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Kansas City Ballet Association Kansas City Ballet Association Independent Auditor’s Report and Financial Statements June 30, 2018 and 2017 Kansas City Ballet Association June 30, 2018 and 2017 Contents Independent Auditor’s Report ............................................................................................... 1 Financial Statements Statements of Financial Position ........................................................................................................ 3 Statement of Activities – Year Ended June 30, 2018 ......................................................................... 4 Statement of Activities – Year Ended June 30, 2017 ......................................................................... 5 Statement of Functional Expenses – Year Ended June 30, 2018 ....................................................... 6 Statement of Functional Expenses – Year Ended June 30, 2017 ....................................................... 7 Statements of Cash Flows .................................................................................................................. 8 Notes to Financial Statements ............................................................................................................ 9 Independent Auditor’s Report Board of Directors Kansas City Ballet Association Kansas City, Missouri We have audited the accompanying financial statements of the Kansas City Ballet Association, which comprise the statements of financial position as of June 30, 2018 and 2017, 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. 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 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 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 audit opinion. Board of Directors Kansas City Ballet Association Page 2 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Kansas City Ballet Association as of June 30, 2018 and 2017, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As described in Note 2 to the financial statements, in 2018, the Kansas City Ballet Association adopted ASU 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities. Our opinion is not modified with respect to this matter. Kansas City, Missouri November 28, 2018 Kansas City Ballet Association Statements of Financial Position June 30, 2018 and 2017 Assets 2018 2017 Cash and cash equivalents $ 1,500,359 $ 1,539,724 Restricted cash and cash equivalents - 44,060 Contributions, grants and accounts receivable 933,752 1,009,169 Prepaid expenses and other, net of accumulated amortization; 2018 - $231,838, 2017 - $224,838 282,373 286,710 Investments 10,791,346 11,174,229 Investment in supporting organization 51,484 55,466 Investment in joint venture 320,000 - Property and equipment, net of accumulated depreciation; 2018 - $4,294,941, 2017 - $3,534,323 24,419,065 25,085,291 Total assets $ 38,298,379 $ 39,194,649 Liabilities and Net Assets Liabilities Accounts payable $ 184,178 $ 279,378 Accrued expenses 176,999 163,407 Advance ticket sales 818,798 741,622 Deferred revenue 293,296 334,849 Total liabilities 1,473,271 1,519,256 Net Assets Without donor restrictions 25,598,691 25,946,501 With donor restrictions 11,226,417 11,728,892 Total net assets 36,825,108 37,675,393 Total liabilities and net assets $ 38,298,379 $ 39,194,649 See Notes to Financial Statements 3 Kansas City Ballet Association Statement of Activities Year Ended June 30, 2018 Without With Donor Donor Restrictions Restrictions Total Revenues, Gains and Other Support Season and single ticket sales $ 3,679,670 $ 3,679,670 Touring 235,000 235,000 School tuition 1,608,999 1,608,999 Net investment return 2,786 $ 787,420 790,206 Other 174,934 - 174,934 5,701,389 787,420 6,488,809 Contributions and grants Individuals/board 593,253 71,014 664,267 Business/corporate 216,483 28,033 244,516 Foundations 645,891 711,792 1,357,683 Kansas City Ballet Guild activities 370,818 - 370,818 Missouri Arts Council 80,010 - 80,010 School/education 215,374 7,500 222,874 2,121,829 818,339 2,940,168 Net assets released from restrictions 2,108,234 (2,108,234) - Total revenues, gains and other support 9,931,452 (502,475) 9,428,977 Expenses and Losses Production 4,861,171 4,861,171 School 1,975,514 1,975,514 Marketing 1,307,426 1,307,426 General and administrative 1,512,119 1,512,119 Fundraising 623,032 623,032 Total expenses and losses 10,279,262 10,279,262 Change in Net Assets (347,810) (502,475) (850,285) Net Assets, Beginning of Year 25,946,501 11,728,892 37,675,393 Net Assets, End of Year $ 25,598,691 $ 11,226,417 $ 36,825,108 See Notes to Financial Statements 4 Kansas City Ballet Association Statement of Activities Year Ended June 30, 2017 Without With Donor Donor Restrictions Restrictions Total Revenues, Gains and Other Support Season and single ticket sales $ 3,875,485 $ 3,875,485 School tuition 1,601,314 1,601,314 Net investment return 2,376 $ 1,206,021 1,208,397 Other 149,496 - 149,496 5,628,671 1,206,021 6,834,692 Contributions and grants Individuals/board 758,093 130,470 888,563 Business/corporate 237,183 10,000 247,183 Non-cash contribution 23,468,605 - 23,468,605 Foundations 1,276,100 742,000 2,018,100 Kansas City Ballet Guild activities 232,265 - 232,265 Missouri Arts Council 150,837 - 150,837 National Endowment for the Arts 20,000 - 20,000 School/education 208,445 5,000 213,445 26,351,528 887,470 27,238,998 Net assets released from restrictions 1,400,012 (1,400,012) - Total revenues, gains and other support 33,380,211 693,479 34,073,690 Expenses and Losses Production 4,320,802 4,320,802 School 1,825,830 1,825,830 Marketing 1,238,966 1,238,966 General and administrative 2,630,266 2,630,266 Fundraising 562,429 562,429 Total expenses and losses 10,578,293 10,578,293 Change in Net Assets 22,801,918 693,479 23,495,397 Net Assets, Beginning of Year 3,144,583 11,035,413 14,179,996 Net Assets, End of Year $ 25,946,501 $ 11,728,892 $ 37,675,393 See Notes to Financial Statements 5 Kansas City Ballet Association Statement of Functional Expenses Year Ended June 30, 2018 General and Total ProductionSchool MarketingAdministrative Fundraising Expenses Salaries and benefits $ 2,579,597 $ 1,370,170 $ 312,638 $ 657,979 $ 425,717 $ 5,346,101 Costumes and sets 194,410 - - - - 194,410 Shoes 85,140 - - - - 85,140 Orchestra 491,934 - - - - 491,934 Guest artists 170,431 - - - - 170,431 Theater rental 238,523 - - - - 238,523 Lights and sound 13,391 - - - - 13,391 Touring 222,130 - - - - 222,130 Box office, ushers and security 176,687 - - - - 176,687 Summer program - 195,702 - - - 195,702 Supplies and expendables 12,473 4,998 75,787 21,478 8,416 123,152 Travel and training 36,150 43,399 - 7,247 9,701 96,497 Rent and maintenance 30,233 78,866 - 245,909 - 355,008 Utilities 1,761 13,085 - 297,174 - 312,020 Advertising/promotion - 50,107 657,275 - - 707,382 Insurance - - - 40,460 - 40,460 Depreciation 548,892 126,125 34,690 34,184 22,076 765,967 Printing and publications - 2,522 67,993 4,734 16,987 92,236 Ticket processing fees - - 83,147 - - 83,147 Bank charges - - - 10,113 - 10,113 Professional fees - - 40,500 118,351 75,225 234,076 Other 59,419 90,540 35,396 74,490 64,910 324,755 $ 4,861,171 $ 1,975,514 $ 1,307,426 $ 1,512,119 $ 623,032 $ 10,279,262 See Notes to Financial Statements 6 Kansas City Ballet Association Statement of Functional Expenses Year Ended June 30, 2017 General and Total ProductionSchool Marketing Administrative Fundraising Expenses Salaries and benefits $ 2,433,441 $ 1,278,644
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