AMERICAN FEDERATION OF TEACHERS, AFL-CIO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2013
AMERICAN FEDERATION OF TEACHERS, AFL-CIO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2013
CONTENTS PAGE Report of Independent Auditors
1
Consolidated Statements of Financial Position
3
Consolidated Statements of Activities
4
Consolidated Statements of Expenses
5
Consolidated Statements of Changes in Net Assets
6
Consolidated Statements of Cash Flows
7
Notes to Consolidated Financial Statements
8
Consolidating Schedules – Building Fund
24
REPORT OF INDEPENDENT AUDITORS
The Secretary-Treasurer American Federation of Teachers, AFL-CIO We have audited the accompanying consolidated financial statements of the American Federation of Teachers, AFL-CIO and related controlled entities (the Federation) which comprise the consolidated statements of financial position as of June 30, 2013 and 2012, and the related consolidated statements of activities, expenses, changes in net assets, and cash flows for the years then ended, and the related notes to the consolidated financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the American Federation of Teachers, AFL-CIO and related controlled entities as of June 30, 2013 and 2012, and the changes in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Other Matter Our audits were made for the purpose of forming an opinion on the basic consolidated financial statements taken as a whole. The accompanying consolidating schedules on pages 24 and 25 and the supplemental fund information on pages 3 through 7 are presented for purposes of additional analysis of the basic consolidated financial statements rather than to present the financial position and changes in net assets of the individual entities and funds. 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 financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements as a whole.
Bethesda, MD January 13, 2014
-2-
American Federation of Teachers, AFL-CIO Consolidated Statements of Financial Position June 30, 2013 and 2012 (With Supplemental Fund Information at June 30, 2013)
Militancy/ Defense Fund
General Fund
Solidarity Funds
Building Fund
Postretirement Benefits Fund
Committee on Political Education
June 30, 2013 Total
June 30, 2012 Total
Assets Current assets Cash and cash equivalents Due from (to) other funds Investments Receivables Per capita taxes, net of allowances Other Prepaid expenses Total current assets
$
846,956 (12,464,237) 574,464 35,201,636 3,089,266 469,836 27,717,921
Net property and equipment
3,050,506
Other assets Loans receivable, net of allowances Deferred charges
3,398,994 -
Total assets
$
515,978 (11,888,028) 25,170,272
$
426,047 14,224,269
5,121 28,826,386 -
$
28,831,507
-
2,441,420 -
$
34,167,421
$
16,665,689
$
$
7,139,277 9,814,648 6,557,818 264,417 1,276,852 148,725 3,729,657
$
7,871,999 -
$
1,370,206 (4,474,121) 20,520,911
$
-
1,035,396 118,492 18,570,884
-
-
18,986,093
-
-
135,773
-
28,831,507
$
$
37,692,750
$
-
$
$
355,961 370,548 6,918 -
$
-
$
4,894,456 4,894,456
$
7,632,717 46,265,647
$
23,936,417 45,003,293
35,201,636 4,550,709 588,328 94,239,037
16,378,325 3,245,715 1,159,748 89,723,498
-
22,036,599
22,780,821
-
5,840,414 135,773
5,248,875 207,696
4,894,456
$
122,251,823
$
117,960,890
$
15,367,237 370,548 9,814,648 6,557,818 264,417 1,276,852 155,643 3,729,657
$
11,796,025 2,147,078 9,421,397 6,101,612 109,804 114,169 916,650
Liabilities and net assets
-3-
Current liabilities Accounts payable Current maturities of mortgage note payable Accrued vacation and severance pay Accrued expenses and other liabilities Advance per capita taxes Bank overdraft Deferred revenue Line of credit Estimated self-insurance reserve - members' liability insurance Postretirement benefits - current portion Total current liabilities
28,931,394
Interest rate swap Mortgage note payable, excluding current maturities Accrued postretirement healthcare costs long term Accrued pension liability - long term Total liabilities
1,000,000 8,871,999
-
733,427
1,191,177 1,191,177
-
1,000,000 1,191,177 39,727,997
1,000,000 894,749 32,501,484
-
-
-
371,918
-
-
371,918
-
-
-
8,984,033
-
-
8,984,033
9,355,990
-
10,089,378
20,096,346 11,268,339 32,555,862
-
20,096,346 11,268,339 80,448,633
19,745,331 10,556,057 72,158,862
27,603,372 27,603,372
(32,555,862) (32,555,862)
-
8,555,280 28,353,454 36,908,734
8,273,907 30,410,682 38,684,589
4,894,456
7,117,439
28,931,394
8,871,999
5,236,027 5,236,027
3,066,979 4,726,711 7,793,690
-
Commitments and contingencies Unrestricted net assets (deficit) Designated Undesignated Total unrestricted net assets (deficit) Temporarily restricted net assets Total liabilities and net assets
$
34,167,421
5,488,301 23,343,206 28,831,507
$
16,665,689
See accompanying notes to consolidated financial statements.
$
28,831,507
$
37,692,750
$
-
4,894,456 $
4,894,456
$
122,251,823
$
117,960,890
American Federation of Teachers, AFL-CIO Consolidated Statements of Activities Years Ended June 30, 2013 and 2012 (With Supplemental Fund Information for the Year Ended June 30, 2013)
Militancy/ Defense Fund
General Fund
-4-
Revenue Per capita taxes (net of agency fee rebates of $1,246,840 in 2013 and $1,586,295 in 2012) Members' liability insurance Investment revenue (net of investment expenses of $120,463 in 2013 and $110,853 in 2012) Net appreciation (depreciation) in fair value of investments Publication revenue Program administration and royalties Reimbursements from related entities Rental revenue on subleased office space Net rental income State AFL-CIO collection rebate Contributions Other revenue Total revenue
$
-
Expenses Excess (deficiency) of revenue over expenses
146,645,845 -
$
$
2,598,484 1,873,796
Solidarity Funds
$
1,124,774
17,986,593 -
Building Fund
$
-
962,401 -
-
17,986,593
1,117,970 308,060 2,314,435 93,011 5,585,215
155,805,435
8,545,503
15,345,595
4,981,914
See accompanying notes to consolidated financial statements.
$
2,640,998
$
-
-
561,975 12,023 6,171,052
$ (2,374,451)
$
789,338
(85,378) 301,056 3,509,700 792,954 1,360,256 1,995,024 154,519,457
(1,285,978)
Postretirement Benefits Fund
603,301
1,359,725
$ (1,359,725)
Committee on Political Education
$
-
2013 Total
$
-
168,193,323 1,873,796
2012 Total
$
1,914,112
168,630,748 1,840,958
1,772,984
6,482,494 6,482,494
1,594,567 301,056 3,509,700 792,954 308,060 2,314,435 1,360,256 6,482,494 2,100,058 190,744,811
(20,392) 315,323 2,819,074 805,094 311,294 1,472,671 1,507,487 6,121,658 950,139 186,527,038
8,705,477
194,743,649
190,458,268
$ (2,222,983)
$
(3,998,838)
$
(3,931,230)
American Federation of Teachers, AFL-CIO Consolidated Statements of Expenses Years Ended June 30, 2013 and 2012 (With Supplemental Fund Information for the Year Ended June 30, 2013)
Militancy/ Defense Fund
General Fund
-5-
Expenses Communications National Officers/Governance Mobilization and organizing Political Professional Issues Strategic Support Funding Our Priorities Legal fees Occupational liability insurance Other insurance Capitol Place I operating expenses Interest State federations' solidarity funds National solidarity fund 527 solidarity fund Postretirement expenses Committee on Political Education Other Total program expense
$
Administration Total expenses
12,688,723 9,375,801 36,065,846 15,451,978 16,070,492 13,027,323 11,189,033 67,371 113,936,567
$
41,868,868 $
155,805,435
6,419,738 1,124,211 947,665 53,889 8,545,503
Solidarity Funds
$
$
8,545,503
See accompanying notes to consolidated financial statements.
6,903,677 7,446,716 995,202 15,345,595
Building Fund
$
$
15,345,595
3,096,419 385,598 1,886,119 5,368,136
Postretirement Benefits Fund
Committee on Political Education
$
$
(386,222) $
4,981,914
1,359,725 1,359,725 -
$
1,359,725
8,705,477 8,705,477
2013 Total
$
$ 8,705,477
12,688,723 9,375,801 36,065,846 15,451,978 16,070,492 13,027,323 11,189,033 6,419,738 1,124,211 947,665 3,096,419 452,969 6,903,677 7,446,716 995,202 1,359,725 8,705,477 1,940,008 153,261,003
2012 Total
$
41,482,646 $
194,743,649
12,802,741 9,353,950 35,396,840 12,877,566 16,092,639 12,581,856 14,924,920 7,341,120 1,062,978 793,214 3,255,693 442,815 6,527,145 3,669,384 500,265 6,871,337 4,500,109 1,571,935 150,566,507 39,891,761
$
190,458,268
American Federation of Teachers, AFL-CIO Consolidated Statements of Changes in Net Assets Years Ended June 30, 2013 and 2012 (With Supplemental Fund Information for the Year Ended)
Militancy/ Defense Fund Designated
General Fund Net assets, July 1, 2011 Unrestricted Temporarily restricted Total net assets
$
Changes in net assets, year ended June 30, 2012
$
(2,906,731)
Board approved transfer of designated funds
-
-6-
Net assets, June 30, 2012 Unrestricted Temporarily restricted Total net assets
6,522,005 6,522,005
Change in net assets, year ended June 30, 2013
(1,285,978)
Board approved transfer of designated funds Net assets, June 30, 2013 Unrestricted Temporarily restricted Total net assets
9,428,736 9,428,736
$
$
(4,745,758)
(3,274,949)
3,274,949
3,066,979 3,066,979
7,101,162 7,101,162
3,066,979 3,066,979
State Solidarity Fund Designated $
4,517,375 4,517,375
$
$
$
23,031 23,031
(20,265)
-
-
Building Fund
Postretirement Benefits Fund
$ 26,642,638 26,642,638
$ (24,324,800) (24,324,800)
357,433
(6,871,337)
-
Committee on Political Education $
5,495,890 5,495,890
Total $
1,621,549
-
44,237,368 5,495,890 49,733,258
(3,931,230)
-
-
5,204,162 5,204,162
20,983,581 20,983,581
2,766 2,766
27,000,071 27,000,071
(31,196,137) (31,196,137)
7,117,439 7,117,439
38,684,589 7,117,439 45,802,028
279,018
2,359,625
2,355
603,301
(1,359,725)
(2,222,983)
(3,998,838)
-
$
14,311,438 14,311,438
527 Solidarity Fund Designated
6,672,143
-
951,061
4,726,711 4,726,711
National Solidarity Fund Undesignated
686,787
(3,325,512)
(951,061)
$
8,571,971 8,571,971
1,274,949
951,061
-
5,236,027 5,236,027
5,066,979 5,066,979
Militancy/ Defense Fund Undesignated
5,483,180 5,483,180
See accompanying notes to consolidated financial statements.
-
$
23,343,206 23,343,206
-
$
5,121 5,121
-
27,603,372 $ 27,603,372
-
(32,555,862) $ (32,555,862)
-
$
4,894,456 4,894,456
-
$
36,908,734 4,894,456 41,803,190
American Federation of Teachers, AFL-CIO Consolidated Statements of Cash Flows Years Ended June 30, 2013 and 2012 (With Supplemental Fund Information for the Year Ended June 30, 2013)
Militancy/ Defense Fund
General Fund Cash flows from operating activities Change in net assets Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities Depreciation and amortization Loss on disposal of property and equipment Net depreciation (appreciation) in fair value of investments Decrease in fair value of swap agreement Decrease (increase) in assets Due from (to) other funds Per capita taxes receivable Loans receivable Other receivables Prepaid expenses Deferred charges Increase (decrease) in liabilities Accounts payable Accrued vacation and severance pay Accrued expenses and other liabilities Advance per capita taxes Accrued postretirement health care costs Accrued pension liability Deferred revenue Net cash provided by (used in) operating activities
$
(1,285,978)
$ (2,374,451)
1,305,939 10,253
(561,975) -
1,849,473 (18,823,311) (624,613) (488,574) 531,629 -
71,248 33,074 (30,055) -
992,099 393,251 550,419 154,613 34,556 (15,314,866)
2,647,709 (214,450)
Cash flows from investing activities Purchases of property and equipment Purchases of investments Proceeds from the sale of investments Net cash provided by (used in) investing activities
(1,002,375) (300,000) (1,302,375)
(10,013,414) 9,637,281 (376,133)
Cash flows from financing activities Change in line of credit, net Principal payments on mortgage note payable Proceeds from mortgage loan Bank overdraft Net cash provided by (used in) financing activities
2,813,007 1,276,852 4,089,859
End of year
$
846,956
515,978
$
(1,359,725)
$
(2,222,983)
2013 Total
$
(3,998,838)
2012 Total
$
(3,931,230)
1,442,278 -
-
-
2,748,217 10,253
-
(1,117,970) 371,918
-
-
(1,594,567) 371,918
20,392 -
717,922 (787,765) 39,791 71,923
-
1,400 -
(18,823,311) (591,539) (1,306,394) 571,420 71,923
11,846,460 37,910 572,455 337,027 -
3,571,212 393,251 456,206 154,613 389,015 970,710 41,474 (16,564,437)
(2,783,245) (365,751) (1,346,036) (5,040) 5,378,010 1,493,327 (191,788) 14,264,562
(68,596) (94,213) 6,918 1,185,507
389,015 970,710 -
(2,221,583)
3,181,277 20,794
-
(1,011,873) (10,184,677) 11,193,023 (3,527)
-
-
(2,014,248) (20,498,091) 20,830,304 (1,682,035)
(1,106,559) (29,676,250) 20,493,808 (10,289,001)
-
(2,148,487) (2,148,487)
-
-
2,813,007 (2,148,487) 1,276,852 1,941,372
916,650 (2,006,641) 10,000,000 8,910,009
(966,507)
-
(2,221,583)
(16,303,700)
12,885,570
-
7,116,039
23,936,417
11,050,847
2,766 $
603,301
Committee on Political Education
-
2,355
1,106,561 $
$
2,355
(590,583)
13,374,338
2,640,998
Building Fund
(2,638,643) -
-
(12,527,382)
Cash and cash equivalents Beginning of year
$
-
85,378 -
Net increase (decrease) in cash and cash equivalents
Solidarity Fund
Postretirement Benefits Fund
5,121
Supplemental Disclosure AFT paid $452,969 and $443,421 in interest during 2013 and 2012, respectively.
See accompanying notes to consolidated financial statements. -7-
2,336,713 $
1,370,206
$
-
$
4,894,456
$
7,632,717
$
23,936,417
AMERICAN FEDERATION OF TEACHERS, AFL-CIO NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2013
NOTE 1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Organization - The American Federation of Teachers, AFL-CIO (the Federation) is committed to advancing an agenda that provides educational opportunity, lifts the disadvantaged, rebuilds the middle class, improves the American economy and public infrastructure, and fosters the democratic principles of respect, dignity and economic security for all those who call America home and seek the American dream. The Federation, working with local and state affiliates, seeks to ensure that the educators, healthcare providers and public employees who make up our membership have the tools and resources they need to make this vision a reality. The major source of revenue to the Federation is per capita taxes paid by locals. Fund Accounting and Principles of Consolidation - To ensure observance of limitations and restrictions placed on the use of resources available to the Federation, the accounts of the Federation are maintained in accordance with the principles of fund accounting. This is the procedure by which resources for various purposes are classified for accounting and reporting purposes into funds established according to their nature and purposes. Separate accounts are maintained for each fund. The Building Fund also includes the consolidated accounts of 555 New Jersey Avenue, N.W., Inc. (555 New Jersey), and a controlled limited partnership - Capitol Place I Associates Limited Partnership (Capitol Place I Associates) (see Note 2). All significant intercompany transactions have been eliminated in consolidation. The assets, liabilities and net assets of the Federation are reported in six self-balancing, unrestricted net asset fund groups, as follows: General Fund
- records all activity not accounted for in the other funds.
Militancy/Defense Fund Undesignated
- the undesignated portion of net assets is to financially support members and locals involved in strikes and in legal matters concerning job security and other issues.
Designated
- established to account for the net activity of the Federation’s Occupational Liability Insurance Plan for members.
Building Fund
- established to account for the Federation's sub-leasing activities and its consolidated investment in 555 New Jersey Avenue, N.W., Inc., and in a limited partnership, Capitol Place I Associates Limited Partnership. -8-
NOTE 1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Solidarity Funds
Postretirement Benefit Fund
Committee on Political Education
- established to assist the Federation and its affiliates in participating in legislative and political activities with significant potential impact on members and the institutions where they work. The State Solidarity Fund net assets are amounts designated for state affiliates with similar funds. The 527 Solidarity Fund net assets are amounts designated for electoral activities.
- established to record the unfunded liabilities and expenses associated with providing healthcare and life insurance benefits to the Federation’s retirees and pension benefits to the retired officers of the Federation.
- established to improve public education through involvement in political activities. The Committee on Political Education is financed by contributions. Funds are disbursed via procedures established by the Executive Committee.
Financial Statement Presentation - The consolidated financial statements of the Federation report the amounts for each of three distinct classes of net assets and changes therein permanently restricted net assets, temporarily restricted net assets and unrestricted net assets based on the existence or absence of donor-imposed restrictions. The Federation has no permanently restricted net assets for the years ended June 30, 2013 and 2012. Per Capita Taxes - The Federation assesses each local a monthly per capita tax for each member. Annual per capita tax assessments and the allocation to the various funds are determined by the Federation's Executive Council pursuant to the Federation's constitution. Per capita taxes are recognized monthly as assessments become due from the various local organizations; taxes received in advance are deferred. The General Fund initially records all per capita tax receipts and receivables, and allocates the portion due to other funds on a monthly basis. Effective September 1, 2011, the monthly per capita tax was $17.10, per member. Since September 1, 1998, $.27 of monthly per capita has been allocated to the Militancy/Defense Fund, $.10 has been allocated to the Building Fund, and $.05 has been allocated to the Albert Shanker Institute as a contribution from the Federation. Effective September 1, 2011, $1.90 of monthly per capita has been allocated to the Solidarity Fund of which $.76 has been designated for state affiliates with similar funds. Also pursuant to the Federation's constitution, a rebate of per capita taxes of 20 cents per month is provided to each chartered state federation based on the number of dues paying members.
-9-
NOTE 1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cash Equivalents - For the purposes of the statement of cash flows, the Federation considers all money market and highly liquid monetary instruments purchased with a maturity of three months or less to be cash equivalents. Investments - Common stock, mutual funds, preferred stock, unit investment trusts and closed end funds are stated at fair value which represents publicly quoted market prices as of the last business day of the year. Corporate bonds, asset backed securities, municipal bonds and U.S. Government and government agency obligations are valued based on quoted market prices when significant inputs are observable either directly or indirectly. Foreign bonds and certain equity securities are valued as estimated by the investment manager. Accounts Receivable - Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probably uncollectable amounts through a provision for bad debt expense based on its assessment of the current status of individual accounts. Rental Income, Net - Net rental income represents the rental income of Capitol Place I Associates, less rental income received from the Federation for all space leased by the Federation. Net rental income is recognized on a straight-line basis over the term of the respective leases, shown net of concessions. Property and Equipment - Property and equipment are carried at cost less accumulated depreciation and amortization. Major additions are capitalized while replacements, maintenance, and repairs which do not improve or extend the lives of respective assets are expensed. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: Building Building renovations and improvements Furniture and equipment
40 years 15 years 5 to 10 years
Deferred Charges - Deferred charges consist of mortgage loan costs, which are being amortized on a straight-line basis over the term of the mortgage loan. Severance Pay, Accumulated Vacation, and Welfare Benefits - The Federation recognizes accumulated severance and vacation expense and employees' welfare benefits as earned by its employees under various contracts and agreements. Estimated Self-Insurance Reserves - Self-insurance reserves represent amounts provided for estimated claims to be submitted under the Federation's Occupational Liability Plan for members and Group Health Insurance Plan for employees. Premiums paid by the Federation's members to the Occupational Liability Plan are used primarily to pay premiums for a liability insurance policy; the remaining premiums are used to pay certain benefits or provide a reserve for benefits not covered under the insurance policy. The Federation provides its employees with health insurance coverage under a self-insured plan. Reserves have been established for amounts attributable to the Occupational Liability Plan which are to be used only for the payment of benefits, and for estimated health insurance claims to be submitted based on estimated claims incurred but not reported at June 30, 2013 and 2012. - 10 -
NOTE 1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes - The Federation is exempt from Federal income taxes, except on net income, if any, from unrelated business activities, under Section 501(c)(5) of the Internal Revenue Code. The Federation has approximately $1,600,000 of net operating losses (NOL’s) to offset any future taxable income. These NOL’s expire over a 15 – 20 year period that generally ends in 2025. 555 New Jersey is exempt from Federal income taxes, except on net income, if any, from unrelated business activities, under Section 501(c)(2) of the Internal Revenue Code. Capitol Place I Associates, as a partnership, passes all net income (loss) tax amounts through to the individual partners in accordance with the Partnership agreement and the Internal Revenue Code. For state tax purposes, the District of Columbia imposes unincorporated business taxes on any net income of the partnership. The Federation accounts for income taxes in accordance with the Accounting Standards Codification (ASC) Topic Income Taxes. These provisions provide consistent guidance for the accounting for uncertainty in income taxes recognized in an entity’s financial statements and prescribe a threshold of “more likely than not” for recognition and derecognition of tax positions taken or expected to be taken in a tax return. The Federation performed an evaluation of uncertain tax positions for the year ended June 30, 2013, and determined that there were no matters that would require recognition in the financial statements. As of June 30, 2013, the statue of limitations for the tax years 2010 through 2012 remains open with the U.S. Federal jurisdiction and the various states and local jurisdictions in which the Federation files returns. Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. Subsequent Events Review - Subsequent events have been evaluated through January 13, 2014, which is the date the financial statements were available to be issued. This review and evaluation revealed no new material event or transaction which would require an additional adjustment to or disclosure in the accompanying financial statements. NOTE 2.
INVESTMENT IN CAPITOL PLACE I ASSOCIATES LIMITED PARTNERSHIP
The Federation is a limited partner in Capitol Place I Associates Limited Partnership, a partnership established in 1982, for the purpose of building and owning an office building that was completed in 1984. From 1984 to October 29, 1992, the Federation had a non-controlling 66 percent interest in Capitol Place I Associates, and in distribution of profits and losses and cash flow of the office building. During 1992 and 1994, the Federation purchased the remaining interests in the partnership and established 555 New Jersey as the managing general partner with a 1% interest in the partnership. The purchase price or cost of assets exchanged in acquiring the remaining interests, plus the deficit balances in the former remaining partners' capital accounts, have been allocated to the cost of the land and building. These amounts are being amortized on a straight-line basis over the remaining useful life of the building, from the date of acquisition.
- 11 -
NOTE 3.
INVESTMENTS
Investments by fund at June 30, 2013 and 2012 consisted of: 2013
2012
Cost General Fund Militancy/Defense Fund Building Fund
$
Fair Value
Cost
Fair Value
574,464 $ 574,464 $ 359,842 $ 359,842 24,402,582 25,170,272 23,743,025 24,232,164 19,526,031 20,520,911 19,866,442 20,411,287
$ 44,503,077 $ 46,265,647 $ 43,969,309 $ 45,003,293 Investments at June 30, 2013 and 2012 are comprised of the following: 2013 Stocks and mutual funds Preferred stocks ETF and closed end funds Unit Investment Trusts Corporate bonds and asset backed securities U.S. Government and agency securities Municipal bonds Foreign bond Investment in joint venture
2012
Cost $ 7,926,242 5,486,453 6,389,538 1,981,771
Fair Value Cost Fair Value $ 9,553,386 $ 13,362,618 $ 13,660,848 5,358,845 2,529,676 2,682,116 6,217,230 1,888,530 699,950 712,211
17,330,427
17,699,838
21,946,696
22,095,205
4,263,048 610,976 300,000 214,622
4,476,420 556,776 300,000 214,622
5,130,369 300,000 -
5,552,913 300,000 -
$ 44,503,077 $ 46,265,647 $ 43,969,309 $ 45,003,293 Realized net gains on investments for the years ended June 30, 2013 and 2012 totaled $951,358 and $225,667, respectively. The Federation reports fair value using a hierarchy for observable independent market inputs and unobservable market assumptions about fair value measurements. Observable inputs are inputs that market participants operating within the same marketplace as the Federation would use in pricing the Federation’s asset or liability based on independently derived and observable market data. Unobservable inputs are inputs that cannot be sourced from a broad active market in which assets or liabilities identical or similar to those of the Federation are traded. Level 1 – Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Federation has the ability to access at the measurement date; Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; Level 3 – Inputs that are unobservable (including the Federation’s own assumptions in the determining the fair value of investments)
- 12 -
NOTE 3.
INVESTMENTS (CONTINUED)
The following table sets forth the Federation’s investments that were measured at fair value on a recurring basis as of June 30, 2013 and 2012 by level within the fair value hierarchy:
Description Total Stock and mutual funds Common stock $ 8,711,840 Mutual funds 252,508 Corporate stock 589,038 Preferred stock 5,358,845 ETF and closed end funds 6,217,230 Unit Investment Trust 1,888,530 Corporate bonds and asset backed securities Corporate bonds - domestic 14,187,508 Corporate bonds - foreign 1,297,552 Fixed rate capital securities 1,906,868 Mortgage backed securities 307,910 US Government and agency securities US Treasury obligations 296,148 US Government agency obligations 4,180,272 Foreign bond 300,000 Municipal bonds 556,776 Investment in joint venture 214,622 Total
$
8,711,840 $ 252,508 5,358,845 6,217,230 1,888,530
Other Stocks $
$
589,038 589,038
14,187,508 1,297,552 1,906,868 307,910
-
296,148 4,180,272 556,776 -
- 13 -
$
Other Bonds $
$
-
-
$ 46,265,647 $ 22,428,953
Changes in Level 3 Category Beginning balance – 7/1/2012 Purchases Net realized loss Ending balance – 6/30/2013
2013 Quoted Market Significant Significant Price for Other Unobservable Assets Observable Inputs Inputs (Level 1) (Level 2) (Level 3)
300,000 $ 300,000 $
$
22,733,034 $ Joint Venture 300,000 (85,378) 214,622
589,038 -
300,000 214,622 1,103,660
NOTE 3.
INVESTMENTS (CONTINUED) 2012
Description Total Stock and mutual funds Common stock $ 11,061,981 Mutual funds 2,009,829 Corporate stock 589,038 Preferred stock 2,682,116 Unit Investment Trust 712,211 Corporate bonds and asset backed securities Corporate bonds - domestic 18,835,802 Corporate bonds - foreign 1,721,592 Fixed rate capital securities 1,118,600 Mortgage backed securities 419,211 US Government and agency securities US Treasury obligations 310,299 US Government agency obligations 5,242,614 Foreign bond 300,000 Total
Quoted Market Significant Significant Price for Other Unobservable Assets Observable Inputs Inputs (Level 1) (Level 2) (Level 3) $ 11,061,981 2,009,829 2,682,116 712,211
Other Stocks
-
-
18,835,802 1,721,592 1,118,600 419,211
-
310,299 5,242,614 -
$ 45,003,293 $ 16,466,137
Changes in Level 3 Category
$
$
$
27,648,118 $
Other Bonds
Beginning balance – 7/1/2011 Purchases Net losses
$
589,038 -
$
300,000 -
Ending balance – 6/30/2012
$
589,038
$
300,000
The fair value of investments in U.S. Government agency securities, U.S. Treasury obligations, municipal bonds, and corporate bonds and asset backed securities were estimated based upon yields currently available on comparable securities of issuers with similar credit ratings. The fair value of foreign bonds and corporate stocks were estimated to be cost due to their limited salability The fair value of the investment in a joint venture is based on the Federation’s original investment adjusted for its share of the current year’s net loss.
- 14 -
589,038 -
300,000 889,038
NOTE 4.
LOANS RECEIVABLE
The Federation has entered into signed loan agreements with various locals which are carried at cost, plus interest, less an estimate made for uncollectible amounts. As of June 30, 2013 and 2012, the Federation had total loans receivable, including interest, of $8,623,083 and $8,031,544, respectively. Of this amount, management has estimated an allowance of $2,782,669 for both years. This estimate is based on management’s analysis of historical data.
NOTE 5.
RELATED PARTY TRANSACTIONS
The Federation established the American Federation of Teachers Benefit Trust (the Trust), as a separate organization which is exempt from federal income taxes under Section 501(c)(5) of the Internal Revenue Code. The Trust has been formed as a welfare benefit plan for members and is fully subject to the various requirements and fiduciary provisions of the Employee Retirement Income Security Act. The purpose of the Trust is to provide various medical, life and disability insurance benefits to participating Federation members as an enhancement to collectively bargained benefits. Certain Federation Executive Council members and officers serve as trustees of the Trust. In addition, the Federation provides facilities and administration assistance for which the Trust reimburses the Federation. The Federation recognized $13,249 and $83,338 of reimbursements for services provided to the Trust for the years ended June 30, 2013 and 2012, respectively. Also, during the year ended June 30, 2013, the Federation recognized $835,129 for services previously paid by the Federation and forgiven. As of June 30, 2013 and 2012, the Trust owed the Federation $121,731 and $26,155, respectively, which is included in other receivables in the statement of financial position. The Federation established the AFT Education Foundation (AFTEF) as a separate organization which is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code. AFTEF is principally financed by the research grants from the U.S. Government and related agencies. The officers and directors of AFTEF are comprised of the Federation’s officers and Executive Council. The Federation provides accounting and administrative services to the Foundation without charge, the value of which has not been separately identified in these financial statements. For the years ended June 30, 2013 and 2012, the Federation was reimbursed $1,303,045 and $1,740,655, respectively, for salaries, fringe benefits and other expenses incurred on behalf of AFTEF. The Federation also advances funds for payment of AFTEF expenses until AFTEF receives reimbursements under the grants. At June 30, 2013 and 2012, the Federation was owed $67,439 and $388,871, respectively, from the AFTEF. These amounts are included in other receivables on the statement of financial position. The Federation established the AFT Disaster Relief Fund (the Fund) during the year ended June 30, 2006 as a separate organization which is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code. The Fund was formed to provide assistance to persons adversely affected by natural or man-made disasters. The officers and directors of the Fund are comprised of the Federation’s officers and several Executive Council members. The Federation provided accounting and administrative services to the Fund without charge, the value of which has not been separately identified in these financial statements.
- 15 -
NOTE 5.
RELATED PARTY TRANSACTIONS (CONTINUED)
The Albert Shanker Institute reimbursed all administrative costs for the years ended June 30, 2013 and 2012. As discussed in Note 1, the Federation allocates a portion of per capita taxes to the Institute. The amount allocated for the years ended June 30, 2013 and 2012 was $508,500 and $523,407, respectively.
NOTE 6.
PROPERTY AND EQUIPMENT
Property and equipment consisted of the following at June 30, 2013 and 2012:
Land Office building and improvements Furniture and equipment Less accumulated depreciation and amortization
$
2013 5,084,148 42,220,452 16,025,247 63,329,847 (41,293,248)
$ 22,036,599
NOTE 7.
$
2012 5,084,148 41,214,526 15,500,197 61,798,871 (39,018,050)
$ 22,780,821
MORTGAGE NOTE PAYABLE, SWAP AGREEMENT AND GUARANTEE
Capitol Place I Associates refinanced its property with a $15,000,000 mortgage loan in July 2003. The loan is payable over 10 years with interest accruing at a per annum rate equal to LIBOR plus 0.75%. Capitol Place I Associates has entered into an interest rate hedge agreement with the lender to provide for a fixed rate hedge against increases in LIBOR. The notional amount of the hedge agreement is $15,000,000 amortizing as principal payments are made on the mortgage loan. This agreement effectively changes Capitol Place I Associates’ interest rate exposure on its floating rate mortgage loan to a fixed 4.09%. The interest rate hedge agreement matures at the time the mortgage loan matures. The loan matured and was paid off during the year ended June 30, 2013. In August 2011, Capitol Place I Associates refinanced its property with a $10,000,000 mortgage loan. The mortgage loan is payable over 5 years with interest accruing at a per annum rate equal to LIBOR plus 1.52%. Capitol Place I Associates has entered into an interest rate hedge agreement with the lender to provide for a fixed rate hedge against increases in LIBOR effectively fixing the Partnership’s interest rate exposure on its floating rate mortgage loan at 3.63%. The interest rate swap agreement matures at the time the mortgage loan matures. In the event of default by the counterparty Capital Place I may be exposed to increased interest rates. Capital Place I Associates does not anticipate default by the counterparty. In the event that Capitol Place I Associates pays off the mortgage loan before the full term, it could be liable for a yield differential payment to the lender based on the remaining term of the loan. At June 30, 2013, the fair value of this swap agreement was $(371,918).
- 16 -
NOTE 7.
MORTGAGE NOTE PAYABLE AND GUARANTEE (CONTINUED)
The details of the Interest rate swap agreement maturing August 24, 2016 are as follows: Fixed rate Variable rate Remaining term of contract in years Original note payable balance covered by agreement (notional amount) Notional amount outstanding at June 30, 2013
3.63% LIBOR 3 $10,000,000 $ 9,354,581
The loan is secured by a deed of trust, assignment and security agreement, creating a first lien on the property and all related improvements, fixtures and equipment, all leases and rents with respect thereto, and all contracts and intangible property related thereto. In addition, the lender has required that all amounts payable to the partnership under the interest rate hedge agreement be assigned as additional security under the loan. The Federation has also guaranteed the full amount of the loan for its entire term. In addition, the Federation will make contributions to Capitol Place I Associates sufficient to cover the debt service payments. The fair value of the swap agreement is estimated using Level 3 inputs. The fair value is based on Capitol Place I Associates floating interest rate on the mortgage note payable compared to the hedged fixed rate of 3.63% as reported by the lender. Future minimum principal obligations under the agreement are as follows: Year Ending June 30, 2014 2015 2016 2017
$
370,548 384,225 398,407 8,201,401
$ 9,354,581
NOTE 8.
ACCRUED EXPENSES AND OTHER LIABILITIES
Accrued expenses and other liabilities consisted of the following at June 30, 2013 and 2012:
Assistance payable to state and local federations State federation per capita taxes Affiliation fees payable Accrued employees' welfare benefits Estimated self-insurance reserve employees' health insurance Other accrued expenses
- 17 -
2013
2012
$ 2,884,044 1,971,548 803,357 -
$ 2,033,644 1,908,046 821,421 56,900
190,000 708,869
360,000 921,601
$ 6,557,818
$ 6,101,612
NOTE 9.
OTHER REVENUE
Other revenue consisted of the following at June 30, 2013 and 2012: 2013
NOTE 10.
2012
Conference and meeting registration $ 413,431 Locals insurance reimbursements 89,102 AFT Benefit Trust reimbursements 826,520 Income from Affiliates 319,433 Parking garage revenue 51,303 Miscellaneous income 400,269
$ 381,276 138,984 72,605 357,274
$2,100,058
$ 950,139
AFFINITY CARD AGREEMENT
The Federation has entered into a multi-year License Agreement and a List Use Agreement with the AFL-CIO, under which the AFL-CIO has obtained rights to use certain intangible property belonging to the Federation, including the right to use the name, logo, trademarks, and membership lists of the Federation, in exchange for specified royalty payments to be paid to the Federation by the AFL-CIO. In turn the AFL-CIO has sub-licensed the rights to use the Federation’s intangible property to a financial institution, for use by the institution in connection with its marketing of credit card and certain other financial products to members of the Federation. The current agreement which was effective on March 1, 1997, extends the term from March 2009 to February 2017. For the years ended June 30, 2013 and 2012, the Federation received affinity card royalties from the AFL-CIO which totaled $1,779,326 and $1,677,205, respectively. These amounts are included in program administration and royalties in the statement of activities.
NOTE 11.
RETIREMENT PLANS
The Federation contributed 23 percent of eligible employees’ salaries to defined contribution retirement plans during the years ended June 30, 2013 and 2012. Total retirement plan expense was $8,415,190 and $8,427,143 for the years ended June 30, 2013 and 2012, respectively. The Federation adopted a defined benefit plan for officers of the Federation who have completed 5 years of service in the capacity of President, Executive Vice President, or Secretary-Treasury, and have served the Federation or any of its state or local affiliates for a period of at least 20 years. The benefit, payable upon retirement, is equal to 60% of final annual compensation and is adjusted annually for an amount equal to Social Security cost of living increases. The surviving
- 18 -
NOTE 11.
RETIREMENT PLANS (CONTINUED)
spouse of an eligible officer will receive a benefit of 50% of the officer’s benefit. Normal retirement age is 62, with a reduction of 6% per year for retirement benefits beginning prior to age 62. Additionally, the monthly benefit is offset by 1/60th of the amount contributed by the Federation on behalf of each eligible officer under the AFT Management Retirement Plan, one of the defined contribution plans maintained by the Federation for its employees. The annual measurement date is June 30. The net periodic pension cost for the plan for the years ended June 30, 2013 and 2012 is summarized as follows:
Interest cost Service cost Net amortization and deferral
$
Net periodic pension cost
2013 458,332 1,510,278 711,896
$
$ 2,680,506
2012 511,342 331,101 489,633
$ 1,332,076
The net periodic pension cost is based on the following weighted-average assumptions at the end of the year: 2013 2012 Discount rate Average rate of compensation increase
4.25% 3.00%
5.50% 3.00%
The plan’s obligations and funded status as of June 30, 2013 and 2012 is summarized as follows: 2013 11,978,516
2012
Fair value of plan assets Projected benefit obligation Excess (deficiency) of plan assets over projected benefit obligation
$
$
11,007,806
(11,978,516)
(11,007,806)
Net accrued pension liability
$ (11,978,516)
$(11,007,806)
The net accrued pension liability is based on the following weighted average assumptions at the end of the year: 2013 Discount rate Average rate of compensation increase
4.75% 3.00%
2012 4.25% 3.00%
Employer contributions and benefit payments for the years ended June 30, 2013 and 2012 were as follows:
Employer contributions Benefit payments
$ $ - 19 -
2013
2012
457,354 $ 457,354 $
402,997 402,997
NOTE 11.
RETIREMENT PLANS (CONTINUED)
Estimated future benefits expected to be paid in each of the next five fiscal years and in the aggregate for the five years thereafter are as follows: Year Ending June 30, 2014 2015 2016 2017 2018 2019 - 2023
$ 710,177 714,534 717,208 901,853 902,492 5,545,784
Total
$9,492,048
The Plan is unfunded and benefits will be paid from the General Fund of the Federation.
NOTE 12.
POSTRETIREMENT MEDICAL AND LIFE INSURANCE BENEFITS
In addition to providing pension benefits, the Federation also provides certain medical and life insurance benefits for retired employees meeting certain minimum age and years of service requirements, based on benefits negotiated in various collective bargaining agreements. Generally, medical and dental benefits are provided until age 65, prescription drugs are provided until death, and life insurance is provided until 70. Substantially all of the Federation’s employees may become eligible for certain of these benefits if they retire while working for the Federation. Postretirement benefit costs for the years ended June 30, 2013 and 2012 include the following components:
Service cost Interest cost Amortization of losses Amortization of prior service cost Amortization of transition obligation
$
Total postretirement benefit costs
$
2013 1,168,849 898,506 289,936 113,771 193,622 2,664,684
$
$
2012 763,444 877,250 113,771 75,537 193,622 2,023,624
The accumulated postretirement benefit obligation at June 30, 2013 and 2012 is as follows: 2013 Fair value of plan assets Postretirement benefit obligation Excess (deficiency) of plan assets over postretirement benefit obligation Unrecognized net actuarial losses Net accrued healthcare liability
- 20 -
$
20,577,346 (20,577,346) -
2012 $
20,188,331 (20,188,331) -
$ (20,577,346) $ (20,188,331)
NOTE 12.
POSTRETIREMENT MEDICAL AND LIFE INSURANCE BENEFITS (CONTINUED)
Weighted-average assumptions used to determine benefit obligations at end of year: 2013 Discount rate
5.00%
2012 4.50%
The assumed health care cost trend rates used to measure the expected cost of benefits for the year ended June 30, 2013 were assumed to increase by 9.0%. Thereafter, rate increases were assumed to gradually decrease until they reached 4.5% in 2022. The assumed prescription drug cost trend rates used to measure the expected cost of benefits for the year ended June 30, 2013 were assumed to increase by 7.0%. Thereafter, rate increases were assumed to gradually decrease until they reached 4.5% in 2018. Previously, prescription drug trend rates were assumed to be in line with the medical trend rates. Estimated future benefits expected to be paid in each of the next five fiscal years and in the aggregate for the five years thereafter are as follows: Year Ending June 30, 2014 2015 2016 2017 2018 2019 - 2023 Total
$ 481,000 580,000 611,000 634,000 690,000 4,428,000 $7,424,000
The plan is unfunded and benefits will be paid from the General Fund of the Federation. The amounts expected to be recognized as net periodic costs in fiscal year 2013 is $443,079.
NOTE 13.
BORROWINGS AND CONTINGENT LIABILITIES
The Federation has lines of credit with one financial institution at June 30, 2013 for a total amount of $10,000,000. Interest is payable monthly at the financial institutions’ prime interest rate. The lines of credit are secured by cash and investments held by the institutions. The Federation had borrowed $3,729,657 and $916,650 at June 30, 2013, and 2012, respectively. At June 30, 2013, the Federation has guaranteed a loan obtained by an affiliate not to exceed $160,000.
- 21 -
NOTE 14.
COMMITMENTS AND CONTINGENCIES
The Federation has several non-cancelable operating leases, primarily for office equipment. Future minimum lease payments, under non-cancelable operating leases for office equipment are: Year Ending June 30, 2014 2015 2016 2017 2018 Total
$ 74,128 48,899 48,899 48,899 24,450 $ 245,275
Rental expense for office equipment leases totaled approximately $192,128 and $259,913 for the years ended June 30, 2013 and 2012, respectively. The Federation also has several office space subleases. Future minimum receipts under these non-cancelable office space subleases, excluding executory costs are: Year Ending June 30, 2014 2015 2016 Total
$
56,166 57,289 14,393
$ 127,849
The Federation has been named as a defendant in a number of actions, none of which, based on currently available information, appear to present significant potential liability in relation to the Federation’s total net assets. The Federation intends to defend itself vigorously against pending litigation and maintains that it has no liability.
NOTE 15.
CAPITOL PLACE I ASSOCIATES LEASE RENTAL INCOME COMMITMENTS
Leases of space in the office building owned by Capitol Place I Associates provide for base rentals plus provisions for escalation in the event of increased operating expenses, real estate taxes, and changes in the Consumer Price Index. Effective March 2013, the Partnership entered into a lease agreement for one year. Subsequent to year end, the Partnership renegotiated a five year extension. This lease provides for monthly payments of $298,096. The minimum annual future rental income on non-cancelable leases, excluding any lease payments from the Federation, are: Year Ending June 30, 2014 2015 Total
$ 2,561,455 30,131 $ 2,591,586
- 22 -
NOTE 16.
UNINSURED CASH AND CASH EQUIVALENTS
The Federation maintains its cash accounts primarily with two banks in the United States which at times may exceed the federally insured limits per bank. Bank deposits in excess of FDIC insured limits at June 30, 2013 were approximately $2.3 million. Additionally, the Federation had approximately $1.4 million in money market accounts held by investment custodians which are not insured by the FDIC. The Federation has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk in cash and cash equivalents.
NOTE 17.
PLEDGES PAYABLE
The Federation made a pledge to the Edward M. Kennedy Institute for $1,500,000, of which the Federation has paid $1,200,000. This amount includes a $300,000 paid by the Federation during the year ending June 30, 2013. The remaining $300,000 is payable over the next year.
NOTE 18.
AFT RESOURCE CENTER
During the year ended June 30, 2012, the Federation entered into a collaborative agreement with TSL Education US, Inc. to form SML JV LLC for the purposes of developing, marketing, launching and operating the AFT Resource Center. The website, targeted to educators both within and outside the United States, provides a forum for educators to communicate and share information and materials. The Federation is a 50% partner in SML JV LLC. The value of the Federation’s investment in this joint venture was $214,622 as of June 30, 2013.
- 23 -
CONSOLIDATING SCHEDULES
American Federation of Teachers, AFL-CIO Consolidating Schedule - Building Fund Schedule of Financial Position June 30, 2013
Building Fund
555 New Jersey Avenue N.W., Inc.
Capitol Place I Associates Limited Partnership
$
$
Elimination Entries Debit Credit
Consolidated Building Fund
Assets Current assets Cash and cash equivalents Due (to) from other funds Investments Other receivables Prepaid expenses Total current assets
$
Net Property and equipment
-
Other assets Investment in Capitol Place I Associates Limited Partnership Deferred charges Total assets
3,440 (4,365,645) (4,362,205)
(115,937) (115,937) -
37,334,821 -
72,349 -
1,366,766 7,461 20,520,911 1,035,396 118,492 23,049,026
$
-
$
-
$
1,370,206 (4,474,121) 20,520,911 1,035,396 118,492 18,570,884
14,364,950
9,944,309
5,323,166
18,986,093
135,773
411,079 -
37,818,249 -
135,773
$ 10,355,388
$
43,141,415
$ 37,692,750
$
$
$ 32,972,616
$ (43,588)
$
37,549,749
$
$
$
352,562 370,548 6,918 730,028
Liabilities and Net Assets Current liabilities Accounts payable Current maturities of mortgage note Deferred rent Total current liabilities Interest rate swap agreement Mortgage note payable, excluding current maturities Total liabilities Net assets and partner's equity Total liabilities and net assets
3,399 3,399
-
-
-
$
355,961 370,548 6,918 733,427
-
-
371,918
-
-
371,918
-
-
8,984,033
-
-
8,984,033
3,399
-
10,085,979
-
-
10,089,378
32,969,217
(43,588)
27,463,770
49,813,626
$ 32,972,616
$ (43,588)
37,549,749
$ 49,813,626
- 24 -
$
$
17,027,599
27,603,372
17,027,599
$ 37,692,750
American Federation of Teachers, AFL-CIO Consolidating Schedule - Building Fund Schedule of Activities Year Ended June 30, 2013
Building Fund Revenue Per capita taxes Investment revenue, net of expenses of $75,213 Net appreciation in fair value of investments Rental revenue on subleased office space Rental income, net Equity in gain (loss) of Capitol Place I Investments Limited Partnership-AFT Other Total revenue
$
962,401 -
555 New Jersey Avenue N.W., Inc.
Capitol Place I Associates Limited Partnership
$
$
-
-
789,338
308,060 -
-
1,117,970 2,902,879
588,444
(406,968) 863,493
(4,111) (4,111)
93,011 4,903,198
588,444
-
-
1,245,413
-
3,310,258 385,598 371,918 5,313,187
-
(11,617) -
-
(11,617)
-
Excess of revenue over expenses
875,110
(4,111)
Net assets and partners' equity, Beginning of year
32,094,107
(39,477) -
Net assets and partners' equity, end of year
$
-
Expenses General operations - depreciation and amortization General operations - General Fund rental expense Rental expense on subleased office space Operating expenses Interest expense Decrease in fair value of interest rate swap Other Total expenses
Net partnership transactions affecting equity
-
$ 32,969,217
$ (43,588)
- 25 -
Consolidated Building Fund
Elimination Entries Debit Credit
-
$
-
$
962,401
-
789,338
-
1,117,970 308,060 2,314,435
411,079 411,079
-
1,245,413
268,788 268,788
588,444
(386,222) (213,839) 3,310,258 385,598 371,918 268,788 4,981,914
857,232
999,523
603,301
25,873,759
46,956,394
16,028,076
27,000,071
2,000,000
2,000,000
$ 27,463,770
$ 49,813,626
(409,989)
386,222 202,222 -
93,011 5,585,215
$ 17,027,599
$ 27,603,372