HABITAT FOR HUMANITY Financial Statements With Independent Auditors’ Report June 30, 2014 and 2013

SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC. Table of Contents

Page Independent Auditors’ Report

1

Financial Statements Statements of Financial Position Statements of Activities Statements of Functional Expenses Statements of Cash Flows

3 4 5 6

Notes to Financial Statements

7 - 16

INDEPENDENT AUDITORS' REPORT Board of Directors San Gabriel Valley Habitat for Humanity, Inc. Azusa, California

We have audited the accompanying financial statements of San Gabriel Valley Habitat for Humanity, Inc., which comprise the statements of financial position as of June 30, 2014 and 2013, and the related statements of activities, functional expenses, and cash flows for the years then ended, and the related notes to the financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these 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. Auditors' 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 from 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 organization'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 organization'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 audit opinion.

Board of Directors San Gabriel Valley Habitat for Humanity, Inc. Azusa, California Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of San Gabriel Valley Habitat for Humanity, Inc. as of June 30, 2014 and 2013, and the changes in its net assets and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Brea, California September 17, 2014

SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC. Statements of Financial Position

June 30, 2014 ASSETS: Current assets: Cash and cash equivalents Restricted cash Investments Contributions receivable Mortgage loans receivable - current portion ReStore inventory Houses under construction Other assets

$ 4,179,066 9,084 1,252,455 18,850 246,476 112,207 263,436 134,079 6,215,653

Non-current assets: Rental property Property and equipment, net of accumulated depreciation Mortgage loans receivable - net of current portion, less discount Total Assets LIABILITIES AND NET ASSETS: Current liabilities: Accounts payable Construction payable Deferred rent liability Accrued expenses Deposits Note payable - current portion

Note payable - net of current portion

2013

$

170,852 2,625,661

3,159,027 16,813 1,020,425 116,480 250,583 89,279 68,685 95,262 4,816,554

548,100 73,118 2,682,003

$ 9,012,166

$

8,119,775

$

$

7,758 66,130 950 67,304 142,142

65,720 48,953 15,911 87,037 70,419 288,040 694,277 982,317

764,696 906,838

1,776,439 4,388,028 6,164,467

1,143,020 4,569,796 5,712,816

Temporarily restricted

1,865,382

1,500,121

Total net assets

8,029,849

7,212,937

Net assets: Unrestricted: Undesignated Board designated Total unrestricted

Total Liabilities and Net Assets

$ 9,012,166 See notes to financial statements -3-

$

8,119,775

SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC. Statements of Activities

Year Ended June 30,

SUPPORT AND REVENUE: Contributions and grants In-kind contributions Sales to homeowners ReStore sales and donations Imputed interest income on mortgage loans Donated services Interest income Other income Net assets released from restrictions: Release of time restriction Satisfaction of donor restrictions Total Support and Revenue EXPENSES: Program services Supporting activities: General and administrative Fundraising Total Expenses Change in Net Assets Net Assets, Beginning of Year Net Assets, End of Year

Unrestricted

2014 Temporarily Restricted

$ 332,956 1,593,663 1,459,566 152,380 69,020 23,163 171,331

$ 382,921 -

5,293 12,367 3,819,739

(5,293) (12,367) 365,261

Unrestricted

2013 Temporarily Restricted

Total

715,877 1,593,663 1,459,566 152,380 69,020 23,163 171,331

$ 196,543 1,331,832 692,938 1,237,761 152,473 28,352 8,848 174,621

$ 1,417,517 -

$ 1,614,060 1,331,832 692,938 1,237,761 152,473 28,352 8,848 174,621

4,185,000

36,018 343,492 4,202,878

Total $

(36,018) (343,492) 1,038,007

5,240,885

3,096,065

-

3,096,065

3,703,277

-

3,703,277

229,783 42,240 3,368,088

-

229,783 42,240 3,368,088

209,600 89,582 4,002,459

-

209,600 89,582 4,002,459

451,651

365,261

816,912

200,419

1,038,007

1,238,426

5,712,816

1,500,121

7,212,937

5,512,397

462,114

5,974,511

$ 6,164,467

$ 1,865,382

$ 8,029,849

$ 5,712,816

$ 1,500,121

$ 7,212,937

See notes to financial statements -4-

SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC. Statements of Functional Expenses Year Ended June 30, 2014 Supporting Activities Program Services Building materials, supplies, and other Salaries and benefits Special events Professional fees Interest expense Bad debt expense Equipment Occupancy Tithes - international Depreciation and amortization Newsletter Conference travel Bank charges Supplies Telephone Postage Insurance Printing Other Totals

$ 1,986,258 892,578 33,924 36,718 692 65,164 13,921

General and Administrative Fundraising

$

121,210 33,529 20,000 14,031 13,552 -

39,738 9,431 171 360 2,810 11,542 2,758

5,272 2,301 6,746 3,480 1,581 1,675 5,615 791

$ 3,096,065

$ 229,783

$

$

2013 Supporting Activities

Total Supporting Activities

Total

Program Services

157,318 38 33,529 20,000 14,031 13,552 -

$ 1,986,258 1,049,896 38 67,453 36,718 20,000 14,723 78,716 13,921

$ 2,703,744 740,983 21,496 1,052 5,688 116,772 9,987

5,686 408

5,272 2,301 6,746 3,480 1,581 1,675 11,301 1,199

39,738 9,431 5,443 2,301 6,746 3,840 1,581 4,485 22,843 3,957

52,279 27,308 1,342 9,994 2,790 9,842

6,143 2,818 6,727 3,612 2,047 8,596 2,790 6,455

42,240

$ 272,023

$ 3,368,088

$ 3,703,277

$ 209,600

36,108 38 -

$

See notes to financial statements -5-

General and Administrative Fundraising

$

107,740 40,462 8,492 13,718 -

$

$

46,881 31,157 6,495 -

Total Supporting Activities

$

Total

154,621 31,157 46,957 8,492 13,718 -

$ 2,703,744 895,604 31,157 68,453 1,052 14,180 130,490 9,987

5,049 -

6,143 2,818 6,727 3,612 2,047 8,596 7,839 6,455

52,279 27,308 7,485 2,818 6,727 3,612 2,047 18,590 10,629 16,297

89,582

$ 299,182

$ 4,002,459

SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC. Statements of Cash Flows

Year Ended June 30, 2014 2013 CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets Adjustments to reconcile change in net assets to net cash provided by operating activities: Discounts on new mortgages Imputed interest income on mortgage loans, net of discounts Depreciation and amortization Realized and unrealized gain on investments Gain on disposal of rental property Net change in: Contributions receivable ReStore inventory Other assets Accounts payable Construction payable Deferred rent liability Accrued expenses Deposits Net Cash Provided by Operating Activities

$

CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures Rental property improvements Proceeds from the sale of rental property Additions to houses under construction, net of in-kind contributions Investments purchased Investment maturities Houses under construction placed in service Receipt of mortgage subsidies Mortgage payments received Net Cash Provided by (Used in) Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from note payable Note payable payments Net Cash Provided by (Used in) Financing Activities

816,912

$ 1,238,426

(152,380) 39,738 (7,030) (74,066)

458,902 (152,473) 52,279 (1,221) -

97,630 (22,928) (40,217) 57,962 48,953 15,911 20,907 (950) 800,442

(56,990) (11,915) (60,596) (67,207) 12,246 (9,050) 1,402,401

(136,072) 622,166 (194,751) (225,000) (39,903) 252,732 279,172

(22,638) (87,505) (4,400) (765,545) 17,307 1,201,224 (1,180,511) 247,269 (594,799)

(67,304) (67,304)

832,000 832,000

Change in Cash and Cash Equivalents

1,012,310

1,639,602

Cash and Cash Equivalents, Beginning of Year

3,175,840

1,536,238

Cash and Cash Equivalents, End of Year

$ 4,188,150

$ 3,175,840

SUPPLEMENTAL DISCLOSURE: Cash paid for interest (none capitalized)

$

$

See notes to financial statements -6-

36,718

1,052

SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC. Notes to the Financial Statements June 30, 2014 and 2013

1.

NATURE OF ORGANIZATION: San Gabriel Valley Habitat for Humanity (SGV Habitat) was incorporated in 1990 in California as a not-forprofit corporation. SGV Habitat is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code (the Code), and is also exempt from state income taxes. SGV Habitat has been classified as a publicly supported organization, which is not a private foundation, under Section 509(a) of the Code. Contributions made by the public are deductible for income tax purposes. SGV Habitat is an affiliate of Habitat for Humanity International, Inc. (Habitat International), a nondenominational Christian nonprofit organization whose purpose is to create decent, affordable housing for those in need, and to make decent shelter a matter of conscience with people everywhere. Although Habitat International assists with information resources, training, publications, prayer support, and in other ways, SGV Habitat is primarily and directly responsible for its own operations. SGV Habitat’s primary source of income consists of sales of homes, along with cash and in-kind contributions.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The financial statements of SGV Habitat have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. A summary of significant accounting policies followed are described below to enhance the usefulness of the financial statements to the reader. CASH AND CASH EQUIVALENTS For statements of financial position and cash flow purposes, cash and cash equivalents include cash on hand, cash on deposit with a bank, and highly liquid investments with a maturity of three months or less when purchased. These accounts may, at times, exceed federally insured limits. SGV Habitat has not experienced any losses in such accounts. RESTRICTED CASH Restricted cash in the form of certificates of deposit is held to comply with the lease agreement for the rental property. The certificates of deposit are stated at the contract price plus accrued interest. INVESTMENTS Investments consist of certificates of deposit which are stated at the contract price plus accrued interest, money market funds, and taxable fixed income funds which are stated at fair market value. Taxable fixed income funds are traded on a United States of America exchange. Accordingly, the exchange's quoted price determines fair market value. The investments, excluding certificates of deposit, are reported at fair value based on quoted prices in active markets for identical assets, which is Level 1 of the fair value hierarchy. At times, certain certificates of deposit are restricted in connection with the current construction projects. No amounts were restricted as of June 30, 2014 and 2013.

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SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC. Notes to the Financial Statements June 30, 2014 and 2013

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued: CONTRIBUTIONS RECEIVABLE Unconditional promises-to-give are recognized as income when received and recorded at fair value based upon estimated future cash flows. All contributions receivable are expected to be collected within one year and are recorded at net realizable value. MORTGAGE LOANS RECEIVABLE Mortgage loans receivable consist of non-interest bearing mortgage loans to homeowners that are secured by real estate and are payable in monthly installments over the lives of the respective mortgages. Rent payments received before the loan became effective are applied toward reducing the principal payments. These non-interest bearing mortgages are recorded at their net realizable value and have been discounted based upon prevailing market rates for low-income housing at the inception of each mortgage. This rate is recommended by Habitat International and does not approximate current market conditions. Utilizing the effective interest method, this discount is recognized as interest income over the term of the mortgage. Certain grants provided by local governments or institutional investors (donating entity) would be required to be repaid to the donating entity in the event the project for which the grants were provided is sold by the homeowner within a specified time period, between 5 and 45 years. These contingent obligations of the homeowners range from approximately $9,000 to $144,632 and are documented in the form of silent second and third trust deeds held by SGV Habitat (CalHome - restricted) or outside of SGV Habitat. ALLOWANCE FOR LOAN LOSSES Before a mortgage is issued, the candidate is carefully screened for financial condition, cash flow, and ability to meet the loan repayment schedule. This screening is done to identify qualified borrowers who can repay the mortgage and mitigate the default rate on mortgages receivable. Loans are classified as delinquent when payments are 30 days overdue. At June 30, 2014 and 2013, no loans were past due. Because the mortgages are heavily discounted when recorded and the value of the collateral is in excess of the discounted mortgage, losses resulting from non-payment are not likely. Also, because of the contingent obligations in that the homeowners are liable for the second and third trust deeds on the property (see mortgage loans receivable), the default rate of these mortgages is very low. However, if the loan becomes delinquent for more than 90 days and management determines that the homeowner will be unable to repay the mortgage balance, SGV Habitat will commence with foreclosure procedures. SGV Habitat, chartered in 1990, has never had a homebuyer default on a mortgage, nor has any home sold by SGV Habitat ever been resold by a SGV Habitat homebuyer.

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SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC. Notes to the Financial Statements June 30, 2014 and 2013

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued: PROPERTY AND EQUIPMENT Expenditures of $500 or more for property and equipment are capitalized at cost, and donated items are recorded at fair value on the date of the gift. Depreciation is computed on the straight line method over the estimated useful lives of five years of the assets. Individual property items valued at less than $500 are expensed when purchased or donated. RESTORE INVENTORY ReStore (RS) inventory consists of donated building materials available for sale to the general public; the recorded value is estimated based on prior year sales to approximate the gift-in-kind fair value when donated. NET ASSETS The financial statements report amounts by class of net assets: Unrestricted net assets are those currently available at the discretion of the board for use in SGV Habitat’s operations, those designated by the board for specified purposes, and those resources invested in property and equipment. Temporarily restricted net assets are those contributed with donor stipulations for specific use including, but not limited to, housing projects or construction. As a result, they are not available for use until commitments regarding their use have been fulfilled. PUBLIC SUPPORT, REVENUE, AND EXPENSES All contributions are considered available for unrestricted use, unless specifically restricted by the donor or subject to legal restrictions. For contributions restricted by donors for the acquisition of property or other long-lived assets, the restriction is considered to be met when the capital expenditures are made. Contributions are recorded when cash or unconditional promises-to-give have been received, or ownership of donated assets is transferred to the organization. SGV Habitat records contributions as temporarily restricted if they are received with donor stipulations that limit their use either through purpose or time restrictions, or both. When donor restrictions expire, that is when the purpose restriction is fulfilled or the time restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statements of activities as net assets released from restrictions. SGV Habitat’s policy is to record temporarily restricted contributions that are received and released in the same period as unrestricted contributions on the statements of activities. As of June 30, 2014 and 2013, SGV Habitat recorded $204,541 and $7,300, respectively, of temporarily restricted contributions as unrestricted. Home sales revenue is recognized when the property is sold and is recorded net of the discount on the mortgage loan receivable. Expenses are recorded when incurred in accordance with the accrual basis of accounting. -9-

SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC. Notes to the Financial Statements June 30, 2014 and 2013

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued: HOUSES UNDER CONSTRUCTION Costs incurred in conjunction with home construction are capitalized in houses under construction (construction in progress). Costs are actual amounts expended for construction in progress. The market value is not lower than construction costs. IN-KIND CONTRIBUTIONS SGV Habitat receives donated building materials and various other building supplies for use in the construction of houses. Such donations are recorded as in-kind contributions on the statements of activities at their estimated fair value at the date of donation. Assets donated with explicit restrictions regarding their use are reported as increases in restricted net assets. Absent donor stipulations regarding how long those donated assets must be maintained, SGV Habitat reports expirations of donor restrictions when the amounts are expended as instructed by the donor. SGV Habitat reclassifies temporarily restricted net assets to unrestricted net assets at that time. During the year ended June 30, 2014 and 2013, in-kind contributions amounted to $1,662,683 and $1,360,184, respectively. Of that amount, $68,710 and $10,542 was capitalized as construction in progress, $1,575,243 and $1,249,903 was recorded as RS inventory, and $18,730 and $99,739 was expensed as building materials and supplies. DONATED SERVICES SGV Habitat receives substantial donated architectural, construction, and legal services in conjunction with home construction and sales to homeowners. Contributed services are recognized as in-kind contributions in accordance with Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification of Accounting for Contributions Received and Contributions Made, if the services (a) create or enhance nonfinancial assets, or (b) require specialized skills, are performed by people with those skills, and would otherwise be purchased by SGV Habitat. During the year ended June 30, 2014 and 2013, SGV Habitat recorded $69,020 and $28,352, respectively, in donated services for the above listed donated services that met the appropriate criteria. In addition to donated services recorded in the financial statements, many other individuals routinely provide voluntary services to the overall work of SGV Habitat. These services have a significant impact on making the housing program effective. However, the value of these services is not reflected in the financial statements because they do not meet the criteria described above. FUNCTIONAL ALLOCATION OF EXPENSES The costs of providing the various program services and supporting activities have been summarized on the statements of activities. Accordingly, certain costs, such as depreciation and payroll, have been allocated among the program and supporting activities.

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SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC. Notes to the Financial Statements June 30, 2014 and 2013

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued: ALLOCATION OF JOINT COSTS SGV Habitat has adopted the Topic of the FASB Accounting Standards Codification of Accounting for Costs of Activities of Not-for-Profit Organizations and State and Local Governmental Entities that Include Fundraising. This statement requires all costs which contain any fundraising appeal to be allocated to fundraising unless all of the following three tests are met: purpose, audience, and content. Since all three tests were not met, all costs have been allocated to fundraising for the years ended June 30, 2014 and 2013. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. UNCERTAIN TAX POSITIONS The financial statement effects of a tax position taken or expected to be taken are recognized in the financial statements when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. Interest and penalties, if any, are included in expenses in the statements of activities. As of June 30, 2014 and 2013, SGV Habitat had no uncertain tax positions that qualify for recognition or disclosure in the financial statements. SGV Habitat files information tax returns in the U.S. and California. SGV Habitat is subject to income tax examinations for the current year and certain prior years based on the applicable laws and regulations.

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SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC. Notes to the Financial Statements June 30, 2014 and 2013

3.

MORTGAGE LOANS RECEIVABLE: A concentration of credit risk may arise from the mortgage loans receivable. The discount rate is recommended by Habitat International and does not approximate current market conditions. Utilizing the effective interest method, the discount is recognized as interest income over the term of the mortgage. Mortgage loans receivable consist of: June 30, 2014 Maple Street, Pasadena Allen Avenue, Glendale Euclid Avenue, Duarte Burkett Road, El Monte Orange Street, Glendale Gardena Avenue, Glendale Pacific Avenue, Glendale Palmer Avenue, Glendale Kenwood Street, Glendale Sherman Avenue, Monrovia Geneva Street, Glendale A Brush with Kindness Exterior Home Repairs

$

1,290 11,965 190,489 66,991 119,758 95,845 171,144 405,467 1,908,957 576,644 1,023,363 169,758 4,741,671 (246,476) (1,869,534)

$

2,625,661

Less current portion Less discount at rates ranging from 7.39% to 8.78% Long-term portion

2013 $

4,040 24,215 248,915 78,132 135,442 111,062 189,850 422,302 1,964,498 592,548 1,048,923 134,575 4,954,502 (250,583) (2,021,916)

$ 2,682,003

The future amounts to be received under mortgage loans receivable outstanding at June 30, 2014, are: Year Ending June 30, 2015 2016 2017 2018 2019 Thereafter

$

246,476 233,917 215,555 194,432 182,660 3,668,631

$ 4,741,671

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SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC. Notes to the Financial Statements June 30, 2014 and 2013

4.

HOUSES UNDER CONSTRUCTION: Costs are stated at actual costs of construction in progress, which is lower than the fair market value. Projects recorded as construction in progress consist of: June 30, 2014 Chestnut, Glendale Desiderio, Pasadena Manzanita, Pasadena

5.

2013

$

177,004 85,097 1,335

$

68,685 -

$

263,436

$

68,685

PROPERTY AND EQUIPMENT: Property and equipment consists of: June 30, 2014 Office equipment Leasehold improvements Vehicles Software

$

48,534 147,825 106,192 78,247 380,798 (308,890) 71,908 98,944

$

45,866 135,507 95,161 68,637 345,171 (272,053) 73,118 -

$

170,852

$

73,118

Less accumulated depreciation Construction in progress

6.

2013

RENTAL PROPERTY: In 2012, an apartment complex with five rentable units was donated to SGV Habitat. In 2013, SGV Habitat completed renovations to the property and the property was sold in the current year. Income received under these rental agreements during the years ended June 30, 2014 and 2013, was $3,870 and $39,790, respectively, and is included in other income on the statements of activities. The donated property was recorded at the fair market value on the date of the donation. The real estate was carried at fair value based on quoted prices for similar instruments in inactive markets, which is Level 2 of the fair value hierarchy.

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SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC. Notes to the Financial Statements June 30, 2014 and 2013

7.

NOTE PAYABLE: In June 2013, SGV Habitat signed a note payable, secured by 22 mortgages receivable with a carrying value of $2,722,537, with a financial institution. Principal and interest payments are payable in quarterly installments of $26,006. Interest is accrued at 4.55%. This note will mature June 2023. The note payable balance was $764,696 and $832,000, at June 30, 2014 and 2013, respectively. Annual maturities are: Year Ending June 30, 2015 2016 2017 2018 2019 Thereafter

$

70,419 73,678 77,088 80,656 84,389 378,466

$

764,696

Interest expense for the years ending June 30, 2014 and 2013, was $36,718 and $1,052, respectively. LOAN COVENANTS In conjunction with the loan, SGV Habitat is required to comply with certain reporting covenants. SGV Habitat was in compliance with all the covenants as of June 30, 2014 and 2013. 8.

COMMITMENTS: At June 30, 2014 and 2013, SGV Habitat had executed commitments for various building related services totaling $732,334 and $45,455, respectively. As of June 30, 2014, $140,546 has been completed.

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SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC. Notes to the Financial Statements June 30, 2014 and 2013

9.

RELATED PARTY TRANSACTIONS: SGV Habitat annually remits a portion of its contributions (excluding in-kind contributions) to Habitat International. These funds are used to construct homes in economically depressed areas around the world. During the years ended June 30, 2014 and 2013, SGV Habitat contributed to Habitat International $13,921 and $9,987. This amount is included in tithes-international as a component of program services in the accompanying statements of functional expenses. SGV Habitat received donated services from a board member for legal services totaling $44,658 and $38,216 for the years ended June 30, 2014 and 2013, respectively. For the years ended June 30, 2014 and 2013, SGV Habitat paid $17,638 and $20,664, respectively, to a printing company owned by a board member for various printing services. During the year, a board member assisted SGV Habitat in finding a property to lease for a new ReStore location. The lessor of the property paid the board member $3,437 and $0, for the years ended June 30, 2014 and 2013, respectively, for the board member’s real estate services and the board member contributed the funds to SGV Habitat as a donation.

10. OPERATING LEASES: SGV Habitat has leases for the office and ReStore spaces with monthly payments of $2,500 through November 2014, $9,075 through July 2018, and $14,656 through December 2018. SGV Habitat leases office equipment that requires monthly payments of $883 through October 2016. The future minimum payments are: Year Ending June 30, 2015 2016 2017 2018 2019

$

306,560 294,060 287,101 284,780 97,015

$ 1,269,516 Lease expense for the years ended June 30, 2014 and 2013, amounted to approximately $266,000 and $136,000, respectively. 11. RETIREMENT PLAN: Upon employment, all employees of SGV Habitat are eligible to participate in the San Gabriel Valley Habitat for Humanity, Inc. Non-ERISA 403(b) plan (the Plan). Employees may contribute a portion of their salary to the Plan, as the legal limits allow. The Plan is non-ERISA and therefore not permitted to have employer contributions. A change in this policy would require a board resolution and an amendment and restatement of the Plan.

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SAN GABRIEL VALLEY HABITAT FOR HUMANITY, INC. Notes to the Financial Statements June 30, 2014 and 2013

12. SUMMARY OF PROJECTS: The following is a schedule of projects, including their status, at June 30, 2014:

Desiderio, Pasadena

Chestnut, Glendale

Manzanita, Pasadena

9

3

2

Status of construction

planning

in progress

planning

Title vesting

Federal Agency

SGV Habitat

SGV Habitat

not occupied

not occupied

not occupied

construction in progress

construction in progress

construction in progress

Number of units

Status of occupancy of homeowner Project valued as

13. TEMPORARILY RESTRICTED NET ASSETS: Temporarily restricted net assets are available for: June 30, 2014 Desiderio building project Chestnut building project Brush with Kindness projects

2013

$

1,587,445 275,257 2,680

$ 1,485,074 15,047

$

1,865,382

$ 1,500,121

14. SUBSEQUENT EVENTS: Subsequent events have been evaluated through the report date, which represents the date the financial statements were available to be issued. Subsequent events after that date have not been evaluated.

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