVV DFWLYLWLHV WDEOH 7KH &RPSDQ\ KDV
H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q -XO\ 7KH &RPSDQ\ HQWHUHG LQWR D PRQWK VXEVFULSWLRQ IRU WKH XVH RI )OLSSLQJERRN $Q LQLWLDO VXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI $VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQ
OLDELOLW\LV7KH&RPSDQ\LVUHTXLUHGWRPDNHPRQWKO\IL[HGSD\PHQWVRI 7KHVXEVFULSWLRQKDVDQ
LQWHUHVW UDWH RI
7KH YDOXH RI WKH ULJKW WR XVH DVVHW DV RI -XQH RI ZLWK DFFXPXODWHG
DPRUWL]DWLRQ RI LV LQFOXGHG ZLWK 6RIWZDUH RQ WKH 6XEVFULSWLRQ &ODVV DFWLYLWLHV WDEOH7KH &RPSDQ\ KDV
H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
2Q 6HSWHPEHU 7KH &RPSDQ\ HQWHUHG LQWR D PRQWK VXEVFULSWLRQ IRU WKH XVH RI &DOHQGO\ $Q LQLWLDO VXEVFULSWLRQOLDELOLW\ZDVUHFRUGHGLQWKHDPRXQWRI$VRI-XQHWKHYDOXHRIWKHVXEVFULSWLRQ OLDELOLW\LV
7KH&RPSDQ\LVUHTXLUHGWRPDNHDQQXDOIL [HGSD\PHQWVRI7KHVXEVFULSWLRQKDVDQ LQWHUHVW UDWH RI 7KH YDOXH RI WKH ULJKW WR XVH DVVHW DV RI -XQH RI ZLWK DFFXPXODWHG DPRUWL]DWLRQ RI LV LQFOXGHG ZLWK 6RIWZDUH RQ WKH 6XEVFULSWLRQ &ODVV DFWLYLWLHV WDEOH 7KH &RPSDQ\ KDV H[WHQVLRQRSWLRQ
V
HDFKIRUPRQWKV
38 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
/21*7(50'(%7
5RVH%RZO
/RQJ7HUPOLDELOLWLHVIRUWKH\HDUHQGHG-XQHDUHDVIROORZV
5RVH%RZO/HDVH5HYHQXH%RQGV
2Q1RYHPEHUWKH&LW\RI3DVDGHQDLVVXHGIRXUVHULHVRIOHDVHUHYHQXHERQGV6HULHV$WKURXJK'
5RVH%RZO5HQRYDWLRQ3URMHFW
LQWKHDJJUHJDWHDPRXQWRI6HULHV$LQWKHDPRXQWRI FRQWDLQHG RI FXUUHQW LQWHUHVW ERQGV PDWXULQJ EHWZHHQ ILVFDO \HDU DQG ILVFDO \HDU
ZLWKWKHUHPDLQLQJLQWKHIRUPRIFDSLWD ODSSUHFLDWLRQERQGVPDWXULQJVHULDOO\IURPILVFDO \HDUWR6HULHV%FRQWDLQHGRIWD[DEOH%XLOG$PHULFD%RQGV7KHVHERQGVDUH LQWZRFRXSRQVWKHLQLWLDOVHULHVPDWXULQJGXULQJILVFDO\HDU DQGWKHILQDOPDWXULQJGXULQJILVFDO\HDU 6HULHV & FRQWDLQHG RI WD[DEOH ERQGV 7KHV H ERQGV PDWXUHG VHULDOO\ IURP ILVFDO \HDU WRILVFDO\HDU
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
%&6
JDPHVVRFFHUPDWFKHVFRQFHUWVDQGVSHFLDOHYHQWVDVZHOODVWREULQJFHUWDLQ EXLOGLQJV\VWHPVXSWRFXUUHQW&LW\%XLOGLQJ&RGHUHTXLUHPHQWV DQGLPSURYHSXEOLFVDIHW\
7KH$ERQGVZHUHSDUWLDOO\UHIXQGHGGXULQJWKH\HDUHQGHG- XQHZLWKWKH$ERQGV
%DODQFHDW
-XO\
$GGLWLRQV
$FFUHWLRQV
'HOHWLRQV
$PRUWL]DWLRQV
%DODQFHDW
-XQH 'XHLQ2QH<HDU
$7D[([HPSW/HDVH
5HYHQXH%RQGV
&DSLWDO$SSUHFLDWLRQ%RQGV
%7D[DEOH%XLOG$PHULFD
/HDVH5HYHQXH%RQGV '7D[DEOH5HFRYHU\
=RQH(FRQRPLF'HYHORSPHQW
/HDVH5HYHQXH%RQGV $7D[([HPSW/HDVH
5HYHQXH%RQGV
$%RQG3UHPLXP
$7D[([HPSW/HDVH
5HYHQXH%RQGV %7D[DEOH/HDVH
5HYHQXH%RQGV
$%RQG3UHPLXP
%%RQG'LVFRXQW
6XEWRWDO%RQGHG/RQJ7HUP
/LDELOLWLHV
/HDVH/LDELOLW\
6XEVFULSWLRQ/LDELOLW\
7RWDO/RQJ7HUP/LDELOLWLHV
39 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
/21*7(50'(%7
&217,18('
7KH%ERQGVZHUHLVVXHGIRU SXUSRVHVRIWKH$PHULFDQ5HFRYH U\DQG5HLQYHVWPHQW$FWRI VLJQHGLQWR
ODZRQ)HEUXDU\
WKH5HF RYHU\$FW
3XUVXDQWWRWKH5HFRYHU\$FWWKH&LW\H[SHFWVWRUHFHLYHDFDVK VXEVLG\SD\PHQWIURPWKH8QLWHG6WDWHV7UHDVXU\HTXDOWRRI WKHLQWHUHVWSD\DEOHE\WKH&LW\RQRUDERXW HDFK LQWHUHVW SD\PHQW GDWH 7KH FDVK SD\PHQW GRHV QRW FRQVWLWXW H D IXOO IDLWK DQG FUHGLW JXDUDQWHH RI WKH 8QLWHG6WDWHV*RYHUQPHQWEXWLVUHTXLUHGWREHSDLGE\WKH7UHD VXU\XQGHUWKH5HFRYHU\$FW$Q\FDVKVXEVLG\ SD\PHQWVUHFHLYHGE\WKH&LW\GRQRWFRQVWLWXWHUHYHQXHVWKDWF DQRIIVHWLQWHUHVWH[SHQVHDQGDUHQRWSOHGJHG XQGHUWKHLQGHQWXUHWRVHFXUHWKHERQGV
7KH'ERQGVZHUHLVVXHGIRUSXUSRVHVRIWKH5HFRYHU\$FW3XUVXDQWWRWKH5HFRYHU\$FWWKH&LW\H[SHFWVWR UHFHLYHDFDVKVXEVLG\SD\PHQWIURPWKH8QLWHG6WDWHV7UHDVXU\HTXDOWRRIWKHLQWHUHVWSD\DEOHE\WKH&LW\RQ RUDERXWHDFKLQWHUHVWSD\PHQWGDWH7KHFDVKSD\PHQWGRHVQRWFRQVWLWXWHDIXOOIDLWKDQGFUHGLWJXDUDQWHHRIWKH 8QLWHG6WDWHV*RYHUQPHQWEXWLVUHTXLUHGWREHSDLGE\WKH7UHD VXU\XQGHUWKH5HFRYHU\$FW$Q\FDVKVXEVLG\ SD\PHQWVUHFHLYHGE\WKH&LW\GRQRWFRQVWLWXWHUHYHQXHVWKDWFDQRIIVHWLQWHUHVWH[SHQVHDQGDUHQRWSOHGJHGXQGHU WKHLQGHQWXUHWRVHFXUHWKHERQGV
)RUWKH\HDUHQGHG-XQHWKH7UHDVXU\PDGHVXEVLG\SD\ PHQWVWRWDOLQJWRZDUGVWKHLQWHUHVW GXHRQWKH%DQG'ERQGVZKLFKKDVEHHQLQFOXGHGLQRWKHUQRQRSHUDWLQJUHYHQXHV
7KH WRWDO DQQXDO GHEW VHUYLFH UHTXLUHPHQWV IRU WKH /HDVH 5 HYHQXH %RQGV LQFOXGLQJ DFFUHWLRQ DV RI -XQHDUHDVIROORZV
Disclosure Related to Long-Term Debt Under GASB 88
,QFDVHRIGHIDXOWWKHIROORZLQJLVWKHFRXUVHRIDFWLRQ
(a) Upon the happening of any of the events & default, then it shall be lawful for the Authority or its assignee, subject to the terms of the Lease, with the consent of the Majority Holder, to (i) exercise any and all remedies available or granted to it under the Sublease or pursuant to law, to the extent not inconsistent with the remedies granted under the Sublease or (ii) by mandamus or other suit, action or proceeding at law or in equity to enforce the Authority’s or its assignee’s rights against the City and to compel the City to perform and carry out its duties and obligations under the law and its covenants and agreements with the City as provided in the Sublease. Upon the breach of any agreement, condition, covenant or term contained in the Sublease required to be observed or performed by the City, the Authority or its assignee may not exercise any rights of entry upon or repossession of the Leased Property.
In the event of such default, the Authority or its assignee must thereafter maintain the Sublease in full force and effect and may only recover rent and other monetary charges as they become due, -XQH 6HULHV$ 6HULHV% 6HULHV' ,QWHUHVW 7RWDO
7RWDO
/HVV
)XWXUH$FFUHWLRQ
3ULQFLSDO3D\PHQWV
40 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
/21*7(50'(%7
&217,18('
all without terminating the City’s right to possession of the Leased Property, regardless of whether or not the City has abandoned the Leased Property; THIS SHALL BE THE SOLE AND EXCLUSIVE REMEDY AVAILABLE AGAINST THE CITY UNDER THE SUBLEASE OR OTHERWISE. THE AUTHORITY SHALL HAVE NO RIGHT
UPON AN EVENT OF DEFAULT UNDER THE SUBLEASE BY THE CITY TO ACCELERATE THE RENTAL PAYMENTS. TERMINATE THE SUBLEASE OR RE-ENTER THE LEASED PROPERTY.
5RVH%RZO/HDVH5HYHQXH%RQGV
2Q6HSWHPEHUWKH&LW\LVVXHGD/HDVH5HYHQXH%RQ G6HULHV$LQWKHDJJUHJDWHDPRXQWRI 7KHERQGZDVLVVXHGWRUHIXQGDSRUWLRQRIWKH/HDVH5HYHQXH6HULHV$%RQG6HULHV$ FRQWDLQHGRIUHIXQGLQJERQGVIRUWKH/HDVH5HYHQXH6HULHV$%RQG
3ULQFLSDOLVSD\DEOHLQDQQXDOLQVWDOOPHQWVUDQJLQJIURP WRFRPPHQFLQJ$SULODQG
HQGLQJ$SULO
7KHEDODQFHRXWVWDQGLQJDW-XQHLVFRPSULVHGRIWKHSULQFLSDODPRXQWRISOXVXQDPRUWL]HG GHIHUUHGERQGSUHPLXPRIIRUDWRWDORI
7KHDQQXDOGHEWVHUYLFHUHTXLUHPHQWVIRUWKH/HDVH5HYHQXH%RQGDVRI-XQHLVDVIROORZV
5RVH%RZO/HDVH5HYHQXH%RQGV
2Q 1RYHPEHU WKH &LW\ LVVXHG WZR /HDVH 5HYHQXH %R QGV 5RVH %RZO 5HQRYDWLRQ 3URMHFW
6HULHV$DQG%LQWKHDJJUHJDWHDPRXQWRI 7KHERQGVZHUHLVVXHGWRGHIHDVHDQG UHIXQG DOO WKH /HDVH 5HYHQXH %RQGV
5RVH %RZO 5HQRYDWLRQ 3URMHFW
DQG SD\ FRVWV RI LVVXDQFH RI WKH
ERQGV
7KH6HULHV$EDODQFHRXWVWDQGLQJDW-XQHLVFRPSULVHGRIWKHSULQFLSDODPRXQWRISOXV XQDPRUWL]HGGHIHUUHGERQGSUHPLXPRI
IRUDWRWDORI
7KH6HULHV%EDODQFHRXWVWDQGLQJDW-XQHLVFRPSUL VHGRIWKHSULQFLSDODPRXQWRISOXV XQDPRUWL]HGGHIHUUHGERQGGLVFRXQWRI
IRUDWRWDORI
-XQH 3ULQFLSDO ,QWHUHVW 7RWDO
7RWDO
41 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
/21*7(50'(%7
&217,18('
7KHDQQXDOGHEWVHUYLFHUHTXLUHPHQWVIRUWKH/HDVH5HYHQXH%RQGVDVRI-XQHDUHDVIROORZV
3OHGJHRI6WDGLXP5HYHQXHV
,QDFFRUGDQFHZLWKWKH&RPSDQ\¶VERQGLQGHQWXUHWKH&RPSDQ\KDVSOHGJHGDOORIWKHIXWXUHUHYHQXHVWRVHFXUH UHSD\PHQWRIWKHDIRUHPHQWLRQHGERQGV3URFHHGVIURPWKHERQGVSURYLGHGILQDQFLQJIRUWKHFXUUHQWFRQVWUXFWLRQ DWWKH5RVH%RZO6WDGLXP7KHERQGVDUHSD\DEOHIURPQHWUHYHQX HVDQGDUHSD\DEOHWKURXJKPDWXULW\$QQXDO SULQFLSDODQGLQWHUHVWSD\PHQWVRQWKHERQGVDUHH[SHFWHGWRUH TXLUHOHVVWKDQRIQHWUHYHQXHV7KHWRWDO SULQFLSDODQGLQWHUHVWUHPDLQLQJWREHSDLGRQWKHERQGVDUH
3ULQFLSDODQGLQWHUHVWSDLGIRUWKHFXUUHQW
\HDUDQGWRWDOQHWUHYHQXHVZHUHDQGUHVSHFWLYHO\
5RVH%RZO/HDVHV3D\DEOH
7KH&RPSDQ\OHDVHVHTXLSPHQWIRUYDULRXVWHUPVXQGHUORQJWHUPQRQFDQFHODEOHOHDVHDJUHHPHQWV7KHOHDVHV H[SLUHDWYDULRXVGDWHVWKURXJK2FWREHU
7RWDOIXWXUHPLQLPXPOHDVHSD\PHQWVXQGHUOHDVHDJUHHPHQWVDUHDVIROORZV
*ROI&RXUVH
/RQJ7HUPOLDELOLWLHVIRUWKH\HDUHQGHG-XQHDUHDVIROORZV
-XQH 6HULHV$ 6HULHV% ,QWHUHVW 7RWDO
7RWDO
3ULQFLSDO3D\PHQWV
3ULQFLSDO
3D\PHQWV
,QWHUHVW
3D\PHQWV 7RWDO3D\PHQWV
7RWDO )LVFDO<HDU
%XVLQHVV7\SH$FWLYLWLHV
%DODQFHDW
-XO\
$GGLWLRQV
$FFUHWLRQV
'HOHWLRQV
$PRUWL]DWLRQV
%DODQFHDW
-XQH
'XHLQ2QH
<HDU
)LQDQFHG3XUFKDVH
7RWDO/RQJ7HUP/LDELOLWLHV
42 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
/21*7(50'(%7
&217,18('
*ROI(TXLSPHQW)LQDQFH
2Q-XQHWKH&RPSDQ\HQWHUHGLQWRDQDJUHHPHQWZLWK$P HULFDQ*ROI&RUSRUDWLRQWRILQDQFH ZRUWKRIJROIHTXLSPHQWWREHSDLGRYHUD\HDUSHULRGDW SHU\HDU7KHUHLVQRLQWHUHVWFKDUJHGRQWKLV
SXUFKDVH
&RPSHQVDWHG$EVHQFHV
&RPSHQVDWHGDEVHQFHVIRUWKH\HDUHQGHG-XQHDUHDVIROORZV
127(
1(7326,7,21
1HWSRVLWLRQIRUWKH5RVH%RZO6WDGLXPDW-XQHFRQVLVWHGRIWKHIROORZLQJ
1HWSRVLWLRQIRUWKH*ROI&RXUVHDW-XQHFRQVLVWHGRIWKHIROORZLQJ
%DODQFHDW
-XO\
$GGLWLRQV
$FFUHWLRQV
'HOHWLRQV
$PRUWL]DWLRQV
%DODQFHDW
-XQH
'XHLQ2QH
<HDU
5RVH%RZO
*ROI&RXUVH
1HWLQYHVWPHQWLQFDSLWDODVVHWV
3URSHUW\SODQWDQGHTXLSPHQWQHW
/HVV
1HWFDUU\LQJYDOXHRIFDSLWDOUHODWHGGHEW
$FFRXQWVSD\DEOHRQFDSLWDODVVHWV
7RWDOQHWLQYHVWPHQWLQFDSLWDODVVHWV
5HVWULFWHGIRUGHEWVHUYLFH
8QUHVWULFWHGQHWGHILFLW
7RWDOQHWSRVLWLRQ
1HWLQYHVWPHQWLQFDSLWDODVVHWV
3URSHUW\SODQWDQGHTXLSPHQWQHW
/HVV
1HWFDUU\LQJYDOXHRIFDSLWDOUHODWHGGHEW
7RWDOQHWLQYHVWPHQWLQFDSLWDODVVHWV
8QUHVWULFWHGQHWGHILFLW
7RWDOQHWSRVLWLRQ
43 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
'(),1('%(1(),73(16,213/$1
0LVFHOODQHRXV3ODQ
'HVFULSWLRQRI3ODQ
7KH 5RVH %RZO 2SHUDWLQJ &RPSDQ\ 0LVFHOODQHRXV 3ODQ DQG 3(35$ 3O DQ WKH 3ODQV
DUH FRVWVKDULQJ
PXOWLSOHHPSOR\HU GHILQHG EHQHILW SHQVLRQ SODQV DGPLQLVWHUHG E\ WKH &DOLIRUQLD 3XEOLF (PSOR\HHV¶ 5HWLUHPHQW 6\VWHP
&DO3(56
$OO TXDOLILHG SHUPDQHQW DQG SUREDWLRQDU\ HPSOR\HHV DUH HOLJLEOH WR SDUWLFLSDWH LQ WKH &RPSDQ\¶V 0LVFHOODQHRXV 3ODQ %HQHILW SURYLVLRQV XQGHU WKH 3ODQ V DUH HVWDEOLVKHG E\ 6WDWH VWDWXH DQG WKH &RPSDQ\¶V%RDUGRI'LUHFWRUV
%HQHILWV3URYLGHG
&DO3(56SURYLGHVVHUYLFHUHWLUHPHQWDQGGLVDELOLW\EHQHILWVDQ QXDOFRVWRIOLYLQJDGMXVWPHQWVDQGGHDWKEHQHILWV WRSODQPHPEHUVZKRPXVWEHSXEOLFHPSOR\HHVDQGEHQHILFLDULHV%HQHILWVDUHEDVHGRQ\HDUVRIFUHGLWHGVHUYLFH HTXDOWRRQH\HDURIIXOOWLPHHPSOR\PHQW0HPEHUVZLWKILYH\H DUVRIWRWDOVHUYLFHDUHHOLJLEOHWRUHWLUHDWDJH ZLWKVWDWXWRULO\UHGXFHGEHQHILWV$OOPHPEHUVDUHHOLJLEOHIRU QRQGXW\GLVDELOLW\EHQHILWVDIWHU\HDUVRIVHUYLFH 7KH GHDWK EHQHILW LV RQH RI WKH IROORZLQJ
7KH %DVLF 'HDWK %HQH ILW WKH
6XUYLYRU %HQHILW RU WKH
2SWLRQDO6HWWOHPHQW:'HDWK%HQHILW7KHFRVWRIOLYLQJDGMXVWPHQWVIRUHDFKSODQDUHDSSOLHGDVVSHFLILHGE\WKH 3XEOLF(PSOR\HHV¶5HWLUHPHQW/DZ
7KH3XEOLF(PSOR\HHV¶3HQVLRQ5HIRUP$FWRI
3(35$
UHTXLUHVQHZEHQHILWVDQGPHPEHUFRQWULEXWLRQVIRU
QHZPHPEHUVDVGHILQHGE\3(35$WKDWDUHKLUHGDIWHU-DQXDU\7KHVH3(35$PHPEHUVLQSRROHGSODQV DUHUHIOHFWHGLQWKHQHZ0LVFHOODQHRXVDQG6DIHW\ULVNSRROVFU HDWHGE\WKH&DO3(56%RDUGLQUHVSRQVHWRWKH SDVVDJHRI3(35$EHJLQQLQJZLWKWKH-XQHULVNSRROYDOXDWLRQV7KH3(35$3ODQRIWKH&RPSDQ\ZHQW LQWRHIIHFWGXULQJWKHPHDVXUHPHQWSHULRGHQGLQJ-XQH
7KH3ODQVSURYLVLRQVDQGEHQHILWVLQHIIHFWDW-XQHDUHVXPPDUL]HGDVIROORZV
0LVFHOODQHRXV
3(35$
0LVFHOODQHRXV
+LUHGDWH
3ULRUWR
-DQXDU\
-DQXDU\
DQGDIWHU
%HQHILWIRUPXOD # #
%HQHILWYHVWLQJVFKHGXOH \HDUVRIVHUYLFH \HDUVRIVHUYLFH %HQHILWSD\PHQWV PRQWKO\IRUOLIH PRQWKO\IRUOLIH
5HWLUHPHQWDJH DQGXS DQGXS
0RQWKO\EHQHILWVDVDRIHOLJLEOHFRPSHQVDWLRQ WR WR 5HTXLUHGHPSOR\HHFRQWULEXWLRQUDWHV
5HTXLUHGHPSOR\HUFRQWULEXWLRQUDWHV
5HTXLUHGHPSOR\HUXQIXQGHGOLDELOLW\SD\PHQW
&ORVHGWRQHZHQWUDQWV
44 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
'(),1('%(1(),73(16,213/$1
&217,18('
&RQWULEXWLRQ'HVFULSWLRQ
6HFWLRQ
F
RI WKH &DOLIRUQLD 3XEOLF (PSOR\HHV¶ 5HWLUHPHQW /DZ 3(5/
UHTXLUHV WKDW WKH HPSOR\HU
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
)RUWKH\HDUHQGHG-XQHWKHFRQWULEXWLRQVUHFRJQL]HG DVDUHGXFWLRQWRWKHQHW SHQVLRQOLDELOLW\ZHUH
3HQVLRQ/LDELOLWLHV
$VVHWV
3HQVLRQ([SHQVHVDQG'HIHUUHG2XWIORZV,QIORZVRI5HVRXUFHV5HODWHGWR3HQVLRQ
$VRI-XQHWKH&RPSDQ\UHSRUWHGDQHWSHQVLRQOLDELOL W\IRULWVSURSRUWLRQDWHVKDUHRIWKHQHWSHQVLRQ OLDELOLW\RIHDFK3ODQRI
7KH&RPSDQ\¶VQHWSHQVLRQOLDELOLW\
DVVHW
IRUWKH3ODQVLVPHDVXUHGDVWKHSURSRUWLRQDWHVKDUHRIWKHQHWSHQVLRQ OLDELOLW\7KHQHWSHQVLRQOLDELOLW\
DVVHW
RIWKH3ODQLVPHDVXUHGDVRI-XQHDQGWKHWRWDOSHQVLRQOLDELOLW\ IRU WKH 3ODQ XVHG WR FDOFXODWH WKH QHW SHQVLRQ OLDELOLW\ DVVHW
ZDV GHWHUPLQHG E\ DQ DFWXDULDO YDOXDWLRQ DV RI -XQHUROOHGIRUZDUGWR-XQHXVLQJVWDQGDUG XSGDWHSURFHGXUHV7KH&RPSDQ\¶VSURSRUWLRQRI WKHQHWSHQVLRQOLDELOLW\ZDVEDVHGRQDSURMHFWLRQRIWKH&RPSDQ\¶VORQJWHUPVKDUHRIFRQWULEXWLRQVWRWKHSHQVLRQ SODQVUHODWLYHWRWKHSURMHFWHGFRQWULEXWLRQVRIDOOSDUWLFLSDW LQJHPSOR\HUVDFWXDULDOO\GHWHUPLQHG7KH&RPSDQ\¶V SURSRUWLRQDWHVKDUHRIWKHQHWSHQVLRQOLDELOLW\IRUWKH3ODQVDVRI-XQHDQGZDVDVIROORZV
)RU WKH \HDU HQGHG -XQH WKH &RPSDQ\ UHFRJQL]HG SHQVLRQ H[SHQVH RI IRU WKH 3ODQV $W -XQHWKH&RPSDQ\UHSRUWHGGHIHUUHGRXWIORZVRIUHVRXU FHVDQGGHIHUUHGLQIORZVRIUHVRXUFHVUHODWHGWR SHQVLRQIURPWKHIROORZLQJVRXUFHV
0LVFHOODQHRXV
3URSRUWLRQ-XQH
3URSRUWLRQ-XQH
&KDQJH,QFUHDVH
'HFUHDVH
'HIHUUHG2XWIORZVRI
5HVRXUFHV
'HIHUUHG,QIORZV
RI5HVRXUFHV
3HQVLRQFRQWULEXWLRQVVXEVHTXHQWWRPHDVXUHPHQWGDWH 'LIIHUHQFHVEHWZHHQH[SHFWHGDQGDFWXDOH[SHULHQFHV
&KDQJHLQDVVXPSWLRQV 1HWGLIIHUHQFHVEHWZHHQSURMHFWHGDQGDFWXDOHDUQLQJVRQ SHQVLRQSODQLQYHVWPHQWV $GMXVWPHQWGXHWRGLIIHUHQFHLQSURSRUWLRQV 'LIIHUHQFHVEHWZHHQDFWXDOFRQWULEXWLRQVDQGWKH
SURSRUWLRQDWHVKDUHRIFRQWULEXWLRQV
7RWDO
45 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
'(),1('%(1(),73(16,213/$1
&217,18('
7KHUHSRUWHGDVGHIHUUHGRXWIORZVRIUHVRXUFHVUHODWHGWRFRQWULEXWLRQVVXEVHTXHQWWRWKHPHDVXUHPHQW GDWHZLOOEHUHFRJQL]HGDVDUHGXFWLRQRIWKHQHWSHQVLRQOLDELOLW\LQWKH\HDUHQGHG-XQH2WKHUDPRXQWV UHSRUWHGDVGHIHUUHGRXWIORZVRIUHVRXUFHVDQGGHIHUUHGLQIORZVRIUHVRXUFHVUHODWHGWRSHQVLRQVZLOOEHUHFRJQL]HG DVSHQVLRQH[SHQVHDVIROORZV
$FWXDULDO$VVXPSWLRQV
)RU WKH PHDVXUHPHQW SHULRG HQGHG -XQH
WKH PHDVXUHPHQW GDWH
WKH WRWDO SHQVLRQ OLDELOLW\ ZDV
GHWHUPLQHGE\UROOLQJIRUZDUGWKH-XQHWRWDOSHQVLRQ OLDELOLW\7KH-XQHDQGWKH-XQH WRWDOSHQVLRQOLDELOLWLHVZHUHEDVHGRQWKHIROORZLQJDFWXDULDOPHWKRGVDQGDVVXPSWLRQV
$OO RWKHU DFWXDULDO DVVXPSWLRQV XVHG LQ WKH -XQH YDOXDWLRQ ZHUH EDVHG RQ WKH UHVXOWV RI DQ DFWXDULDO H[SHULHQFHVWXG\IRUWKHSHULRGIURP
WRLQFOXGLQJXS GDWHVWRVDODU\LQFUHDVHPRUWDOLW\DQGUHWLUHPHQW UDWHV7KH([SHULHQFH6WXG\UHSRUWFDQEHREWDLQHGDW&DO3(56¶ZHEVLWH
&KDQJHLQ$VVXPSWLRQV
,QWKHDFFRXQWLQJGLVFRXQWUDWHFKDQJHVIURPWR 7KHLPSDFWLVUHIOHFWHGLQGHIHUUHGRXWIORZV
UHSUHVHQWHGDVXQDPRUWL]HGSRUWLRQRIWKHFKDQJHLQDVVXPSWLRQ )RUWKH)LVFDO<HDU
(QGLQJ-XQH
5HFRJQL]HG'HIHUUHG
2XWIORZV
,QIORZV
RI
5HVRXU F HV
7RWDO
$FWXDULDO&RVW0HWKRG (QWU\ $JH 1RUPDO LQ DFFRUGDQFH ZLWK WKH UHTXLUHPHQWV RI *$6%6WDWHPHQW1R
'LVFRXQW5DWH
,QIODWLRQ
6DODU\,QFUHDVHV 9DULHVE\(QWU\$JHDQG6HUY LFH
,QY HVWPHQW5DWH
RI5HWXUQ
1HW RI 3HQVLRQ 3ODQ ,QYHVWPHQW DQG $GPLQLVWUDWLY H ([SHQVHV
LQFOXGHV,QIODWLRQ
0RUWDOLW\5DWH
7DEOH
'HULY HGXVLQJ&DO3(56¶0HPEHUVKLS'DWDIRUDOO)XQGV 3RVW5HWLUHPHQW
%HQHILW,QFUHDVH
&RQWUDFW &2/$ XS WR XQWLO 3XUFKDVLQJ 3RZHU
3URWHFWLRQ $OORZDQFH )ORRU RQ 3XUFKDVLQJ 3RZHU DSSOLHV WKHUHDIWHU
$FWXDULDO$VVXPSWLRQV
7KH PRUWDOLW\ WDEOH XVHG LQ WKH -XQH DQG Y DOXDWLRQ ZDV GHY H ORSHG EDVHG RQ &DO3(56¶ VSHFLILF GDWD 7KH SUREDELOLWLHV RI PRUWDOLW\ DUH EDVHG RQ WKH &DO3(5 6 ([ SHULHQFH 6WXG\ IRU WKH SHULRG IURP WR
3UHUHWLUHPHQW DQG 3RVWUHWLUHPHQW PRUWDOLW\ UDWHV LQ FOXGH JHQHUDWLRQDO PRUWDOLW\ LPSURY HPHQW XVLQJ RI 6FDOH 0 3 SXEOLVKHG E\ WKH 6RFLHW\ RI $ FWXDULHV )RU PRUH GHWDLOV RQ WKLV WDEOH SOHDVH UHIHU WR WKH &DO3(56 ([ SHULHQFH 6WXG\ DQG 5HY LHZ RI $ FWXDULD O $ VVXPSWLRQV UHSRUW IURP 1RY HPEHUWKDWFDQEHIRXQGRQWKH&DO3(56ZHEVLWH 46 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
'(),1('%(1(),73(16,213/$1
&217,18('
,Q GHPRJUDSKLF DVVXPSWLRQV DQG LQIODWLRQ UDWH ZHUH FKDQJHG LQ DFFRUGDQFH WR WKH &DO3(56 ([SHULHQFH 6WXG\DQG5HYLHZRI$FWXDULDO$VVXPSWLRQV'HFHPEHU7KHUHZHUHQRFKDQJHVLQWKHGLVFRXQWUDWH
'LVFRXQW5DWH
7KHGLVFRXQWUDWHXVHGWRPHDVXUHWKHWRWDOSHQVLRQOLDELOLW\ZDV SHUFHQW7RGHWHUPLQHZKHWKHUWKHPXQLFLSDO
ERQGUDWHVKRXOGEHXVHGLQWKHFDOFXODWLRQRIDGLVFRXQWUDWHIRUHDFKSODQ&DO3(56VWUHVVWHVWHGSODQVWKDWZRXOG PRVWOLNHO\UHVXOWLQDGLVFRXQWUDWHWKDWZRXOGEHGLIIHUHQWIURPWKHDFWXDULDOO\DVVXPHGGLVFRXQWUDWH%DVHGRQWKH WHVWLQJQRQHRIWKHWHVWHGSODQVUXQRXWRIDVVHWV7KHUHIRUH WKHFXUUHQW SHUFHQWGLVFRXQWUDWHLVDGHTXDWH
DQG WKH XVH RI WKH PXQLFLSDO ERQG UDWH FDOFXODWLRQ LV QRW QHFHVVDU\ 7KH ORQJ WHUP H[SHFWHG GLVFRXQW UDWH RI
SHUFHQWLVDSSOLHGWRDOOSODQVLQWKH3XEOLF(PSOR\HHV5HWLUHPHQW)XQG7KHVWUHVVWHVWUHVXOWVDUHSUHVHQWHG LQDGHWDLOHGUHSRUWFDOOHG³*$6%&URVVRYHU7HVWLQJ5HSRUW´WKD WFDQEHREWDLQHGDW&DO3(56¶ZHEVLWHXQGHUWKH *$6%VHFWLRQ
/RQJ7HUP([SHFWHG5DWHRI5HWXUQ
7KHORQJWHUPH[SHFWHGUDWHRIUHWXUQRQSHQVLRQSODQLQYHVWPHQWVZDVGHWHUPLQHGXVLQJDEXLOGLQJEORFNPHWKRG LQ ZKLFK EHVWHVWLPDWH UDQJHV RI H[SHFWHG IXWXUH UHDO UDWHV RI UHWXUQ H[SHFWHG UHWXUQV QHW RI SHQVLRQ SODQ
LQYHVWPHQWH[SHQVHDQGLQIODWLRQ
DUHGHYHORSHGIRUHDFKPDMRUDVVHWFODVV
,QGHWHUPLQLQJWKHORQJWHUPH[SHFWHGUDWHRIUHWXUQ&DO3(56WRRNLQWRDFFRXQWERWKVKRUWWHUPDQGORQJWHUP PDUNHW UHWXUQ H[SHFWDWLRQV DV ZHOO DV WKH H[SHFWHG SHQVLRQ IXQG FDVK IORZV 6XFK FDVK IORZV ZHUH GHYHORSHG DVVXPLQJWKDWERWKPHPEHUVDQGHPSOR\HUVZLOOPDNHWKHLUUHTXLUHGFRQWULEXWLRQVRQWLPHDQGDVVFKHGXOHGLQDOO IXWXUH\HDUV8VLQJKLVWRULFDOUHWXUQVRIDOOWKHIXQGV¶DVVHW FODVVHVH[SHFWHGFRPSRXQG
JHRPHWULF
UHWXUQVZHUH
FDOFXODWHGRYHUWKHVKRUWWHUP
ILUVW\HDUV
DQGWKHORQJWHUP
\HDUV
XVLQJDEXLOGLQJEORFNDSSURDFK
8VLQJWKHH[SHFWHGQRPLQDOUHWXUQVIRUERWKVKRUWWHUPDQGORQJWHUPWKHSUHVHQWYDOXHRIEHQHILWVZDVFDOFXODWHG IRUHDFKIXQG7KHH[SHFWHGUDWHRIUHWXUQZDVVHWE\FDOFXODWLQJWKHVLQJOHHTXLYDOHQWH[SHFWHGUHWXUQWKDWDUULYHG DWWKHVDPHSUHVHQWYDOXHRIEHQHILWVIRUFDVKIORZVDVWKHRQH FDOFXODWHGXVLQJERWKVKRUWWHUPDQGORQJWHUP UHWXUQV 7KHH[SHFWHG UDWH RI UHWXUQZDV WKHQ VHW HTXLYDOHQW WR WKH VLQJOH HTXLYDOHQW UDWHFDOFXODWHG DERYHDQG URXQGHGGRZQWRWKHQHDUHVWRQHTXDUWHURIRQHSHUFHQW
7KHWDEOHEHORZUHIOHFWVORQJWHUPH[SHFWHGUHDOUDWHRIUHWXUQ E\DVVHWFODVV7KHUDWHRIUHWXUQZDVFDOFXODWHG XVLQJWKHFDSLWDOPDUNHWDVVXPSWLRQVDSSOLHGWRGHWHUPLQHWKHGLVFRXQWUDWHDQGDVVHWDOORFDWLRQ7KHVHJHRPHWULF UDWHVRIUHWXUQDUHQHWRIDGPLQLVWUDWLYHH[SHQVHV
$VVHW&ODVV
$VVXPHG$VVHW
$OORFDWLRQ
5HDO5HWXUQ
<HDUV
DE
*OREDO(TXLW\FDSZHLJKHG
*OREDO(TXLW\QRQFDSZHLJKHG
3ULYDWH(TXLW\
7UHDVXU\
0RUWJDJHEDFNHG6HFXULWLHV
,QYHVWPHQW*UDGH&RUSRUDWHV
+LJK<LHOG
(PHUJLQJ0DUNHW'HEW
3ULYDWH'HEW
5HDO$VVHWV
/HYHUDJH
7RWDO
D
$QH[ SHFWHGLQIODWLRQRIXVHGIRUWKLVSHULRG
E
)LJXUHVDUHEDVHGRQWKH$VVHW/LDELOLW\0DQDJHPHQWVWXG\ 47 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
'(),1('%(1(),73(16,213/$1
&217,18('
6HQVLWLYLW\RIWKH1HW3HQVLRQ/LDELOLW\
$VVHW
WR&KDQJHVLQWKH'LVFRXQW5DWH
7KHIROORZLQJSUHVHQWVWKHQHWSHQVLRQOLDELOLW\
DVVHW
RIWKH3ODQDVRIWKHPHDVXUHPHQWGDWHFDOFXODWHGXVLQJWKH GLVFRXQWUDWHRI
SHUFHQWDVZHOODVZKDWWKHQHWSHQVLRQOLDELOLW\
DVVHW
ZRXOGEHLILWZHUHFDOFXODWHGXVLQJD
GLVFRXQWUDWHWKDWLVSHUFHQWDJHSRLQWORZHU
SHUFHQW
R USHUFHQWDJHSRLQWKLJKHU
SHUFHQW
WKDQWKH
FXUUHQWUDWH
127(
$'9$1&(
'XULQJWKH\HDUHQGHG-XQHWKH&RPSDQ\VLJQHGDQDJUHHPHQWZLWK/HY\3UHPLXP)RRG6HUYLFHWREX\ RXWWKHFRQWUDFWRI6RGH[R0DJLF7KLVDJUHHPHQWSURYLGHGWKHFR PSDQ\DQDGYDQFHRIWRSXUFKDVH FDSLWDO LPSURYHPHQWV 7KH &RPSDQ\ PXVW UHLPEXUVH WKH YHQGRU SHU \HDU RYHU \HDUV H[SLULQJ RQ -XQH7KHWRWDODPRXQWGXHDW-XQHZDV$Q\XQSDLGRUXQUHFRXSHGSRUWLRQRIWKH DGYDQFHVKDOOEHUHLPEXUVHGWR/HY\3UHPLXP)RRG6HUYLFHDVDS UHFRQGLWLRQWRWKHHIIHFWLYHQHVVRIWHUPLQDWLRQ RIWKHDJUHHPHQWIRUDQ\UHDVRQ
127(
6(/),1685$1&(352*5$0
7KH &RPSDQ\ LV HQWLWOHG WR LQGHPQLW\ IURP WKH &LW\ DQG LWV ORVVHV DUH LQFOXGHG LQ WKH &LW\¶V JHQHUDO OLDELOLW\ VHOILQVXUDQFH SURJUDP DQG XQGHU WKH H[FHVV JHQHUDO OLDELOLW\ S ROLFLHV 5%2& FDUULHV VWDWXWRU\ ZRUNHUV¶ FRPSHQVDWLRQ LQVXUDQFH ZLWK QR UHWHQWLRQ 7HQDQWV RI WKH 5RVH %RZO SURYLGH LQVXUDQFH QDPLQJ WKH &LW\ RI 3DVDGHQDDVDGGLWLRQDOLQVXUHGRQWKHLUSROLFLHV6HHWKH&LW\RI3DVDGHQD¶VILQDQFLDOVWDWHPHQWVIRUIXUWKHUGHWDLOV
127(
*2/)&2856(0$1$*(0(17$*5((0(17
7KH*ROI&RXUVHLVRSHUDWHGDQGPDLQWDLQHGE\$PHULFDQ*ROI&RUSRUDWLRQ $*&
XQGHUWKHWHUPVRIDQDJUHHPHQW
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
127(
5(/$7('3$57<75$16$&7,216
'XULQJ WKH FXUUHQW \HDU WKH &RPSDQ\ LQFXUUHG FKDUJHV IRU WKH XVH RI WKH &LW\¶V EXLOGLQJ PDLQWHQDQFH
HOHFWULFLDQVSOXPEHUV
ORFNVPLWKVSULQWLQJDQGPDLOVHUYLFHV7KHVHQRQHYHQWH[SHQVHVWRWDOHG
DQG
DUHLQFOXGHGZLWKLQJHQHUDODQGDGPLQLVWUDWLYHH[SHQVHV'XULQJWKHFXUUHQW\HDUWKH&RPSDQ\DOVRSDLGWKH&LW\ IRUSROLFHILUHDQGSXEOLFZRUNVVHUYLFHVSULPDULO\IRUHYHQWVDPRXQWLQJWR
$W-XQHDPRXQWV
SD\DEOHWRWKH&LW\WRWDOHG
'XULQJWKHFXUUHQW\HDUWKH&RPSDQ\KDVDPRXQWVUHFHLYDEOHIURPWKH&LW\UHODWHGWRWKHERQGUHIXQGLQJLQ WKHDPRXQWRIZKLFKZLOOEHUHFHLYHGWKURXJKDQQXDOSD\PHQWVIURPWKH&LW\WKURXJK 'LVFRXQW5DWH
&XUUHQW'LVFRXQW5DWH
'LVFRXQW5DWH
3ODQ
V1HW3HQVLRQ
/LDELOLW\
$VVHWV
48 526(%2:/23(5$7,1*&203$1<
1RWHVWRWKH)LQDQFLDO6WDWHPHQWV
-XQH
127(
&200,70(176$1'&217,1*(1&,(6
0DQDJHPHQW$JUHHPHQW
$VDSDUWRIWKH&RPSDQ\¶VPDQDJHPHQWDJUHHPHQWZLWK$PHULFDQ*ROI&RUSRUDWLRQWKH&RPSDQ\PD\EHUHTXLUHG WRUHWXUQXSWRRIFDSLWDOFRQWULEXWLRQVSUHYLRXVO\UHFHLYHGIURP$*&LIWKHPDQDJHPHQWDJUHHPHQWZHUH WREHWHUPLQDWHGSULRUWRWKHHQGRIWKHVWDWHGWHUPLQ-XQH 49 THIS PAGE INTENTIONALLY LEFT BLANK
50
5(48,5('6833/(0(17$5<,1)250$7,21
51 ROSE BOWL OPERATING COMPANY
Cost Sharing Multiple-Employer Plans
Schedule of Proportionate Share of the Net Pension Liability As of June 30, for the Last Ten Fiscal Years (1)
2023 2022 2021 2020
Measurement Period June 30, 2022 June 30, 2021 June 30, 2020 June 3 0, 2019 Proportion of the Net Pension Liability (Asset) 0. 07536% 0.07321% 0.07105% 0.06964% Proportionate Share of the Net Pension Liability (Asset) 3,526,411$ 1, 390,048$ 2,996,767 $ 2,788,864 $ Covered Payroll 3,209,344$ 2,655,214$ 3,273,956$ 3,083,082$ Proportionate Share of the Net Pension Liability (Asset) as Percentage of Covered Payroll 109.88% 52.35% 91.53% 90.46% Total Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 87.16% 90.35% 76.58% 75.26%
Notes to Schedule of Proportionate Share of the Net Pension Liability:
1 Fiscal year 2015 was the first year of GASB Statement No. 68 implementation; therefore only nine years are shown.
Benefit Changes : There were no changes to benefit terms that applied to all members of the Public Agency Pool. However, individual employers in the Plan may have provided a benefit improvement to their employees such as Golden Handshakes, service purchases, and other prior service costs. Employers that have done so may need to report this information as a separate liability in their financial statement as CalPERS considers such amounts to be separately financed employer-specific liabilities. These employers should consult with their auditors. Additionally, the figures above do not include any liability impact that occurred after the June 30, 2021 valuation date, unless the liability impact is deemed to be material to the Public Agency Pool.
Changes of Assumptions : Effective with the June 30, 2021 valuation date (2022 measurement date),the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. 52 2019 2018 2017 2016 2015
June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014
0.06867% 0.06821% 0.06766% 0.07266% 0.02717%
2,587,867$ 2,688,676 $ 2, 350,455$ 1, 993,478$ 1, 690,891$ 2,798,456$ 2,583,602 $ 2, 183,555$ 2, 292,759$ 2, 304,751$
92.47% 104.07% 107.64% 86.95% 73.37%
77.69% 75.39% 75.87% 78.40% 76.63%
53 ROSE BOWL OPERATING COMPANY
Cost Sharing Multiple-Employer Plans
Schedule of Plan Contributions
As of June 30, for the Last Ten Fiscal Years (1)
Fiscal year ended June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 Actuarially Determined Contributions 608,451$ 593,271$ 513,532$ 537,091$ Contribution in Relation to the Actuarially Determined Contribution (608,451) (593,271) ( 513,532) (537,091) Contribution Deficiency (Excess) -$ - $ - $ -$ Covered Payroll 3,332,480$ 3, 209,344$ 2, 655,214$ 3,273,956$ Contributions as a Percentage of Covered Payroll 18.26% 18.49% 19.34% 16.40% Note to Schedule:
Valuation Date: June 30, 2021
Methods and assumptions used to determine contribution rates:
Actuarial Cost Method Entry Age Normal Cost Method
Amortization method Level percentage of payroll, closed Assets valuation method Market Value
Discount Rate 6.90% (net of administrative expenses)
Projected Salary Increases
Inflation 2.50%
Payroll Growth 2.75%
(1) Historical information is required only for measurement for which GASB Statement No. 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only nine years are shown.
Depending on Age, Service, and type of employment.
54 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 20 15 470,264$ 403,984$ 371,534$ 317,561$ 324,587$ (470,264) (403,984) (371,534) (317,561) (324,587) -$ - $ - $ - $ -$ 3,083,082$ 2,798,456$ 2,583,602$ 2,373,593$ 1,922,101$
15.25% 14.44% 14.38% 13.38% 16.89%
55 THIS PAGE INTENTIONALLY LEFT BLANK
56 1611 E. Fourth Street, Suite 200
Santa Ana, CA 92701
(714) 569-1000
203 N. Brea Blvd, Suite 203
Brea, CA 92821
(714) 672-0022
21 Waterway Avenue, Suite 30089
The Woodlands, TX 77380
(936) 828-4587
2151 River Plaza Dr., Suite 150
Sacramento, CA 95833
(916) 503-9691
24422 Avenida de la Carlota, Suite 275
Laguna Hills, CA 92653
(949) 829-8299
www.lslcpas.com
,1'(3(1'(17$8',725¶65(325721,17(51$/&21752/29(5),1$1&,$/5(3257,1*$1'21 &203/,$1&($1'27+(50$77(56%$6('21$1$8',72)),1$1&,$/67$7(0(1763(5)250(',1 $&&25'$1&(:,7+GOVERNMENT AUDITING STANDARDS
7RWKH%RDUGRI'LUHFWRUV
5RVH%RZO2SHUDWLQJ&RPSDQ\
3DVDGHQD&DOLIRUQLD
:HKDYHDXGLWHGLQDFFRUGDQFHZLWKWKHDXGLWLQJVWDQGDUGVJHQH UDOO\DFFHSWHGLQWKH8QLWHG6WDWHVRI$PHULFD DQG WKH VWDQGDUGV DSSOLFDEOH WR ILQDQFLDO DXGLWV FRQWDLQHG LQ Government Auditing Standards LVVXHG E\ WKH &RPSWUROOHU *HQHUDO RI WKH 8QLWHG 6WDWHV WKH ILQDQFLDO VWDWHPHQWV RI HDFK PDMRU IXQG RI 5RVH %RZO 2SHUDWLQJ &RPSDQ\
WKH³&RPSDQ\´
FRPSRQHQWXQLWRIWKH&LW\RI3DVDGHQD &DOLIRUQLD
WKH³&LW\´
DVRIDQGIRUWKH\HDU
HQGHG-XQHDQGWKHUHODWHGQRWHVWRWKHILQDQFLDOVWDWHPHQWVZKLFKFROOHFWLYHO\FRPSULVHWKH&RPSDQ\¶V EDVLFILQDQFLDOVWDWHPHQWVDQGKDYHLVVXHGRXUUHSRUWWKHUHRQGDWHG1RYHPEHU
5HSRUWRQ,QWHUQDO&RQWURORYHU)LQDQFLDO5HSRUWLQJ
,QSODQQLQJDQGSHUIRUPLQJRXUDXGLWRIWKHILQDQFLDOVWDWHPHQWVZHFRQVLGHUHGWKH&RPSDQ\¶VLQWHUQDOFRQWURORYHU ILQDQFLDO UHSRUWLQJ
LQWHUQDO FRQWURO
DV D EDVLV IRU GHVLJQLQJ DXGLW SURFHGXUHV WKDW DUH DSSURSULDWH LQ WKH FLUFXPVWDQFHVIRUWKHSXUSRVHRIH[SUHVVLQJRXURSLQLRQVRQWKH ILQDQFLDOVWDWHPHQWVEXWQRWIRUWKHSXUSRVHRI H[SUHVVLQJDQRSLQLRQRQWKHHIIHFWLYHQHVVRIWKH&RPSDQ\¶VLQW HUQDOFRQWURO$FFRUGLQJO\ZHGRQRWH[SUHVVDQ RSLQLRQRQWKHHIIHFWLYHQHVVRIWKH&RPSDQ\¶VLQWHUQDOFRQWURO
$deficiency in internal control H[LVWV ZKHQ WKH GHVLJQ RU RSHUDWLRQ RI D FRQWURO GRHV QRW DOORZ PDQDJHPHQW RU HPSOR\HHV LQ WKH QRUPDO FRXUVH RI SHUIRUPLQJ WKHLU DVVLJQHG IX QFWLRQV WR SUHYHQW RU GHWHFW DQG FRUUHFW PLVVWDWHPHQWVRQDWLPHO\EDVLV$material weaknessLVDGHILFLHQF\RUDFRPELQDWLRQRIGHILFLHQFLHVLQLQWHUQDO FRQWUROVXFKWKDWWKHUHLVDUHDVRQDEOHSRVVLELOLW\WKDWDPDW HULDOPLVVWDWHPHQWRIWKHHQWLW\¶VILQDQFLDOVWDWHPHQWV ZLOOQRWEHSUHYHQWHGRUGHWHFWHGDQGFRUUHFWHGRQDWLPHO\E DVLV$ significant deficiencyLVDGHILFLHQF\RUD FRPELQDWLRQRIGHILFLHQFLHVLQLQWHUQDOFRQWUROWKDWLVOHVVV HYHUHWKDQDPDWHULDOZHDNQHVV\HWLPSRUWDQWHQRXJK WRPHULWDWWHQWLRQE\WKRVHFKDUJHGZLWKJRYHUQDQFH
2XUFRQVLGHUDWLRQRILQWHUQDOFRQWUROZDVIRUWKHOLPLWHGSXUSRVHGHVFULEHGLQWKHILUVWSDUDJUDSKRIWKLVVHFWLRQDQG ZDVQRWGHVLJQHGWRLGHQWLI\DOOGHILFLHQFLHVLQLQWHUQDOFRQWU ROWKDWPLJKWEHPDWHULDOZHDNQHVVHVRUVLJQLILFDQW GHILFLHQFLHV*LYHQWKHVHOLPLWDWLRQVGXULQJRXUDXGLWZHGLGQRWLGHQWLI\DQ\GHILFLHQFLHVLQLQWHUQDOFRQWUROWKDWZH FRQVLGHUWREHPDWHULDOZHDNQHVVHV+RZHYHUPDWHULDOZHDNQHVVHVRUVLJQLILFDQWGHILFLHQFLHVPD\H[LVWWKDWZHUH QRWLGHQWLILHG
5HSRUWRQ&RPSOLDQFHDQG2WKHU0DWWHUV
$VSDUWRIREWDLQLQJUHDVRQDEOHDVVXUDQFHDERXWZKHWKHUWKH&RPSDQ\¶VILQDQFLDOVWDWHPHQWVDUHIUHHIURPPDWHULDO PLVVWDWHPHQWZHSHUIRUPHGWHVWVRILWVFRPSOLDQFHZLWKFHUWDLQSURYLVLRQVRIODZVUHJXODWLRQVFRQWUDFWVDQGJUDQW DJUHHPHQWV QRQFRPSOLDQFH ZLWK ZKLFK FRXOG KDYH D GLUHFW DQG PD WHULDO HIIHFW RQ WKH ILQDQFLDO VWDWHPHQWV +RZHYHU SURYLGLQJ DQ RSLQLRQ RQ FRPSOLDQFH ZLWK WKRVH SURYLVLR QV ZDV QRW DQ REMHFWLYH RI RXU DXGLW DQG DFFRUGLQJO\ZHGRQRWH[SUHVVVXFKDQRSLQLRQ7KHUHVXOWVRIRXUWHVWVGLVFORVHGQRLQVWDQFHVRIQRQFRPSOLDQFH RURWKHUPDWWHUVWKDWDUHUHTXLUHGWREHUHSRUWHGXQGHUGovernment Auditing Standards
7RWKH%RDUGRI'LUHFWRUV
5RVH%RZO2SHUDWLQJ&RPSDQ\
3DVDGHQD&DOLIRUQLD
3XUSRVHRI7KLV5HSRUW
7KHSXUSRVHRIWKLVUHSRUWLVVROHO\WRGHVFULEHWKHVFRSHRIR XUWHVWLQJRILQWHUQDOFRQWURODQGFRPSOLDQFHDQGWKH UHVXOWVRIWKDWWHVWLQJDQGQRWWRSURYLGHDQRSLQLRQRQWKHH IIHFWLYHQHVVRIWKH&RPSDQ\¶VLQWHUQDOFRQWURORURQ FRPSOLDQFH7KLVUHSRUWLVDQLQWHJUDOSDUWRIDQDXGLWSHUIRUPHGLQDFFRUGDQFHZLWKGovernment Auditing Standards LQFRQVLGHULQJWKH&RPSDQ\¶VLQWHUQDOFRQWURODQGFRPSOLDQFH$ FFRUGLQJO\WKLVFRPPXQLFDWLRQLVQRWVXLWDEOHIRU DQ\RWKHUSXUSRVH
%UHD&DOLIRUQLD
1RYHPEHU
58