2014 and 2013 jacksonville symphony audited financial statements executed by Design Extensions

JACKSONVILLE SYMPHONY ASSOCIATION (A Not-For-Profit Organization) AND JACKSONVILLE SYMPHONY FOUNDATION (A Not-For-Profit Organization) Financial Report Years Ended June 30, 2014 and 2013

JACKSONVILLE SYMPHONY ASSOCIATION (A Not-For-Profit Organization) AND JACKSONVILLE SYMPHONY FOUNDATION (A Not-For-Profit Organization) Table of Contents

Report of independent certified public accountants

Combined Financial statements: Combined statements of financial position with combining information

Combined statements of activities with combining information

Combined statements of cash flows with combining information

Notes to combined financial statements

Supplemental schedules: Combining schedules of financial position

Combining schedules of activities

Report of independent certified public accountant 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

Report of independent certified public accountants on the management assertion report

Management assertion report

Schedule of state financial assistance

The G RO U P

Accountants Consultants Wealth Advisors

LBA Certified Public Accountants, PA

Report of Independent Certified Public Accountants

To The Board of Directors of Jacksonville Symphony Association and Jacksonville Symphony Foundation Jacksonville, Florida Report on the Financial Statements We have audited the accompanying combined financial statements of the Jacksonville Symphony Association (a not-for-profit organization) and the Jacksonville Symphony Foundation (a not-forprofit organization) which comprise the combined statements of financial position as of June 30, 2014 and 2013, and the related combined statements of activities and cash flows for the years then ended, and the related notes to the combined financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these combined financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of combined financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these combined financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the combined financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the combined financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly,

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we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management as well as evaluating the overall presentation of the combined financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of the Jacksonville Symphony Association and the Jacksonville Symphony Foundation as of June 30, 2014 and 2013, and the changes in their net assets and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Other Matters Other Information Our audits were conducted for the purpose of forming an opinion on the combined financial statements as a whole. The combining information on pages 4,5,6,23,24,25 and 26 is presented for purposes of additional analysis of the combined financial statements rather than to present the financial position, changes in net assets and cash flows of the individual organizations or funds, and it is not a required part of the combined financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the combined financial statements. The combining information has been subjected to the auditing procedures applied in the audit of the combined financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the combined financial statements or to the combined financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining information is fairly stated in all material respects in relation to the combined financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 16, 2014, on our consideration of the Jacksonville Symphony Association and Jacksonville Symphony Foundationâ&#x20AC;&#x2122;s internal control over financial reporting and on our tests of their compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Jacksonville

The G RO U P

Accountants Consultants Wealth Advisors

Symphony Association and Jacksonville Symphony Foundationâ&#x20AC;&#x2122;s internal control over financial reporting and compliance.

October 16, 2014

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Combined Statement of Financial Position With Combining Information June 30, 2014

Assets: Cash and cash equivalents Contributions receivable, net Other receivables and accrued interest Investments Investment in real estate Property and equipment, net Other assets

Jacksonville Symphony Association

Jacksonville Symphony Foundation

Total

$ 374,720 553,643 119,416 9,017,231 271,990 73,404 235,046

$ 8,465,228 -

$ 374,720 553,643 119,416 17,482,459 271,990 73,404 235,046

Total assets

$ 10,645,450

$ 8,465,228

$ 19,110,678

$ 472,653

$ -

$ 472,653

1,186,417 2,682,893 4,341,963

(3,451,457) 9,059,468 5,608,011 695,476 6,303,487

8,465,228 8,465,228 8,465,228

(3,451,457) 17,524,696 14,073,239 695,476 14,768,715

$ 10,645,450

$ 8,465,228

$ 19,110,678

Liabilities and net assets: Liabilities: Accounts payable and accrued liabilities Deferred revenue - concert ticket sales and sponsorships Line of credit Total liabilities Net assets: Unrestricted: Undesignated Board designated Total unrestricted Temporarily restricted Total net assets Total liabilities and net assets

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Combined Statement of Financial Position With Combining Information June 30, 2013

Jacksonville Symphony Association

Jacksonville Symphony Foundation

Total

Assets: Cash and cash equivalents Contributions receivable, net Other receivables and accrued interest Investments Property and equipment, net Other assets

$ 226,953 848,341 140,785 8,073,212 69,766 243,544

$ 629 7,976,832 -

$ 226,953 848,341 141,414 16,050,044 69,766 243,544

Total assets

$ 9,602,601

$ 7,977,461

$ 17,580,062

$ 366,586

$ -

$ 366,586

1,236,117 2,291,239 3,893,942

(3,527,771) 8,151,529 4,623,758 1,084,901 5,708,659

7,977,461 7,977,461 7,977,461

(3,527,771) 16,128,990 12,601,219 1,084,901 13,686,120

$ 9,602,601

$ 7,977,461

$ 17,580,062

See accompanying notes to combined financial statements.

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Combined Statement of Activities With Combining Information Year Ended June 30, 2014

Jacksonville Symphony Association Unrestricted Board Temporarily Designated Restricted Undesignated

Jacksonville Symphony Foundation

Total

Board Designated

Total

Revenues, gains and other support: Ticket sales and concert fees

$ 3,215,903

$ -

$ 3,215,903

$ -

$ 3,215,903

Contributions

930,000

3,854,528

4,784,528

5,000

4,789,528

Grants

406,491

Advertising

77,410

Fundraising activities

453,366

Investment income

165

132,922

133,087

10,425

143,512

Realized gain on sale of investments

22,695

405,092

427,787

Unrealized investment gain

155,640

388,729 -

388,729 155,640

664,110 -

1,052,839 155,640

Total revenues, gains and other support

3,902,484

1,474,346

4,261,019

9,637,849

1,084,627

10,722,476

Net assets released from restriction

4,650,444

(4,650,444)

Other revenue

Expenses: Musical productions: Salaries and benefits

4,201,677

Advertising and promotion

1,055,398

Production expenses

1,839,909 685,664

7,782,648

Guest artist fees Total musical productions Supporting services: Interest expense

19,371

Fundraising activities

285,872

2,486

288,358

Administrative salaries and benefits

1,185,063 327,161

1,284

1,185,063 328,445

35,996

1,185,063 364,441

1,817,467

1,284

1,818,751

38,482

1,857,233

Total expenses

9,600,115

1,284

9,601,399

38,482

9,639,881

Net assets released by board

1,123,501

(565,123)

558,378

(558,378)

General and administrative expenses Total supporting services

Change in net assets

76,314

907,939

(389,425)

594,828

487,767

1,082,595

Net assets, beginning of year

(3,527,771)

8,151,529

1,084,901

5,708,659

7,977,461

13,686,120

Net assets, end of year

$ (3,451,457)

$ 9,059,468

$ 695,476

$ 6,303,487

$ 8,465,228

$ 14,768,715

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Combined Statement of Activities With Combining Information Year Ended June 30, 2013

Jacksonville Symphony Association Unrestricted Board Temporarily Undesignated Designated Restricted

Jacksonville Symphony Foundation

Total

Board Designated

Total

Revenues, gains and other support: Ticket sales and concert fees

$ 2,671,380

$ -

$ 2,671,380

$ -

$ 2,671,380

Contributions

17,925

3,785,534

3,803,459

250,000

4,053,459

Grants

416,091

Advertising

100,926

Fundraising activities

189,765

Investment income

165

145,597

145,762

8,208

153,970

Realized gain on sale of investments

58,724

401,112

459,836

Unrealized investment gain

729,634

909,628

1,639,262

Other revenue

142,391

Total revenues, gains and other support

3,104,627

951,880

4,201,625

8,258,132

1,568,948

9,827,080

Net assets released from restriction

4,517,884

(4,517,884)

Salaries and benefits

4,223,755

Advertising and promotion

1,005,824

Production expenses

1,473,225

Guest artist fees

658,823

7,361,627

Expenses: Musical productions:

Total musical productions Supporting services: Interest expense

21,788

Fundraising activities

211,618

Administrative salaries and benefits

1,132,139

General and administrative expenses

263,740

9,817

273,557

18,564

292,121

1,629,285

9,817

1,639,102

18,564

1,657,666

Total expenses

8,990,912

9,817

9,000,729

18,564

9,019,293

Net assets released by board

969,941

(603,861)

366,080

(366,080)

Net assets designated by board

11,334

(11,334)

Change in net assets

(398,460)

349,536

(316,259)

(365,183)

1,172,970

807,787

Net assets, beginning of year

(3,129,311)

7,801,993

1,401,160

6,073,842

6,804,491

12,878,333

Net assets, end of year

$ (3,527,771)

$ 8,151,529

$ 1,084,901

$ 5,708,659

$ 7,977,461

$ 13,686,120

Total supporting services

See accompanying notes to combined financial statements.

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Combined Statement of Cash Flows With Combining Information Year Ended June 30, 2014

Cash flows from operating activities: Change in net assets Adjustments to reconcile change in net assets to net cash used by operating activities: Donation of real property Realized gain on sale of investments Unrealized investment gain Investment management fees Depreciation Net changes in: Contributions receivable Other receivables and accrued interest Other assets Accounts payable and accrued liabilities Deferred revenue Net cash provided (used) by operating activities

Jacksonville Symphony Association

Jacksonville Symphony Foundation

Total

$ 594,828

$ 487,767

$ 1,082,595

(271,990) (22,695) (388,729) 30,234

(405,092) (664,110) 33,113 -

(271,990) (427,787) (1,052,839) 33,113 30,234

294,698 21,369 8,498 106,067 (49,700) 322,580

629 (547,693)

294,698 21,998 8,498 106,067 (49,700) (225,113)

Cash flows from investing activities: Purchases of investments Net increase in money market and certificate of deposit investments Proceeds from sales of investments Purchases of property and equipment Net cash (used) provided by investing activities

(1,749,543)

(86,671)

(1,836,214)

(1,635,411) 2,852,359 (33,872) (566,467)

(50,407) 684,771 547,693

(1,685,818) 3,537,130 (33,872) (18,774)

Cash flows from financing activities: Net borrowings on the line of credit

391,654

Net increase in cash and cash equivalents Cash and cash equivalents, beginning of year

147,767 226,953

Cash and cash equivalents, ending of year

$ 374,720

$ -

$ 374,720

Supplemental disclosure of cash flow information: Interest paid

$ 19,371

$ -

$ 19,371

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Combined Statement of Cash Flows With Combining Information Year Ended June 30, 2013

Jacksonville Symphony Association

Jacksonville Symphony Foundation

Total

$ (365,183)

$ 1,172,970

$ 807,787

(58,724) (729,634) 25,019

(401,112) (909,628) 15,600 -

(459,836) (1,639,262) 15,600 25,019

468,901 8,121 21,139 14,531 (12,916) (628,746)

(597) (122,767)

468,901 7,524 21,139 14,531 (12,916) (751,513)

(797,771)

(679,158)

(1,476,929)

223,019 782,356 (33,563) 174,041

5,298 796,627 122,767

228,317 1,578,983 (33,563) 296,808

Cash flows from financing activities: Net increase in line of credit

503,450

Net increase in cash and cash equivalents Cash and cash equivalents, beginning of year

48,745 178,208

Cash and cash equivalents, ending of year

$ 226,953

$ -

$ 226,953

$ 21,788

$ -

$ 21,788

Cash flows from operating activities: Change in net assets Adjustments to reconcile change in net assets to net cash used by operating activities: Realized gain on sale of investments Unrealized investment gain Investment management fees Depreciation Net changes in: Contributions receivable Other receivables and accrued interest Other assets Accounts payable and accrued liabilities Deferred revenue Net cash used by operating activities Cash flows from investing activities: Purchases of investments Net decrease in money market and certificate of deposit investments Proceeds from sales of investments Purchases of property and equipment Net cash provided by investing activities

Supplemental disclosure of cash flow information: Interest paid See accompanying notes to combined financial statements.

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Notes to Combined Financial Statements Years Ended June 30, 2014 and 2013 1.

Organization The Jacksonville Symphony Association (the Association) is a not-for-profit organization established to encourage and expand musical appreciation in the community. The Jacksonville Symphony Foundation (the Foundation) is a not-for-profit organization established to provide financial assistance and support to the Association. The Foundation was fully funded by investments transferred from the Association. The Association and the Foundation are collectively referred to as the Symphony.

Summary of Significant Accounting Policies This summary of significant accounting policies of the Symphony is presented to assist in understanding the combined financial statements. The combined financial statements and accompanying notes are representations of the Symphonyâ&#x20AC;&#x2122;s management. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the presentation of the combined financial statements. Use of Estimates The preparation of combined financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the combined financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Principles of Combination The accompanying combined financial statements include the accounts of the Association and the Foundation, which are under common control. Significant intercompany transactions and balances have been eliminated in the combination. Fund Accounting To ensure observance of limitations and restrictions placed on the use of resources available to the Symphony, its accounts are maintained in accordance with the principles of fund accounting. This is the procedure by which resources are classified for accounting purposes into funds established according to their nature and objectives. Separate accounts are maintained for each fund. The assets, liabilities and fund balances of the Symphony are accounted for in self-balancing funds as follows: ď&#x201A;ˇ

The Operating Fund represents the portion of expendable funds that are available for support of Association operations.

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Notes to Combined Financial Statements Years Ended June 30, 2014 and 2013 2.

Summary of Significant Accounting Policies (Continued) 

The Guild Fund, controlled by volunteers of the Jacksonville Symphony Guild, represents the portion of expendable funds that is available for support of Jacksonville Symphony Guild and Association operations.



The Endowment Fund represents funds that are either designated for a particular use by the Board of Directors (Board) or are subject to restrictions by the donor or grantor. Income from endowment investments may be used for support of Association operations.



The Bridge Fund represents funds that are either designated by the Board or were donated by a small group of donors to fund potential operating budgetary shortfalls that might have occurred through the 2012 fiscal year. In 2012, the Symphony transferred the balance of the temporarily restricted Bridge Fund to the Operating Fund. The Board designated Bridge Fund dollars were transferred to the Operating Fund to cover 2013 budgetary shortfalls.



The Foundation Fund represents funds that are designated for a particular use by the Board.

Net Asset Classifications Net assets, revenues, expenses, gains and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets and the changes therein are classified as follows: a. Undesignated net assets - Net assets and contributions not subject to donor-imposed stipulations. b. Board designated net assets - Net assets and contributions subject to Board designation. Generally, the income earned on related investments is designated for general or specific purposes. Board designated net assets include investments designated as endowments, certain contributions received and accumulated gains or losses on restricted endowments which are not stipulated by the donor or law for permanent reinvestment. c. Temporarily restricted net assets - Net assets and contributions subject to donor-imposed stipulations that may or will be met by actions of the Symphony and/or the passage of time. After the donor-imposed time or purpose restriction is satisfied, temporarily restricted net assets are reclassified to unrestricted net assets and reported within the combined statement of activities as net assets released from restrictions. There were no permanently restricted net assets at June 30, 2014 and 2013. Revenues are reported as increases in unrestricted net assets unless use of the related assets is limited by donor-imposed restrictions or Board action. Federal and local grants are recognized as unrestricted revenue to the extent expenses have been incurred under the terms of the respective grant agreements in the combined statement of activities. Expenses are reported as decreases in unrestricted net assets. Gains and losses on investments and other assets or liabilities are reported as increases or decreases in Board designated net assets unless their use is restricted by donor stipulation or law. 8

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Notes to Combined Financial Statements Years Ended June 30, 2014 and 2013 2.

Summary of Significant Accounting Policies (Continued) Contributions Contributions, including unconditional promises to give due in future periods, are recognized as revenues in the period made or received. Conditional promises to give, which depend upon specified future and uncertain events, are recognized as revenue when the conditions upon which they depend are substantially met. An allowance for uncollectible contributions receivable is provided based upon management's judgment including such factors as prior collection history, type of contribution, and nature of fund-raising activity. It is the Symphonyâ&#x20AC;&#x2122;s policy to charge off uncollectible accounts when management determines the receivable will not be collected. Contributions to be received after one year are discounted at an appropriate discount rate commensurate with the risks involved. Amortization of discounts is recorded as contribution revenue in accordance with donor-imposed restrictions, if any, on the contributions. Contributions received with donor-imposed restrictions that are met in the same year as the contribution is received are reported initially as revenues of the temporarily restricted net asset class, and a reclassification to unrestricted net assets is made to reflect the expiration of such restrictions. For the purposes of the combining schedule of activities those contributions received with donor-imposed restrictions that are met in the same year are reported as undesignated net assets. Contributions of property and equipment without donor stipulations concerning the use of such long-lived assets are reported as revenues of the unrestricted net asset class. Contributions of assets other than cash are recorded at their estimated fair value at the date received. Contributions of cash or other assets to be used to acquire property and equipment are reported as revenues of the temporarily restricted net asset class; the restrictions are considered to be released at the time of acquisition of such long-lived assets. A substantial number of volunteers have donated significant amounts of their time to the Symphony. No amounts have been reflected in the statements for contributed services since the contribution of services did not create or enhance non-financial assets or require specialized skills. When professional services are donated, in-kind values are recorded as contributions. The Symphony recognized $34,898 and $275,000 in donated legal services during 2014 and 2013, respectively. These amounts are included as in-kind production expense in Note 8. Cash and Cash Equivalents The Symphony considers all highly liquid investments purchased with an initial maturity of three months or less to be cash equivalents, except for certain money market and commercial paper investments held within the marketable securities portfolio. The Symphony places its temporary cash investments with FDIC insured institutions. At times, such investments may be in excess of FDIC insurance limits. The Symphony does not believe it is exposed to any significant credit risk with respect to cash and cash equivalents.

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Notes to Combined Financial Statements Years Ended June 30, 2014 and 2013 2.

Summary of Significant Accounting Policies (Continued) Investments Investments are carried at fair value (see note 7 for fair value measurements). Fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Realized and unrealized gains and losses are included in the combined statements of activities. Board Designated Endowment At June 30, 2014 and 2013, the Board of Directors had designated $17,524,696 and $16,128,990, respectively of unrestricted net assets as a general endowment to support the mission of the Symphony. Since that amount resulted from an internal designation and is not donor-restricted, it is classified and reported as unrestricted net assets. The Symphony has a spending policy of appropriating for distribution each year of no less than 5% and no more than 7% of its Board designated endowmentâ&#x20AC;&#x2122;s fair market value at year end. The transfer rate is based on a five year average return. In establishing this policy, the Symphony considered the long-term expected investment return on its endowment. Accordingly, over the long term, the Symphony expects the current spending policy to allow its general endowment fund to grow at an average of 3% annually. This is consistent with the Symphonyâ&#x20AC;&#x2122;s objective to maintain, and preferably enhance, the transfer power of its assets in perpetuity. To achieve that objective, the Symphony has adopted an investment policy that attempts to maximize total return consistent with an acceptable level of risk. Endowment assets are invested in a well diversified asset mix, which includes equity and debt securities and certain approved alternative investments, that is intended to result in a consistent inflation-protected rate of return that has sufficient liquidity to make an annual distribution of 7%, while growing the fund if possible. Accordingly, the Symphony expects its endowment assets, over time, to produce an average rate of return of approximately 10%. Actual returns in any given year may vary from this amount. Investment risk is measured in terms of the total endowment fund; investment assets and allocation between asset classes and strategies are managed to not expose the fund to unacceptable levels of risk. Property and Equipment Property and equipment with values of $200 or more, and a useful life longer than a year, are capitalized. Property and equipment are stated at cost. Maintenance and repairs are charged to expense as incurred. When items of property and equipment are sold or otherwise disposed of, the asset and related accumulated depreciation accounts are eliminated, and any gain or loss is included in operations. Depreciation is provided over the estimated useful life (3 to 10 years) of the related assets using the straight-line method. The Symphony periodically reviews property and equipment for indicators of potential impairment. If this review indicates that the carrying amount of these assets may not be recoverable, the Symphony estimates the future cash flows expected to result from the operations of the asset and its eventual disposition. If the sum of these future cash flows 10

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Notes to Combined Financial Statements Years Ended June 30, 2014 and 2013 2.

Summary of Significant Accounting Policies (Continued) (undiscounted and without interest charges) is less than the carrying amounts of the asset, the Symphony records an impairment loss based on the fair value of the asset. Deferred Revenue The Symphony records amounts received for the purchase of the following seasons' concert tickets and sponsorships as deferred revenue. These amounts will be recognized as revenue in the related concert year. Income Taxes The Association and the Foundation are not-for-profit organizations as described in Section 501(c)(3) of the Internal Revenue Code and are exempt from federal and state income taxes on related income pursuant to Section 501(a) of the Internal Revenue Code and Chapter 220.13 of the Florida Statutes, respectively. The Symphony evaluates its tax positions for any uncertainties based on the technical merits of the position taken in accordance with authoritative guidance. The Symphony recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be upheld on examination by taxing authorities. The Symphony has analyzed the tax positions taken and has concluded that as of June 30, 2014 and 2013, there were no uncertain tax positions taken, or expected to be taken, that would require recognition of a liability or disclosure in the combined financial statements. Management is required to analyze all open tax years, as defined by the Statute of Limitations, for all major jurisdictions, including federal and certain state taxing authorities. At June 30, 2014, the Symphony is no longer subject to U.S. federal income tax examinations by taxing authorities for years before 2011. As of and for the years ended June 30, 2014 and 2013, the Symphony did not have a liability for any unrecognized taxes. The Symphony has no examinations in progress and is not aware of any tax positions for which it is reasonable possible that the total amounts of unrecognized tax liabilities will significantly change in the next twelve months. Subsequent Events The Symphony has evaluated events through the date of the report of independent certified public accountants, the date the financial statements were available to be issued.

Line of Credit The Symphony has a $3,600,000 line of credit which is due on demand and bears interest at LIBOR plus 0.5% (1.04% at June 30, 2014). The line is secured by investments in Berkshire Hathaway and other corporate stocks, SunTrust cash reserves and various corporate and U.S. Treasury Bonds.

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Notes to Combined Financial Statements Years Ended June 30, 2014 and 2013 4.

Property and Equipment Property and equipment consisted of the following at June 30:

Furniture and fixtures Instruments Leasehold improvements Total property and equipment Less: accumulated depreciation and amortization Property and equipment, net 5.

2014

2013

$ 819,059 428,047 344,953

$ 796,473 416,761 344,953

1,592,059

1,558,187

(1,518,655)

(1,488,421)

$ 73,404

$ 69,766

Operating Lease The Association has a two year lease on its facilities which expires on June 30, 2015. Rent expense was $100,183 for each of the years ended June 30, 2014 and 2013. Future minimum lease payments for its facilities for the year ended June 30, 2015 is $100,183. The Association receives rent-free rehearsal space for the Jacksonville Symphony Youth Orchestra as a contribution from an unrelated party. The Association recognized $275,335 and $338,043 for such facilities in the combined statements of activities as both revenue and expense in accordance with authoritative guidance for the years ended June 30, 2014 and 2013 respectively. These amounts are included as in-kind production expense in Note 8.

Investments The Associationâ&#x20AC;&#x2122;s Endowment Fund investments consisted of the following at June 30, 2014: Cost

Market

Money market funds: Merrill Lynch Regions Bank of America EverBank Wells Fargo SunTrust U.S. Treasury bonds Certificate of Deposit â&#x20AC;&#x201C; SunTrust U.S. Treasury Notes Corporate bonds Corporate stock

$ 10,180 15,487 78,049 102,153 594,622 1,430,755 228,839 937,093 1,140,256 1,093,803 1,069,106

$ 10,180 15,487 78,049 102,153 594,622 1,430,755 264,834 937,093 1,121,531 1,298,949 3,163,578

Total investments

$ 6,700,343

$ 9,017,231

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Notes to Combined Financial Statements Years Ended June 30, 2014 and 2013 6.

Investments (Continued) The Foundation Fund investments consisted of the following at June 30, 2014: Cost

Market

Money market funds - Wells Fargo Closed end funds Corporate stock Spitfire Fund, L.P. 683 Capital Partners, L.P. Lone Pine Capital, LLC Semper Vic Partners, L.P.

$ 50,647 39,665 185,585 500,000 500,000 490,305 475,000

$ 50,647 51,216 255,179 497,811 533,455 2,880,641 4,196,279

Total investments

$ 2,241,202

$ 8,465,228

The Association’s Endowment Fund investments consisted of the following at June 30, 2013: Cost

Market

Money market funds: Merrill Lynch Regions SunTrust Wells Fargo Bank of America EverBank U.S. Treasury bonds Certificate of deposit - SunTrust Corporate bonds Mutual funds – fixed income Corporate stock

$ 10,214 15,513 32,750 47,323 78,344 101,528 228,839 1,247,256 1,093,803 1,912,654 1,271,804

$ 10,214 15,513 32,750 47,323 78,344 101,528 273,565 1,247,256 1,305,942 1,885,749 3,075,028

Total investments

$ 6,040,028

$ 8,073,212

The Foundation Fund investments consisted of the following at June 30, 2013: Cost

Market

Money market funds - Wells Fargo Closed end funds Corporate stock Mutual funds - fixed income Lone Pine Capital, LLC Semper Vic Partners, L.P.

$ 240 39,665 176,080 578,582 490,305 1,475,000

$ 240 47,644 249,496 568,270 2,686,236 4,424,946

Total investments

$ 2,759,872

$ 7,976,832

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Notes to Combined Financial Statements Years Ended June 30, 2014 and 2013 6.

Investments (Continued) The Spitfire Fund, L.P., is an investor in small capitalization US equities. Most of its targets are underfollowed by sell side analysts and institutional investors and are often attractive acquisition candidates. Since inception, fifteen companies representing 25% of its investments have been acquired, by strategic or financial buyers. 683 Capital Partners, L.P., emphasizes fundamental-company and industry-specific research in selecting investments. It targets dislocations and special investment situations occurring across all industries and geographies. It is primarily invested in long-short equities and distressed debt as well as equity options and interest rates. Lone Pine Capital, LLCâ&#x20AC;&#x2122;s investment objective is to provide investors with compound annual longterm returns that are superior to the broad market averages while having less risk than the overall stock market. To accomplish this, the partnership invests primarily in public equity securities of U.S. and non-U.S. issuers. The partnership also invests (no more than 5% of partners' capital) in private placement securities, may utilize both over-the-counter and exchange traded instruments (including derivative instruments such as options, swaps, and futures on equities and equity indices and other equity derivatives), invest in other funds and invest in the high yield and convertible fixed income markets. The partnership does not engage in speculative trading in the interest rate, currency or physical commodities markets. Semper Vic Partners, L.P., is a limited partnership whose purpose is to serve as a fund through which the assets of its partners may be utilized in investing, holding and trading in securities, other financial instruments and rights and options relating thereto.

Fair Value Measurements Authoritative guidance provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under authoritative guidance are described as follows: Level 1

Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Symphony has the ability to access.

Level 2

Inputs to the valuation methodology include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Notes to Combined Financial Statements Years Ended June 30, 2014 and 2013 7.

Fair Value Measurements (Continued) Level 3

Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The assetâ&#x20AC;&#x2122;s or liabilityâ&#x20AC;&#x2122;s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. There have been no changes in the methodologies used at June 30, 2014 and 2013. Following is a description of the valuation methodologies used for Level 2 and 3 assets measured at fair value: Government bonds and notes: Valued using a third party data pricing service. Corporate bonds: Valued using matrix pricing. Matrix pricing is a mathematical technique used without relying exclusively on quoted prices for the specific investments, but rather on the investmentsâ&#x20AC;&#x2122; relationship to other benchmark quoted investments. Private investment partnership: Values of the securities and assets held are determined based on the last sales price, or the last current bid quotation, as applicable. Valuations of assets for which market quotations are not readily available are determined at the discretion of the investment manager. Real property: Valued using the market approach based primarily on current appraised values and other market information for similar property. All properties are valued at their highest and best use. The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Symphony believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Notes to Combined Financial Statements Years Ended June 30, 2014 and 2013 7.

Fair Value Measurements (Continued) The following table sets forth by level, within the fair value hierarchy, the Symphonyâ&#x20AC;&#x2122;s financial instruments at fair value at June 30, 2014: Level 1

Level 2

Level 3

Total

Closed end funds $ 51,216 Corporate stocks: Basic materials 15,264 Consumer goods 242,865 Consumer services 64,464 Financials 2,915,295 Industrials 34,178 Oil and gas 92,021 Technology 54,670 Certificates of deposit 937,093 Money market funds 2,281,893 U.S Treasury notes U.S. Treasury bonds Corporate bonds Private investment partnerships Real property -

$ -

$ 51,216

1,121,531 264,834 1,298,949 -

8,108,186 271,990

15,264 242,865 64,464 2,915,295 34,178 92,021 54,670 937,093 2,281,893 1,121,531 264,834 1,298,949 8,108,186 271,990

Total assets at fair value

$ 2,685,314

$ 8,380,176

$ 17,754,449

$ 6,688,959

Level 3 Gains and Losses The following table sets forth a summary of changes in the fair value of the Symphonyâ&#x20AC;&#x2122;s level 3 assets for the year ended June 30, 2014: Private Investment Partnerships Balance, beginning of year Donation of real property Investment Income Investment management fees Realized and unrealized gains

$ 7,111,182 271,990 307 (33,113) 1,029,810

Balance, end of year

$ 8,380,176

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Notes to Combined Financial Statements Years Ended June 30, 2014 and 2013 7.

Level 2

Level 3

Total

Mutual funds - fixed income $ 2,454,019 Closed end funds 47,644 Corporate stocks: Basic materials 17,970 Consumer goods 252,342 Consumer services 30,936 Financials 2,749,664 Industrials 50,523 Oil and gas 162,251 Technology 60,838 Certificates of deposit 1,247,256 Money market funds 285,912 U.S. Treasury bonds Corporate bonds Private investment partnerships -

$ -

$ 2,454,019 47,644

273,565 1,305,942 -

7,111,182

17,970 252,342 30,936 2,749,664 50,523 162,251 60,838 1,247,256 285,912 273,565 1,305,942 7,111,182

Total assets at fair value

$ 1,579,507

$ 7,111,182

$ 16,050,044

$ 7,359,355

Level 3 Gains and Losses The following table sets forth a summary of changes in the fair value of the Symphonyâ&#x20AC;&#x2122;s level 3 assets for the year ended June 30, 2013: Private Investment Partnerships Balance, beginning of year Investment management fees Transfers out Realized and unrealized gains

$ 6,499,003 (15,600) (627,223) 1,255,002

Balance, end of year

$ 7,111,182

There were no transfers between Level 1, Level 2 or Level 3 investments during the years ended June 30, 2014 and 2013.

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Notes to Combined Financial Statements Years Ended June 30, 2014 and 2013 8.

Contributions Contributions to the Operating Fund include the following in-kind amounts for the years ended June 30:

Production expenses Advertising and promotions Fundraising activities General and administrative

2014

2013

$ 364,835 54,570 25,037 4,898

$ 638,042 126,736 10,643 -

$ 449,340

$ 775,421

Contributions receivable consisted of the following at June 30: Unconditional promises expected to be collected in: Less than one year Between one to five years Total contributions Less: allowance for uncollectible contributions Less: discount to present value

2014

2013

$ 465,550 116,000

$ 477,773 410,250

581,550 (24,944) (2,963) $ 553,643

888,023 (31,013) (8,669) $ 848,341

Contributions have been discounted by an 8% annual rate of interest. One donor represented 17% of contributions receivable at June 30, 2014. One donor represented 23% of contributions receivable at June 30, 2013. 9.

Grant Programs City of Jacksonville Appropriations from the City of Jacksonville Cultural Services Grant Program for 2014 and 2013 are included in the Operating Fund and are maintained in a separate account at SunTrust Bank. City of Jacksonville Cultural Services Grant â&#x20AC;&#x201C; Operating (no grant number) Receipt of Funds City FY 2013-2014

City FY 2012-2013

Amount of award (per city budget ordinance) Actual funds received from City in last audit period Actual amount received this period

$ 285,791 (214,343)

$ 327,380 (245,535) (81,845)

Amount remaining to be distributed

$ 71,448

$ -

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Notes to Combined Financial Statements Years Ended June 30, 2014 and 2013 9.

Grant Programs (Continued) City FY 2013-2014

Item Artistic salary expenses

Budgeted

Actual 10/1/2013 – 6/30/2014

Actual 7/1/2014 – 9/30/2014

$ 285,791

$ -

$ 285,791

$ -

Total

$ 285,791

$ -

$ 285,791

$ -

Total Actual

Remaining Balance

City FY 2012-2013

Item Artistic salary expenses

Budgeted

Actual 10/1/2012 – 6/30/2013

Actual 7/1/2013 – 9/30/2013

$ 327,380

$ -

$ 327,380

$ -

Total

$ 327,380

$ -

$ 327,380

$ -

Total Actual

Remaining Balance

State of Florida Appropriations from the State of Florida, Division of Cultural Affairs are included in the Operating Fund. The total grant awards of $36,800 and $41,211 were expended toward guest artist fees during the years ended June 30, 2014 and 2013, respectively. Other Other federal, state and local grant revenues were $83,900 and $47,500 for the years ended June 30, 2014 and 2013, respectively. 10. Commitments The Symphony entered into a collective bargaining agreement beginning January 27, 2013, with its Full and Core Orchestra musicians, which represents 100% of the Symphony's musician labor force. The original contract terminated on August 31, 2014. In June of 2014, an extension agreement for this contract was signed, extending the contract to November 30, 2014. 11. Multiemployer plan The Symphony contributes to multiemployer defined benefit pension plans under the terms of collective-bargaining agreement, see note 10, that cover its union-represented musicians. The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects: a. Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Notes to Combined Financial Statements Years Ended June 30, 2014 and 2013 11. Multiemployer plan (Continued) b. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. c. If the Symphony chooses to stop participating in its multiemployer plan, the Symphony may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. The Symphony’s participation in these plans for the periods ended June 30, 2014 and 2013, is outlined in the table below. The EIN/Pension Plan Number column provides the Employer Identification Number (EIN) and the three-digit plan number, if applicable. Unless otherwise noted, the most recent Pension Protection Act (PPA) zone status available in 2014 is for the plan’s year-end at March 31, 2014. The zone status is based on information that the Symphony received from the plan and is certified by the plan’s actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded. The FIP/RP Status Pending/Implemented column indicates plans for which a financial improvement plan (FIP) or a rehabilitation plan (RP) is either pending or has been implemented. The last column lists the expiration date of the collective-bargaining agreement to which the plans are subject see note 10. Contributions for the year ended

Pension Fund American Federation of Musicians and Employers’ Pension Plan

EIN/ Pension Plan Number

51-6120204 001

FIP/RP Pension Status Protection Pending/ Act Zone Implemented Status

Red

Yes

June 30, 2014

June 30, Surcharge imposed? 2013

$ 194,223 $ 174,000

Expiration Date of Collective Bargaining Agreement

November 30, 2014

As of June 30, 2014 and 2013, the Symphony had $15,858 and $0, respectively, of contributions to the Pension Fund in accounts payable and accrued liabilities on the combined statement of financial position. The contributions above did not exceed 5% of the total contributions to the Fund in any of the years listed above. 12. Fine Arts Investments The Symphony has three endowment programs (Fine Arts I, Fine Arts II and Fine Arts III) with assets held at Wells Fargo that received matching funds from the State. The Symphony contributed $360,000 and the State matched $240,000 in each case. The Symphony is required, at all times, to maintain the $600,000 for each award in these separate accounts. If the funds fall below $600,000 the Symphony would be required to refund the State portion. 20

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Notes to Combined Financial Statements Years Ended June 30, 2014 and 2013 12. Fine Arts Investments (Continued) These accounts consisted of the following, and are included in Board designated net assets, at June 30: Fine Arts I Cost Market

2014 Fine Arts II Cost Market

Fine Arts III Cost Market

Money market funds U.S. Treasury Notes Corporate Stocks

$ 532,677 $ 532,677 $ 14,383 $ 14,383 $ 24,842 $ 24,842 619,677 604,361 520,557 517,171 101,037 184,256 34,142 72,886 81,698 165,563

Total

$ 633,714 $ 716,933 $ 668,202 $ 691,630 $ 627,097 $ 707,576

Fine Arts I Cost Market

2013 Fine Arts II Cost Market

Fine Arts III Cost Market

Money market funds Corporate bonds Mutual funds fixed income

$ 19,179 $ 19,179 $ 125 $ 125 $ 5,294 $ 5,294 120,847 179,255 123,109 184,913 125,878 188,368

Total

$ 696,758 $ 745,420 $ 760,319 $ 811,821 $ 699,666 $ 756,833

556,732

546,986

637,085

626,783

568,494

563,171

13. Restrictions and Limitations on Net Asset Balances Temporarily restricted net assets consisted of gifts and other unexpended revenues and gains available for future Operating Fund Program services of $695,476 and $1,084,901 at June 30, 2014 and 2013, respectively. 14. Transfers Net Assets Released From Temporary Restrictions Net assets are released from temporary restrictions through the occurrence of expenses satisfying the restricted purposes or by occurrence of events specified by the donors and are summarized as follows for the years ended June 30: 2014

2013

Utilization of time restricted contributions Utilization of purpose restricted contributions

$ 3,240,392 1,410,052

$ 3,128,794 1,389,090

Net assets released from temporary restrictions

$ 4,650,444

$ 4,517,884

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Notes to Combined Financial Statements Years Ended June 30, 2014 and 2013 14. Transfers (Continued) Net Assets Released from Board Designated The Symphony Board of Directors approved releases of Board designated net assets to undesignated net assets as follows for the years ended June 30: 2014

2013

Bridge Fund Foundation Fund* Endowment Fund*

$ 565,123 558,378

$ 200,767 366,080 403,094

Total release of Board designated net assets

$ 1,123,501

$ 969,941

*These transfers to the Association’s Operating Fund are consistent with the Association’s “Endowment Investment and Spending Policy.”

Supplemental Schedules

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Combining Schedule of Financial Position June 30, 2014

Assets: Cash and cash equivalents Contributions receivable, net Due from (to) other funds Other receivables and accrued interest Investments Investment in real estate Property and equipment, net Other assets

Total assets

Liabilities and net assets: Liabilities: Accounts payable and accrued liabilities Deferred revenue ‐ concert ticket sales and sponsorships Line of credit Total liabilities Net assets Total liabilities and net assets

Operating Fund

Guild Fund

Endowment Fund

$ 98,583 476,606 145,453 89,763 ‐ 271,990 73,404 233,549

$ 276,137 ‐ (81,000) ‐ ‐ ‐ ‐ 1,497

$ ‐ 77,037 (64,453) 29,653 9,017,231 ‐ ‐ ‐

$ 468,288

$ 4,365

$ ‐

$ 1,389,348

1,178,952 2,682,893 4,330,133 (2,940,785) $ 1,389,348

$ 196,634

7,465 ‐ 11,830 184,804 $ 196,634

$ 9,059,468

‐ ‐ ‐ 9,059,468 $ 9,059,468

Jacksonville Symphony Association Total

Jacksonville Symphony Foundation

Total

$ 374,720 553,643 ‐ 119,416 9,017,231 271,990 73,404 235,046

$ ‐ ‐ ‐ ‐ 8,465,228 ‐ ‐ ‐

$ 374,720 553,643 ‐ 119,416 17,482,459 271,990 73,404 235,046

$ 472,653

$ ‐

$ 472,653

$ 10,645,450

$ 8,465,228

$ 19,110,678

$ 10,645,450

1,186,417 2,682,893 4,341,963 6,303,487

$ 8,465,228

‐ ‐ ‐ 8,465,228

$ 19,110,678

1,186,417 2,682,893 4,341,963 14,768,715

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Combining Schedule of Financial Position June 30, 2013

Assets: Cash and cash equivalents Contributions receivable, net Due (to) from other funds Other receivables and accrued interest Investments Property and equipment, net Other assets

Total assets

Operating Fund

Guild Fund

Endowment Fund

$ 187,711

$ 8,151,529

$ ‐ 737,010 101,503 112,136 ‐ 69,766 242,946

$ 226,953 ‐ (39,840) ‐ ‐ ‐ 598

$ 366,586

$ ‐

$ 1,263,361

1,221,522 2,291,239 3,879,347 (2,615,986) $ 1,263,361

14,595 ‐ 14,595 173,116 $ 187,711

$ ‐ 111,331 (61,663) 28,649 8,073,212 ‐ ‐

$ ‐

‐ ‐ ‐ 8,151,529 $ 8,151,529

Jacksonville Symphony Association Total

Jacksonville Symphony Foundation

Total

$ 226,953 848,341 ‐ 140,785 8,073,212 69,766 243,544

$ ‐ ‐ ‐ 629 7,976,832 ‐ ‐

$ 226,953 848,341 ‐ 141,414 16,050,044 69,766 243,544

$ 366,586

$ ‐

$ 366,586

$ 9,602,601

1,236,117 2,291,239 3,893,942 5,708,659 $ 9,602,601

$ 7,977,461

‐ ‐ ‐ 7,977,461 $ 7,977,461

$ 17,580,062

1,236,117 2,291,239 3,893,942 13,686,120 $ 17,580,062

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Combining Schedule of Activities Year Ended June 30, 2014 Undesignated Operating Fund

Board Designated

Guild Fund

Endowment Fund

(81,000)

‐

Revenue, gains and other support: Ticket sales and concert fees Contributions Grants Advertising Fundraising activities Interest income Gain on sale of investments Unrealized investment gain Other revenue Total revenue, gains and other support

$ 3,215,903 3,854,528 406,491 77,410 286,924 ‐ ‐ ‐ 155,640 7,996,896

$ ‐ ‐ ‐ ‐ 166,442 165 ‐ ‐ ‐ 166,607

Transfers from foundation

558,378

‐

Transfers from guild fund

Transfers from endowment fund

81,000

565,123

‐

$ ‐ 930,000 ‐ ‐ ‐ 132,922 22,695 388,729 ‐ 1,474,346

(565,123)

Expenses: Musical productions: Salaries and benefits Advertising and promotion Production expenses Guest artist fees Total musical productions

4,201,677 1,055,398 1,839,909 685,664 7,782,648

‐ ‐ ‐ ‐ ‐

Total expenses

9,526,196

73,919

1,284

Supporting activities: Interest expense Fundraising activities Administrative salaries and benefits General and administrative expenses Total supporting activities

Change in net assets before non‐recurring transactions Release from future years annual fund Change in net assets

Net assets, beginning of year Net assets, end of year

19,371 211,953 1,185,063 327,161 1,743,548 (324,799) 389,425

‐ 73,919 ‐ ‐ 73,919

‐ ‐ ‐ 1,284 1,284

64,626

11,688 ‐

11,688

907,939 ‐

$ (3,636,261)

$ 184,804

$ 9,059,468

(3,700,887)

173,116

907,939

8,151,529

Temporarily Restricted

Future Year(s) Annual Fund

Jacksonville Symphony Association Total

Jacksonville Symphony Foundation

Total

$ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

$ 3,215,903 4,784,528 406,491 77,410 453,366 133,087 22,695 388,729 155,640 9,637,849

$ ‐ 5,000 ‐ ‐ ‐ 10,425 405,092 664,110 ‐ 1,084,627

$ 3,215,903 4,789,528 406,491 77,410 453,366 143,512 427,787 1,052,839 155,640 10,722,476

‐

558,378

(558,378)

‐

‐ ‐ ‐ ‐ ‐

‐ ‐

4,201,677 1,055,398 1,839,909 685,664 7,782,648

‐ ‐ ‐ ‐ ‐

4,201,677 1,055,398 1,839,909 685,664 7,782,648

9,601,399

38,482

9,639,881

‐ ‐ ‐ ‐ ‐

19,371 285,872 1,185,063 328,445 1,818,751

‐ (389,425)

594,828 ‐

487,767 ‐

1,082,595 ‐

$ 695,476

$ 6,303,487

$ 8,465,228

$ 14,768,715

‐

(389,425) 1,084,901

594,828

5,708,659

‐ 2,486 ‐ 35,996 38,482

487,767

7,977,461

19,371 288,358 1,185,063 364,441 1,857,233

1,082,595

13,686,120

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION Combining Schedule of Activities Year Ended June 30, 2013 Undesignated Revenue, gains and other support: Ticket sales and concert fees Contributions Grants Advertising Fundraising activities Interest income Gain on sale of investments Unrealized investment gain Other revenue Total revenue, gains and other support

Transfers from guild fund Transfers from foundation Transfers from endowment fund Expenses: Musical productions: Salaries and benefits Advertising and promotion Production expenses Guest artist fees

Total musical productions

Supporting activities: Interest expense Fundraising activities Administrative salaries and benefits General and administrative expenses Total supporting activities

Total expenses

Change in net assets before non‐recurring transactions Release from temporarily restricted to board Release from future year annual fund Release from board designated bridge fund for budget shortfall Release from temporarily restricted bridge

Operating Fund

$ 2,671,380 3,785,534 416,091 100,926 99,739 ‐ ‐ ‐ 142,391 7,216,061

Guild Fund

Endowment Fund

Bridge Fund

39,840 366,080 403,094

$ ‐ ‐ ‐ ‐ 90,026 165 ‐ ‐ ‐ 90,191

(39,840) ‐ ‐

$ ‐ ‐ ‐ ‐ ‐ 145,597 58,724 729,634 ‐ 933,955

$ ‐ 17,925 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 17,925

4,223,755 1,005,824 1,473,225 658,823

‐ ‐ ‐ ‐

21,788 161,595 1,132,139 263,740

‐ 50,023 ‐ ‐ 50,023

‐ ‐ ‐ 9,817

9,817

‐ ‐ ‐ ‐

(915,814)

328

532,378

17,925

‐

172,788

7,619,151

7,361,627

1,579,262

8,940,889

316,259

200,767

‐

50,023 ‐

Change in net assets

(398,788)

328

Net assets, end of year

$ (3,700,887)

$ 173,116

Net assets, beginning of year

Board Designated

(3,302,099)

‐ ‐ 11,334 ‐ (403,094) ‐

‐

9,817 ‐

‐

‐ ‐ ‐

(200,767)

532,378

(182,842)

$ 8,151,529

$ ‐

182,842

Temporarily Restricted

Future Year(s) Annual Fund

Jacksonville Symphony Association Total

Jacksonville Symphony Foundation

Total

$ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

$ 2,671,380 3,803,459 416,091 100,926 189,765 145,762 58,724 729,634 142,391 8,258,132

$ ‐ 250,000 ‐ ‐ ‐ 8,208 401,112 909,628 ‐ 1,568,948

$ 2,671,380 4,053,459 416,091 100,926 189,765 153,970 459,836 1,639,262 142,391 9,827,080

‐ ‐ ‐ ‐

4,223,755 1,005,824 1,473,225 658,823

‐ ‐ ‐ ‐

4,223,755 1,005,824 1,473,225 658,823

‐ ‐ ‐ ‐

21,788 211,618 1,132,139 273,557

‐ ‐ ‐ 18,564

21,788 211,618 1,132,139 292,121

‐

(365,183)

1,172,970

807,787

‐

‐ ‐ ‐

‐

(316,259)

‐ 377,414 ‐

7,361,627

1,639,102 9,000,729

‐

(316,259)

(365,183)

$ 1,084,901

$ 5,708,659

1,401,160

6,073,842

‐ (377,414) ‐

‐

18,564 18,564 ‐

‐

1,172,970

6,804,491

$ 7,977,461

‐ ‐ ‐

7,361,627

1,657,666 9,019,293

‐

807,787

12,878,333

$ 13,686,120

The G RO U P

Accountants Consultants Wealth Advisors

LBA Certified Public Accountants, PA

Report of Independent Certified Public Accountant 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 To the Board of Directors of Jacksonville Symphony Association and Jacksonville Symphony Foundation Jacksonville, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the combined financial statements of Jacksonville Symphony Association (a not-for-profit organization) and Jacksonville Symphony Foundation (a not-for-profit organization) (collectively the Symphony) which comprise the combined statement of financial position as of June 30, 2014, and the related combined statements of activities, and cash flows for the year then ended, and the related notes to the combined financial statements and have issued our report thereon dated October 16, 2014. Internal Control Over Financial Reporting In planning and performing our audit of the combined financial statements, we considered the Symphony’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the combined financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Symphony’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Symphony’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s combined financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 501 Riverside Avenue, Suite 800, Jacksonville, FL 32202-4939 904.396.4015 904.399.4012 www.TheLBAGroup.com

The G RO U P

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Compliance and Other Matters As part of obtaining reasonable assurance about whether the Symphonyâ&#x20AC;&#x2122;s combined financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of combined financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Symphonyâ&#x20AC;&#x2122;s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Symphonyâ&#x20AC;&#x2122;s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

October 16, 2014

The G RO U P

Accountants Consultants Wealth Advisors

LBA Certified Public Accountants, PA

Report of Independent Certified Public Accountants on the Management Assertion Report

To the Board of Directors of Jacksonville Symphony Association Jacksonville, Florida We have examined management’s assertion, included in the accompanying Management Assertion Report, that the Jacksonville Symphony Association (the Association) complied with the allowable cost requirements established in the grant agreements applicable to grant expenditures identified on the Schedule of State Financial Assistance for the year ended June 30, 2014. Management is responsible for the Association’s compliance with those requirements. Our responsibility is to express an opinion on management’s assertion about the Association’s compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Association’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. In our opinion, management’s assertion that the Association complied with the aforementioned requirements during the year ended June 30, 2014 is fairly stated, in all material respects.

October 16, 2014

501 Riverside Avenue, Suite 800, Jacksonville, FL 32202-4939 904.396.4015 904.399.4012 www.TheLBAGroup.com

JACKSONVILLE SYMPHONY ASSOCIATION Schedule of State Financial Assistance Year Ended June 30, 2014

State Agency and Program Title

State Contract/Grant Number

Florida Department of State, Division of Cultural Affairs: General Program Support Grant

13.6.102.245

Expenditures

$ 36,800