The Joffrey Ballet
Financial Report
June 30, 2024
Independent Auditor's Report
To the Board of Directors
The Joffrey Ballet
Opinion
We have audited the financial statements of The Joffrey Ballet (the "Organization"), which comprise the statement of financial position as of June 30, 2024 and 2023 and the related statements of activities, functional expenses, and cash flows for the years then ended, and the related notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Organization as of June 30, 2024 and 2023 and the changes in its net assets, functional expenses, and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audits of the Financial Statements section of our report. We are required to be independent of the Organization and to meet our ethical responsibilities in accordance with the relevant ethical requirements relating to our audits We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Organization's ability to continue as a going concern within one year after the date that the financial statements are issued or available to be issued
Auditor’s Responsibilities for the Audits of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and, therefore, is not a guarantee that audits conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
To the Board of Directors
The Joffrey Ballet
In performing audits in accordance with GAAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audits.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audits 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 Organization's internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Organization's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audits, significant audit findings, and certain internal control-related matters that we identified during the audits.
November 19, 2024
The Joffrey Ballet Statement of Financial Position
Liabilities and Net Assets
The Joffrey Ballet
The
The
The Joffrey Ballet
Statement of Cash Flows
The Joffrey Ballet
Note 1 - Nature of Business
Notes to Financial Statements
June 30, 2024 and 2023
The Joffrey Ballet (the “Organization”) is a nonprofit corporation incorporated in the state of Illinois that commenced operations on May 1, 1995. The Organization is a classically based dance company whose signature elements include the incorporation of popular culture, modern technology, and contemporary ideas into its ballets. The repertoire emphasizes works by contemporary American and international artists and revivals of the 20th-century masterworks. The Organization's operations include the Joffrey Academy of Dance (the "Academy") and community engagement programs. Classes and programs are for various age groups at varying levels of dance instruction. The Organization conducts its activities from the Joffrey Tower, its building located in Chicago, Illinois; its new studios on South Wabash; and throughout the Chicago Public School System, and its subscription series and the Nutcracker are performed at the Lyric Opera of Chicago. The Organization is supported primarily through ticket sales, academy revenue, and contributions (cash and in kind).
Note 2 - Significant Accounting Policies
Basis of Presentation
The financial statements of the Organization have been prepared on the basis of generally accepted accounting principles (GAAP). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid investments with maturities of three months or less when purchased. The Organization maintains its cash and cash equivalents in bank deposit accounts that at times may exceed federally insured limits. The Organization has not experienced any losses in such accounts.
Contributions Receivable
The Organization's contributions receivable are primarily composed of pledges. These are intended by donors to fund the Organization's operations and the endowment and are stated at the present value of the expected future cash flows. Discounts are amortized to contribution revenue over the duration of the pledge. An allowance for uncollectible pledges receivable is calculated based upon management's judgment, including such factors as prior collection history, the type of contribution, and the nature of the fundraising activity.
Other Receivables
Other receivables generally include tuition payments for the Academy and community engagement activities. An allowance for credit losses is based on specific identification of uncollectible accounts, the Organization's historical collection experience, and consideration for future economic conditions. No allowance was deemed necessary at June 30, 2024 and 2023.
Investments
Investments are presented at fair value. The Organization's investments are exposed to various risks, such as interest rate, credit, and overall market volatility Due to these risk factors, it is reasonably possible that changes in the value of the investments will occur in the near term and could materially affect the amounts reported in the financial statements.
The Joffrey Ballet
Notes to Financial Statements
June 30, 2024 and 2023
Note 2 - Significant Accounting Policies (Continued)
Property and Equipment
Property and equipment are recorded at cost. Donated property and equipment are recorded as assets at their estimated fair value on the date of contribution. The Organization capitalizes all property and equipment purchases over $1,000. Costs of maintenance and repairs are charged to expense when incurred. Depreciation is recorded on the straight-line basis over the estimated useful lives of the assets, which are 3 to 20 years for sets, costumes, and props and 4 to 10 years for furniture and fixtures, equipment, and other property.
Classification of Net Assets
Net assets of the Organization are classified based on the presence or absence of donor-imposed restrictions.
Net assets without donor restrictions: Net assets that are not subject to donor-imposed restrictions or for which the donor-imposed restrictions have expired or been fulfilled. Net assets in this category may be expended for any purpose in performing the primary objectives of the Organization
Net assets with donor restrictions: Net assets subject to stipulations imposed by donors and grantors. Some donor restrictions are temporary in nature; those restrictions will be met by actions of the Organization or by the passage of time. Other donor restrictions are perpetual in nature, where the donor has stipulated the funds be maintained in perpetuity.
Earnings, gains, and losses on donor-restricted net assets are classified as net assets without donor restrictions unless specifically restricted by the donor or by applicable state law.
Board-designated Net Assets
Board-designated net assets are net assets without donor restrictions designated by the board primarily for capital improvements, future projects, and innovation. These designations are based on board actions, which can be altered or revoked at a future time by the board (see Note 8).
Revenue Recognition
The Organization recognizes performance and academy revenue in accordance with guidance for revenue for contracts with customers. Revenue from contracts with patrons and students is reported at the amount that reflects the consideration to which the Organization expects to be entitled in exchange for providing performances and instruction. Revenue is recognized as performance obligations are satisfied, which generally occurs when performances or classes are held. Payments for ticket sales are generally received in advance of the related performance; payments for classes are received in advance or in installments over the duration of the program. Cash received from ticket sales for the next fiscal year's programs and tuition payments received in advance for classes that take place after the fiscal year end are recorded as deferred revenue. The Organization had deferred revenue of $2,563,428, $2,083,578, and $2,353,267 as of June 30, 2024; June 30, 2023; and July 1, 2022, respectively. The Organization had accounts receivable of $196,735, $89,646, and $188,646 as of June 30, 2024; June 30, 2023; and July 1, 2022, respectively Special event revenue is composed of an exchange element based upon the direct benefits donors receive and a contribution element for the difference. Special event revenue is recognized when the event takes place. Community engagement revenue relates to programming presented to Chicago Public School groups or other organizations. The revenue is reported net of discounts and fee waivers provided to these organizations. Revenue is recognized when these programs are held.
The Joffrey Ballet
Notes to Financial Statements
June 30, 2024 and 2023
Note 2 - Significant Accounting Policies (Continued)
Contributions
Contributions of cash and other assets, including unconditional promises to give in the future, are reported as revenue when received, measured at fair value. Contributions with donor-imposed time or purpose restrictions are reported as contributions with donor restrictions. All other contributions are reported as contributions without donor restrictions. Contributions without donor-imposed restrictions and contributions with donor-imposed time or purpose restrictions that are met in the period in which the gift is received are both reported as unrestricted support.
Contributions of Nonfinancial Assets
Contributions of nonfinancial assets are reflected in contributions and expenses recorded in the corresponding functional expense category in the accompanying statement of activities at their estimated fair value. The Organization has recorded in-kind contributions, which include professional services, transportation, and event services, at their estimated fair values. See Note 17 for additional information.
Leases
The Organization has an operating lease for warehouse space and a finance lease for office equipment. During the year ended June 30, 2024, the lease for the warehouse space ended. The Organization recognizes expense for leases on a straight-line basis over the lease term. The Organization made a policy election not to separate lease and nonlease components for the warehouse lease. Therefore, all payments are included in the calculation of the right-of-use asset and lease liability
The Organization has operating leases for office equipment, academy summer program housing, and stage rental for performances with lease terms of one year or less that the Organization elected to account for as short-term leases. As these leases are short-term leases, they are not included in the rightof-use asset and lease liability Total expense related to office equipment and academy summer program housing short-term leases and academy performance space rental was $265,921 and $250,963 for 2024 and 2023, respectively Total theater rental expenses at the Lyric Opera House were $685,091 and $658,150 for 2024 and 2023, respectively
The Organization elected to use the risk-free rate as the discount rate for calculating the right-of-use asset and lease liability in place of the incremental borrowing rate for the operating and finance leases.
Income Taxes
The Organization is a not-for-profit corporation and is exempt from tax under the provisions of Internal Revenue Code Section 501(c)(3).
Use of Estimates
In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions affecting the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Advertising Expense
Advertising expense is charged to expense during the year in which it is incurred. Advertising expense for exchange-related transactions is included in program services. Advertising expense for 2024 and 2023 was $2,273,346 and $2,142,337, respectively
The Joffrey Ballet
Notes to Financial Statements
June 30, 2024 and 2023
Note 2 - Significant Accounting Policies (Continued)
Functional Allocation of Expenses
Costs of providing the program and support services have been reported on a functional basis in the statement of activities. Costs have been allocated between the various program and support services on the basis of square footage for depreciation, facilities, insurance, and other services. Payroll taxes, retirement benefits, information technology, and other employee benefits were allocated based on related salary allocations. Although the methods of allocation used are considered appropriate, other methods could be used that would produce different amounts.
Subsequent Events
The financial statements and related disclosures include evaluation of events up through and including November 19, 2024, which is the date the financial statements were available to be issued.
Adoption of New Accounting Pronouncement
During 2024, the Organization adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments The ASU includes changes to the accounting and measurement of financial assets, including the Organization's accounts receivable from patrons and students, by requiring the Organization to recognize an allowance for all expected losses over the life of the financial asset at origination. This is different from the previous practice where an allowance was not recognized until the losses were considered probable. The ASU has been adopted for the year ended June 30, 2024 using a modified retrospective transition method. There was no adjustment made to beginning of year net assets as a result of this adoption.
Note 3 - Contributions Receivable
Included in contributions receivable are several unconditional promises to give generated from a campaign. They are included as follows:
Subtotal 3,275,187 3,230,544
Contributions receivable, net of discount and allowance, are restricted as follows for the years ended June 30:
Contributions receivable for operations $ 3,231,853 $ 2,562,914 Contributions receivable for endowment - 600,000 Total contributions receivable $ 3,231,853 $ 3,162,914
The discount rate used in determining the fair value of contributions receivable ranged from 4.43 to 4.87 percent as of June 30, 2024 and 2023
The Joffrey Ballet
Note 4 - Fair Value Measurements
Notes to Financial Statements
June 30, 2024 and 2023
Accounting standards require certain assets and liabilities be reported at fair value in the financial statements and provide a framework for establishing that fair value. The framework for determining fair value is based on a hierarchy that prioritizes the inputs and valuation techniques used to measure fair value.
Fair values determined by Level 1 inputs use quoted prices in active markets for identical assets that the Organization has the ability to access.
Fair values determined by Level 2 inputs use other inputs that are observable, either directly or indirectly These Level 2 inputs include quoted prices for similar assets in active markets and other inputs, such as interest rates and yield curves, that are observable at commonly quoted intervals.
Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset. These Level 3 fair value measurements are based primarily on management’s own estimates using pricing models, discounted cash flow methodologies, or similar techniques taking into account the characteristics of the asset
In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The Organization’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset
The following tables present information about the Organization’s assets measured at fair value on a recurring basis at June 30, 2024 and 2023 and the valuation techniques used by the Organization to determine those fair values:
Investments:
Assets Measured at Fair Value on a Recurring Basis at June 30, 2024 Quoted Prices in Active Markets for Identical Assets (Level 1)
Significant Other Observable Inputs (Level 2)
Significant Unobservable Inputs (Level 3) Balance at June 30, 2024
The Joffrey Ballet
Note
Notes to Financial Statements
June 30, 2024 and 2023
4 - Fair Value Measurements (Continued)
Assets Measured at Fair Value on a Recurring Basis at June 30, 2023 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at June 30, 2023
Not included in the above tables is $115,837 and $231,133 in cash and money market funds as of June 30, 2024 and 2023, respectively.
Note 5 - Property and Equipment
Depreciation expense for 2024 and 2023 was $1,092,439 and $908,322, respectively
As of June 30, 2024 and 2023, the Organization had no outstanding construction commitments.
The Joffrey Ballet
Note 6 - Leases
Notes to Financial Statements
June 30, 2024 and 2023
The Organization is obligated under an operating lease for warehouse space, which expired in June 2024. The right-of-use asset and related lease liability have been calculated using a discount rate of 2.84 percent.
The Organization leases office equipment under a long-term lease arrangement that is classified as a finance lease. Under the terms of the lease agreement, payment of $1,414 is due monthly through October 2026. The right-of-use asset and related lease liability have been calculated using a discount rate of 2.88 percent.
Expenses recognized under these leases for the years ended June 30, 2024 and 2023 consist of the following:
The future minimum lease payments under finance leases are as follows: Years Ending June 30 Total Payments
Beginning in July 2020, the Organization has a seven-year license agreement with the Lyric Opera for all its subscription series and holiday performances.
The Joffrey Ballet
Note 7 - Net Assets
Notes to Financial Statements
The Organization's board has designated a portion of its funds without donor restrictions for the specific uses detailed below as of June 30:
The Organization had net assets with donor restrictions consisting of the following as of June 30:
Net assets were released from restrictions due to the passage of time or by incurring expenses to satisfy the purposes specified by donor grant agreements as follows:
The Joffrey Ballet
Note 8 - Donor-restricted Endowments
Notes to Financial Statements
June 30, 2024 and 2023
The Organization's endowment includes donor-restricted endowment funds. Net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions.
Interpretation of Relevant Law
The Organization is subject to the State Prudent Management of Institutional Funds Act (SPMIFA) and, thus, classifies amounts in its donor-restricted endowment funds as net assets with donor restrictions because those net assets are time restricted until the board of directors appropriates such amounts for expenditures. Most of those net assets also are subject to purpose restrictions that must be met before reclassifying those net assets to net assets without donor restrictions. The board of directors of the Organization had interpreted SPMIFA as not requiring the maintenance of purchasing power of the original gift amount contributed to an endowment fund, unless a donor stipulates the contrary As a result of this interpretation, when reviewing its donor-restricted endowment funds, the Organization considers a fund to be underwater if the fair value of the fund is less than the sum of (a) the original value of initial and subsequent gift amounts donated to the fund and (b) any accumulations to the fund that are required to be maintained in perpetuity in accordance with the direction of the applicable donor gift instrument. The Organization has interpreted SPMIFA to permit spending from underwater funds in accordance with the prudent measures required under the law. Additionally, in accordance with SPMIFA, the Organization considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds:
The duration and preservation of the fund
The purpose of the Organization and the donor-restricted endowment fund
General economic conditions
The possible effect of inflation and deflation
The expected total return from income and the appreciation of investments
Other resources of the Organization
The investment policies of the Organization
Donor-restricted endowment funds: Original donor-restricted gift amount and amounts required to be maintained in perpetuity by the
Endowment Net Asset Composition by Type of Fund as of June 30, 2024 Without Donor Restrictions With Donor Restrictions Total
Changes in Endowment Net Assets for the Fiscal Year Ended June 30, 2024 Without Donor Restrictions With Donor Restrictions Total
The Joffrey Ballet
Note
Notes to Financial Statements
June 30, 2024 and 2023
8 - Donor-restricted Endowments (Continued)
Endowment Net Asset Composition by Type of Fund as of June 30, 2023 Without Donor Restrictions With Donor Restrictions Total
Donor-restricted endowment funds:
Original donor-restricted gift amount and amounts required to be maintained in perpetuity by the
Changes in Endowment Net Assets for the Fiscal Year Ended June 30, 2023 Without Donor Restrictions With Donor Restrictions Total
Underwater Endowment Funds
From time to time, the fair value of assets associated with individual donor-restricted endowment funds may fall below the level that the donor or SPMIFA requires the Organization to retain as a fund of perpetual duration. Deficiencies of this nature exist in one donor-restricted endowment fund, which has an original gift value of $1,014,180, a current fair value of $1,012,117, and a deficiency of $2,063 as of June 30, 2024 Deficiencies of this nature existed in two donor-restricted endowment funds at June 30, 2023, which had an original gift value of $3,414,180, a current fair value of $3,263,013, and a deficiency of $151,167. These deficiencies resulted from unfavorable market fluctuations that occurred shortly after the investment of new contributions for donor-restricted endowment funds and continued appropriation for certain programs that was deemed prudent by the board of directors.
Return Objectives and Risk Parameters
The Organization has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor-restricted funds that the Organization must hold in perpetuity or for a donor-specified period, as well as board-designated funds. Under this policy, as approved by the board of directors, the endowment assets are invested in a manner that is intended to achieve a return of 5 percent, net of inflation and investment expenses. The secondary investment objective is to earn a total return, net of expenses, at least equal to the portfolio's composite benchmark, as defined in its investment policy statement. Actual returns in any given year may vary from this amount.
Strategies Employed for Achieving Objectives
To satisfy its long-term rate-of-return objectives, the Organization relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). The Organization targets a diversified asset allocation that places a greater emphasis on equity-based investments to achieve its long-term return objectives within prudent risk constraints.
The Joffrey Ballet
Notes to Financial Statements
June 30, 2024 and 2023
Note 8 - Donor-restricted Endowments (Continued)
Spending Policy and How the Investment Objectives Relate to Spending Policy
The Organization established an investment policy that allows for the appropriation of 4 percent of the average market value of the endowment over the preceding 12 quarters. Appropriated earnings are to be used for the Organization's operations and expenses in accordance with donor restrictions, if any. For the years ended June 30, 2024 and 2023, appropriations amounted to $513,679 and $442,544, respectively.
Note 9 - Federal Funding
Paycheck Protection Program Loans
The Organization received Paycheck Protection Program (PPP) term loans in April 2020 and March 2021 in the amounts of $2,019,225 and $1,764,592, respectively. The notes were issued pursuant to the Coronavirus Aid, Relief, and Economic Security (CARES) Act's PPP. The loan structure required organization officials to certify certain statements that permitted the Organization to qualify for the loans and provides loan forgiveness for a portion or all of the borrowed amount if the Organization uses the loan proceeds for the permitted loan purpose described in the PPP agreement; the portion not forgiven will be required to be paid back in full by the Organization in equal monthly principal payments plus interest at 1.00 percent beginning after the financial institution receives the approved loan forgiveness funds from the Small Business Administration (SBA). The Organization has the right to repay any amount outstanding at any time without penalty. These loans helped the Organization fund payroll, benefits, lease payments, and building utility costs.
The legal form of the PPP agreements is a loan, and the Organization had concluded to record them as such until the Small Business Administration reviewed and approved the forgiveness application. In June 2021, the first PPP loan was forgiven, and the Organization recognized a gain on extinguishment. In August 2022, the Organization was notified that $1,671,078 of the second PPP loan was forgiven, and the remaining balance of $93,514 was repaid by the Organization in August 2022. The Organization recognized a gain on extinguishment for the forgiven amount for the year ended June 30, 2023.
Note 10 - Collective Bargaining Agreements
Approximately 45 percent of the Organization’s workforce is covered by various collective bargaining agreements (CBA); the American Guild of Musical Artists; and the International Alliance of Theatrical Stage Employees, Moving Picture Technicians, Artists, and Allied Crafts, or Makeup Artists or Hairstylists of the United States, its Territories and Canada. The CBA covering the Organization's employees who were organized under IATSE Local 769 expired on June 30, 2024. Subsequent to year end, the Organization finalized a new agreement, which expires June 30, 2029. The CBA covering the Organization's employees who were organized under Theatrical Stage Employees Union Local No. 2 expires on June 30, 2029. The CBA covering the Organization's employees who were organized under Motion Picture Studio Mechanics Local Number 476 expired on August 31, 2024. The Organization is in negotiations for a new agreement. The CBA covering the Organization's employees who were organized under the American Guild of Musical Artists expires on June 30, 2027.
Note 11 - Lines of Credit
Under a line of credit agreement with a bank, the Organization has available borrowings of approximately $1,500,000 Interest is at the greater of 2.75 percent or the prime rate less 0.50 percent (an effective rate of 8 percent and 7.75 percent at June 30, 2024 and 2023, respectively). The line of credit matures on December 22, 2024, and the Organization intends to negotiate a renewal. The line of credit is collateralized by general assets and pledges receivable. The Organization had no outstanding balance on the line of credit at June 30, 2024 and 2023 No borrowings were made on the line of credit during the years ended June 30, 2024 and 2023
The Joffrey Ballet
Note 11 - Lines of Credit (Continued)
Notes to Financial Statements
June 30, 2024 and 2023
Under the agreement with the bank, the Organization is subject to certain nonfinancial covenants, including the requirement to file audited financial statements within 120 days of fiscal year end with the bank. At June 30, 2023, the Organization was in violation of the covenant requiring audited financial statements to be filed with the bank within 120 days of fiscal year end. The bank has waived that requirement of the agreement as of December 6, 2023 and for the period ended June 30, 2023. There were no such violations in 2024.
The Organization entered into a separate line of credit agreement with a bank on April 30, 2024 for the purpose of financing the purchase of a warehouse. The Organization has available borrowings of approximately $3,700,000 Interest is at the adjusted SOFR plus the applicable margin of 1.6 percent, an effective rate of 8.5 percent at June 30, 2024 The line of credit matures on April 30, 2025. The line of credit is collateralized by the Organization's assets. The Organization had an outstanding balance on the line of credit of $2,400,000 at June 30, 2024
Under the agreement with the bank, the Organization is subject to certain financial and nonfinancial covenants, including the requirement to meet certain financial ratios and to file audited financial statements within 120 days of fiscal year end with the bank.
Note 12 - Retirement Plans
The Organization administers The Joffrey Ballet Tax Deferred Annuity Plan, a 403(b) defined contribution benefit plan. The plan allows for discretionary matching contributions in an amount equal to the lesser of the participant's actual contributions or 3 percent of the participant's salary Contributions to the plan totaled $135,944 and $124,437 for the years ended June 30, 2024 and 2023, respectively. The Organization administers a 457(f) where, at the discretion of the board of directors, certain executives receive deferred contributions. The Organization made contributions of $260,000 and $250,000 to the plan in the years ended June 30, 2024 and 2023, respectively The Organization made contributions of $148,062 and $140,158 for the years ended June 30, 2024 and 2023, respectively, to the American Guild of Musical Artists (AGMA) Retirement Fund for employees who are covered by the AGMA CBA. The contribution is calculated based on the AGMA CBA.
Note 13 - Multiemployer Pension Plans
The Organization is a participant in multiemployer defined benefit pension plans under the terms of collective bargaining agreements covering most of its union employees established under the terms of the collective bargaining agreements covering the Organization's stagehands, wardrobe, and wig labor. Contribution rates are determined annually and assessed based on employee payrolls for individuals covered under the plans. Benefits under these plans are generally based on a flat rate for all employees under the agreement.
The financial risks of participating in multiemployer plans are different from single-employer defined benefit pension plans in the following respects:
Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.
If a participating employer discontinues contributions to a plan, the unfunded obligations of the plan may be borne by the remaining participating employers.
If a participating employer chooses to stop participating in a plan, a withdrawal liability may be created based on the unfunded vested benefits for all employees in the plan.
The Joffrey Ballet
Notes to Financial Statements
June 30, 2024 and 2023
Note 13 - Multiemployer Pension Plans (Continued)
Information regarding significant multiemployer pension benefit plans in which the Organization participates and total contributions made to all multiemployer plans is shown in the following table:
Based on information as of December 31, 2023, the year end of the plans, organization contributions to any of the plans listed above do not represent more than 5 percent of total contributions received by each plan.
Note 14 - Deferred Revenue
The Organization recorded deferred revenue from the following sources as of June 30:
The Joffrey Ballet
Notes to Financial Statements
June 30, 2024 and 2023
Note 15 - Liquidity and Availability of Resources
The following reflects the Organization's financial assets as of June 30, 2024 and 2023, reduced by amounts not available for general use because of board-designated or donor-imposed restrictions within one year of the statement of financial position date:
The pledges receivable are subject to implied time restrictions, but the amount reported above is expected to be collected within one year.
The Organization's endowment funds consist of donor-restricted endowments. Income from donorrestricted endowments is restricted for specific purposes and, therefore, is not available for general expenditure.
The Organization regularly monitors its liquidity in order to meet financial obligations. As part of its boarddesignated net assets, the Organization approved in 2023 an operating reserve fund policy that requires the Organization to maintain an equivalent of three months of average actual cash operating costs. The amount of the operating reserve will be calculated each year after the annual budget is approved. The available line of credit may be counted as a part of the calculated target reserve but may not exceed 50 percent of the reserve amount. Any spending from this account that brings the balance below the approved amount must be eventually refunded. As of June 30, 2024 and 2023, the balance in this account was $4,451,390 and $4,450,000, respectively The remaining board-designated net assets could be released by action of the board in order to cover any approved budgeted uses. In addition, the Organization has two separate commercial lines of credit with available credit of $1,500,000 and $1,300,000.
The Joffrey Ballet
Note 16 - Related Party Transactions
Notes to Financial Statements
June 30, 2024 and 2023
Contributions to the Organization from board members and staff, amounting to $1,670,859 and $1,552,650 for the years ended June 30, 2024 and 2023, respectively, are included in contributions revenue on the statement of activities. Pledges receivable from board members of $998,055 and $211,400 at June 30, 2024 and 2023, respectively, are included in pledges receivable on the statement of financial position.
Note 17 - Contributed Nonfinancial Assets
Contributed nonfinancial assets recognized within the statement of activities consisted of the following for the years ended June 30:
Contributed nonfinancial assets did not have donor-imposed restrictions.
Contributed nonfinancial assets are valued and reported at their estimated fair value in the financial statements. Contributed professional and legal services, as well as event space and catering, are estimated based on stated prices for similar items or services, legal services' fair value was provided by working attorney Contributed supplies and equipment are estimated based on market value for similar supplies or pieces of equipment. None of the contributed nonfinancial assets were sold or monetized.