Audit Committee
September 3, 2024

Santa Clara Stadium AuthorityOverview of Santa Clara Stadium Authority Fiscal Year 2023/24 Annual Financial Statements and Audit Results Presentation by KPMG, LLPSeptember 3, 2024 Agenda•Audit Limitations and Methodology•Overview•Key Financial Highlights•Management’s Discussion and Analysis (MD&A) •Basic Financial Statements •Statements of Net Position•Statements of Revenues, Expenses, and Changes in Net Position•Notes to the Financial Statements•Additional Disclosures•Audit Results Presentation by KPMG, LLP•Recommendation2 Audit Limitations & Methodology •This was an audit of the Stadium Authority’s financial reports, processes, internal controls and the Stadium Authority’s shared expenses with Forty-Niners Stadium Management Company LLC (ManCo).•This financial audit is an independent evaluation of the Stadium Authority’s financial reports and reporting processes to provide reasonable assurance that the financial statements are accurate and complete. This is not an absolute guarantee that there were no human errors or miscommunications that could lead to a mistake.•Through various audit processes and procedures, auditors determine if controls and processes are in place to produce accurate and reasonable financial statements.•KPMG will discuss the audit processes and procedures in more detail during their presentation.3 Overview•KPMG has audited the Stadium Authority’s Financial Statements as required by section 5.1(a) of the Credit Agreement.•The Financial Statements cover the 2023/24 fiscal year (April 1, 2023 to March 31, 2024) with comparative data from the 2022/23 fiscal year.•Unmodified (i.e., “clean”) opinion expressed by the auditors.•Reports will be available on the City’s Stadium Authority webpage.4 Key Financial Highlights•Management’s Discussion and Analysis (page 4)•Introduces the financial statements and provides an analytical overview of the SCSA financial activities.•SCSA’s net position was $123.6 million, an increase of $11.6 million when compared to the prior year.•Debt service payments during the fiscal year totaled $28.7 million and overall outstanding long-term debt decreased by $16.6 million.5 Key Financial Highlights•Management’s Discussion and Analysis (page 4) continued•During this fiscal year, there were twelve National Football League (NFL) games, seven ticketed non-NFL events and fifty-three smaller special events held at Levi’s Stadium. The Stadium Authority recognized $81.1 million in operating revenue and $79.5 million in operating expenses.•Revenue from Non-NFL events were $24.9 million, and the related expenses were $16.7 million resulting in net Non-NFL event profit of $8.2 million.•ManCo provided the Non-NFL events’ year-end documents on June 28, 2024.6 Key Financial Highlights•Statements of Net Position (page 8)•Financial statement that reports the assets, liabilities, and net position of the Stadium Authority.•Total Assets were $1.4 billion, with Levi’s Stadium being the largest asset with a carrying value of $670.5 million, net of depreciation.•Total Liabilities were $736.2 million made up mostly of outstanding debt equaling $228.7 million and unearned revenues relating to Stadium Builder’s Licenses (SBL’s) of $440.5 million.7 Key Financial Highlights•Statements of Revenues, Expenses, and Changes in Net Position (page 9)•Financial statement that reports the increases and decreases in the Stadium Authority’s net position (revenues and expenses)•Operating Revenues – Total $81.1 million•Charges for Services were $40.6 million including $24.9 million in Non-NFL event revenue, $12.7 million in NFL ticket surcharge, $1.6 million in Non-NFL event ticket surcharge, $835 thousand STR revenue and $250 thousand in senior/youth fees.•Rents and Licensingrevenues were $40.5 million including 24.8 million of lease revenue, SBL revenue recognition of $15.2 million, and naming rights revenue recognition of $8.1 million offset by $7.8 million from GASB 87 lease revenue adjustment.8 Key Financial Highlights•Statements of Revenues, Expenses, and Changes in Net Position (cont.)•Operating Expenses – Total $79.5 million•Lease Expenses were $7.6 million including $7.3 million for performance-based rent for FYs 22/23 and FY23/24 and $250 thousand senior/youth fees. •Materials, Services and Supplies were $51.8 million including $16.7 million for Non-NFL event expenses, $14.7 million of public safety costs over the threshold, Shared Stadium Expenses of $8.6 million, $3.3 million of insurance expenses, $2.4 million of SBL sales and service expenses and $1.4 million of utility expenses•Selling, general, and administrative expenses were $2 million, and Depreciationtotaled $18.0 million.9 Key Financial Highlights•Notes to the Financial Statements (page 12)•An integral part of the annual financial statements•Note 4 – Capital Assets•Note 5 – Long-Term Debt•Note 7 – Contingencies•Note 8 – Subsequent Events 10 Audit Results Presentation by KPMG, LLP11
Recommendation•Accept the Santa Clara Stadium Authority Fiscal Year 2023/24 Annual Financial Statements and recommend that the Stadium Authority note and file the report at the September 10, 2024 Joint Council and Authorities Concurrent and Stadium Authority meeting.12