TIGCR ATUM-TIC FOUNDATION FINANCIAL STATI-WENTS. OTHJ-R FINANCIAL INI-ORMA i ION, AND Suppi.f-jMKNi'Ai. INFORMATION AS Ol: AND FOR THE VI:AR ENDED Dl-:CEMUEK 3 1, 2005 WITH REPORT oi-1 INDEPENDENT AUDITOKS
Under provisions of state law, this report is a public document. A copy of the report has been submitted to the entity and other appropriate public officials. The report is available for public inspection at the Baton Rouge office of the Legislative Auditor and, where appropriate, at the office of the parish clerk of court.
Release Date Tiger Athletic Foundation
Financial Statements, Other Financial Information, and Supplemental Information
As of and for the year ended December 31, 2005
Contents
Report of Independent Auditors I -2
Audited Financial Statements
Statement of Financial Position ...3 Statement of Activities 4 -5 Statement of Functional Expenses 6 Statement of Cash Flows 7 Notes to Financial Statements 8 - 18
Other Financial Information
Report of Independent Auditors on Other Financial Information 20 Statement of Nei Assets 21 -22 Statement of Revenues, Expenses, and Changes in Net Assets 23 - 24 Component Unit Description 25 Schedule of Capital Assets 26 Schedule of Bonds and Notes Payable and Capital Leases 27 Schedule of Bonds Payable 28 Schedule of Notes Payable 29 Schedule of Bonds Payable Amortization 30 Schedule of Notes Payable Amortization 31
Other Supplementary Information
Statement of Activities 33 Statement of Expenses- Legislative Auditor 34 CERTIFIED PUBLIC ACCOUNTANTS
The Executive Committee of the Board of Directors Tiger Athletic Foundation
Independent Auditor's Report
We have audited the accompanying statement of financial position of Tiger Athletic Foundation (a nonprofit organization) as of December 31, 2005, and the related statements of activities, functional expenses, and cash flows for the year then ended. These financial statements are the responsibility of Tiger Athletic Foundation's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Tiger Athletic Foundation as of December 31, 2005, and the changes in its net assets and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated February 24, 2006, on our consideration of Tiger Athletic Foundation's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting and compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.
110 VETERANS MEMORIAL BOULEVARD, SUITE 2OO, METAIRIE. LA 70005-4958 • 504.835.5522 • FAX 504.835.5535 51OO VILLAGE WALK, SUITE 202, COVINGTON, LA 7O433-40L2 • 985.892.5850 • FAX 985.892.5956 WWW.LAI'OIITE.COM RSMMcGladrey Network Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The other supplementary information on pages 33 and 34 is presented for purposes of additional analysis and is not a required part of the basic Financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic Financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
A Professional Accounting Corporation
February 24, 2006 Tiger Athletic Foundation
Statement of Financial Position
December 3 1, 2005
Assets Current Assets: Cash and cash equivalents $ 1,588,890 Restricted cash 38,268,081 Accrued interest receivable Investments Accounts receivable, net 703,651 Unconditional promises to give, net 2,574,604 Inventories Deferred charges and prepaid expenses 533,664 Notes receivable Other current assets 9,628,965 Total current assets 53,297,855
Noncurrenl Assets Restricted assets: Cash and cash equivalents 860,262 Investments Accounts receivable, net Notes receivable Other Investments Unconditional promises to give 5,721,360 Notes receivable Property and equipment, net 149,981,065 Assets under capital leases, net Other noncurrent assets 26,849,850 Total noncurrent assets 183,412,537
Total assets
See accompanying notes. Liabilities Current Liabilities: Accounts payable 140,141 Accounts payable - construction in progress 3,194,184 Deferred revenues Amounts held in custody for others 1,039,963 Compensated absences payable Capital lease obligations Line-of-Credit 2,927,707 Note payable 1,239,000 Contracts payable Bonds payable 2,665,000 Other current liabilities 415,895 Total current liabilities 23,020,836
Noncurrent Liabilities Amounts held in custody for others Compensated absences payable Capital lease obligations Note payable 1,736,336 Contracts payable Bonds payable 132,245,000 Other noncurrent liabilities 27,143,621 Total noncurrent liabilities 161,124.957 Total iiabilities 184,145,793
Net Assets Unrestricted Undcsignated 26,191,037 Designated 8,638,010 Temporarily restricted 16,875,290 Permanently restricted 860,262 Total net assets 52,564,599 Total liabilities and net assets 236,710^92 Tiger Athletic Foundation
Statement of Activities
Year ended December 31, 2005
Change in unrestricted net assets Revenues: Contributions 16,282,182 Investment earnings 407,412 Service fees Other revenues 6,836,627 Total unrestricted revenues 23,526^21
Nel assets released from restrictions: Satisfaction of program expenses 2,644,703 Total net assets released from restrictions 2,644,703 Total unrestricted revenues and other support 26,170,924
Program expenses; Amounts paid to benefit Louisiana State University for: Projects specified by donors Projects specified by the Board of Directors 3,603,983 Other 6,380,504 Total program expenses 10,484,487
Supporting services: Salaries and benefits 1,253,933 Occupancy 138,283 Office operations 106,457 Travel Professional services 85,154 Dues and subscriptions 21,579 Meetings and development Depreciation 35,129 Provision for uncollectible accounts Loss on sale of assets Other 602,158 Total supporting services 2,242,693 Fund-raising expenses 882,900
Total expenses 13,610,080 Change in unrestricted net assets 12,560,844
Change in temporarily restricted net assets: Revenues: Contributions, net of provision for uncollectible accounts 2,722,219 Investment earnings Total temporarily restricted revenues 2,722,219
See accompanying notes. Tiger Athletic Foundation
Statement of Activities (continued)
Year ended December 31, 2005
Net assets released from restrictions; Satisfaction of program expenses _S (2,644,703) Total net assets released from restrictions (2,644,703)
Total temporarily restricted revenues and other support 77,516 Change in temporarily restricted net assets 5 77,516
Change in permanently restricted net assets: Revenues: Contributions S 10,855 Investment earnings, net 18,531 Total permanently restricted revenue 29,386 Transfers to LSU Foundation - Change in permanently restricted net assets S 29,386
Change in net assets $ 12,667,746 Net assets at beginning of year 39,689,260 Change in fair value of Interest Rate Swap Agreement 207,593 Net assets at end of year $ 52,564,599
See accompanying notes. Tiger Athletic Foundation
Statement of Functional Expenses
Year ended December 3 t. 2005
Program Services
Contributions Contributions toLSU toLSU Tiger Den Stadium Athletic Nonathlettc Suites Club
Salaries ond \vages Payroll taxes Employee benefits Conlribulions to LSU ,466,544 49,852 2,000,000 Coaches' supplement 560,000 Scoreboard expenses 108,184 Marketing and publicity 15,300 Dues and subscriptions Professional Tecs 181,822 17,488 14,477 Academic awards 95,000 LSU Campus Transportation and Development Fund 79,524 LSU System Transportation Fund 26,723 Tickets purchased Letter of credit and remarkcting fees 389,897 76,914 Interest expense 1,961,398 917.249 Catering and other expenses 490,001 595,229 Managemcnl fee 109,950 40333 Occupancy 25,000 Parking 45,600 Repairs and maintenance 27,210 983 Travel iind enlcrtninmenl Membership Meeting expense Basketball Baseball Supplies and office cquipmenl Printing Compuier Bunk charges Special events and other Insurance 144,733 8,242 Bad debts and other allowances Promotional expense Depreciation 1,036,334 Total expenses 3,352384 251,099 5,201,577 1,678,927
See accompanying notes. Supporting Fund- Services Raising Total
Salaries and wages $ 947,494 J 334,718 S 1,282,212 Payroll luxes 84,973 - 84,973 Employee benefits 221,466 - 221,466 Contributions lo LSU - - 3,516,396 Coaches' supplement - - 560,000 Scoreboard expenses - - 108,184 Marketing and publicity 55,717 - 71,017 Dues and subscriptions 21,579 - 21,579 Professional fees 85,154 - 298,941 Academic awards - - 95,000 LSU Campus Transportation and Development Fund - - 79,524 LSU System Transportation Fund - - 26,723 Tickets purchased 41,373 - 41,373 Letter oCcredit and remarketing fees - - 466,811 Interest expense - - 2,878,647 Catering and other expenses - - 1,085,230 Management fee - - 150.783 Occupancy I38.2S3 - 163,283 Parking 106,769 - 152,369 Repairs and maintenance 11,755 - 39,948 Travel and entertainment - 140,829 140,829 Membership 1 19,460 90,796 210.256 Meeting expense 11,654 - 11,654 Basketball 18,057 18,057 Baseball - 700 700 Supplies and office equipment 46,843 - 46343 Printing 6,746 - 6,746 Computer 52,868 - 52,868 Bank charges 133,586 - 133,586 Special events and other 16,189 207,017 223,206 Insurance 105,655 - 258,630 Bad dcbis and other allowances - 87,258 87,258 Promotional expense - 3,525 3,525 Depreciation 35,129 - 1,071,463 Total expenses $ 2,242,693 $ 882,900 S 13,610,080 Tiger Athletic Foundation
Statement of Cash Flows
Year Ended December 31, 2005
Operating activities Change in net assets S 12,667,746 Adjustments to reconcile increase in nei assets to net cash provided by operating activities; Depreciation 1,071,463 Change in allowance for unconditional promises to give Change in fair value of interest rale derivative 207,593 (Increase) Decrease in operating assets: Receivables, deferred charges, and other prepaid assets (585,071) Unconditional promises to give 3,247,962 Other assets (35305,869) Increase (Decrease) in operating liabilities: Accounts payable 48,023 Accounts payable - construction in progress (1,241,982) Deferred revenues 7,435,597 Other current liabilities 415,895 Other noncurrent liabilities 25,635,453 Amounts held in custody for others 147,575 Net cash provided by operating activities 13,744,385
Investing activities Net change in restricted cash and cash equivalents 50,943,957 Transfers to LSD Foundation Purchase of property and equipment (63,588.926) Net cash used in investing activities (12,644,969)
Financing activities Net borrowings under the line-of-credit agreement 2,927,707 Principal payments on borrowings (4,756,000) Net cash used in financing activities (1.828,293)
Net change in cash and cash equivalents (728,877) Cash and cash equivalents, beginning of year 2,317,767 Cash and cash equivalents, end of year $ 1388,890
See accompanying notes. Tiger Athletic Foundation Notes to Financial Statements December 31, 2005
I. Summary of Significant Accounting Policies
Nature of Activities
Tiger Athletic Foundation (TAF or the Foundation) was organized on May 17, 1983, under the name The LSD Tigers Unlimited Corporation, as a nonprofit corporation under Louisiana R.S. 12:201 (7). The corporation's name was changed to Tiger Athletic Foundation on April 17, 1987.
The Foundation's primary objective is to encourage support and raise funds for the Louisiana State University and Agricultural and Mechanical College (LSU) located in Baton Rouge, Louisiana, and its intercollegiate athletic program. Funds attracted by this private, nonprofit corporation are primarily used to defray the cost of scholarships of more than 300 student athletes, to help maintain and improve LSU athletic facilities, and to retire present indebtedness. The Foundation is governed by a board of directors that are elected from the membership.
Net Assets
The Foundation reports information regarding its financial position and activities according to three classes of net assets: unrestricted, temporarily restricted and permanently restricted. Unrestricted net asserts include those net assets whose use by the Foundation is not restricted by donors, even though their use may be limited in other respects, such as by contract or board designation. Temporarily restricted net assets are those net assets whose use by the Foundation has been limited by donors (a) to later periods of time or other specific dates, or (b) to specified purposes. Permanently restricted net assets are those net assets received with donor-imposed restrictions limiting the Foundation's use of the asset.
Cash and Cash Equivalents
For the purpose of the statement of cash flows, the Foundation considers all unrestricted highly liquid investments with an original maturity of three months or less, and whose use is not limited, to be cash equivalents.
Unconditional Promises to Give
Contributions that are expected to be collected within one year are recorded at net realizable value. Contributions that are expected to be collected in future years are recorded at the present value of their estimated future cash flows. Changes to the eslimate of the present value ol'the contributions will be reported in the period the changes are made. The Foundation eslablishes an allowance for uncollectible contributions based on a specific analysis of the remaining contribution balance due for contributions that were not made in accordance with the donor's pledged timeline. Tiger Athletic Foundation Notes to Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
Property and Equipment
The purchase of property and equipment is recorded al cost. Donations of property and equipment are recorded as support at their estimated fair value. Such donations are reported as unrestricted support unless the donor has restricted the donated asset to a specific purpose. Assets donated with explicit restrictions regarding their use and contributions of cash that must be used to acquire property and equipment are reported as temporarily or permanently restricted revenue. Property and equipment is depreciated using the straight-line method over estimated useful lives of 5 to 50 years.
Construction in progress and other additions are stated at cost and represent costs of construction. During the construction period, interest will be capitalized on all qualifying expenditures.
Impairment of Long-Lived Assets
The Foundation reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In the event that the undiscounted cash flows resulting from the use of the asset group is less than the carrying amount, an impairment loss equal to the excess of the asset's carrying amount over its fair value is recorded. The Foundation did not record any impairment loss during the year ended December 31,2005.
Other Noncurrent Assets
Other assets include deferred financing costs, associated with the Revenue Bonds Series 2004, totaling $1,193,794 that are being amortized over the life of the bond agreement, which is 30 years. This amount is net of accumulated amortization of $69,636. Amortization of the costs is recorded as a component of interest expense.
Amounts Held in Custody for Others
The amounts held in custody for others represent the coaches' escrow accounts and affiliated chapters' account, which were established as a custodial fund at the request of LSD. This fund was created in order for TAP to act as a nonaffiliated party in overseeing the revenue generated by the coaches and affiliated booster club chapters of LSU and to provide institutional control as required by NCAA rules. The Foundation has included the $1,039,963 in amounts held in custody for others as restricted cash. Tiger Athletic Foundation
Notes to Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
Contributions
Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted depending on the existence or nature of any donor restrictions.
Contributions are recognized when the donor makes a promise to give to the Foundation that is, in substance, unconditional. Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictions expire in the fiscal year in which the contributions are recognized. All other donor-restricted contributions are reported as increases in temporarily or permanently restricted net assets depending on the nature of the restrictions. When a restriction expires, temporarily restricted contributions are recognized as changes in unrestricted net assets.
Functional Expenses
Functional expenses are allocated between program services and supporting activities, which include fundraising, and general and administrative activities. General and administrative expenses include those expenses that are not directly identifiable with any other specific function but provide for the overall support and direction of the Foundation.
Donated Services
During the year ended December 31, 2005, the value of contributed services meeting the requirements for recognition in the financial statements was not considered material and has not been recorded.
Scoreboard Sponsorships
The Foundation owns scoreboards and related equipment installed at various athletic venues on the LSU campus. Corporate sponsorship agreements exist between the Foundation and Scoreboard sponsors, as more fully described in Note 11.
Rents - University Club and LSU
In 1999, the Foundation issued $43,575,000 in revenue bonds for the purpose of financing or reimbursing a portion of the cosl of certain improvements and renovations to the East Side Upper Deck (ESUD) of Tiger Stadium at LSU. The bond agreement stipulates that LSU shall pay $2,000,000 to the Foundation as annual rent for the facilities.
In 2004, the Foundation issued $90,000,000 in revenue bonds, for the purpose of financing or reimbursing a portion of the cost of certain improvements and renovations to the West Side Upper Deck (WSUD) at LSU's Tiger Stadium, construction of a football operations center and miscellaneous improvements to Tiger Stadium. The bond agreement stipulates that LSU shall pay $2,500,000 to the Foundation as annual rent for these facilities.
10 Tiger Athletic Foundation Notes to Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
Rents - University Club and LSU (continued)
The Foundation maintains a lease and license agreement with The University Club of Baton Rouge, L.L.C., as the tenant of the lease. The foundation receives monthly payments equal lo 6% of the prior month's gross revenues plus an annual fee per member.
Tax Status
The Foundation is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code and has been designated as an organization that is not a private foundation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
2. Concentration of Credit Risk for Cash Held in Bank
The Tiger Athletic Foundation maintains several bank accounts at various financial institutions. Accounts at these institutions are insured by the Federal Deposit Insurance Corporation (FDIC) up to $100,000. TAF's bond agreement requires certain funds to be maintained at these financial institutions. The amount in excess of the FDIC limit totaled approximately $92,290,067 as of December3l,2005. Tiger Athletic Foundation Notes to Financial Statements (continued)
3. Restricted Cash and Cash Equivalents
Restricted cash and cash equivalents are available for the following purposes:
December 31, 2005 Bond restrictions Maintenance reserve and escrow accounts $ 8,923,538 Tiger Den Suites tower account 1301,198 West Side Upper Deck Stadium Club deposits 2,831,505 West Side Upper Deck Hibernia construction account 3,256,805 West Side Upper Deck project construction fund 3,630,100 West Side Upper Deck Funds Academic Center Trust Funds 48,092 By Board for designated purposes 8,638,010 Donor restrictions 8,598,868 Amounts held in custody for others 1,039,963 Endowment funds 860,264
Of the above total, $38,268,081 is classified as current while $860,262 is classified as noncurrent due to it being permanently restricted.
12 Tiger Athletic Foundation Notes to Financial Statements (continued)
4. Temporarily Restricted Net Assets
Temporarily restricted net assets are available for the following purposes:
December3l, 2005 Donor restrictions Academic Center P 542,877 Band uniforms 250 Baseball 43,468 Football 35,334 Coaches Excellence 217,500 Jeff Boss Honorarium 11,803 HNB 115,321 LSU Golf Facility 51,540 Miscellaneous memorials 32,933 Baseball seating 132,433 Softball compfex 65,584 Al Moreau 9,525 Tiger Den 2,628,180 Top 100 Tigers 1,147,990 Women's basketball 39,424 PMAC restoration 85,061 Capital program 3,430,502 Sue Gunter Fund 9,093 Swimming 50 8,598,868
Restricted contributions receivable 8,295,964 Restricted accounts payable (19,542) Total temporarily restricted funds $ 16,875,290
13 Tiger Athletic Foundation Notes to Financial Statements (continued)
5. Unconditional Promises to Give
Unconditional promises to give at December 31, 2005, were as follows:
Receivable in less than one year 2^74,604 Receivable in one to ten years 7,877^42 Total contributions receivable 10,452,446
Less discount to net present value (discount rate at December 31, 2005 was 5.49%) (1,503,173) Less allowance for uncollectible contributions (653309) Net contributions receivable S 8,295,964
6. Property and Equipment
The Foundation's investment in property and equipment consisted of the following at December 31,2005:
Beginning Ending Balance Additions Retirements Transfers Balance Land $ 3,090,000 S 3,090,000 Leaseholds and other improvements 1,558,658 1,558,658 Stadium expansion and Scoreboard 54,1 27,544 115,714 54,243,258 Furniture and equipment 315,853 25,609 341,462 59,092,055 141323 59,233378 Less accumulated depreciation (3,099,763) (1,071,463) (4,171,226) Construction in process 31,471310 63,447.603 94,918,913 Property and equipment, net S 87,463,602 S 62,577,463 $ S - $ 149,981,065
As mentioned in Note 8, the Foundation obtained total debt financing of $90 million for the addition of a new upper deck on the west side of Tiger Stadium, general stadium improvements, and a football operations center location on the LSU campus. As of December 31, 2005, the Foundation had expended approximately $62 million for property and equipment. The Foundation has approximately $5.6 million remaining to pay under its contracts with all contractors for all of its projects. The projects were substantially completed during the fall of 2005.
Interest capitalized totaled approximately $1,470,000 in fiscal year 2005.
7. Line-of-Credit
The Foundation also has a non-recourse line-of-credit agreement with a bank that provides for borrowings up to $3,500,000. The amount is secured solely by unconditional promises to give related to Mike the Tiger's habitat. At December 31, 2005, the line-of-credit bears an interest rate of 5.22%, The outstanding balance on the line-of-credit as of December 31, 2005, was $2,927,707. Cash held and restricted for use towards paying this line-of-credit totals $2,628,180 as presented in Note 4.
14 Tiger Athletic Foundation Notes to Financial Statements (continued) 8. Note and Bonds Payable
A summary of the Foundation's note and bonds payable is as follows:
December 31, 2005 Note payable, with annual principal and interest payments through September 1,2009 S 2,975,336 Revenue Bonds Series 1999 43,575,000 Revenue Bonds Series 2001 2,800,000 Revenue Bonds Series 2004 88,535,000 S 137,885,336
The note payable includes a term loan bearing interest at one-month L1BOR plus 110 basis points. At December 31, 2005, that rate was 5.22%. Principal and interest payments are due monthly through September 1, 2009. The note is secured by a lien on pledged revenues.
Revenue Bonds Series 1999 consist of debt issued by Tiger Athletic Foundation primarily for the purpose of certain improvements and renovations to the East Side Upper Deck of Tiger Stadium at LSU. Revenue derived from the sale of certain tickeis for the East Side Upper Deck are pledged for the payment of the debt service. Bond indentures contain requirements for annual debt service and flow for ftmds through various restricted accounts. The bonds have a floating interest rate that is established through weekly remarkeiing. The rate was approximately 3.53% at December 31, 2005, and the bonds are due in annual payments beginning December 31, 2010, with a final payment due December 3 i, 2028.
Revenue Bonds Series 2001 was issued for the purpose of certain improvements and renovations to the Gym Armory at LSU. Unconditional promises lo give are pledged for payment of the debt service. The bonds have a floating interest rate that is established through weekly remarketing. The rate was approximately 4.01% at December 31, 2005, and the bonds are due in annual payments through December 31, 201!.
15 Tiger Athletic Foundation
Notes to Financial Statements (continued)
8. Notes and Bonds Payable (continued)
In March 2004, the Foundation issued Revenue Bonds Series 2004 for a principal amount of $90,000,000. The proceeds of the loan are being used to finance or reimburse a portion of the costs of the acquisition and construction of certain improvements and renovations to Tiger Stadium and a football operations center at LSD, including funding the interest and costs associated with the project. The bonds are secured by the pledged revenues on a parity with (i) the Series 1999 and 2001 bonds. The bonds have a floating interest rate based on the BMA index, which was approximately 3.55% at December 31, 2005. Annual payments began on September 1,2005 and will continue through September 1, 2033.
Under the provisions of the above revenue bond agreements, the Foundation is required to maintain a minimum debt service coverage ratio. The Foundation was in compliance with its debt service coverage calculation loan covenant at December 31, 2005.
The debt service requirements on the notes and bonds payable are as follows:
Bonds Total Notes Payable Payable Principal 2006 S 1,239,000 S 2,665,000 $ 3,904,000 2007 1,329,000 2,745,000 4,074,000 2008 407,336 2,825,000 3,232,336 2009 - 2,175,000 2,175,000 2010 - 3,335,000 3,335,000 2011 - 2015 - 18,230,000 18,230,000 2016- 2020 - 24330,000 24330,000 2021 - 2024 - 30,780,000 30,780,000 2025 - 2030 - 31,755,000 31,755,000 2031 - 2033 - 16,070,000 16,070,000 Total $ 2,975,336 $ 134,910,000 $ 137,885,336
Effective April I, 2003, the Foundation entered into an interest rate swap agreement with Morgan Stanley Capital Services Inc. (MSCS), which expires September I, 2028, to hedge its interest rate exposure on the Series 1999 revenue bonds. The agreement covers 100% of the outstanding principal balance over the life of the bonds and effectively fixes the interest rate to the Foundation at 4.01%. The floating rate payor is MSCS and the fixed rate payor is the Foundation. The floating rate is based on the BMA Municipal Swap Index, as defined in the agreement.
16 Tiger Athletic foundation Notes to Financial Statements (continued)
8. Notes and Bonds Payable (continued)
The Foundation accounts for the interest rate swap as a fair value hedge as directed by Financial Accounting Standard (FAS) No. 133, Accounting for Derivative Instruments and Hedging Activities. Since the Foundation does not report earnings as a separate caption in a statement of financial performance, both the swap agreement and the hedged item, the Series 1999 Bonds, are accounted for at fair value with the change in fair value reported as a change in net assets. The fair market value of the swap agreement and the hedged item as of December 31, 2005, was a liability of approximately $356,000, which represents a change of $207,593 from the prior year, and is presented as a change of net assets on the Statement of Activities.
The Revenue Bonds Series 1999, 2001 and Series 2004 are subject to a remarketing agreement whereby the Foundation obtained a remarketing agent which shall offer for sale and use its best efforts to find purchasers for all bonds or portions thereof for which notice of tender has been received at a price equal to the principal amount thereof plus accrued interest to the purchase date. To provide for the payment of the bonds, in the event a purchaser is not found for the full amount of the outstanding bonds or default, the Foundation has entered into letter of credit agreements with Hibernia National Bank. The letter of credit agreements authorize Trustees, on behalf of holders of bonds, to make draws on the letters of credit, subject to the terms and conditions thereof, to pay the outstanding principal of and up to 45 days interest on the bonds. Draws on a letter of credit must be promptly reimbursed by the Foundation. Annual fees on the Hibernia letters of credit issued in connection with the Revenue Bond Series 1999 and 2004 are 1% of the outstanding principal. Annual fees on the letter of credit issued in connection with the Revenue Bond Series 2001 are 1.27% of the outstanding principal. As of November 24, 2005, Hibernia National Bank's letters of credit on the revenue Bond Series 1999 and 2004 were replaced with letters of credit issued by Regions Bank. Annual fees on the Regions fetters of credit will be 0,90% of the outstanding principal balance commencing April 1, 2006. There were no outstanding amounts under the letters of credit at December 31, 2005.
9. Commitments and Contingencies
The Foundation is subject to certain legal proceedings and claims that arise in the ordinary course of business. In the opinion of management, the amount of ultimate liability with respect to these actions will not materially affect the financial position of the Foundation.
17 Tiger Athletic Foundation Notes to Financial Statements (continued)
10. Retirement Savings Plan
The Foundation established a 40l(k) plan (the Plan) effective February 1, 2002, to replace an existing Section 403(b) tax shelter annuity plan. The Plan covers all employees who complete applications to participate in the plan and agree to the terms of the Plan. Participants may contribute up to 25% of their compensation to the Plan each year. TAP will make matching contributions on behalf of each participant up to 7.5% of their contribution. Employees are vested in the employer contributions to the Plan 20% per year after the first year reaching 100% vesting after six years. The Foundation made matching contributions of $73,500 for the year ended December 31, 2005.
11. Scoreboard Sponsorships
In 1999, the Foundation entered into a Cooperative Endeavor Agreement with LSU that obligated the Foundation to acquire, construct and maintain new scoreboards in LSU athletic venues at a total cost of approximately $5.2 million. In return for its fulfillment of this obligation, the Foundation was given an eight year license to solicit certain qualified corporate sponsorship contracts. In connection with its issuance of the Series 2004 Revenue Bonds, LSU extended the Foundation's rights to solicit qualified corporate sponsorship contracts for a period of approximately 35 years. Effective July 1, 2005, the Foundation, with approval of LSU, entered into a ten year lease agreement with Viacom Outdoor Advertising, Inc., d/b/a LSU Sports Properties, whereby the Foundation leased its rights to the scoreboards to Viacom in return for an annual guaranteed rental payment. The rent payment, which was $1.4 million in year one and will increase by $25,000 annually each year during the life of the lease agreement, is due in two equal installments payable in July and October of each year.
18 °'her LAPORTESEHRT ROMIGHAND CERTIFIED PUBUCACCOUNTANTS
The Executive Committee of the Board of Directors Tiger Athletic Foundation
Report of Independent Auditors on Other Financial Information
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying forms were prepared in conformity with accounting principals generally accepted in the United States. These forms are required by the Office of Statewide Reporting and Accounting Policy for the State of Louisiana and arc presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects in relation to the basic financial statements taken as a whole. __
A Professional accounting Corporation February 24, 2006
110 VETERANS MEMORML BOULEVARD, SUITE 200, Mt-fAiRiH. LA 70005-4958 • 504.835.5522 • FAX 504.835.5535 5100 VILLAGE WALK. SUITE 202, COVINCTON, LA 70433-4012 • 965.892.5850 • FAX 985.892.5956 WWW.LAyORTE.COM RSMMcGladrey Network An Bfcpmfcnllf Dm) Itorttr Tiger Athletic Foundation
Statement of Net Assets
Year ended December 31, 2005
Assets Current assets; Cash and cash equivalents $ 1,588,890 Restricted cash 38,268,081 Investments Accounts receivable, net 703,651 Pledges receivable 2,574,604 Due from other campuses Due from State Treasury Inventories Deferred charges and prepaid expenses 533,664 Notes receivable Other current assets 9,628,965 Total current assets 53,297,855
Noncurrent assets Restricted assets: Cash and cash equivalents 860,262 Investments Accounts receivable, net Notes receivable Other Investments Pledges receivable 5,721,360 Notes receivable Capital assets, net 149,981,065 Assets under capital leases, net Other noncurrent assets 26,849,850 Total noncurrent assets 183,412,537 Total assets
See report of independent auditors on other financial information.
21 Tiger Athletic Foundation
Statement of Net Assets (continued)
Year ended December 31, 2005
Liabilities Current liabilities: Accounts payable and accrued liabilities S 140,141 Accounts payable - construction in progress 3,194,184 Due to other campuses Due IQ State Treasury Deferred revenues 11,398,946 Amounls held in custody for others 1,039,963 Compensated absences payable Capital lease obligations Line-of-credit 2,927,707 Note payable 1,239,000 Contracts payable Bonds payable 2,665,000 Other current liabliiies 415,895 Total current liabilities 23,020,836
Noncurrent liabilities: Amounts held in custody for others Compensated absences payable Capital lease obligations Note payable 1,736,336 Contracts payable Bonds payable 132,245,000 Other noncurrent liabilities 27,143,621 Total noncurrent liabilities 161,124,957 Total liabilities 184,145,793
Net assets Invested in capital assets, net of related debt 9,168,022 Restricted for: Nonexpendable 860,262 Expendable 16,875,290 Unrestricted 25,661,025 Total net assets 52,564.599 Total liabilities and net assets 5 236,710,392
See report of independent auditors on other financial information.
22 Tiger Athletic Foundation
Statement of Revenues, Expenses, and Changes in Net Assets
Year ended December 31, 2005
Operating revenues: Student tuition and fees S Less scholarship allowances ^_ Net student tuition and fees Gifts received by the foundation 19,004,401 Earnings on foundation endowments 18,531 Federal appropriations Federal grants and contracts State and local grants and contracts Nongovernmental grants and contracts Sales and services of educational departments Hospital income Auxiliary enterprise revenues, including revenues pledged as security for bond issues Less scholarship allowances -_ Net auxiliary revenues Other operating revenues J>,836,627 Total operating revenues 25,859,559
Operaiing expenses: Educational and general Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Scholarships and fellowships Auxiliary enterprises Hospital Other operating expenses 7,449,470 Total operating expenses 7,449,470 Operating income 18,410,089
See report of independent auditors on other financial information.
23 Tiger Athletic Foundation
Statement of Revenues, Expenses, and Changes in Net Assets (continued)
Year ended December 31, 2005
Nonoperating revenues and (expenses)'. State appropriations Gifts Net investment income 407,412 Interest expense (2,556,627) Payments to or on behalf of the university (3,603,983) Other nonoperating revenues (expenses) Net nonoperating revenues (expenses) (5,753,198) Income before other revenues, expenses, gains, and losses 12,656,891
Capital appropriations Capital gifts and grants Additions to permanent endowments 10,855 Other additions, net Increase in net assets 12,667,746"
Net assets, beginning of year 39,689,260 Change in fair value of Interest Rate Swap Agreement 207,593 Net assets, endofyear $ 52,564,599
See report of independent auditors on other financial information.
24 Tiger Athletic Foundation
Component Unit Description
December 3 I, 2005
Component Unit Description
The Tiger Athletic Foundation is a legally separate, tax-exempt organization supporting the LSU System, specifically the following campus: Louisiana State University - Baton Rouge. This foundation was included in the university's financial statements because its assets equaled 3% or more of the assets of the university system it supports.
During the year ended December 31,2005, the Tiger Athletic Foundation made distributions to or on behalf of the University for both restricted and unrestricted purposes in the amount of $3,621,450.
Complete financial statements for the Tiger Athletic Foundation can be obtained from:
Tiger Athletic Foundation P.O. Box 711 Baton Rouge, Louisiana 70821
Or from the foundation's website at: www.lsutaf.org
The Tiger Athletic Foundation is a nonprofit organization that reports under FASB standards, including FASB Statement No. 117, financial Reporting for Not-for-profit Organizations. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features. With the exception of necessary presentation adjustments, no modifications have been made to the Foundation's financial information in the university's financial report for these differences.
Note A. 15
See report of independent auditors on other financial information.
25 ' OO — •a- r* fS o vi o w. — r- TT S3 O (N •o — Oft O r- -T IN (N OO VI — ' C r-i f^v ^ — ' — " (N — •A IN ?i (N r-i oo '1 fN c" —
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' 00 O00 O 00 (N w-i r-l VI . . • •r ' OO VI •r. T3T vl •sll — ' oo OOO tr oo V. (N n r- vi r^ oo •o o •O VI V Op °°, *H Vi oo oo' i--" r^ O VI -» g 03 IN IO — **" C- S 5C " g I c •8o- ,o 8 o. J 1 1==* _(3 t 2 u t« o 2 J> t 5 1 3 EC DO S 2 Q. C n S CL g .0 00 s dep r $ •o u e c £ |a" Ji o. i o ~3 •o u a S * J3 3 u _o 3 B g § u 3 1 c a 6 J3 i 'S. a f 3 i <«. •o .2 mutne d 8 mulate d 3 3 E S M 3 CL o 0 1 Q. J3 5 s .3 8 a. s S VI 3 JT o tt 3 1 astruct u 1 u ,1 o. b "5 K a t a 1n •g i s- c .es s acc u "3 ta l othe r Q. .es s accu : 'E. L e I- _J S u 'Jj o Ol a ! —i O n U _! ra 3 j 3 o o _o U " 6 1- 1- U U Tiger Athletic Foundation Schedule of Bonds and Notes Payable and Capital Leases December 31,2005 Bakince at Balance it Amount! December 31, December 31, Due Within 2004 Additions RcJuctioni 2005 One Year Bonds and notes payable and capital leases: Bonds payable S 138,510,000 J J 3,600,000 $ 134,910,000 J 2,665.000 Noic payable 4,131,336 1,156,000 2,975,336 1.239,000 Capilal lease obligations Tola! bonds, noles, and Capilal leases $ 142.641,336 $ $ 4,756,000 $ 137,885,336 $ 3.904,000 Other liabilities: Amounts held in custody for oihcrs S 892.388 S 1.039,963 $ 8')2.388 $ 1.039.963 S 1.039.963 Compensated absences payable Contracts payable Deferred revenue 3.963.349 38.186.161 3,963.349 38.186.161 38.186.161 Giber liabilities 7,034,333 7,034.333 6,677.927 Total other liabilities $ 4.855.737 S 46.260.457 I 4,855.737 I 46.260.457 S 45,904.051 See report of independent auditors on other financial information. 27 Tiger Athfetic Foundation Schedule of Bonds Payable December 31,2005 Principal Principal Interest Date of Original Outstanding (Redeemed) Outstanding Interest Outstanding Issue Issue Issue 12/31/2004 Issued 12/31/2005 Rates 12/31/2005 July 26, Series 2001 Bonds 2001 $ 10.200,000 $ 4,935,000 $ (2,135,000) $ 2,800,000 Variable $ March 4, Series 1999 Bonds 1999 43,575,000 43,575,000 - 43,575,000 Variable March 23, Series 2004 Bonds 2004 90.000.000 90,000,000 (1.465.000) 88,535,000 Variable S 143.775,000 S 138,510,000 S (3,600,000) $ 134,910,000 See report of independent auditors on other financial information. 28 Tiger Athletic Foundation Schedule of Note Payable December 31,2005 Principal Principal Interest Date of Original Outstanding (Redeemed) Outstanding Interest Outstanding Issue Issue ISSUE 12/31/2004 Issued 12/31/2005 Rate 1231/2005 Hibemia Term and July 26, RevnlwrLoan 2001 - S 4,131.336 5 (1,156.000) S 2,975,336 Variable See report of independent auditors on other financial information. 29 Tiger Athletic Foundation Schedule of Bonds Payable Amortization Year ended December 31. 2005 Fiscal Year Ending Principal Interest Total 2006 2,665,000 Variable 2,665,000 2007 2,745,000 Variable 2,745.000 2008 2,825,000 Variable 2,825,000 2009 2.175.000 Variable 2,175,000 2010 3,335,000 Variable 3,335,000 20)1 3,490,000 Variable 3,490,000 2012 3,660,000 Variable 3,660,000 2013 3,840,000 Variable 3,840,000 2014 4,025,000 Variable 4,025,000 2015 4,215,000 Variable 4,215,000 2016 4,420,000 Variable 4,420,000 2017 4,635,000 Variable 4,635,000 2018 4,855,000 Variable 4,855,000 2019 5,085,000 Variable 5,085,000 2020 4,335,000 Variable 5,335.000 2021 5,590,000 Variable 4,590,000 2022 5,860,000 Variable 5,860,000 2023 6,140,000 Varittble 6,140,000 2024 6,440.000 Variable 6,440,000 2025 6.750,000 Variable 6,750,000 2026 7,075,000 Variable 7,075,000 2027 7,415,000 Variable 7,415,000 - 2028 7,770,000 Variable 7,770,000 2029 4,635,000 Variable 4.635,000 2030 4,860,000 Variable 4,860,000 2031 5,100,000 Variable 5,100,000 2032 5,355,000 Variable 5,355,000 2033 5,615.000 Variable 5,615.000 Total $ 134,910,000 $ 134,910,000 Schedule 2-A See report of independent auditors on other financial information. 30 Tiger Athletic Foundation Schedule of Note Payable Amortization Year ended December 31, 2005 Fiscal Year Ending Principal Interest Total 2006 1,239,000 Variable . 1,239,000 2007 1,329,000 Variable 1,329,000 2008 407,336 Variable 407,336 Total $ 2,975,336 $ 2,975,336 See report of independent auditors on other financial information. 31 Other Supplementary Information op o^ in o^ r* oo r* -^" — oo ~> o m w. o r^ • -c " P* 8 c •- oo" « i: c a Cb 5 o S- o (N M H£ £ O J? U. < or4o ' eo r>\o i* -r^ gr v r* r- 1 •S o r—* oiroi KoT^ r^^ f-» -^ — go" 1) *rf 00 K) •-< O •S c *n m c> P- -C U "I <^ aE> <5 5 .2? oo I* — — oo (N « 3 o>> oo rs ~- (N m o T3 r- •3- .0 •=• •<-• rt cQ —• •3a 1-a) O ,_] J3 E oo m of vi X *° tu S m OJ) H o O CN S (—N Oov u •*: Q R ex ex in C re V) (/r V maintenance , an d rent e expense s n d benefit s rketing , an d promotio n expense s an d benefit s provide revenu e compensatio n & benefi l ministrativ e othe r m *2 on .- ~o .— tn C 00 cm T3 C U Ec .4«> 03 c t c c w 4? c c C J= re el m cu u u x ex en i ji o C o "re C. o o Equipment , u Fundraising , Direc t facilit i Membershi p Revenue s Compensati o Coachin g ot h Suppor t staff ] Recruitin g Spiri t group s Contribution ; U Compensati o Tea m trave l Gam e expen s Othe r operat i