Fiscal Year 2011-2012 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, 2012 AND 2011

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

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 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 We have audited the accompanying combined statements of financial position of the Jacksonville Symphony Association (a not-for-profit organization) and the Jacksonville Symphony Foundation (a notfor-profit organization) as of June 30, 2012 and 2011, and the related combined statements of activities and cash flows for the years then ended. These financial statements are the responsibility of the Jacksonville Symphony Association and Jacksonville Symphony Foundationâ&#x20AC;&#x2122;s management. 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Jacksonville Symphony Association and the Jacksonville Symphony Foundation as of June 30, 2012 and 2011, 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. In accordance with Government Auditing Standards, we have also issued our report dated October 8, 2012, 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 and should be considered in assessing the results of our audit. Our audits were conducted for the purpose of forming an opinion on the combined financial statements as a whole. The combining information on pages 3, 4, 5, 20, 21, 22 and 23 is presented for purposes of additional analysis of the combined financial statements rather than to present the financial position,

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

The G RO U P

Accountants Consultants Wealth Advisors

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.

October 8, 2012

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION COMBINED STATEMENT OF FINANCIAL POSITION WITH COMBINING INFORMATION JUNE 30, 2012

Jacksonville Symphony Association Assets: Cash and cash equivalents Contributions receivable, net Other receivables and accrued interest Investments 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: Unrestricted: Undesignated Board designated Total unrestricted Temporarily restricted Total net assets Total liabilities and net assets

Jacksonville Symphony Foundation

Total

178,208 1,317,242 148,906 7,492,458 61,222 264,683

32 6,804,459 -

$ 9,462,719

6,804,491

$ 16,267,210

352,055 1,249,033 1,787,789 3,388,877

(3,129,311) 7,801,993 4,672,682 1,401,160 6,073,842 $ 9,462,719

6,804,491 6,804,491 6,804,491 $

6,804,491

178,208 1,317,242 148,938 14,296,917 61,222 264,683

352,055 1,249,033 1,787,789 3,388,877

(3,129,311) 14,606,484 11,477,173 1,401,160 12,878,333 $ 16,267,210

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION COMBINED STATEMENT OF FINANCIAL POSITION WITH COMBINING INFORMATION JUNE 30, 2011

Jacksonville Symphony Foundation

Total

178,523 603,523 246,125 7,440,541 31,507 220,908

6,567,864 -

$ 8,721,127

6,567,864

$ 15,288,991

2,060

265,847 1,155,039 468,611 1,889,497

2,060

(2,625,399) 7,899,372 5,273,973 1,557,657 6,831,630 $ 8,721,127

6,565,804 6,565,804 6,565,804 $

6,567,864

178,523 603,523 246,125 14,008,405 31,507 220,908

267,907 1,155,039 468,611 1,891,557

(2,625,399) 14,465,176 11,839,777 1,557,657 13,397,434 $ 15,288,991

See accompanying notes to financial statements.

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION COMBINED STATEMENT OF ACTIVITIES WITH COMBINING INFORMATION YEAR ENDED JUNE 30, 2012

Jacksonville Symphony Association Unrestricted Board Temporarily Undesignated Designated Restricted

Jacksonville Symphony Foundation Board Designated

Total

Revenues and other support: Ticket sales and concert fees

Contributions Grants

2,796,517

$ 2,796,517

2,796,517

24,099

3,949,263

3,973,362

389,530

Advertising

105,640

Fund raising activities

267,371

3,584

145,067

148,651

4,939

153,590

Investment income Gain on sale of investments

60,638

243,544

304,182

Unrealized investment gain

134,983

181,302 -

181,302 134,983

341,286 -

522,588 134,983

3,308,095

411,106

4,338,793

8,057,994

589,769

8,647,763

5,197,885

(378,475)

(4,495,290)

324,120

(324,120)

4,471,163

Other revenue Total revenues and other support Net assets released from restricted and board designated Expenses: Musical productions: Salaries and benefits Advertising and promotion Production expenses Guest artist fees Total musical productions

984,980

1,326,033 700,405

7,482,581

Supporting services: Interest expense Fund raising activities Administrative salaries and benefits General and administrative expenses Total supporting services Total expenses

14,434

304,680

1,093,928 240,204

4,075

1,093,928 244,279

26,962

1,093,928 271,241

1,653,246

4,075

1,657,321

26,962

1,684,283

9,135,827

4,075

9,139,902

26,962

9,166,864

Net assets released by board

150,000

(150,000)

Net assets designated by board

(24,065)

24,065

Change in net assets

(503,912)

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

(97,379)

(2,625,399) $

(3,129,311)

(156,497)

7,899,372 $

7,801,993

(757,788)

238,687

(519,101)

1,557,657

6,831,630

6,565,804

13,397,434

1,401,160

$ 6,073,842

$ 6,804,491

$ 12,878,333

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION COMBINED STATEMENT OF ACTIVITIES WITH COMBINING INFORMATION YEAR ENDED JUNE 30, 2011

Jacksonville Symphony Association Unrestricted Board Temporarily Undesignated Designated Restricted

Jacksonville Symphony Foundation

Total

Board Designated

Total

Revenues and other support: Ticket sales and concert fees

Contributions Grants

2,364,481

$ 2,364,481

2,364,481

381,765

3,961,727

4,343,492

373,603

Advertising

103,171

Fund raising activities

294,191

Investment income

17,398

197,519

214,917

6,806

221,723

Gain on sale of investments

44,826

421,970

466,796

Unrealized investment (loss) gain

(1,861)

1,111,834

1,109,973

Other revenue Total revenues and other support

121,098

2,900,339

622,249

4,335,330

7,857,918

1,540,610

9,398,528

5,315,238

(695,008)

(4,354,132)

Net assets released from restricted and board designated

266,098

(266,098)

Expenses: Musical Productions: Salaries and benefits

4,221,348

Advertising and promotion

1,028,383

Production expenses

1,082,251

584,048

6,916,030

Guest artist fees Total musical productions Supporting services: Interest expense Fund raising activities Administrative salaries and benefits General and administrative expenses Total supporting services Total expenses Change in net assets

7,361

68,744

347,818

1,089,719

254,758

1,057

255,815

29,639

285,454

1,630,912

69,801

1,700,713

29,639

1,730,352

8,546,942

69,801

8,616,743

29,639

8,646,382

1,244,873

752,146

(331,365)

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

7,361 279,074

(142,560)

(2,294,034)

8,041,932

(2,625,399)

$ 7,899,372

(18,802)

(492,727)

1,576,459

7,324,357

5,320,931

12,645,288

1,557,657

$ 6,831,630

$ 6,565,804

$ 13,397,434

See accompanying notes to financial statements.

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION COMBINED STATEMENT OF CASH FLOWS WITH COMBINING INFORMATION YEAR ENDED JUNE 30, 2012

Cash flows from operating activities: Change in net assets Adjustments to reconcile change in net assets to net cash used by operating activities: 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

Jacksonville Symphony Association

Jacksonville Symphony Foundation

Cash flows from investing activities: Purchases of investments Net (increase) 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 Cash flows from financing activities: Net increase in line of credit

(757,788)

(519,101)

(60,638) (181,302) 21,472

(243,544) (341,286) 25,277 -

(304,182) (522,588) 25,277 21,472

(713,719) 97,219 (43,775) 86,208 93,994 (1,458,329)

(32) (2,060) (322,958)

(713,719) 97,187 (43,775) 84,148 93,994 (1,781,287)

(650,122)

(415,536)

(1,065,658)

(11,351) 851,496 (51,187) 138,836

18,440 720,054 322,958

7,089 1,571,550 (51,187) 461,794

1,319,178

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

238,687

Total

(315) 178,523

1,319,178

(315) 178,523

Cash and cash equivalents, ending of year

178,208

Supplemental disclosure of cash flow information: Interest paid

14,434

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION COMBINED STATEMENT OF CASH FLOWS WITH COMBINING INFORMATION YEAR ENDED JUNE 30, 2011

Cash flows from operating activities: Change in net assets Adjustments to reconcile change in net assets to net cash used by operating activities: Loss on disposal of assets Gain on sale of investments Unrealized investment loss (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

Jacksonville Symphony Association

Jacksonville Symphony Foundation

$ 1,244,873

Cash flows from investing activities: Purchases of investments Net decrease (increase) in money market and certificate of deposit investments Proceeds from sales of investments Purchases of property and equipment Net cash provided by investing activities Cash flows from financing activities: Net decrease in line of credit Net decrease in cash and cash equivalents Cash and cash equivalents, beginning of year

(492,727)

Total $

752,146

752 (44,826) 1,861 37,200

(421,970) (1,111,834) 25,527 -

752 (466,796) (1,109,973) 25,527 37,200

79,455 (132,978) (40,845) 14,478 64,077 (513,553)

1,030 (262,374)

79,455 (132,978) (40,845) 15,508 64,077 (775,927)

(1,401,714)

(116,623)

(1,518,337)

9,107 1,555,226 (8,549) 154,070

(20,986) 399,983 262,374

(11,879) 1,955,209 (8,549) 416,444

(31,389)

(390,872) 569,395

Cash and cash equivalents, ending of year

178,523

Supplemental disclosure of cash flow information: Interest paid

7,361

See accompanying notes to financial statements. 5

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION NOTES TO COMBINED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2012 AND 2011 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 Symphony’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. Principals 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: 

The Operating Fund represents the portion of expendable funds that are available for support of 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. 6

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION NOTES TO COMBINED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2012 AND 2011 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 Organ Fund represented funds that were designated for the restoration of a pipe organ. The restoration project was completed in fiscal year 2002 and the pipe organ was relinquished to the City of Jacksonville. All funds were then expendable funds available for support of Association operations. In 2011, the Symphony transferred the balance of the Organ Fund to the Operating Fund.



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 held to fund future potential operating 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, 2012 and 2011. 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. 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, law or by Board action.

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION NOTES TO COMBINED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2012 AND 2011 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 fundraising 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 additional 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. Contributions of property and equipment without donor stipulations concerning the use of such longlived 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 $42,000 in donated legal services during the year 2012. 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, 2012 AND 2011 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, 2012 and 2011, the Board of Directors had designated $14,606,484 and $14,465,176, 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 up to 5% of its Board designated endowmentâ&#x20AC;&#x2122;s fair market value at year end. 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 3.5% 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 5%, while growing the fund if possible. Accordingly, the Symphony expects its endowment assets, over time, to produce an average rate of return of approximately 8.5%. 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 (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.

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION NOTES TO COMBINED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2012 AND 2011 2.

Summary of Significant Accounting Policies (Continued) 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. 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. 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% (1.57% at June 30, 2012). The line is secured by investments in Berkshire Hathaway and other corporate stocks, SunTrust cash reserves and various corporate and U.S. Treasury Bonds.

Property and Equipment Property and equipment consisted of the following at June 30: 2012 Furniture and fixtures Instruments Leasehold improvements

Total property and equipment Less: accumulated depreciation and amortization Property and equipment, net

780,284 399,387 344,953

2011 $

734,888 393,597 344,953

1,524,624

1,473,438

(1,463,402)

(1,441,931)

61,222

31,507

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION NOTES TO COMBINED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2012 AND 2011 5.

Operating Lease The Association has a two year lease on its facilities which expires June 30, 2013. Rent expense was $99,220 and $95,998 for the years ended June 30, 2012 and 2011, respectively. Future minimum lease payments under this non-cancelable operating lease amount to $100,183 for the year ended June 30, 2013. The Association receives rent-free rehearsal space for the Jacksonville Symphony Youth Orchestra as a contribution from an unrelated party. The Association recognized $338,043 and $323,580 for such facilities in the combined statements of activities as both revenue and an expense accordance with authoritative guidance for each of the years ended June 30, 2012 and 2011. 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, 2012: Cost Money market funds: SunTrust EverBank Bank of America Wells Fargo Regions Merrill Lynch Certificate of deposit - SunTrust Federal Farm Credit Bank bonds U.S. Treasury bonds Mutual funds - fixed income Corporate bonds Corporate stock Total investments

Market

294,509 100,769 78,641 22,749 15,511 10,270 1,233,499 50,185 228,839 1,150,611 1,473,188 1,507,350

294,509 100,769 78,641 22,749 15,511 10,270 1,233,499 51,633 294,563 1,146,760 1,722,499 2,521,055

6,166,121

7,492,458

The Foundation Fund investments consisted of the following at June 30, 2012: Cost

Market

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

5,538 50,000 49,545 149,729 490,305 1,475,000

5,538 50,000 77,595 172,323 2,808,404 3,690,599

Total investments

2,220,117

6,804,459

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION NOTES TO COMBINED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2012 AND 2011 6.

Investments (Continued) The Associationâ&#x20AC;&#x2122;s Endowment Fund investments consisted of the following at June 30, 2011: Cost Money market funds: SunTrust Merrill Lynch Wells Fargo Regions Certificate of deposit - SunTrust Federal Farm Credit Bank bonds U.S. Treasury notes U.S. Treasury bonds Corporate bonds Corporate stock Mutual funds - fixed income Total investments

Market

382,256 89,289 27,204 15,478 1,230,372 50,185 148,689 228,839 1,558,452 1,147,649 1,424,770

382,256 89,289 27,204 15,478 1,230,372 53,281 153,492 274,277 1,769,571 2,015,372 1,429,949

6,303,183

7,440,541

The Foundation Fund investments consisted of the following at June 30, 2011: Cost

Market

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

23,978 69,305 491,644 490,305 1,475,000

23,978 102,201 569,068 2,577,806 3,294,811

Total investments

2,550,232

6,567,864

Lone Pine Capital, LLCâ&#x20AC;&#x2122;s investment objective is to provide investors with compound annual long-term 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.

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION NOTES TO COMBINED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2012 AND 2011 7.

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.

Level 3

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

The asset’s or liability’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, 2012 and 2011. Following is a description of the valuation methodologies used for assets measured at fair value: Mutual funds, money market funds and closed end funds: Valued at the net asset value of the units reported on the active market on which the individual securities are traded. Corporate stock: Valued at the closing price reported on the active market on which the individual securities are traded. Certificates of deposit: Valued using a third party data service’s specialized certificate of deposit values. 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 investments’ relationship to other benchmark quoted investments. Government bonds and notes: Valued using a third party data pricing service. 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.

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION NOTES TO COMBINED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2012 AND 2011 7.

Fair Value Measurements (Continued) 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. 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, 2012: Level 1 Mutual funds - fixed income Closed end funds Corporate stocks: Basic materials Consumer goods Consumer services Financials Industrials Oil and gas Technology Certificates of deposit Money market funds U.S. Treasury notes U.S. Treasury bonds Corporate bonds Private investment partnerships

Total assets at fair value

Level 2

1,196,760 77,595

29,106 168,232 36,428 2,230,938 61,729 93,665 73,280 1,233,499 527,987

51,633 294,563 1,722,499 -

5,729,219

Level 3

2,068,695

Total -

$ 1,196,760 77,595

6,499,003

29,106 168,232 36,428 2,230,938 61,729 93,665 73,280 1,233,499 527,987 51,633 294,563 1,722,499 6,499,003

6,499,003

$ 14,296,917

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, 2012: Private Investment Partnerships Balance, beginning of year Management fees Realized and unrealized gains

5,872,617 (25,277) 651,663

Balance, end of year

6,499,003

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION NOTES TO COMBINED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2012 AND 2011 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, 2011: Level 1 Mutual funds - fixed income Closed end funds Corporate stocks: Basic materials Consumer goods Consumer services Financials Industrials Oil and gas Technology Certificates of deposit Money market funds U.S. Treasury notes Federal farm credit bank bonds U.S. Treasury bonds Corporate bonds Private investment partnerships

Total assets at fair value

1,429,949 102,201

Level 2 $

32,382 136,648 82,778 2,102,765 39,330 140,732 49,805 1,230,372 538,205 153,492 6,038,659

Level 3 -

53,281 274,277 1,769,571 $

2,097,129

Total -

1,429,949 102,201

5,872,617

32,382 136,648 82,778 2,102,765 39,330 140,732 49,805 1,230,372 538,205 153,492 53,281 274,277 1,769,571 5,872,617

5,872,617

$ 14,008,405

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, 2011: Private Investment Partnerships Balance, beginning of year Management fees Sale of investment shares Realized and unrealized gains

4,745,444 (25,527) (267,000) 1,419,700

Balance, end of year

5,872,617

There were no transfers between Level 1, Level 2 or Level 3 investments during the years ended June 30, 2012 and 2011.

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION NOTES TO COMBINED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2012 AND 2011 8.

Contributions Contributions to the Operating Fund include the following in-kind amounts for the years ended June 30: 2012 Production expenses Fundraising activities Advertising and promotions

2011

380,043 16,176 -

325,562 6,102 4,500

396,219

336,164

Contributions receivable consisted of the following at June 30: 2012 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

792,746 579,500

2011 $

1,372,246 (35,163) (19,841) $

1,317,242

548,583 200,500 749,083 (112,212) (33,348)

603,523

Contributions have been discounted by an 8% annual rate of interest. Two donors represented 21% and 14% of contributions receivable at June 30, 2012. One donor represented 26% of contributions receivable at June 30, 2011. 9.

Grant Programs City of Jacksonville Appropriations from the City of Jacksonville Cultural Services Grant Program for 2012 and 2011 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 2011-2012

City FY 2010-2011

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

323,724 (242,793)

Amount remaining to be distributed

80,931

318,861 (239,146) (79,715) -

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION NOTES TO COMBINED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2012 AND 2011 9.

Grant Programs (Continued) City FY 2011-2012 Actual 10/1/2011 – 6/30/2012

Budgeted

Actual 7/1/2012 – 9/30/2012

Total Actual

Remaining Balance

Item Artistic salary expenses

323,724

Total

323,724

City FY 2010-2011 Actual 10/1/2010 – 6/30/2011

Budgeted

Actual 7/1/2011 – 9/30/2011

Total Actual

Remaining Balance

Item Artistic salary expenses

318,861

Total

318,861

State of Florida Appropriations from the State of Florida, Division of Cultural Affairs are included in the Operating Fund. The total grant awards of $18,306 and $7,242 were expended toward guest artist fees during the years ended June 30, 2012 and 2011, respectively. Other Other federal, state and local grant revenues were $47,500 for each of the years ended June 30, 2012 and 2011. 10. Commitments The Symphony entered into a collective bargaining agreement beginning January 16, 2008, with its Full and Core Orchestra musicians, which represents 100% of the Symphony's musician labor force. This contract terminated on August 31, 2012. As of the date of this report the musician labor force and Symphony management are in ongoing negotiations. 11. Fine Arts Investments The Association 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 Association contributed $360,000 and the State matched $240,000 in each case. The Association 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 Association would be required to refund the State portion.

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION NOTES TO COMBINED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2012 AND 2011 11. Fine Arts Investments (Continued) These accounts consisted of the following, and are included in Board designated net assets, at June 30: 2012 Fine Arts 2 Cost Market

Fine Arts 1 Cost Market Money market funds Corporate bonds Mutual funds fixed income

$ 15,821 176,857

$ 15,821 179,929

$ 14,978 151,919

$ 14,978 153,015

296,933

296,451

296,525

295,978

470,995

468,759

178,109

208,519

212,452

227,589

200,472

196,017

$ 667,720

$ 700,720

$ 675,874

$ 691,560

$ 674,423

$ 667,732

Corporate stocks Total

Fine Arts 3 Cost Market

2011 Fine Arts 2 Cost Market

Fine Arts 1 Cost Market 1,574 176,857

1,574 185,979

974 151,919

974 159,156

2,956 -

Fine Arts 3 Cost Market

Money market funds U.S. Treasury notes Corporate bonds Mutual funds fixed income Corporate stocks

1,881 98,076 -

1,881 103,184 -

411,921 65,940

413,364 65,008

433,499 65,155

435,794 64,234

494,987 65,155

496,259 64,234

Total

$ 656,292

$ 665,925

$ 651,547

$ 660,158

$ 660,099

$ 665,558

12. Restrictions and Limitations on Net Asset Balances Temporarily restricted net assets consisted of gifts and other unexpended revenues and gains available for Operating Fund Program services of $1,401,160 and $1,557,657 at June 30, 2012 and 2011, respectively. 13. 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: 2012

2011

Utilization of time restricted contributions Utilization of purpose restricted contributions

3,242,185 1,253,105

3,134,997 1,219,135

Net assets released from temporary restrictions

4,495,290

4,354,132

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION NOTES TO COMBINED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2012 AND 2011 13. 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: 2012 Bridge Fund Foundation Fund* Endowment Fund* Total release of Board designated net assets

2011

150,000 328,393 374,202

317,000 266,098 378,008

852,595

961,106

*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, 2012

Operating Fund 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 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

Bridge Fund

Guild Fund

1,146,856 (107,226) 116,983 61,222 264,683

27,302 155,540 -

178,208 -

1,482,518

182,842

178,208

351,655

400

1,244,013 1,787,789 3,383,457 (1,900,939) $

1,482,518

182,842 $

182,842

5,020 5,420 172,788 $

178,208

Jacksonville Symphony Association Total

Endowment Fund

Jacksonville Symphony Foundation

Total

143,084 (48,314) 31,923 7,492,458 -

178,208 1,317,242 148,906 7,492,458 61,222 264,683

32 6,804,459 -

178,208 1,317,242 148,938 14,296,917 61,222 264,683

7,619,151

9,462,719

6,804,491

16,267,210

352,055

7,619,151 $

7,619,151

1,249,033 1,787,789 3,388,877 6,073,842 $

9,462,719

6,804,491 $

6,804,491

1,249,033 1,787,789 3,388,877 12,878,333 $

16,267,210

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION COMBINING SCHEDULE OF FINANCIAL POSITION JUNE 30, 2011

Operating Fund 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 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

Guild Fund

Bridge Fund

5,829 376,644 (1,029,726) 194,706 31,507 220,324

54,394 1,078,040 -

172,694 17,036 584

(200,716)

1,132,434

190,314

265,847

1,146,584 468,611 1,881,042 (2,081,758) $

(200,716)

1,132,434 $

1,132,434

8,455 8,455 181,859 $

190,314

Endowment Fund

Jacksonville Symphony Association Total

172,485 (48,314) 34,383 7,440,541 -

178,523 603,523 246,125 7,440,541 31,507 220,908

6,567,864 -

178,523 603,523 246,125 14,008,405 31,507 220,908

7,599,095

8,721,127

6,567,864

15,288,991

265,847

2,060

267,907

7,599,095 $

7,599,095

Jacksonville Symphony Foundation

1,155,039 468,611 1,889,497 6,831,630 $

8,721,127

Total

2,060 6,565,804 $

6,567,864

1,155,039 468,611 1,891,557 13,397,434 $

15,288,991

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION COMBINING SCHEDULE OF ACTIVITIES YEAR ENDED JUNE 30, 2012

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

2,796,517 3,946,355 389,530 105,640 110,985 134,983 7,484,010

Guild Fund $

62,068

Transfers from guild fund

Board Designated

156,386 3,584 159,970

Endowment Fund

Bridge Fund

(62,068)

15,599 145,067 60,638 181,302 402,606

8,500 8,500

(675,660)

Transfers from foundation

328,393

(4,273)

Transfers from endowment fund

374,202

(374,202)

4,471,163 984,980 1,326,033 700,405 7,482,581

Supporting activities: Interest expense Fund raising activities Administrative salaries and benefits General and administrative expenses

14,434 197,707 1,093,928 240,204

106,973 -

4,075

Total supporting activities

1,546,273

106,973

4,075

9,028,854

106,973

4,075

20,056

8,500

Transfers from future year annual fund

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

Total expenses Change in net assets before non-recurring transactions Release from temporarily restricted to board designated bridge fund

(1,455,841)

(9,071)

24,065

Release from board designated bridge fund for budget shortfall

150,000

(150,000)

Release from temporarily restricted bridge fund for budget shortfall

811,000

20,056

(117,435)

(494,841)

Change in net assets

181,859

(2,807,258)

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

(9,071)

(3,302,099)

172,788

7,599,095 $

7,619,151

300,277 $

182,842

Temporarily Restricted Future Year(s) Bridge Fund Annual Fund $

2,908 2,908

2,796,517 3,973,362 389,530 105,640 267,371 148,651 60,638 181,302 134,983 8,057,994

Jacksonville Symphony Foundation $

Total

4,939 243,544 341,286 589,769

(324,120) -

2,796,517 3,973,362 389,530 105,640 267,371 153,590 304,182 522,588 134,983 8,647,763

675,660 -

324,120 -

4,471,163 984,980 1,326,033 700,405 7,482,581

14,434 304,680 1,093,928 244,279

26,962

14,434 304,680 1,093,928 271,241

1,657,321

26,962

1,684,283

9,139,902

26,962

9,166,864

2,908

675,660

(24,065)

(757,788)

238,687

(519,101)

(811,000)

(832,157)

675,660

832,157

725,500

Jacksonville Symphony Association Total

1,401,160

(757,788)

238,687

6,831,630 $

6,073,842

(519,101)

6,565,804 $

6,804,491

13,397,434 $

12,878,333

JACKSONVILLE SYMPHONY ASSOCIATION AND JACKSONVILLE SYMPHONY FOUNDATION COMBINING SCHEDULE OF ACTIVITIES YEAR ENDED JUNE 30, 2011

Undesignated

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

2,364,481 3,959,847 373,603 103,171 59,460 121,098 6,981,660

Board Designated

Organ Fund $

Guild Fund -

Endowment Fund

234,731 17,398 252,129

197,519 44,826 (1,861) 240,484

11,025 102,557 20,682 266,098 378,008

(11,025) -

(102,557) -

(378,008)

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

4,221,348 1,028,383 1,082,251 584,048

Total musical productions

6,916,030

Supporting activities: Interest expense Fund raising activities Administrative salaries and benefits General and administrative expenses

7,361 148,606 1,089,719 254,758

130,468 -

68,744 1,057

Total supporting activities

1,500,444

130,468

69,801

8,416,474

130,468

69,801

(11,025)

19,104

(207,325)

(11,025)

19,104

(207,325)

11,025

162,755

Transfers from guild fund Transfers from guild fund Transfers from future year annual fund Transfers from foundation Transfers from endowment fund

Total expenses Change in net assets before non-recurring transactions

(656,444)

Release from bridge fund for special marketing initiatives, budget shortfall

317,000

Change in net assets

(339,444) (2,467,814)

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

(2,807,258)

181,859

7,806,420 $

7,599,095

Board Designated

Temporarily Restricted Net Assets

Bridge Fund $

Bridge Fund

381,765 381,765

1,880 1,880

Jacksonville Symphony Association Total

Jacksonville Symphony Foundation

4,221,348 1,028,383 1,082,251 584,048

6,916,030

7,361 347,818 1,089,719 255,815

29,639

7,361 347,818 1,089,719 285,454

1,700,713

29,639

1,730,352

8,616,743

29,639

8,646,382

381,765

1,880

1,244,873

752,146

1,244,873

752,146

7,324,357

5,320,931

12,645,288

6,831,630

$ 6,565,804

$ 13,397,434

(20,682)

1,880

235,512

830,277 $

832,157

(492,727)

(20,682)

(492,727)

746,182 $

725,500

(266,098) -

$ 2,364,481 4,343,492 373,603 103,171 294,191 221,723 466,796 1,109,973 121,098 9,398,528

64,765

266,098 -

6,806 421,970 1,111,834 1,540,610

300,277

(20,682) -

2,364,481 4,343,492 373,603 103,171 294,191 214,917 44,826 (1,861) 121,098 7,857,918

Total

(317,000)

Future Year(s) Annual Fund

The G RO U P

Accountants Consultants Wealth Advisors

LBA Certified Public Accountants, PA

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

To the Board of Directors of Jacksonville Symphony Association and Jacksonville Symphony Foundation Jacksonville, Florida We have audited the combed financial statements of Jacksonville Symphony Association and Jacksonville Symphony Foundation (collectively the "Symphony") as of and for the year ended June 30, 2012, and have issued our report thereon dated October 8, 2012. We conducted our audit 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. Internal Control Over Financial Reporting Management of the Symphony is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the Symphony’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Symphony’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Symphony’s internal control over financial reporting. 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 financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.

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

The G RO U P

Accountants Consultants Wealth Advisors

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. This report is intended solely for the information and use of management, others within the entity, the Board of Trustees, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

October 8, 2012

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, 2012. 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. Our examination does not provide a legal determination on the Association’s compliance with specified requirements. In our opinion, management’s assertion that the Association complied with the aforementioned requirements during the year ended June 30, 2012 is fairly stated, in all material respects.

October 8, 2012

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, 2012

State Agency and Program Title

State Contract/Grant Number

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

12.6.0109

Expenditures $

18,306