forty-niner shops, inc. financial statements june...
Post on 22-May-2018
217 Views
Preview:
TRANSCRIPT
FORTY-NINER SHOPS INC
FINANCIAL STATEMENTS
JUNE 302017 AND 2016
INDEPENDENT AUDITORS REPORT 1 - 2
FINANCIAL STATEMENTS
Statements of Financial Position 3 - 4
Statements of Activities 5
Statements of Cash Flows 7 - 8
Notes to Financial Statements 9 - 26
ADDITIONAL INFORMATION
Schedule of Enterprise Activities 27 - 28
Schedule of Revenues Expenses
Schedule of Other Information 31 - 37
Statements of Changes in Net Assets 6
Schedule of Net Position 29
and Changes in Net Position 30
Guzman amp Gray Certified Public Accountants
4510 East Pacific Coast Highway Suite 270 Mark Gray CPA Long Beach California 90804 Patrick S Guzman CPA
(562) 498-0997 Fax (562) 597-7359
INDEPENDENT AUDITORS REPORT
Board of Directors Forty-Niner Shops Inc California State University Long Beach
Financial Statements We have audited the accompanying financial statements of the Forty-Niner Shops Inc (a nonprofit organization) which comprise the statements of financial position as of June 30 2017 and 2016 and the related statements of activities changes in net assets and cash flows for the years then ended and the related notes to the financial statements
Managements 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 auditors 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 entitys 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 entitys 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
1
INDEPENDENT AUDITORS REPORT (Continued)
Opinion In our opinion the financial statements referred to above present fairly in all material respects the financial position of the Forty-Niner Shops Inc as of June 30 2017 and 2016 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
Other Matter Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole The statements on pages 27 through 37 are presented for the purpose of additional analysis and are not a required part of the financial statements 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 financial statements and certain additional procedures including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the 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 financial statements as a whole
GUzc1tc~ Long Beach California September 72017
2
FORTY-NINER SHOPS INC STATEMENTS OF FINANCIAL POSITION
ASSETS
CURRENT ASSETS Cash and cash equivalents Investments Accounts receivable Accounts receivable CSULB auxiliary
organizations Accounts receivable CSULB Note receivable CSULB Inventories Prepaid expenses
CAPITAL ASSETS net of accumulated depreCiation
OTHER ASSETS Investments designated for sick pay benefits
TOTAL ASSETS
JUNE 30 2017
$ 4295499 8309092 1265132
8814 297999
2727406 22071
16926013
8486644
768432 768432
$26181089
2016
$ 3499447 6722616 1633078
45646 272666 500000
2504477 14000
15191930
768432 768432
$24554920
See Independent Auditors Report and Notes to Financial Statements 3
FORTY-NINER SHOPS INC STATEMENTS OF FINANCIAL POSITION (CONTINUED)
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES Long term debt current portion Accounts payable trade Accounts payable CSULB Refundable campus debit card deposits Accrued liabilities Accrued payroll Accrued vacation Accrued sick pay Pension obligation current Accrued post-retirement current
NONCURRENT LIABILITIES Long term debt net of current portion Pension obligation net of current portion Accrued postretirement benefits
Total Liabilities
NET ASSETS Unrestricted
Invested in capital assets Other unrestricted
Total Net Assets
TOTAL LIABILITIES AND NET ASSETS
JUNE 30 2017 2016
$ 95000 $ 85000 122697 131345 211788 213860 308544 312882 461007 459047 664118 548772 486449 459963 989603 930299 577603 474416 407000 409000
4323809 4024584
3383768 3491328 4660554 3724428 2778391 3782913
10822713 10998669 15146522 15023253
8486644 8594558 2547923 937109
11034567 9531667
~2sectj_e~ $24554920
See Independent Auditors Report and Jotes to Financial Statements 4
FORTY-NINER SHOPS INC STATEMENTS OF ACTIVITIES
JUNE 30 1
ENTERPRISE OPERATING REVENUES Sales Commission Vending Other
ENTERPRISE OPERATING EXPENSES Cost of sales Operating expenses Depreciation and amortization
ENTERPRISE OPERATING (LOSS) INCOME
NONOPERATING INCOME (EXPENSE) Interest and dividend income Interest imputed from net loan premiums and costs
Interest expense Unrealized gain (loss) on investments Realized gain (loss) on investments Net gain (loss) on disposal of fixed assets
NONMANDATORY TRANSFERS TO UNIVERSITY Contributions to University and
University programs
POST RETIREMENT -RELATED CHANGES OTHER THAN NET PERIODIC COST
INCREASE IN NET ASSETS
2017
$ 36290437 1394267
352627 116 1646
38153 1 977
16440145 20931513
977 1635 38349293
( 195316)
169148
12560 ( 152407)
552937 326159
5984 902413
273190
1068993
$ 1502900
2016
$ 36636425 954401 339183
82 1305 38 1012314
16550622 18356171
985466 35 1892259
2120 1055
279561
( ( ( ( (
1843 171911) 311727) 157672)
6788) 366694
( 314829)
( 1230670)
See Independent Auditors Report and Notes to Financial Statements 5
FORTY-NINER SHOPS INC STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30
2017 2016
BEGINNING NET ASSETS $ 9531667 $ 9323805
INCREASE IN NET ASSETS 1502900 207862
ENDING NET ASSETS $ 11034567 $ 9531667
See Independent Auditors Report and Notes to Financial Statements 6
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES Increase in net assets Adjustments to reconcile change in net assets
to net cash from operating activities Depreciation Amortization of loan discount Interest imputed from net loan
premiums and costs Unrealized (gain) loss on investments Realized (gain) loss on investments Net (gain) loss on disposal of fixed assets (Increase) decrease in
Accounts receivable Accounts receivable CSULB auxiliary
organizations Accounts receivable CSULB Note receivable CSULB Inventories Prepaid expenses
Increase (decrease) in Accounts payable Accounts payable CSULB Refundable campus debit card deposits Accrued liabilities Accrued payroll Accrued vacation Accrued sick pay Accrued pension obligation Accrued post retirement benefits
Net Cash From Operating Activities
FOR THE YEARS ENDED
2017 JUNE 30
2016
$1502900 $ 207862
977635 985466
12560) 552937) 326159)
5984
1843) 311727 157672
6788
367946 701974)
36832 25333)
500000 222929)
8071 )
37654) 184031
259764) 45250
9115) 1602) 4338) 1960
115346 26486 59304
1039313 ( 506522)
2964140
749495) 1475)
14032 156294 212076
37985 70389
163467 1000337 1801171
See Independent Auditors Report and Notes to Financial Statements 7
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED JUNE 30
2017 2016
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of capital assets Construction in progress additions Purchase of investments Proceeds from sale of investments Proceeds from sale of capital assets
Net Cash From Investment Activities
905471 )
( 5742895) 5065278
( 1 583088)
( ( (
345007) 424089)
3177541) 1895823
900 2049914)
CASH FLOWS FROM FINANCING ACTIVITIES Repayment of long term debt Proceeds from refinancing of long term debt Contributions to post retirement benefit trust
Net Cash From Financing Activities ( (
85000)
500000) 585000)
375000) 282911 500000 592089)
CHANGE IN CASH AND CASH EQUIVALENTS 796052 840832)
BEGINNING CASH AIID CASH EQUIVALENTS 3499447 4340279
ENDING CASH AND CASH EQUIVALENTS ~ 4295499 $ 3499447
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest $ 152000 $ 179000
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General The Organization is a nonprofit auxiliary organization organized to operate food services and bookstore activities at California State University Long Beach for the benefit of the University Campus The Organizations customer base consists primarily of students enrolled at California State University Long Beach
Basis of Presentation The Organizations financial statements are presented in accordance with guidelines established for auxiliary organizations issued by the Office of the Chancellor of the California State University
Contributions received are recorded as unrestricted temporarily restricted or permanently restricted support depending on the existence andor the nature of any donor restrictions The Organization has not received any contributions with donor-imposed restrictions that would result in temporarily or permanently restricted net assets
The Organization is required to report information regarding their financial position and activities according to three classes of net assets unrestricted net assets temporarily restricted net assets and permanently restricted assets The Organization does not have any temporarily or permanently restricted net assets
Basis of Accounting The accounting records of the Forty-Niner Shops Inc are maintained on the accrual basis of accounting
Change in Accounting Principle In April of 2015 the Financial Accounting Standards Board issued ASU-2015-03 Imputation of Interest ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability Similarly the discount on premium resulting from the determination of present value shall be reported in the statement of financial position as a direct deduction from or addition to the face amount of the note and shall not be classified as a deferred charge or deferred credit Amortization of discounts premiums and debt issuance costs shall be reported as either interest expense or interest income ASU 2015shy03 is effective for financial statements issued for fiscal years beginning after December 15 2015 Early adoption is permitted for financial statements that have not been previously issued
The Organization has adopted the new standard for the year ended June 30 2016
9
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounting 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 Significant estimates include annual depreciation the carrying value of property plant and equipment and the actuarial estimate of postretirement benefits Actual results could differ from those estimates
Fair Value of Financial Instruments Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer liability in an orderly transaction between market participants at the measurement date
Cash and Cash Equivalents Cash and cash equivalents includes highly liquid investments such as money market funds that are readily convertible to known amounts of cash within 90 days from the date of purchase All cash balances are held at major banking and broker institutions
Investments The Organization accounts for all investments at fair market value Net realized and unrealized gains and losses on investments are reflected in the statement of activities
Allowance for Doubtful Accounts No allowance for doubtful accounts has been established because management believes that all accounts are collectible and no allowance is needed
Inventories Inventories for the bookstore are valued using the lower of cost or market by the conventional retail inventory method Inventories for the food service are valued using the lower of cost (first-in first-out) or market method
Capital Assets and Depreciation Capital asset accounts are stated at cost less accumulated depreciation Betterments and major improvements are added to the respective assets cost while ordinary repairs that do not extend useful lives are expensed as incurred All direct and indirect costs incurred in constructing assets are accumulated in an asset account and no depreciation is recognized until the asset is put into operation When an asset is sold or otherwise disposed of the cost of the asset and the related accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the statement of activities
10
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Capital Assets and Depreciation (Continued) Depreciation and amortization of capital assets are provided on the straight-line method over the estimated useful lives of the various classes of property which are ten to fifty years for buildings and improvements five to ten years for equipment furniture and fixtures and three to five years for automobiles The capitalization thresholds are as follows buildings and building improvements - $10000 equipment and furniture - $2500 vehicles - all purchases are capitalized
Equipment acquired under capital leases are recorded at the lower of the fair value or the present value of future minimum lease payments These leases are amortized over their estimated useful lives of five years or the lease term whichever is shorter Amortization of equipment acquired under capitalized leases is included with depreciation expense
Accrued Vacation and Sick Pay Accruals for vacation and sick pay are made on a monthly basis as such benefits become payable to employees Pay rate increases are applied to the hours earned in prior periods if any and are reported as a current expense in the statement of activities
Income Taxes The Organization is exempt from federal income and state franchise taxes under Section 501 (c)(3) of the Internal Revenue Code and Section 23701 (d) of the California Revenue and Taxation Code respectively
Reclassifications Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation in the current year financial statements
Reporting of Subsequent Events The Organization has evaluated events and transactions for potential recognition or disclosure through September 7 2017 which represents the date the financial statements were available to be issued
NOTE 2 - ACCOUNTS RECEIVABLE CSULB AUXILIARY ORGANIZATIONS
Accounts receivable from CSULB auxiliary organizations are comprised of the following
June 30 2017 2016
CSULB Research Foundation $ $ 28234 Employee 3732 University Student Union 2650 Forty-Niner Foundation 6029 Associated Students 2432 11383
$ 45646 11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 3 - NOTE RECEIVABLE CSULB DEPARTMENT OF ATHLETICS
On March 23 2015 the Organization loaned $500000 to the Department of Athletics for the campus track and field improvement project The loan bared interest at 4 on a semiannual basis and had an original due date of September 23 2015 Interest was payable at each maturity date
During the year ended June 30 2016 the Department of Athletics paid the required interest installments of $20000 in September 2015 and again in March 2016 The parties agreed to extend the repayment of the loan
In September 2016 the Organization received full payment for the note
NOTE 4 -INVENTORIES
Inventories consist of the following June 30 2017 2016
New textbooks $ 884762 $ 715117 Computer equipment supplies and software 409232 473322 Supplies 488844 481274 Used textbooks 552565 513978 Trade books 5924 20493 Food service 386979 300293
$ 2727406 $ 2504477
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
Cost Market
NOTE 5 -INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2017 Cost Market
CURRENT ASSETS Mutual funds $4071190 $4375070 $5044679 $5041438 Common stocks 2539668 2940992 1000598 1181323 Investments in alternative funds 982884 993030 499136 499855
$7593742 $8309092 $6722616
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
2017 Buildings and improvements Equipment furniture and fixtures Automobiles
Less accumulated depreciation
Construction in progress
$ 19003699 6685136
46734 25735569
(17392621 ) 8342948
$19681399 6168813
25896946 (17796296)
8100650 493908
$ 8594558
Construction in progress at June 30 2017 consists primarily of capital leasehold improvement expenditures for the bookstore and food service facilities
DepreCiation expense for the years ended June 30 2017 and 2016 was $977635 and $985466 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 7 - INVESTMENTS DESIGNATED FOR SICK PAY
Investments designated for sick pay benefits are funds designated by the Organizations Board of Directors primarily for the funding of accumulated and vested sick pay
NOTE 8 - ACCOUNTS PAYABLE CSULB AUXILIARY ORGANIZATIONS
There were no accounts payable to CSULB auxiliary organizations at June 30 2017 and 2016
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2017 2016
Note payable to CSU is payable semiannually on May 1 and November 1 of each year includininterest and matures May 1 2039
g
$ 3215000 $ 3300000
Unamortized net deferred amount on refinancing 263768 3478768 3
276328 576328
Less Current portion 95000) ( 85000)
Noncurrent portion $ 3383768 $ 3491328
In 2008 the Organization borrowed $4110000 from CSU in connection with the construction of certain food service leasehold improvements The CSU assisted in financing the construction through the issuance of System wide Revenue Bonds Series 2008A by the State of California in the amount of $4110000
14
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 9 - LONG TERM DEBT (Continued)
On April 20 2016 CSU refinanced $3415000 of the System wide Revenue Bonds Series 2008A by issuing a $3125000 of System wide Revenue Bonds Series 2016A
Interest rates range from 2 to 5 with an average face coupon rate of 461 and effective rate of 332 The bonds will mature over the next 23 years with an average maturity of 1425 years
On May 12016 the loan agreement between the Organization and CSU was amended to reflect the refinancing of the bonds
The Organization is obligated to repay the CSU the amount of the indenture obligations interest and costs by making payments to the CSU equal to the CSUs debt service on the bonds The debt obligation is secured by the Organizations revenues
The future scheduled maturities of long term debt for the next five years and thereafter are as follows
Year ending June 30 2018 $ 95000 2019 90000 2020 90000 2021 95000 2022 100000 Thereafter 2745000
$3215000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley Smith Barney which has a zero balance at June 30 2017 The line of credit has a variable rate not to exceed the Open Federal rate plus 50 basis points and is secured by the Organizations investments held at MorganStanley Smith Barney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 10 - LEASE COMMITMENTS
The Organization leases certain property for the bookstore and food service facilities from California State University Long Beach (CSULB) and other unrelated third parties The agreements with CSULB require the Organization to manage and operate the facilities for the benefit of the University Under the terms of the leases the Organization is required to make monthly lease payments totaling $3000 and is responsible for repairs maintenance alterations and insurance The leases for the facilities are non-cancellable and expire in 2017 and 2018 with an option to renew for five years Non-cancellable operating lease agreements with Associated Students Inc and other unrelated third parties for retail and food service facilities commenced in 200720082011 and 2012 and expire in 20162018 and 2020 Monthly lease payments for these facilities total $8440
Also the Organization maintains equipment under non-cancellable operating leases The lease agreements expire between 2018 and 2022
Future minimum rental payments required for equipment and facilities under operating leases that have an initial or remaining non-cancellable lease term in excess of one year as of June 30 2017 are as follows
Year ending June 30
2018 $ 190842 2019 150981 2020 138161 2021 60161 2022 5316
$ 595461
Rent expense was $119384 and $114000 for the years ended June 30 2017 and 2016 respectiveIy
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 11 - OPERATING AGREEMENTS
The Organization has entered into certain non-cancellable operating agreements with selected food service providers for catering vending and other food services Royalties are due to the Organization based on a percentage of monthly gross sales of the Operator or a set annual amount whichever is greater Also the Operators will pay a percent of monthly gross sales for common area maintenance charges Initial terms of the leases vary from one to fifteen years and have varying expiration dates
The Organization has also entered into an agreement that contains guaranteed minimum commission payments Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2018 $ 175000 2019 200000 2020 200000 2021 200000
$ 775000
NOTE 12 - PENSION PLAN (CALPERS)
The Organization participates in a cost-sharing multiple-employer defined benefit plan through the California Public Employees Retirement System plan (CaIPERS) which covers substantially all regular salaried full-time employees of the Organization CalPERS acts as a common investment and administrative agent for partiCipating public entities within the State of California
17
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
INDEPENDENT AUDITORS REPORT 1 - 2
FINANCIAL STATEMENTS
Statements of Financial Position 3 - 4
Statements of Activities 5
Statements of Cash Flows 7 - 8
Notes to Financial Statements 9 - 26
ADDITIONAL INFORMATION
Schedule of Enterprise Activities 27 - 28
Schedule of Revenues Expenses
Schedule of Other Information 31 - 37
Statements of Changes in Net Assets 6
Schedule of Net Position 29
and Changes in Net Position 30
Guzman amp Gray Certified Public Accountants
4510 East Pacific Coast Highway Suite 270 Mark Gray CPA Long Beach California 90804 Patrick S Guzman CPA
(562) 498-0997 Fax (562) 597-7359
INDEPENDENT AUDITORS REPORT
Board of Directors Forty-Niner Shops Inc California State University Long Beach
Financial Statements We have audited the accompanying financial statements of the Forty-Niner Shops Inc (a nonprofit organization) which comprise the statements of financial position as of June 30 2017 and 2016 and the related statements of activities changes in net assets and cash flows for the years then ended and the related notes to the financial statements
Managements 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 auditors 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 entitys 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 entitys 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
1
INDEPENDENT AUDITORS REPORT (Continued)
Opinion In our opinion the financial statements referred to above present fairly in all material respects the financial position of the Forty-Niner Shops Inc as of June 30 2017 and 2016 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
Other Matter Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole The statements on pages 27 through 37 are presented for the purpose of additional analysis and are not a required part of the financial statements 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 financial statements and certain additional procedures including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the 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 financial statements as a whole
GUzc1tc~ Long Beach California September 72017
2
FORTY-NINER SHOPS INC STATEMENTS OF FINANCIAL POSITION
ASSETS
CURRENT ASSETS Cash and cash equivalents Investments Accounts receivable Accounts receivable CSULB auxiliary
organizations Accounts receivable CSULB Note receivable CSULB Inventories Prepaid expenses
CAPITAL ASSETS net of accumulated depreCiation
OTHER ASSETS Investments designated for sick pay benefits
TOTAL ASSETS
JUNE 30 2017
$ 4295499 8309092 1265132
8814 297999
2727406 22071
16926013
8486644
768432 768432
$26181089
2016
$ 3499447 6722616 1633078
45646 272666 500000
2504477 14000
15191930
768432 768432
$24554920
See Independent Auditors Report and Notes to Financial Statements 3
FORTY-NINER SHOPS INC STATEMENTS OF FINANCIAL POSITION (CONTINUED)
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES Long term debt current portion Accounts payable trade Accounts payable CSULB Refundable campus debit card deposits Accrued liabilities Accrued payroll Accrued vacation Accrued sick pay Pension obligation current Accrued post-retirement current
NONCURRENT LIABILITIES Long term debt net of current portion Pension obligation net of current portion Accrued postretirement benefits
Total Liabilities
NET ASSETS Unrestricted
Invested in capital assets Other unrestricted
Total Net Assets
TOTAL LIABILITIES AND NET ASSETS
JUNE 30 2017 2016
$ 95000 $ 85000 122697 131345 211788 213860 308544 312882 461007 459047 664118 548772 486449 459963 989603 930299 577603 474416 407000 409000
4323809 4024584
3383768 3491328 4660554 3724428 2778391 3782913
10822713 10998669 15146522 15023253
8486644 8594558 2547923 937109
11034567 9531667
~2sectj_e~ $24554920
See Independent Auditors Report and Jotes to Financial Statements 4
FORTY-NINER SHOPS INC STATEMENTS OF ACTIVITIES
JUNE 30 1
ENTERPRISE OPERATING REVENUES Sales Commission Vending Other
ENTERPRISE OPERATING EXPENSES Cost of sales Operating expenses Depreciation and amortization
ENTERPRISE OPERATING (LOSS) INCOME
NONOPERATING INCOME (EXPENSE) Interest and dividend income Interest imputed from net loan premiums and costs
Interest expense Unrealized gain (loss) on investments Realized gain (loss) on investments Net gain (loss) on disposal of fixed assets
NONMANDATORY TRANSFERS TO UNIVERSITY Contributions to University and
University programs
POST RETIREMENT -RELATED CHANGES OTHER THAN NET PERIODIC COST
INCREASE IN NET ASSETS
2017
$ 36290437 1394267
352627 116 1646
38153 1 977
16440145 20931513
977 1635 38349293
( 195316)
169148
12560 ( 152407)
552937 326159
5984 902413
273190
1068993
$ 1502900
2016
$ 36636425 954401 339183
82 1305 38 1012314
16550622 18356171
985466 35 1892259
2120 1055
279561
( ( ( ( (
1843 171911) 311727) 157672)
6788) 366694
( 314829)
( 1230670)
See Independent Auditors Report and Notes to Financial Statements 5
FORTY-NINER SHOPS INC STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30
2017 2016
BEGINNING NET ASSETS $ 9531667 $ 9323805
INCREASE IN NET ASSETS 1502900 207862
ENDING NET ASSETS $ 11034567 $ 9531667
See Independent Auditors Report and Notes to Financial Statements 6
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES Increase in net assets Adjustments to reconcile change in net assets
to net cash from operating activities Depreciation Amortization of loan discount Interest imputed from net loan
premiums and costs Unrealized (gain) loss on investments Realized (gain) loss on investments Net (gain) loss on disposal of fixed assets (Increase) decrease in
Accounts receivable Accounts receivable CSULB auxiliary
organizations Accounts receivable CSULB Note receivable CSULB Inventories Prepaid expenses
Increase (decrease) in Accounts payable Accounts payable CSULB Refundable campus debit card deposits Accrued liabilities Accrued payroll Accrued vacation Accrued sick pay Accrued pension obligation Accrued post retirement benefits
Net Cash From Operating Activities
FOR THE YEARS ENDED
2017 JUNE 30
2016
$1502900 $ 207862
977635 985466
12560) 552937) 326159)
5984
1843) 311727 157672
6788
367946 701974)
36832 25333)
500000 222929)
8071 )
37654) 184031
259764) 45250
9115) 1602) 4338) 1960
115346 26486 59304
1039313 ( 506522)
2964140
749495) 1475)
14032 156294 212076
37985 70389
163467 1000337 1801171
See Independent Auditors Report and Notes to Financial Statements 7
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED JUNE 30
2017 2016
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of capital assets Construction in progress additions Purchase of investments Proceeds from sale of investments Proceeds from sale of capital assets
Net Cash From Investment Activities
905471 )
( 5742895) 5065278
( 1 583088)
( ( (
345007) 424089)
3177541) 1895823
900 2049914)
CASH FLOWS FROM FINANCING ACTIVITIES Repayment of long term debt Proceeds from refinancing of long term debt Contributions to post retirement benefit trust
Net Cash From Financing Activities ( (
85000)
500000) 585000)
375000) 282911 500000 592089)
CHANGE IN CASH AND CASH EQUIVALENTS 796052 840832)
BEGINNING CASH AIID CASH EQUIVALENTS 3499447 4340279
ENDING CASH AND CASH EQUIVALENTS ~ 4295499 $ 3499447
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest $ 152000 $ 179000
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General The Organization is a nonprofit auxiliary organization organized to operate food services and bookstore activities at California State University Long Beach for the benefit of the University Campus The Organizations customer base consists primarily of students enrolled at California State University Long Beach
Basis of Presentation The Organizations financial statements are presented in accordance with guidelines established for auxiliary organizations issued by the Office of the Chancellor of the California State University
Contributions received are recorded as unrestricted temporarily restricted or permanently restricted support depending on the existence andor the nature of any donor restrictions The Organization has not received any contributions with donor-imposed restrictions that would result in temporarily or permanently restricted net assets
The Organization is required to report information regarding their financial position and activities according to three classes of net assets unrestricted net assets temporarily restricted net assets and permanently restricted assets The Organization does not have any temporarily or permanently restricted net assets
Basis of Accounting The accounting records of the Forty-Niner Shops Inc are maintained on the accrual basis of accounting
Change in Accounting Principle In April of 2015 the Financial Accounting Standards Board issued ASU-2015-03 Imputation of Interest ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability Similarly the discount on premium resulting from the determination of present value shall be reported in the statement of financial position as a direct deduction from or addition to the face amount of the note and shall not be classified as a deferred charge or deferred credit Amortization of discounts premiums and debt issuance costs shall be reported as either interest expense or interest income ASU 2015shy03 is effective for financial statements issued for fiscal years beginning after December 15 2015 Early adoption is permitted for financial statements that have not been previously issued
The Organization has adopted the new standard for the year ended June 30 2016
9
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounting 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 Significant estimates include annual depreciation the carrying value of property plant and equipment and the actuarial estimate of postretirement benefits Actual results could differ from those estimates
Fair Value of Financial Instruments Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer liability in an orderly transaction between market participants at the measurement date
Cash and Cash Equivalents Cash and cash equivalents includes highly liquid investments such as money market funds that are readily convertible to known amounts of cash within 90 days from the date of purchase All cash balances are held at major banking and broker institutions
Investments The Organization accounts for all investments at fair market value Net realized and unrealized gains and losses on investments are reflected in the statement of activities
Allowance for Doubtful Accounts No allowance for doubtful accounts has been established because management believes that all accounts are collectible and no allowance is needed
Inventories Inventories for the bookstore are valued using the lower of cost or market by the conventional retail inventory method Inventories for the food service are valued using the lower of cost (first-in first-out) or market method
Capital Assets and Depreciation Capital asset accounts are stated at cost less accumulated depreciation Betterments and major improvements are added to the respective assets cost while ordinary repairs that do not extend useful lives are expensed as incurred All direct and indirect costs incurred in constructing assets are accumulated in an asset account and no depreciation is recognized until the asset is put into operation When an asset is sold or otherwise disposed of the cost of the asset and the related accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the statement of activities
10
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Capital Assets and Depreciation (Continued) Depreciation and amortization of capital assets are provided on the straight-line method over the estimated useful lives of the various classes of property which are ten to fifty years for buildings and improvements five to ten years for equipment furniture and fixtures and three to five years for automobiles The capitalization thresholds are as follows buildings and building improvements - $10000 equipment and furniture - $2500 vehicles - all purchases are capitalized
Equipment acquired under capital leases are recorded at the lower of the fair value or the present value of future minimum lease payments These leases are amortized over their estimated useful lives of five years or the lease term whichever is shorter Amortization of equipment acquired under capitalized leases is included with depreciation expense
Accrued Vacation and Sick Pay Accruals for vacation and sick pay are made on a monthly basis as such benefits become payable to employees Pay rate increases are applied to the hours earned in prior periods if any and are reported as a current expense in the statement of activities
Income Taxes The Organization is exempt from federal income and state franchise taxes under Section 501 (c)(3) of the Internal Revenue Code and Section 23701 (d) of the California Revenue and Taxation Code respectively
Reclassifications Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation in the current year financial statements
Reporting of Subsequent Events The Organization has evaluated events and transactions for potential recognition or disclosure through September 7 2017 which represents the date the financial statements were available to be issued
NOTE 2 - ACCOUNTS RECEIVABLE CSULB AUXILIARY ORGANIZATIONS
Accounts receivable from CSULB auxiliary organizations are comprised of the following
June 30 2017 2016
CSULB Research Foundation $ $ 28234 Employee 3732 University Student Union 2650 Forty-Niner Foundation 6029 Associated Students 2432 11383
$ 45646 11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 3 - NOTE RECEIVABLE CSULB DEPARTMENT OF ATHLETICS
On March 23 2015 the Organization loaned $500000 to the Department of Athletics for the campus track and field improvement project The loan bared interest at 4 on a semiannual basis and had an original due date of September 23 2015 Interest was payable at each maturity date
During the year ended June 30 2016 the Department of Athletics paid the required interest installments of $20000 in September 2015 and again in March 2016 The parties agreed to extend the repayment of the loan
In September 2016 the Organization received full payment for the note
NOTE 4 -INVENTORIES
Inventories consist of the following June 30 2017 2016
New textbooks $ 884762 $ 715117 Computer equipment supplies and software 409232 473322 Supplies 488844 481274 Used textbooks 552565 513978 Trade books 5924 20493 Food service 386979 300293
$ 2727406 $ 2504477
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
Cost Market
NOTE 5 -INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2017 Cost Market
CURRENT ASSETS Mutual funds $4071190 $4375070 $5044679 $5041438 Common stocks 2539668 2940992 1000598 1181323 Investments in alternative funds 982884 993030 499136 499855
$7593742 $8309092 $6722616
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
2017 Buildings and improvements Equipment furniture and fixtures Automobiles
Less accumulated depreciation
Construction in progress
$ 19003699 6685136
46734 25735569
(17392621 ) 8342948
$19681399 6168813
25896946 (17796296)
8100650 493908
$ 8594558
Construction in progress at June 30 2017 consists primarily of capital leasehold improvement expenditures for the bookstore and food service facilities
DepreCiation expense for the years ended June 30 2017 and 2016 was $977635 and $985466 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 7 - INVESTMENTS DESIGNATED FOR SICK PAY
Investments designated for sick pay benefits are funds designated by the Organizations Board of Directors primarily for the funding of accumulated and vested sick pay
NOTE 8 - ACCOUNTS PAYABLE CSULB AUXILIARY ORGANIZATIONS
There were no accounts payable to CSULB auxiliary organizations at June 30 2017 and 2016
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2017 2016
Note payable to CSU is payable semiannually on May 1 and November 1 of each year includininterest and matures May 1 2039
g
$ 3215000 $ 3300000
Unamortized net deferred amount on refinancing 263768 3478768 3
276328 576328
Less Current portion 95000) ( 85000)
Noncurrent portion $ 3383768 $ 3491328
In 2008 the Organization borrowed $4110000 from CSU in connection with the construction of certain food service leasehold improvements The CSU assisted in financing the construction through the issuance of System wide Revenue Bonds Series 2008A by the State of California in the amount of $4110000
14
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 9 - LONG TERM DEBT (Continued)
On April 20 2016 CSU refinanced $3415000 of the System wide Revenue Bonds Series 2008A by issuing a $3125000 of System wide Revenue Bonds Series 2016A
Interest rates range from 2 to 5 with an average face coupon rate of 461 and effective rate of 332 The bonds will mature over the next 23 years with an average maturity of 1425 years
On May 12016 the loan agreement between the Organization and CSU was amended to reflect the refinancing of the bonds
The Organization is obligated to repay the CSU the amount of the indenture obligations interest and costs by making payments to the CSU equal to the CSUs debt service on the bonds The debt obligation is secured by the Organizations revenues
The future scheduled maturities of long term debt for the next five years and thereafter are as follows
Year ending June 30 2018 $ 95000 2019 90000 2020 90000 2021 95000 2022 100000 Thereafter 2745000
$3215000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley Smith Barney which has a zero balance at June 30 2017 The line of credit has a variable rate not to exceed the Open Federal rate plus 50 basis points and is secured by the Organizations investments held at MorganStanley Smith Barney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 10 - LEASE COMMITMENTS
The Organization leases certain property for the bookstore and food service facilities from California State University Long Beach (CSULB) and other unrelated third parties The agreements with CSULB require the Organization to manage and operate the facilities for the benefit of the University Under the terms of the leases the Organization is required to make monthly lease payments totaling $3000 and is responsible for repairs maintenance alterations and insurance The leases for the facilities are non-cancellable and expire in 2017 and 2018 with an option to renew for five years Non-cancellable operating lease agreements with Associated Students Inc and other unrelated third parties for retail and food service facilities commenced in 200720082011 and 2012 and expire in 20162018 and 2020 Monthly lease payments for these facilities total $8440
Also the Organization maintains equipment under non-cancellable operating leases The lease agreements expire between 2018 and 2022
Future minimum rental payments required for equipment and facilities under operating leases that have an initial or remaining non-cancellable lease term in excess of one year as of June 30 2017 are as follows
Year ending June 30
2018 $ 190842 2019 150981 2020 138161 2021 60161 2022 5316
$ 595461
Rent expense was $119384 and $114000 for the years ended June 30 2017 and 2016 respectiveIy
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 11 - OPERATING AGREEMENTS
The Organization has entered into certain non-cancellable operating agreements with selected food service providers for catering vending and other food services Royalties are due to the Organization based on a percentage of monthly gross sales of the Operator or a set annual amount whichever is greater Also the Operators will pay a percent of monthly gross sales for common area maintenance charges Initial terms of the leases vary from one to fifteen years and have varying expiration dates
The Organization has also entered into an agreement that contains guaranteed minimum commission payments Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2018 $ 175000 2019 200000 2020 200000 2021 200000
$ 775000
NOTE 12 - PENSION PLAN (CALPERS)
The Organization participates in a cost-sharing multiple-employer defined benefit plan through the California Public Employees Retirement System plan (CaIPERS) which covers substantially all regular salaried full-time employees of the Organization CalPERS acts as a common investment and administrative agent for partiCipating public entities within the State of California
17
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
Guzman amp Gray Certified Public Accountants
4510 East Pacific Coast Highway Suite 270 Mark Gray CPA Long Beach California 90804 Patrick S Guzman CPA
(562) 498-0997 Fax (562) 597-7359
INDEPENDENT AUDITORS REPORT
Board of Directors Forty-Niner Shops Inc California State University Long Beach
Financial Statements We have audited the accompanying financial statements of the Forty-Niner Shops Inc (a nonprofit organization) which comprise the statements of financial position as of June 30 2017 and 2016 and the related statements of activities changes in net assets and cash flows for the years then ended and the related notes to the financial statements
Managements 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 auditors 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 entitys 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 entitys 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
1
INDEPENDENT AUDITORS REPORT (Continued)
Opinion In our opinion the financial statements referred to above present fairly in all material respects the financial position of the Forty-Niner Shops Inc as of June 30 2017 and 2016 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
Other Matter Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole The statements on pages 27 through 37 are presented for the purpose of additional analysis and are not a required part of the financial statements 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 financial statements and certain additional procedures including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the 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 financial statements as a whole
GUzc1tc~ Long Beach California September 72017
2
FORTY-NINER SHOPS INC STATEMENTS OF FINANCIAL POSITION
ASSETS
CURRENT ASSETS Cash and cash equivalents Investments Accounts receivable Accounts receivable CSULB auxiliary
organizations Accounts receivable CSULB Note receivable CSULB Inventories Prepaid expenses
CAPITAL ASSETS net of accumulated depreCiation
OTHER ASSETS Investments designated for sick pay benefits
TOTAL ASSETS
JUNE 30 2017
$ 4295499 8309092 1265132
8814 297999
2727406 22071
16926013
8486644
768432 768432
$26181089
2016
$ 3499447 6722616 1633078
45646 272666 500000
2504477 14000
15191930
768432 768432
$24554920
See Independent Auditors Report and Notes to Financial Statements 3
FORTY-NINER SHOPS INC STATEMENTS OF FINANCIAL POSITION (CONTINUED)
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES Long term debt current portion Accounts payable trade Accounts payable CSULB Refundable campus debit card deposits Accrued liabilities Accrued payroll Accrued vacation Accrued sick pay Pension obligation current Accrued post-retirement current
NONCURRENT LIABILITIES Long term debt net of current portion Pension obligation net of current portion Accrued postretirement benefits
Total Liabilities
NET ASSETS Unrestricted
Invested in capital assets Other unrestricted
Total Net Assets
TOTAL LIABILITIES AND NET ASSETS
JUNE 30 2017 2016
$ 95000 $ 85000 122697 131345 211788 213860 308544 312882 461007 459047 664118 548772 486449 459963 989603 930299 577603 474416 407000 409000
4323809 4024584
3383768 3491328 4660554 3724428 2778391 3782913
10822713 10998669 15146522 15023253
8486644 8594558 2547923 937109
11034567 9531667
~2sectj_e~ $24554920
See Independent Auditors Report and Jotes to Financial Statements 4
FORTY-NINER SHOPS INC STATEMENTS OF ACTIVITIES
JUNE 30 1
ENTERPRISE OPERATING REVENUES Sales Commission Vending Other
ENTERPRISE OPERATING EXPENSES Cost of sales Operating expenses Depreciation and amortization
ENTERPRISE OPERATING (LOSS) INCOME
NONOPERATING INCOME (EXPENSE) Interest and dividend income Interest imputed from net loan premiums and costs
Interest expense Unrealized gain (loss) on investments Realized gain (loss) on investments Net gain (loss) on disposal of fixed assets
NONMANDATORY TRANSFERS TO UNIVERSITY Contributions to University and
University programs
POST RETIREMENT -RELATED CHANGES OTHER THAN NET PERIODIC COST
INCREASE IN NET ASSETS
2017
$ 36290437 1394267
352627 116 1646
38153 1 977
16440145 20931513
977 1635 38349293
( 195316)
169148
12560 ( 152407)
552937 326159
5984 902413
273190
1068993
$ 1502900
2016
$ 36636425 954401 339183
82 1305 38 1012314
16550622 18356171
985466 35 1892259
2120 1055
279561
( ( ( ( (
1843 171911) 311727) 157672)
6788) 366694
( 314829)
( 1230670)
See Independent Auditors Report and Notes to Financial Statements 5
FORTY-NINER SHOPS INC STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30
2017 2016
BEGINNING NET ASSETS $ 9531667 $ 9323805
INCREASE IN NET ASSETS 1502900 207862
ENDING NET ASSETS $ 11034567 $ 9531667
See Independent Auditors Report and Notes to Financial Statements 6
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES Increase in net assets Adjustments to reconcile change in net assets
to net cash from operating activities Depreciation Amortization of loan discount Interest imputed from net loan
premiums and costs Unrealized (gain) loss on investments Realized (gain) loss on investments Net (gain) loss on disposal of fixed assets (Increase) decrease in
Accounts receivable Accounts receivable CSULB auxiliary
organizations Accounts receivable CSULB Note receivable CSULB Inventories Prepaid expenses
Increase (decrease) in Accounts payable Accounts payable CSULB Refundable campus debit card deposits Accrued liabilities Accrued payroll Accrued vacation Accrued sick pay Accrued pension obligation Accrued post retirement benefits
Net Cash From Operating Activities
FOR THE YEARS ENDED
2017 JUNE 30
2016
$1502900 $ 207862
977635 985466
12560) 552937) 326159)
5984
1843) 311727 157672
6788
367946 701974)
36832 25333)
500000 222929)
8071 )
37654) 184031
259764) 45250
9115) 1602) 4338) 1960
115346 26486 59304
1039313 ( 506522)
2964140
749495) 1475)
14032 156294 212076
37985 70389
163467 1000337 1801171
See Independent Auditors Report and Notes to Financial Statements 7
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED JUNE 30
2017 2016
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of capital assets Construction in progress additions Purchase of investments Proceeds from sale of investments Proceeds from sale of capital assets
Net Cash From Investment Activities
905471 )
( 5742895) 5065278
( 1 583088)
( ( (
345007) 424089)
3177541) 1895823
900 2049914)
CASH FLOWS FROM FINANCING ACTIVITIES Repayment of long term debt Proceeds from refinancing of long term debt Contributions to post retirement benefit trust
Net Cash From Financing Activities ( (
85000)
500000) 585000)
375000) 282911 500000 592089)
CHANGE IN CASH AND CASH EQUIVALENTS 796052 840832)
BEGINNING CASH AIID CASH EQUIVALENTS 3499447 4340279
ENDING CASH AND CASH EQUIVALENTS ~ 4295499 $ 3499447
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest $ 152000 $ 179000
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General The Organization is a nonprofit auxiliary organization organized to operate food services and bookstore activities at California State University Long Beach for the benefit of the University Campus The Organizations customer base consists primarily of students enrolled at California State University Long Beach
Basis of Presentation The Organizations financial statements are presented in accordance with guidelines established for auxiliary organizations issued by the Office of the Chancellor of the California State University
Contributions received are recorded as unrestricted temporarily restricted or permanently restricted support depending on the existence andor the nature of any donor restrictions The Organization has not received any contributions with donor-imposed restrictions that would result in temporarily or permanently restricted net assets
The Organization is required to report information regarding their financial position and activities according to three classes of net assets unrestricted net assets temporarily restricted net assets and permanently restricted assets The Organization does not have any temporarily or permanently restricted net assets
Basis of Accounting The accounting records of the Forty-Niner Shops Inc are maintained on the accrual basis of accounting
Change in Accounting Principle In April of 2015 the Financial Accounting Standards Board issued ASU-2015-03 Imputation of Interest ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability Similarly the discount on premium resulting from the determination of present value shall be reported in the statement of financial position as a direct deduction from or addition to the face amount of the note and shall not be classified as a deferred charge or deferred credit Amortization of discounts premiums and debt issuance costs shall be reported as either interest expense or interest income ASU 2015shy03 is effective for financial statements issued for fiscal years beginning after December 15 2015 Early adoption is permitted for financial statements that have not been previously issued
The Organization has adopted the new standard for the year ended June 30 2016
9
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounting 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 Significant estimates include annual depreciation the carrying value of property plant and equipment and the actuarial estimate of postretirement benefits Actual results could differ from those estimates
Fair Value of Financial Instruments Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer liability in an orderly transaction between market participants at the measurement date
Cash and Cash Equivalents Cash and cash equivalents includes highly liquid investments such as money market funds that are readily convertible to known amounts of cash within 90 days from the date of purchase All cash balances are held at major banking and broker institutions
Investments The Organization accounts for all investments at fair market value Net realized and unrealized gains and losses on investments are reflected in the statement of activities
Allowance for Doubtful Accounts No allowance for doubtful accounts has been established because management believes that all accounts are collectible and no allowance is needed
Inventories Inventories for the bookstore are valued using the lower of cost or market by the conventional retail inventory method Inventories for the food service are valued using the lower of cost (first-in first-out) or market method
Capital Assets and Depreciation Capital asset accounts are stated at cost less accumulated depreciation Betterments and major improvements are added to the respective assets cost while ordinary repairs that do not extend useful lives are expensed as incurred All direct and indirect costs incurred in constructing assets are accumulated in an asset account and no depreciation is recognized until the asset is put into operation When an asset is sold or otherwise disposed of the cost of the asset and the related accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the statement of activities
10
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Capital Assets and Depreciation (Continued) Depreciation and amortization of capital assets are provided on the straight-line method over the estimated useful lives of the various classes of property which are ten to fifty years for buildings and improvements five to ten years for equipment furniture and fixtures and three to five years for automobiles The capitalization thresholds are as follows buildings and building improvements - $10000 equipment and furniture - $2500 vehicles - all purchases are capitalized
Equipment acquired under capital leases are recorded at the lower of the fair value or the present value of future minimum lease payments These leases are amortized over their estimated useful lives of five years or the lease term whichever is shorter Amortization of equipment acquired under capitalized leases is included with depreciation expense
Accrued Vacation and Sick Pay Accruals for vacation and sick pay are made on a monthly basis as such benefits become payable to employees Pay rate increases are applied to the hours earned in prior periods if any and are reported as a current expense in the statement of activities
Income Taxes The Organization is exempt from federal income and state franchise taxes under Section 501 (c)(3) of the Internal Revenue Code and Section 23701 (d) of the California Revenue and Taxation Code respectively
Reclassifications Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation in the current year financial statements
Reporting of Subsequent Events The Organization has evaluated events and transactions for potential recognition or disclosure through September 7 2017 which represents the date the financial statements were available to be issued
NOTE 2 - ACCOUNTS RECEIVABLE CSULB AUXILIARY ORGANIZATIONS
Accounts receivable from CSULB auxiliary organizations are comprised of the following
June 30 2017 2016
CSULB Research Foundation $ $ 28234 Employee 3732 University Student Union 2650 Forty-Niner Foundation 6029 Associated Students 2432 11383
$ 45646 11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 3 - NOTE RECEIVABLE CSULB DEPARTMENT OF ATHLETICS
On March 23 2015 the Organization loaned $500000 to the Department of Athletics for the campus track and field improvement project The loan bared interest at 4 on a semiannual basis and had an original due date of September 23 2015 Interest was payable at each maturity date
During the year ended June 30 2016 the Department of Athletics paid the required interest installments of $20000 in September 2015 and again in March 2016 The parties agreed to extend the repayment of the loan
In September 2016 the Organization received full payment for the note
NOTE 4 -INVENTORIES
Inventories consist of the following June 30 2017 2016
New textbooks $ 884762 $ 715117 Computer equipment supplies and software 409232 473322 Supplies 488844 481274 Used textbooks 552565 513978 Trade books 5924 20493 Food service 386979 300293
$ 2727406 $ 2504477
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
Cost Market
NOTE 5 -INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2017 Cost Market
CURRENT ASSETS Mutual funds $4071190 $4375070 $5044679 $5041438 Common stocks 2539668 2940992 1000598 1181323 Investments in alternative funds 982884 993030 499136 499855
$7593742 $8309092 $6722616
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
2017 Buildings and improvements Equipment furniture and fixtures Automobiles
Less accumulated depreciation
Construction in progress
$ 19003699 6685136
46734 25735569
(17392621 ) 8342948
$19681399 6168813
25896946 (17796296)
8100650 493908
$ 8594558
Construction in progress at June 30 2017 consists primarily of capital leasehold improvement expenditures for the bookstore and food service facilities
DepreCiation expense for the years ended June 30 2017 and 2016 was $977635 and $985466 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 7 - INVESTMENTS DESIGNATED FOR SICK PAY
Investments designated for sick pay benefits are funds designated by the Organizations Board of Directors primarily for the funding of accumulated and vested sick pay
NOTE 8 - ACCOUNTS PAYABLE CSULB AUXILIARY ORGANIZATIONS
There were no accounts payable to CSULB auxiliary organizations at June 30 2017 and 2016
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2017 2016
Note payable to CSU is payable semiannually on May 1 and November 1 of each year includininterest and matures May 1 2039
g
$ 3215000 $ 3300000
Unamortized net deferred amount on refinancing 263768 3478768 3
276328 576328
Less Current portion 95000) ( 85000)
Noncurrent portion $ 3383768 $ 3491328
In 2008 the Organization borrowed $4110000 from CSU in connection with the construction of certain food service leasehold improvements The CSU assisted in financing the construction through the issuance of System wide Revenue Bonds Series 2008A by the State of California in the amount of $4110000
14
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 9 - LONG TERM DEBT (Continued)
On April 20 2016 CSU refinanced $3415000 of the System wide Revenue Bonds Series 2008A by issuing a $3125000 of System wide Revenue Bonds Series 2016A
Interest rates range from 2 to 5 with an average face coupon rate of 461 and effective rate of 332 The bonds will mature over the next 23 years with an average maturity of 1425 years
On May 12016 the loan agreement between the Organization and CSU was amended to reflect the refinancing of the bonds
The Organization is obligated to repay the CSU the amount of the indenture obligations interest and costs by making payments to the CSU equal to the CSUs debt service on the bonds The debt obligation is secured by the Organizations revenues
The future scheduled maturities of long term debt for the next five years and thereafter are as follows
Year ending June 30 2018 $ 95000 2019 90000 2020 90000 2021 95000 2022 100000 Thereafter 2745000
$3215000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley Smith Barney which has a zero balance at June 30 2017 The line of credit has a variable rate not to exceed the Open Federal rate plus 50 basis points and is secured by the Organizations investments held at MorganStanley Smith Barney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 10 - LEASE COMMITMENTS
The Organization leases certain property for the bookstore and food service facilities from California State University Long Beach (CSULB) and other unrelated third parties The agreements with CSULB require the Organization to manage and operate the facilities for the benefit of the University Under the terms of the leases the Organization is required to make monthly lease payments totaling $3000 and is responsible for repairs maintenance alterations and insurance The leases for the facilities are non-cancellable and expire in 2017 and 2018 with an option to renew for five years Non-cancellable operating lease agreements with Associated Students Inc and other unrelated third parties for retail and food service facilities commenced in 200720082011 and 2012 and expire in 20162018 and 2020 Monthly lease payments for these facilities total $8440
Also the Organization maintains equipment under non-cancellable operating leases The lease agreements expire between 2018 and 2022
Future minimum rental payments required for equipment and facilities under operating leases that have an initial or remaining non-cancellable lease term in excess of one year as of June 30 2017 are as follows
Year ending June 30
2018 $ 190842 2019 150981 2020 138161 2021 60161 2022 5316
$ 595461
Rent expense was $119384 and $114000 for the years ended June 30 2017 and 2016 respectiveIy
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 11 - OPERATING AGREEMENTS
The Organization has entered into certain non-cancellable operating agreements with selected food service providers for catering vending and other food services Royalties are due to the Organization based on a percentage of monthly gross sales of the Operator or a set annual amount whichever is greater Also the Operators will pay a percent of monthly gross sales for common area maintenance charges Initial terms of the leases vary from one to fifteen years and have varying expiration dates
The Organization has also entered into an agreement that contains guaranteed minimum commission payments Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2018 $ 175000 2019 200000 2020 200000 2021 200000
$ 775000
NOTE 12 - PENSION PLAN (CALPERS)
The Organization participates in a cost-sharing multiple-employer defined benefit plan through the California Public Employees Retirement System plan (CaIPERS) which covers substantially all regular salaried full-time employees of the Organization CalPERS acts as a common investment and administrative agent for partiCipating public entities within the State of California
17
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
INDEPENDENT AUDITORS REPORT (Continued)
Opinion In our opinion the financial statements referred to above present fairly in all material respects the financial position of the Forty-Niner Shops Inc as of June 30 2017 and 2016 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
Other Matter Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole The statements on pages 27 through 37 are presented for the purpose of additional analysis and are not a required part of the financial statements 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 financial statements and certain additional procedures including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the 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 financial statements as a whole
GUzc1tc~ Long Beach California September 72017
2
FORTY-NINER SHOPS INC STATEMENTS OF FINANCIAL POSITION
ASSETS
CURRENT ASSETS Cash and cash equivalents Investments Accounts receivable Accounts receivable CSULB auxiliary
organizations Accounts receivable CSULB Note receivable CSULB Inventories Prepaid expenses
CAPITAL ASSETS net of accumulated depreCiation
OTHER ASSETS Investments designated for sick pay benefits
TOTAL ASSETS
JUNE 30 2017
$ 4295499 8309092 1265132
8814 297999
2727406 22071
16926013
8486644
768432 768432
$26181089
2016
$ 3499447 6722616 1633078
45646 272666 500000
2504477 14000
15191930
768432 768432
$24554920
See Independent Auditors Report and Notes to Financial Statements 3
FORTY-NINER SHOPS INC STATEMENTS OF FINANCIAL POSITION (CONTINUED)
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES Long term debt current portion Accounts payable trade Accounts payable CSULB Refundable campus debit card deposits Accrued liabilities Accrued payroll Accrued vacation Accrued sick pay Pension obligation current Accrued post-retirement current
NONCURRENT LIABILITIES Long term debt net of current portion Pension obligation net of current portion Accrued postretirement benefits
Total Liabilities
NET ASSETS Unrestricted
Invested in capital assets Other unrestricted
Total Net Assets
TOTAL LIABILITIES AND NET ASSETS
JUNE 30 2017 2016
$ 95000 $ 85000 122697 131345 211788 213860 308544 312882 461007 459047 664118 548772 486449 459963 989603 930299 577603 474416 407000 409000
4323809 4024584
3383768 3491328 4660554 3724428 2778391 3782913
10822713 10998669 15146522 15023253
8486644 8594558 2547923 937109
11034567 9531667
~2sectj_e~ $24554920
See Independent Auditors Report and Jotes to Financial Statements 4
FORTY-NINER SHOPS INC STATEMENTS OF ACTIVITIES
JUNE 30 1
ENTERPRISE OPERATING REVENUES Sales Commission Vending Other
ENTERPRISE OPERATING EXPENSES Cost of sales Operating expenses Depreciation and amortization
ENTERPRISE OPERATING (LOSS) INCOME
NONOPERATING INCOME (EXPENSE) Interest and dividend income Interest imputed from net loan premiums and costs
Interest expense Unrealized gain (loss) on investments Realized gain (loss) on investments Net gain (loss) on disposal of fixed assets
NONMANDATORY TRANSFERS TO UNIVERSITY Contributions to University and
University programs
POST RETIREMENT -RELATED CHANGES OTHER THAN NET PERIODIC COST
INCREASE IN NET ASSETS
2017
$ 36290437 1394267
352627 116 1646
38153 1 977
16440145 20931513
977 1635 38349293
( 195316)
169148
12560 ( 152407)
552937 326159
5984 902413
273190
1068993
$ 1502900
2016
$ 36636425 954401 339183
82 1305 38 1012314
16550622 18356171
985466 35 1892259
2120 1055
279561
( ( ( ( (
1843 171911) 311727) 157672)
6788) 366694
( 314829)
( 1230670)
See Independent Auditors Report and Notes to Financial Statements 5
FORTY-NINER SHOPS INC STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30
2017 2016
BEGINNING NET ASSETS $ 9531667 $ 9323805
INCREASE IN NET ASSETS 1502900 207862
ENDING NET ASSETS $ 11034567 $ 9531667
See Independent Auditors Report and Notes to Financial Statements 6
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES Increase in net assets Adjustments to reconcile change in net assets
to net cash from operating activities Depreciation Amortization of loan discount Interest imputed from net loan
premiums and costs Unrealized (gain) loss on investments Realized (gain) loss on investments Net (gain) loss on disposal of fixed assets (Increase) decrease in
Accounts receivable Accounts receivable CSULB auxiliary
organizations Accounts receivable CSULB Note receivable CSULB Inventories Prepaid expenses
Increase (decrease) in Accounts payable Accounts payable CSULB Refundable campus debit card deposits Accrued liabilities Accrued payroll Accrued vacation Accrued sick pay Accrued pension obligation Accrued post retirement benefits
Net Cash From Operating Activities
FOR THE YEARS ENDED
2017 JUNE 30
2016
$1502900 $ 207862
977635 985466
12560) 552937) 326159)
5984
1843) 311727 157672
6788
367946 701974)
36832 25333)
500000 222929)
8071 )
37654) 184031
259764) 45250
9115) 1602) 4338) 1960
115346 26486 59304
1039313 ( 506522)
2964140
749495) 1475)
14032 156294 212076
37985 70389
163467 1000337 1801171
See Independent Auditors Report and Notes to Financial Statements 7
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED JUNE 30
2017 2016
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of capital assets Construction in progress additions Purchase of investments Proceeds from sale of investments Proceeds from sale of capital assets
Net Cash From Investment Activities
905471 )
( 5742895) 5065278
( 1 583088)
( ( (
345007) 424089)
3177541) 1895823
900 2049914)
CASH FLOWS FROM FINANCING ACTIVITIES Repayment of long term debt Proceeds from refinancing of long term debt Contributions to post retirement benefit trust
Net Cash From Financing Activities ( (
85000)
500000) 585000)
375000) 282911 500000 592089)
CHANGE IN CASH AND CASH EQUIVALENTS 796052 840832)
BEGINNING CASH AIID CASH EQUIVALENTS 3499447 4340279
ENDING CASH AND CASH EQUIVALENTS ~ 4295499 $ 3499447
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest $ 152000 $ 179000
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General The Organization is a nonprofit auxiliary organization organized to operate food services and bookstore activities at California State University Long Beach for the benefit of the University Campus The Organizations customer base consists primarily of students enrolled at California State University Long Beach
Basis of Presentation The Organizations financial statements are presented in accordance with guidelines established for auxiliary organizations issued by the Office of the Chancellor of the California State University
Contributions received are recorded as unrestricted temporarily restricted or permanently restricted support depending on the existence andor the nature of any donor restrictions The Organization has not received any contributions with donor-imposed restrictions that would result in temporarily or permanently restricted net assets
The Organization is required to report information regarding their financial position and activities according to three classes of net assets unrestricted net assets temporarily restricted net assets and permanently restricted assets The Organization does not have any temporarily or permanently restricted net assets
Basis of Accounting The accounting records of the Forty-Niner Shops Inc are maintained on the accrual basis of accounting
Change in Accounting Principle In April of 2015 the Financial Accounting Standards Board issued ASU-2015-03 Imputation of Interest ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability Similarly the discount on premium resulting from the determination of present value shall be reported in the statement of financial position as a direct deduction from or addition to the face amount of the note and shall not be classified as a deferred charge or deferred credit Amortization of discounts premiums and debt issuance costs shall be reported as either interest expense or interest income ASU 2015shy03 is effective for financial statements issued for fiscal years beginning after December 15 2015 Early adoption is permitted for financial statements that have not been previously issued
The Organization has adopted the new standard for the year ended June 30 2016
9
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounting 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 Significant estimates include annual depreciation the carrying value of property plant and equipment and the actuarial estimate of postretirement benefits Actual results could differ from those estimates
Fair Value of Financial Instruments Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer liability in an orderly transaction between market participants at the measurement date
Cash and Cash Equivalents Cash and cash equivalents includes highly liquid investments such as money market funds that are readily convertible to known amounts of cash within 90 days from the date of purchase All cash balances are held at major banking and broker institutions
Investments The Organization accounts for all investments at fair market value Net realized and unrealized gains and losses on investments are reflected in the statement of activities
Allowance for Doubtful Accounts No allowance for doubtful accounts has been established because management believes that all accounts are collectible and no allowance is needed
Inventories Inventories for the bookstore are valued using the lower of cost or market by the conventional retail inventory method Inventories for the food service are valued using the lower of cost (first-in first-out) or market method
Capital Assets and Depreciation Capital asset accounts are stated at cost less accumulated depreciation Betterments and major improvements are added to the respective assets cost while ordinary repairs that do not extend useful lives are expensed as incurred All direct and indirect costs incurred in constructing assets are accumulated in an asset account and no depreciation is recognized until the asset is put into operation When an asset is sold or otherwise disposed of the cost of the asset and the related accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the statement of activities
10
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Capital Assets and Depreciation (Continued) Depreciation and amortization of capital assets are provided on the straight-line method over the estimated useful lives of the various classes of property which are ten to fifty years for buildings and improvements five to ten years for equipment furniture and fixtures and three to five years for automobiles The capitalization thresholds are as follows buildings and building improvements - $10000 equipment and furniture - $2500 vehicles - all purchases are capitalized
Equipment acquired under capital leases are recorded at the lower of the fair value or the present value of future minimum lease payments These leases are amortized over their estimated useful lives of five years or the lease term whichever is shorter Amortization of equipment acquired under capitalized leases is included with depreciation expense
Accrued Vacation and Sick Pay Accruals for vacation and sick pay are made on a monthly basis as such benefits become payable to employees Pay rate increases are applied to the hours earned in prior periods if any and are reported as a current expense in the statement of activities
Income Taxes The Organization is exempt from federal income and state franchise taxes under Section 501 (c)(3) of the Internal Revenue Code and Section 23701 (d) of the California Revenue and Taxation Code respectively
Reclassifications Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation in the current year financial statements
Reporting of Subsequent Events The Organization has evaluated events and transactions for potential recognition or disclosure through September 7 2017 which represents the date the financial statements were available to be issued
NOTE 2 - ACCOUNTS RECEIVABLE CSULB AUXILIARY ORGANIZATIONS
Accounts receivable from CSULB auxiliary organizations are comprised of the following
June 30 2017 2016
CSULB Research Foundation $ $ 28234 Employee 3732 University Student Union 2650 Forty-Niner Foundation 6029 Associated Students 2432 11383
$ 45646 11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 3 - NOTE RECEIVABLE CSULB DEPARTMENT OF ATHLETICS
On March 23 2015 the Organization loaned $500000 to the Department of Athletics for the campus track and field improvement project The loan bared interest at 4 on a semiannual basis and had an original due date of September 23 2015 Interest was payable at each maturity date
During the year ended June 30 2016 the Department of Athletics paid the required interest installments of $20000 in September 2015 and again in March 2016 The parties agreed to extend the repayment of the loan
In September 2016 the Organization received full payment for the note
NOTE 4 -INVENTORIES
Inventories consist of the following June 30 2017 2016
New textbooks $ 884762 $ 715117 Computer equipment supplies and software 409232 473322 Supplies 488844 481274 Used textbooks 552565 513978 Trade books 5924 20493 Food service 386979 300293
$ 2727406 $ 2504477
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
Cost Market
NOTE 5 -INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2017 Cost Market
CURRENT ASSETS Mutual funds $4071190 $4375070 $5044679 $5041438 Common stocks 2539668 2940992 1000598 1181323 Investments in alternative funds 982884 993030 499136 499855
$7593742 $8309092 $6722616
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
2017 Buildings and improvements Equipment furniture and fixtures Automobiles
Less accumulated depreciation
Construction in progress
$ 19003699 6685136
46734 25735569
(17392621 ) 8342948
$19681399 6168813
25896946 (17796296)
8100650 493908
$ 8594558
Construction in progress at June 30 2017 consists primarily of capital leasehold improvement expenditures for the bookstore and food service facilities
DepreCiation expense for the years ended June 30 2017 and 2016 was $977635 and $985466 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 7 - INVESTMENTS DESIGNATED FOR SICK PAY
Investments designated for sick pay benefits are funds designated by the Organizations Board of Directors primarily for the funding of accumulated and vested sick pay
NOTE 8 - ACCOUNTS PAYABLE CSULB AUXILIARY ORGANIZATIONS
There were no accounts payable to CSULB auxiliary organizations at June 30 2017 and 2016
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2017 2016
Note payable to CSU is payable semiannually on May 1 and November 1 of each year includininterest and matures May 1 2039
g
$ 3215000 $ 3300000
Unamortized net deferred amount on refinancing 263768 3478768 3
276328 576328
Less Current portion 95000) ( 85000)
Noncurrent portion $ 3383768 $ 3491328
In 2008 the Organization borrowed $4110000 from CSU in connection with the construction of certain food service leasehold improvements The CSU assisted in financing the construction through the issuance of System wide Revenue Bonds Series 2008A by the State of California in the amount of $4110000
14
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 9 - LONG TERM DEBT (Continued)
On April 20 2016 CSU refinanced $3415000 of the System wide Revenue Bonds Series 2008A by issuing a $3125000 of System wide Revenue Bonds Series 2016A
Interest rates range from 2 to 5 with an average face coupon rate of 461 and effective rate of 332 The bonds will mature over the next 23 years with an average maturity of 1425 years
On May 12016 the loan agreement between the Organization and CSU was amended to reflect the refinancing of the bonds
The Organization is obligated to repay the CSU the amount of the indenture obligations interest and costs by making payments to the CSU equal to the CSUs debt service on the bonds The debt obligation is secured by the Organizations revenues
The future scheduled maturities of long term debt for the next five years and thereafter are as follows
Year ending June 30 2018 $ 95000 2019 90000 2020 90000 2021 95000 2022 100000 Thereafter 2745000
$3215000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley Smith Barney which has a zero balance at June 30 2017 The line of credit has a variable rate not to exceed the Open Federal rate plus 50 basis points and is secured by the Organizations investments held at MorganStanley Smith Barney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 10 - LEASE COMMITMENTS
The Organization leases certain property for the bookstore and food service facilities from California State University Long Beach (CSULB) and other unrelated third parties The agreements with CSULB require the Organization to manage and operate the facilities for the benefit of the University Under the terms of the leases the Organization is required to make monthly lease payments totaling $3000 and is responsible for repairs maintenance alterations and insurance The leases for the facilities are non-cancellable and expire in 2017 and 2018 with an option to renew for five years Non-cancellable operating lease agreements with Associated Students Inc and other unrelated third parties for retail and food service facilities commenced in 200720082011 and 2012 and expire in 20162018 and 2020 Monthly lease payments for these facilities total $8440
Also the Organization maintains equipment under non-cancellable operating leases The lease agreements expire between 2018 and 2022
Future minimum rental payments required for equipment and facilities under operating leases that have an initial or remaining non-cancellable lease term in excess of one year as of June 30 2017 are as follows
Year ending June 30
2018 $ 190842 2019 150981 2020 138161 2021 60161 2022 5316
$ 595461
Rent expense was $119384 and $114000 for the years ended June 30 2017 and 2016 respectiveIy
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 11 - OPERATING AGREEMENTS
The Organization has entered into certain non-cancellable operating agreements with selected food service providers for catering vending and other food services Royalties are due to the Organization based on a percentage of monthly gross sales of the Operator or a set annual amount whichever is greater Also the Operators will pay a percent of monthly gross sales for common area maintenance charges Initial terms of the leases vary from one to fifteen years and have varying expiration dates
The Organization has also entered into an agreement that contains guaranteed minimum commission payments Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2018 $ 175000 2019 200000 2020 200000 2021 200000
$ 775000
NOTE 12 - PENSION PLAN (CALPERS)
The Organization participates in a cost-sharing multiple-employer defined benefit plan through the California Public Employees Retirement System plan (CaIPERS) which covers substantially all regular salaried full-time employees of the Organization CalPERS acts as a common investment and administrative agent for partiCipating public entities within the State of California
17
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC STATEMENTS OF FINANCIAL POSITION
ASSETS
CURRENT ASSETS Cash and cash equivalents Investments Accounts receivable Accounts receivable CSULB auxiliary
organizations Accounts receivable CSULB Note receivable CSULB Inventories Prepaid expenses
CAPITAL ASSETS net of accumulated depreCiation
OTHER ASSETS Investments designated for sick pay benefits
TOTAL ASSETS
JUNE 30 2017
$ 4295499 8309092 1265132
8814 297999
2727406 22071
16926013
8486644
768432 768432
$26181089
2016
$ 3499447 6722616 1633078
45646 272666 500000
2504477 14000
15191930
768432 768432
$24554920
See Independent Auditors Report and Notes to Financial Statements 3
FORTY-NINER SHOPS INC STATEMENTS OF FINANCIAL POSITION (CONTINUED)
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES Long term debt current portion Accounts payable trade Accounts payable CSULB Refundable campus debit card deposits Accrued liabilities Accrued payroll Accrued vacation Accrued sick pay Pension obligation current Accrued post-retirement current
NONCURRENT LIABILITIES Long term debt net of current portion Pension obligation net of current portion Accrued postretirement benefits
Total Liabilities
NET ASSETS Unrestricted
Invested in capital assets Other unrestricted
Total Net Assets
TOTAL LIABILITIES AND NET ASSETS
JUNE 30 2017 2016
$ 95000 $ 85000 122697 131345 211788 213860 308544 312882 461007 459047 664118 548772 486449 459963 989603 930299 577603 474416 407000 409000
4323809 4024584
3383768 3491328 4660554 3724428 2778391 3782913
10822713 10998669 15146522 15023253
8486644 8594558 2547923 937109
11034567 9531667
~2sectj_e~ $24554920
See Independent Auditors Report and Jotes to Financial Statements 4
FORTY-NINER SHOPS INC STATEMENTS OF ACTIVITIES
JUNE 30 1
ENTERPRISE OPERATING REVENUES Sales Commission Vending Other
ENTERPRISE OPERATING EXPENSES Cost of sales Operating expenses Depreciation and amortization
ENTERPRISE OPERATING (LOSS) INCOME
NONOPERATING INCOME (EXPENSE) Interest and dividend income Interest imputed from net loan premiums and costs
Interest expense Unrealized gain (loss) on investments Realized gain (loss) on investments Net gain (loss) on disposal of fixed assets
NONMANDATORY TRANSFERS TO UNIVERSITY Contributions to University and
University programs
POST RETIREMENT -RELATED CHANGES OTHER THAN NET PERIODIC COST
INCREASE IN NET ASSETS
2017
$ 36290437 1394267
352627 116 1646
38153 1 977
16440145 20931513
977 1635 38349293
( 195316)
169148
12560 ( 152407)
552937 326159
5984 902413
273190
1068993
$ 1502900
2016
$ 36636425 954401 339183
82 1305 38 1012314
16550622 18356171
985466 35 1892259
2120 1055
279561
( ( ( ( (
1843 171911) 311727) 157672)
6788) 366694
( 314829)
( 1230670)
See Independent Auditors Report and Notes to Financial Statements 5
FORTY-NINER SHOPS INC STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30
2017 2016
BEGINNING NET ASSETS $ 9531667 $ 9323805
INCREASE IN NET ASSETS 1502900 207862
ENDING NET ASSETS $ 11034567 $ 9531667
See Independent Auditors Report and Notes to Financial Statements 6
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES Increase in net assets Adjustments to reconcile change in net assets
to net cash from operating activities Depreciation Amortization of loan discount Interest imputed from net loan
premiums and costs Unrealized (gain) loss on investments Realized (gain) loss on investments Net (gain) loss on disposal of fixed assets (Increase) decrease in
Accounts receivable Accounts receivable CSULB auxiliary
organizations Accounts receivable CSULB Note receivable CSULB Inventories Prepaid expenses
Increase (decrease) in Accounts payable Accounts payable CSULB Refundable campus debit card deposits Accrued liabilities Accrued payroll Accrued vacation Accrued sick pay Accrued pension obligation Accrued post retirement benefits
Net Cash From Operating Activities
FOR THE YEARS ENDED
2017 JUNE 30
2016
$1502900 $ 207862
977635 985466
12560) 552937) 326159)
5984
1843) 311727 157672
6788
367946 701974)
36832 25333)
500000 222929)
8071 )
37654) 184031
259764) 45250
9115) 1602) 4338) 1960
115346 26486 59304
1039313 ( 506522)
2964140
749495) 1475)
14032 156294 212076
37985 70389
163467 1000337 1801171
See Independent Auditors Report and Notes to Financial Statements 7
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED JUNE 30
2017 2016
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of capital assets Construction in progress additions Purchase of investments Proceeds from sale of investments Proceeds from sale of capital assets
Net Cash From Investment Activities
905471 )
( 5742895) 5065278
( 1 583088)
( ( (
345007) 424089)
3177541) 1895823
900 2049914)
CASH FLOWS FROM FINANCING ACTIVITIES Repayment of long term debt Proceeds from refinancing of long term debt Contributions to post retirement benefit trust
Net Cash From Financing Activities ( (
85000)
500000) 585000)
375000) 282911 500000 592089)
CHANGE IN CASH AND CASH EQUIVALENTS 796052 840832)
BEGINNING CASH AIID CASH EQUIVALENTS 3499447 4340279
ENDING CASH AND CASH EQUIVALENTS ~ 4295499 $ 3499447
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest $ 152000 $ 179000
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General The Organization is a nonprofit auxiliary organization organized to operate food services and bookstore activities at California State University Long Beach for the benefit of the University Campus The Organizations customer base consists primarily of students enrolled at California State University Long Beach
Basis of Presentation The Organizations financial statements are presented in accordance with guidelines established for auxiliary organizations issued by the Office of the Chancellor of the California State University
Contributions received are recorded as unrestricted temporarily restricted or permanently restricted support depending on the existence andor the nature of any donor restrictions The Organization has not received any contributions with donor-imposed restrictions that would result in temporarily or permanently restricted net assets
The Organization is required to report information regarding their financial position and activities according to three classes of net assets unrestricted net assets temporarily restricted net assets and permanently restricted assets The Organization does not have any temporarily or permanently restricted net assets
Basis of Accounting The accounting records of the Forty-Niner Shops Inc are maintained on the accrual basis of accounting
Change in Accounting Principle In April of 2015 the Financial Accounting Standards Board issued ASU-2015-03 Imputation of Interest ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability Similarly the discount on premium resulting from the determination of present value shall be reported in the statement of financial position as a direct deduction from or addition to the face amount of the note and shall not be classified as a deferred charge or deferred credit Amortization of discounts premiums and debt issuance costs shall be reported as either interest expense or interest income ASU 2015shy03 is effective for financial statements issued for fiscal years beginning after December 15 2015 Early adoption is permitted for financial statements that have not been previously issued
The Organization has adopted the new standard for the year ended June 30 2016
9
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounting 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 Significant estimates include annual depreciation the carrying value of property plant and equipment and the actuarial estimate of postretirement benefits Actual results could differ from those estimates
Fair Value of Financial Instruments Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer liability in an orderly transaction between market participants at the measurement date
Cash and Cash Equivalents Cash and cash equivalents includes highly liquid investments such as money market funds that are readily convertible to known amounts of cash within 90 days from the date of purchase All cash balances are held at major banking and broker institutions
Investments The Organization accounts for all investments at fair market value Net realized and unrealized gains and losses on investments are reflected in the statement of activities
Allowance for Doubtful Accounts No allowance for doubtful accounts has been established because management believes that all accounts are collectible and no allowance is needed
Inventories Inventories for the bookstore are valued using the lower of cost or market by the conventional retail inventory method Inventories for the food service are valued using the lower of cost (first-in first-out) or market method
Capital Assets and Depreciation Capital asset accounts are stated at cost less accumulated depreciation Betterments and major improvements are added to the respective assets cost while ordinary repairs that do not extend useful lives are expensed as incurred All direct and indirect costs incurred in constructing assets are accumulated in an asset account and no depreciation is recognized until the asset is put into operation When an asset is sold or otherwise disposed of the cost of the asset and the related accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the statement of activities
10
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Capital Assets and Depreciation (Continued) Depreciation and amortization of capital assets are provided on the straight-line method over the estimated useful lives of the various classes of property which are ten to fifty years for buildings and improvements five to ten years for equipment furniture and fixtures and three to five years for automobiles The capitalization thresholds are as follows buildings and building improvements - $10000 equipment and furniture - $2500 vehicles - all purchases are capitalized
Equipment acquired under capital leases are recorded at the lower of the fair value or the present value of future minimum lease payments These leases are amortized over their estimated useful lives of five years or the lease term whichever is shorter Amortization of equipment acquired under capitalized leases is included with depreciation expense
Accrued Vacation and Sick Pay Accruals for vacation and sick pay are made on a monthly basis as such benefits become payable to employees Pay rate increases are applied to the hours earned in prior periods if any and are reported as a current expense in the statement of activities
Income Taxes The Organization is exempt from federal income and state franchise taxes under Section 501 (c)(3) of the Internal Revenue Code and Section 23701 (d) of the California Revenue and Taxation Code respectively
Reclassifications Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation in the current year financial statements
Reporting of Subsequent Events The Organization has evaluated events and transactions for potential recognition or disclosure through September 7 2017 which represents the date the financial statements were available to be issued
NOTE 2 - ACCOUNTS RECEIVABLE CSULB AUXILIARY ORGANIZATIONS
Accounts receivable from CSULB auxiliary organizations are comprised of the following
June 30 2017 2016
CSULB Research Foundation $ $ 28234 Employee 3732 University Student Union 2650 Forty-Niner Foundation 6029 Associated Students 2432 11383
$ 45646 11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 3 - NOTE RECEIVABLE CSULB DEPARTMENT OF ATHLETICS
On March 23 2015 the Organization loaned $500000 to the Department of Athletics for the campus track and field improvement project The loan bared interest at 4 on a semiannual basis and had an original due date of September 23 2015 Interest was payable at each maturity date
During the year ended June 30 2016 the Department of Athletics paid the required interest installments of $20000 in September 2015 and again in March 2016 The parties agreed to extend the repayment of the loan
In September 2016 the Organization received full payment for the note
NOTE 4 -INVENTORIES
Inventories consist of the following June 30 2017 2016
New textbooks $ 884762 $ 715117 Computer equipment supplies and software 409232 473322 Supplies 488844 481274 Used textbooks 552565 513978 Trade books 5924 20493 Food service 386979 300293
$ 2727406 $ 2504477
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
Cost Market
NOTE 5 -INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2017 Cost Market
CURRENT ASSETS Mutual funds $4071190 $4375070 $5044679 $5041438 Common stocks 2539668 2940992 1000598 1181323 Investments in alternative funds 982884 993030 499136 499855
$7593742 $8309092 $6722616
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
2017 Buildings and improvements Equipment furniture and fixtures Automobiles
Less accumulated depreciation
Construction in progress
$ 19003699 6685136
46734 25735569
(17392621 ) 8342948
$19681399 6168813
25896946 (17796296)
8100650 493908
$ 8594558
Construction in progress at June 30 2017 consists primarily of capital leasehold improvement expenditures for the bookstore and food service facilities
DepreCiation expense for the years ended June 30 2017 and 2016 was $977635 and $985466 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 7 - INVESTMENTS DESIGNATED FOR SICK PAY
Investments designated for sick pay benefits are funds designated by the Organizations Board of Directors primarily for the funding of accumulated and vested sick pay
NOTE 8 - ACCOUNTS PAYABLE CSULB AUXILIARY ORGANIZATIONS
There were no accounts payable to CSULB auxiliary organizations at June 30 2017 and 2016
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2017 2016
Note payable to CSU is payable semiannually on May 1 and November 1 of each year includininterest and matures May 1 2039
g
$ 3215000 $ 3300000
Unamortized net deferred amount on refinancing 263768 3478768 3
276328 576328
Less Current portion 95000) ( 85000)
Noncurrent portion $ 3383768 $ 3491328
In 2008 the Organization borrowed $4110000 from CSU in connection with the construction of certain food service leasehold improvements The CSU assisted in financing the construction through the issuance of System wide Revenue Bonds Series 2008A by the State of California in the amount of $4110000
14
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 9 - LONG TERM DEBT (Continued)
On April 20 2016 CSU refinanced $3415000 of the System wide Revenue Bonds Series 2008A by issuing a $3125000 of System wide Revenue Bonds Series 2016A
Interest rates range from 2 to 5 with an average face coupon rate of 461 and effective rate of 332 The bonds will mature over the next 23 years with an average maturity of 1425 years
On May 12016 the loan agreement between the Organization and CSU was amended to reflect the refinancing of the bonds
The Organization is obligated to repay the CSU the amount of the indenture obligations interest and costs by making payments to the CSU equal to the CSUs debt service on the bonds The debt obligation is secured by the Organizations revenues
The future scheduled maturities of long term debt for the next five years and thereafter are as follows
Year ending June 30 2018 $ 95000 2019 90000 2020 90000 2021 95000 2022 100000 Thereafter 2745000
$3215000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley Smith Barney which has a zero balance at June 30 2017 The line of credit has a variable rate not to exceed the Open Federal rate plus 50 basis points and is secured by the Organizations investments held at MorganStanley Smith Barney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 10 - LEASE COMMITMENTS
The Organization leases certain property for the bookstore and food service facilities from California State University Long Beach (CSULB) and other unrelated third parties The agreements with CSULB require the Organization to manage and operate the facilities for the benefit of the University Under the terms of the leases the Organization is required to make monthly lease payments totaling $3000 and is responsible for repairs maintenance alterations and insurance The leases for the facilities are non-cancellable and expire in 2017 and 2018 with an option to renew for five years Non-cancellable operating lease agreements with Associated Students Inc and other unrelated third parties for retail and food service facilities commenced in 200720082011 and 2012 and expire in 20162018 and 2020 Monthly lease payments for these facilities total $8440
Also the Organization maintains equipment under non-cancellable operating leases The lease agreements expire between 2018 and 2022
Future minimum rental payments required for equipment and facilities under operating leases that have an initial or remaining non-cancellable lease term in excess of one year as of June 30 2017 are as follows
Year ending June 30
2018 $ 190842 2019 150981 2020 138161 2021 60161 2022 5316
$ 595461
Rent expense was $119384 and $114000 for the years ended June 30 2017 and 2016 respectiveIy
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 11 - OPERATING AGREEMENTS
The Organization has entered into certain non-cancellable operating agreements with selected food service providers for catering vending and other food services Royalties are due to the Organization based on a percentage of monthly gross sales of the Operator or a set annual amount whichever is greater Also the Operators will pay a percent of monthly gross sales for common area maintenance charges Initial terms of the leases vary from one to fifteen years and have varying expiration dates
The Organization has also entered into an agreement that contains guaranteed minimum commission payments Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2018 $ 175000 2019 200000 2020 200000 2021 200000
$ 775000
NOTE 12 - PENSION PLAN (CALPERS)
The Organization participates in a cost-sharing multiple-employer defined benefit plan through the California Public Employees Retirement System plan (CaIPERS) which covers substantially all regular salaried full-time employees of the Organization CalPERS acts as a common investment and administrative agent for partiCipating public entities within the State of California
17
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC STATEMENTS OF FINANCIAL POSITION (CONTINUED)
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES Long term debt current portion Accounts payable trade Accounts payable CSULB Refundable campus debit card deposits Accrued liabilities Accrued payroll Accrued vacation Accrued sick pay Pension obligation current Accrued post-retirement current
NONCURRENT LIABILITIES Long term debt net of current portion Pension obligation net of current portion Accrued postretirement benefits
Total Liabilities
NET ASSETS Unrestricted
Invested in capital assets Other unrestricted
Total Net Assets
TOTAL LIABILITIES AND NET ASSETS
JUNE 30 2017 2016
$ 95000 $ 85000 122697 131345 211788 213860 308544 312882 461007 459047 664118 548772 486449 459963 989603 930299 577603 474416 407000 409000
4323809 4024584
3383768 3491328 4660554 3724428 2778391 3782913
10822713 10998669 15146522 15023253
8486644 8594558 2547923 937109
11034567 9531667
~2sectj_e~ $24554920
See Independent Auditors Report and Jotes to Financial Statements 4
FORTY-NINER SHOPS INC STATEMENTS OF ACTIVITIES
JUNE 30 1
ENTERPRISE OPERATING REVENUES Sales Commission Vending Other
ENTERPRISE OPERATING EXPENSES Cost of sales Operating expenses Depreciation and amortization
ENTERPRISE OPERATING (LOSS) INCOME
NONOPERATING INCOME (EXPENSE) Interest and dividend income Interest imputed from net loan premiums and costs
Interest expense Unrealized gain (loss) on investments Realized gain (loss) on investments Net gain (loss) on disposal of fixed assets
NONMANDATORY TRANSFERS TO UNIVERSITY Contributions to University and
University programs
POST RETIREMENT -RELATED CHANGES OTHER THAN NET PERIODIC COST
INCREASE IN NET ASSETS
2017
$ 36290437 1394267
352627 116 1646
38153 1 977
16440145 20931513
977 1635 38349293
( 195316)
169148
12560 ( 152407)
552937 326159
5984 902413
273190
1068993
$ 1502900
2016
$ 36636425 954401 339183
82 1305 38 1012314
16550622 18356171
985466 35 1892259
2120 1055
279561
( ( ( ( (
1843 171911) 311727) 157672)
6788) 366694
( 314829)
( 1230670)
See Independent Auditors Report and Notes to Financial Statements 5
FORTY-NINER SHOPS INC STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30
2017 2016
BEGINNING NET ASSETS $ 9531667 $ 9323805
INCREASE IN NET ASSETS 1502900 207862
ENDING NET ASSETS $ 11034567 $ 9531667
See Independent Auditors Report and Notes to Financial Statements 6
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES Increase in net assets Adjustments to reconcile change in net assets
to net cash from operating activities Depreciation Amortization of loan discount Interest imputed from net loan
premiums and costs Unrealized (gain) loss on investments Realized (gain) loss on investments Net (gain) loss on disposal of fixed assets (Increase) decrease in
Accounts receivable Accounts receivable CSULB auxiliary
organizations Accounts receivable CSULB Note receivable CSULB Inventories Prepaid expenses
Increase (decrease) in Accounts payable Accounts payable CSULB Refundable campus debit card deposits Accrued liabilities Accrued payroll Accrued vacation Accrued sick pay Accrued pension obligation Accrued post retirement benefits
Net Cash From Operating Activities
FOR THE YEARS ENDED
2017 JUNE 30
2016
$1502900 $ 207862
977635 985466
12560) 552937) 326159)
5984
1843) 311727 157672
6788
367946 701974)
36832 25333)
500000 222929)
8071 )
37654) 184031
259764) 45250
9115) 1602) 4338) 1960
115346 26486 59304
1039313 ( 506522)
2964140
749495) 1475)
14032 156294 212076
37985 70389
163467 1000337 1801171
See Independent Auditors Report and Notes to Financial Statements 7
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED JUNE 30
2017 2016
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of capital assets Construction in progress additions Purchase of investments Proceeds from sale of investments Proceeds from sale of capital assets
Net Cash From Investment Activities
905471 )
( 5742895) 5065278
( 1 583088)
( ( (
345007) 424089)
3177541) 1895823
900 2049914)
CASH FLOWS FROM FINANCING ACTIVITIES Repayment of long term debt Proceeds from refinancing of long term debt Contributions to post retirement benefit trust
Net Cash From Financing Activities ( (
85000)
500000) 585000)
375000) 282911 500000 592089)
CHANGE IN CASH AND CASH EQUIVALENTS 796052 840832)
BEGINNING CASH AIID CASH EQUIVALENTS 3499447 4340279
ENDING CASH AND CASH EQUIVALENTS ~ 4295499 $ 3499447
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest $ 152000 $ 179000
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General The Organization is a nonprofit auxiliary organization organized to operate food services and bookstore activities at California State University Long Beach for the benefit of the University Campus The Organizations customer base consists primarily of students enrolled at California State University Long Beach
Basis of Presentation The Organizations financial statements are presented in accordance with guidelines established for auxiliary organizations issued by the Office of the Chancellor of the California State University
Contributions received are recorded as unrestricted temporarily restricted or permanently restricted support depending on the existence andor the nature of any donor restrictions The Organization has not received any contributions with donor-imposed restrictions that would result in temporarily or permanently restricted net assets
The Organization is required to report information regarding their financial position and activities according to three classes of net assets unrestricted net assets temporarily restricted net assets and permanently restricted assets The Organization does not have any temporarily or permanently restricted net assets
Basis of Accounting The accounting records of the Forty-Niner Shops Inc are maintained on the accrual basis of accounting
Change in Accounting Principle In April of 2015 the Financial Accounting Standards Board issued ASU-2015-03 Imputation of Interest ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability Similarly the discount on premium resulting from the determination of present value shall be reported in the statement of financial position as a direct deduction from or addition to the face amount of the note and shall not be classified as a deferred charge or deferred credit Amortization of discounts premiums and debt issuance costs shall be reported as either interest expense or interest income ASU 2015shy03 is effective for financial statements issued for fiscal years beginning after December 15 2015 Early adoption is permitted for financial statements that have not been previously issued
The Organization has adopted the new standard for the year ended June 30 2016
9
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounting 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 Significant estimates include annual depreciation the carrying value of property plant and equipment and the actuarial estimate of postretirement benefits Actual results could differ from those estimates
Fair Value of Financial Instruments Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer liability in an orderly transaction between market participants at the measurement date
Cash and Cash Equivalents Cash and cash equivalents includes highly liquid investments such as money market funds that are readily convertible to known amounts of cash within 90 days from the date of purchase All cash balances are held at major banking and broker institutions
Investments The Organization accounts for all investments at fair market value Net realized and unrealized gains and losses on investments are reflected in the statement of activities
Allowance for Doubtful Accounts No allowance for doubtful accounts has been established because management believes that all accounts are collectible and no allowance is needed
Inventories Inventories for the bookstore are valued using the lower of cost or market by the conventional retail inventory method Inventories for the food service are valued using the lower of cost (first-in first-out) or market method
Capital Assets and Depreciation Capital asset accounts are stated at cost less accumulated depreciation Betterments and major improvements are added to the respective assets cost while ordinary repairs that do not extend useful lives are expensed as incurred All direct and indirect costs incurred in constructing assets are accumulated in an asset account and no depreciation is recognized until the asset is put into operation When an asset is sold or otherwise disposed of the cost of the asset and the related accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the statement of activities
10
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Capital Assets and Depreciation (Continued) Depreciation and amortization of capital assets are provided on the straight-line method over the estimated useful lives of the various classes of property which are ten to fifty years for buildings and improvements five to ten years for equipment furniture and fixtures and three to five years for automobiles The capitalization thresholds are as follows buildings and building improvements - $10000 equipment and furniture - $2500 vehicles - all purchases are capitalized
Equipment acquired under capital leases are recorded at the lower of the fair value or the present value of future minimum lease payments These leases are amortized over their estimated useful lives of five years or the lease term whichever is shorter Amortization of equipment acquired under capitalized leases is included with depreciation expense
Accrued Vacation and Sick Pay Accruals for vacation and sick pay are made on a monthly basis as such benefits become payable to employees Pay rate increases are applied to the hours earned in prior periods if any and are reported as a current expense in the statement of activities
Income Taxes The Organization is exempt from federal income and state franchise taxes under Section 501 (c)(3) of the Internal Revenue Code and Section 23701 (d) of the California Revenue and Taxation Code respectively
Reclassifications Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation in the current year financial statements
Reporting of Subsequent Events The Organization has evaluated events and transactions for potential recognition or disclosure through September 7 2017 which represents the date the financial statements were available to be issued
NOTE 2 - ACCOUNTS RECEIVABLE CSULB AUXILIARY ORGANIZATIONS
Accounts receivable from CSULB auxiliary organizations are comprised of the following
June 30 2017 2016
CSULB Research Foundation $ $ 28234 Employee 3732 University Student Union 2650 Forty-Niner Foundation 6029 Associated Students 2432 11383
$ 45646 11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 3 - NOTE RECEIVABLE CSULB DEPARTMENT OF ATHLETICS
On March 23 2015 the Organization loaned $500000 to the Department of Athletics for the campus track and field improvement project The loan bared interest at 4 on a semiannual basis and had an original due date of September 23 2015 Interest was payable at each maturity date
During the year ended June 30 2016 the Department of Athletics paid the required interest installments of $20000 in September 2015 and again in March 2016 The parties agreed to extend the repayment of the loan
In September 2016 the Organization received full payment for the note
NOTE 4 -INVENTORIES
Inventories consist of the following June 30 2017 2016
New textbooks $ 884762 $ 715117 Computer equipment supplies and software 409232 473322 Supplies 488844 481274 Used textbooks 552565 513978 Trade books 5924 20493 Food service 386979 300293
$ 2727406 $ 2504477
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
Cost Market
NOTE 5 -INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2017 Cost Market
CURRENT ASSETS Mutual funds $4071190 $4375070 $5044679 $5041438 Common stocks 2539668 2940992 1000598 1181323 Investments in alternative funds 982884 993030 499136 499855
$7593742 $8309092 $6722616
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
2017 Buildings and improvements Equipment furniture and fixtures Automobiles
Less accumulated depreciation
Construction in progress
$ 19003699 6685136
46734 25735569
(17392621 ) 8342948
$19681399 6168813
25896946 (17796296)
8100650 493908
$ 8594558
Construction in progress at June 30 2017 consists primarily of capital leasehold improvement expenditures for the bookstore and food service facilities
DepreCiation expense for the years ended June 30 2017 and 2016 was $977635 and $985466 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 7 - INVESTMENTS DESIGNATED FOR SICK PAY
Investments designated for sick pay benefits are funds designated by the Organizations Board of Directors primarily for the funding of accumulated and vested sick pay
NOTE 8 - ACCOUNTS PAYABLE CSULB AUXILIARY ORGANIZATIONS
There were no accounts payable to CSULB auxiliary organizations at June 30 2017 and 2016
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2017 2016
Note payable to CSU is payable semiannually on May 1 and November 1 of each year includininterest and matures May 1 2039
g
$ 3215000 $ 3300000
Unamortized net deferred amount on refinancing 263768 3478768 3
276328 576328
Less Current portion 95000) ( 85000)
Noncurrent portion $ 3383768 $ 3491328
In 2008 the Organization borrowed $4110000 from CSU in connection with the construction of certain food service leasehold improvements The CSU assisted in financing the construction through the issuance of System wide Revenue Bonds Series 2008A by the State of California in the amount of $4110000
14
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 9 - LONG TERM DEBT (Continued)
On April 20 2016 CSU refinanced $3415000 of the System wide Revenue Bonds Series 2008A by issuing a $3125000 of System wide Revenue Bonds Series 2016A
Interest rates range from 2 to 5 with an average face coupon rate of 461 and effective rate of 332 The bonds will mature over the next 23 years with an average maturity of 1425 years
On May 12016 the loan agreement between the Organization and CSU was amended to reflect the refinancing of the bonds
The Organization is obligated to repay the CSU the amount of the indenture obligations interest and costs by making payments to the CSU equal to the CSUs debt service on the bonds The debt obligation is secured by the Organizations revenues
The future scheduled maturities of long term debt for the next five years and thereafter are as follows
Year ending June 30 2018 $ 95000 2019 90000 2020 90000 2021 95000 2022 100000 Thereafter 2745000
$3215000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley Smith Barney which has a zero balance at June 30 2017 The line of credit has a variable rate not to exceed the Open Federal rate plus 50 basis points and is secured by the Organizations investments held at MorganStanley Smith Barney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 10 - LEASE COMMITMENTS
The Organization leases certain property for the bookstore and food service facilities from California State University Long Beach (CSULB) and other unrelated third parties The agreements with CSULB require the Organization to manage and operate the facilities for the benefit of the University Under the terms of the leases the Organization is required to make monthly lease payments totaling $3000 and is responsible for repairs maintenance alterations and insurance The leases for the facilities are non-cancellable and expire in 2017 and 2018 with an option to renew for five years Non-cancellable operating lease agreements with Associated Students Inc and other unrelated third parties for retail and food service facilities commenced in 200720082011 and 2012 and expire in 20162018 and 2020 Monthly lease payments for these facilities total $8440
Also the Organization maintains equipment under non-cancellable operating leases The lease agreements expire between 2018 and 2022
Future minimum rental payments required for equipment and facilities under operating leases that have an initial or remaining non-cancellable lease term in excess of one year as of June 30 2017 are as follows
Year ending June 30
2018 $ 190842 2019 150981 2020 138161 2021 60161 2022 5316
$ 595461
Rent expense was $119384 and $114000 for the years ended June 30 2017 and 2016 respectiveIy
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 11 - OPERATING AGREEMENTS
The Organization has entered into certain non-cancellable operating agreements with selected food service providers for catering vending and other food services Royalties are due to the Organization based on a percentage of monthly gross sales of the Operator or a set annual amount whichever is greater Also the Operators will pay a percent of monthly gross sales for common area maintenance charges Initial terms of the leases vary from one to fifteen years and have varying expiration dates
The Organization has also entered into an agreement that contains guaranteed minimum commission payments Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2018 $ 175000 2019 200000 2020 200000 2021 200000
$ 775000
NOTE 12 - PENSION PLAN (CALPERS)
The Organization participates in a cost-sharing multiple-employer defined benefit plan through the California Public Employees Retirement System plan (CaIPERS) which covers substantially all regular salaried full-time employees of the Organization CalPERS acts as a common investment and administrative agent for partiCipating public entities within the State of California
17
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC STATEMENTS OF ACTIVITIES
JUNE 30 1
ENTERPRISE OPERATING REVENUES Sales Commission Vending Other
ENTERPRISE OPERATING EXPENSES Cost of sales Operating expenses Depreciation and amortization
ENTERPRISE OPERATING (LOSS) INCOME
NONOPERATING INCOME (EXPENSE) Interest and dividend income Interest imputed from net loan premiums and costs
Interest expense Unrealized gain (loss) on investments Realized gain (loss) on investments Net gain (loss) on disposal of fixed assets
NONMANDATORY TRANSFERS TO UNIVERSITY Contributions to University and
University programs
POST RETIREMENT -RELATED CHANGES OTHER THAN NET PERIODIC COST
INCREASE IN NET ASSETS
2017
$ 36290437 1394267
352627 116 1646
38153 1 977
16440145 20931513
977 1635 38349293
( 195316)
169148
12560 ( 152407)
552937 326159
5984 902413
273190
1068993
$ 1502900
2016
$ 36636425 954401 339183
82 1305 38 1012314
16550622 18356171
985466 35 1892259
2120 1055
279561
( ( ( ( (
1843 171911) 311727) 157672)
6788) 366694
( 314829)
( 1230670)
See Independent Auditors Report and Notes to Financial Statements 5
FORTY-NINER SHOPS INC STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30
2017 2016
BEGINNING NET ASSETS $ 9531667 $ 9323805
INCREASE IN NET ASSETS 1502900 207862
ENDING NET ASSETS $ 11034567 $ 9531667
See Independent Auditors Report and Notes to Financial Statements 6
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES Increase in net assets Adjustments to reconcile change in net assets
to net cash from operating activities Depreciation Amortization of loan discount Interest imputed from net loan
premiums and costs Unrealized (gain) loss on investments Realized (gain) loss on investments Net (gain) loss on disposal of fixed assets (Increase) decrease in
Accounts receivable Accounts receivable CSULB auxiliary
organizations Accounts receivable CSULB Note receivable CSULB Inventories Prepaid expenses
Increase (decrease) in Accounts payable Accounts payable CSULB Refundable campus debit card deposits Accrued liabilities Accrued payroll Accrued vacation Accrued sick pay Accrued pension obligation Accrued post retirement benefits
Net Cash From Operating Activities
FOR THE YEARS ENDED
2017 JUNE 30
2016
$1502900 $ 207862
977635 985466
12560) 552937) 326159)
5984
1843) 311727 157672
6788
367946 701974)
36832 25333)
500000 222929)
8071 )
37654) 184031
259764) 45250
9115) 1602) 4338) 1960
115346 26486 59304
1039313 ( 506522)
2964140
749495) 1475)
14032 156294 212076
37985 70389
163467 1000337 1801171
See Independent Auditors Report and Notes to Financial Statements 7
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED JUNE 30
2017 2016
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of capital assets Construction in progress additions Purchase of investments Proceeds from sale of investments Proceeds from sale of capital assets
Net Cash From Investment Activities
905471 )
( 5742895) 5065278
( 1 583088)
( ( (
345007) 424089)
3177541) 1895823
900 2049914)
CASH FLOWS FROM FINANCING ACTIVITIES Repayment of long term debt Proceeds from refinancing of long term debt Contributions to post retirement benefit trust
Net Cash From Financing Activities ( (
85000)
500000) 585000)
375000) 282911 500000 592089)
CHANGE IN CASH AND CASH EQUIVALENTS 796052 840832)
BEGINNING CASH AIID CASH EQUIVALENTS 3499447 4340279
ENDING CASH AND CASH EQUIVALENTS ~ 4295499 $ 3499447
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest $ 152000 $ 179000
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General The Organization is a nonprofit auxiliary organization organized to operate food services and bookstore activities at California State University Long Beach for the benefit of the University Campus The Organizations customer base consists primarily of students enrolled at California State University Long Beach
Basis of Presentation The Organizations financial statements are presented in accordance with guidelines established for auxiliary organizations issued by the Office of the Chancellor of the California State University
Contributions received are recorded as unrestricted temporarily restricted or permanently restricted support depending on the existence andor the nature of any donor restrictions The Organization has not received any contributions with donor-imposed restrictions that would result in temporarily or permanently restricted net assets
The Organization is required to report information regarding their financial position and activities according to three classes of net assets unrestricted net assets temporarily restricted net assets and permanently restricted assets The Organization does not have any temporarily or permanently restricted net assets
Basis of Accounting The accounting records of the Forty-Niner Shops Inc are maintained on the accrual basis of accounting
Change in Accounting Principle In April of 2015 the Financial Accounting Standards Board issued ASU-2015-03 Imputation of Interest ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability Similarly the discount on premium resulting from the determination of present value shall be reported in the statement of financial position as a direct deduction from or addition to the face amount of the note and shall not be classified as a deferred charge or deferred credit Amortization of discounts premiums and debt issuance costs shall be reported as either interest expense or interest income ASU 2015shy03 is effective for financial statements issued for fiscal years beginning after December 15 2015 Early adoption is permitted for financial statements that have not been previously issued
The Organization has adopted the new standard for the year ended June 30 2016
9
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounting 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 Significant estimates include annual depreciation the carrying value of property plant and equipment and the actuarial estimate of postretirement benefits Actual results could differ from those estimates
Fair Value of Financial Instruments Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer liability in an orderly transaction between market participants at the measurement date
Cash and Cash Equivalents Cash and cash equivalents includes highly liquid investments such as money market funds that are readily convertible to known amounts of cash within 90 days from the date of purchase All cash balances are held at major banking and broker institutions
Investments The Organization accounts for all investments at fair market value Net realized and unrealized gains and losses on investments are reflected in the statement of activities
Allowance for Doubtful Accounts No allowance for doubtful accounts has been established because management believes that all accounts are collectible and no allowance is needed
Inventories Inventories for the bookstore are valued using the lower of cost or market by the conventional retail inventory method Inventories for the food service are valued using the lower of cost (first-in first-out) or market method
Capital Assets and Depreciation Capital asset accounts are stated at cost less accumulated depreciation Betterments and major improvements are added to the respective assets cost while ordinary repairs that do not extend useful lives are expensed as incurred All direct and indirect costs incurred in constructing assets are accumulated in an asset account and no depreciation is recognized until the asset is put into operation When an asset is sold or otherwise disposed of the cost of the asset and the related accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the statement of activities
10
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Capital Assets and Depreciation (Continued) Depreciation and amortization of capital assets are provided on the straight-line method over the estimated useful lives of the various classes of property which are ten to fifty years for buildings and improvements five to ten years for equipment furniture and fixtures and three to five years for automobiles The capitalization thresholds are as follows buildings and building improvements - $10000 equipment and furniture - $2500 vehicles - all purchases are capitalized
Equipment acquired under capital leases are recorded at the lower of the fair value or the present value of future minimum lease payments These leases are amortized over their estimated useful lives of five years or the lease term whichever is shorter Amortization of equipment acquired under capitalized leases is included with depreciation expense
Accrued Vacation and Sick Pay Accruals for vacation and sick pay are made on a monthly basis as such benefits become payable to employees Pay rate increases are applied to the hours earned in prior periods if any and are reported as a current expense in the statement of activities
Income Taxes The Organization is exempt from federal income and state franchise taxes under Section 501 (c)(3) of the Internal Revenue Code and Section 23701 (d) of the California Revenue and Taxation Code respectively
Reclassifications Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation in the current year financial statements
Reporting of Subsequent Events The Organization has evaluated events and transactions for potential recognition or disclosure through September 7 2017 which represents the date the financial statements were available to be issued
NOTE 2 - ACCOUNTS RECEIVABLE CSULB AUXILIARY ORGANIZATIONS
Accounts receivable from CSULB auxiliary organizations are comprised of the following
June 30 2017 2016
CSULB Research Foundation $ $ 28234 Employee 3732 University Student Union 2650 Forty-Niner Foundation 6029 Associated Students 2432 11383
$ 45646 11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 3 - NOTE RECEIVABLE CSULB DEPARTMENT OF ATHLETICS
On March 23 2015 the Organization loaned $500000 to the Department of Athletics for the campus track and field improvement project The loan bared interest at 4 on a semiannual basis and had an original due date of September 23 2015 Interest was payable at each maturity date
During the year ended June 30 2016 the Department of Athletics paid the required interest installments of $20000 in September 2015 and again in March 2016 The parties agreed to extend the repayment of the loan
In September 2016 the Organization received full payment for the note
NOTE 4 -INVENTORIES
Inventories consist of the following June 30 2017 2016
New textbooks $ 884762 $ 715117 Computer equipment supplies and software 409232 473322 Supplies 488844 481274 Used textbooks 552565 513978 Trade books 5924 20493 Food service 386979 300293
$ 2727406 $ 2504477
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
Cost Market
NOTE 5 -INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2017 Cost Market
CURRENT ASSETS Mutual funds $4071190 $4375070 $5044679 $5041438 Common stocks 2539668 2940992 1000598 1181323 Investments in alternative funds 982884 993030 499136 499855
$7593742 $8309092 $6722616
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
2017 Buildings and improvements Equipment furniture and fixtures Automobiles
Less accumulated depreciation
Construction in progress
$ 19003699 6685136
46734 25735569
(17392621 ) 8342948
$19681399 6168813
25896946 (17796296)
8100650 493908
$ 8594558
Construction in progress at June 30 2017 consists primarily of capital leasehold improvement expenditures for the bookstore and food service facilities
DepreCiation expense for the years ended June 30 2017 and 2016 was $977635 and $985466 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 7 - INVESTMENTS DESIGNATED FOR SICK PAY
Investments designated for sick pay benefits are funds designated by the Organizations Board of Directors primarily for the funding of accumulated and vested sick pay
NOTE 8 - ACCOUNTS PAYABLE CSULB AUXILIARY ORGANIZATIONS
There were no accounts payable to CSULB auxiliary organizations at June 30 2017 and 2016
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2017 2016
Note payable to CSU is payable semiannually on May 1 and November 1 of each year includininterest and matures May 1 2039
g
$ 3215000 $ 3300000
Unamortized net deferred amount on refinancing 263768 3478768 3
276328 576328
Less Current portion 95000) ( 85000)
Noncurrent portion $ 3383768 $ 3491328
In 2008 the Organization borrowed $4110000 from CSU in connection with the construction of certain food service leasehold improvements The CSU assisted in financing the construction through the issuance of System wide Revenue Bonds Series 2008A by the State of California in the amount of $4110000
14
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 9 - LONG TERM DEBT (Continued)
On April 20 2016 CSU refinanced $3415000 of the System wide Revenue Bonds Series 2008A by issuing a $3125000 of System wide Revenue Bonds Series 2016A
Interest rates range from 2 to 5 with an average face coupon rate of 461 and effective rate of 332 The bonds will mature over the next 23 years with an average maturity of 1425 years
On May 12016 the loan agreement between the Organization and CSU was amended to reflect the refinancing of the bonds
The Organization is obligated to repay the CSU the amount of the indenture obligations interest and costs by making payments to the CSU equal to the CSUs debt service on the bonds The debt obligation is secured by the Organizations revenues
The future scheduled maturities of long term debt for the next five years and thereafter are as follows
Year ending June 30 2018 $ 95000 2019 90000 2020 90000 2021 95000 2022 100000 Thereafter 2745000
$3215000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley Smith Barney which has a zero balance at June 30 2017 The line of credit has a variable rate not to exceed the Open Federal rate plus 50 basis points and is secured by the Organizations investments held at MorganStanley Smith Barney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 10 - LEASE COMMITMENTS
The Organization leases certain property for the bookstore and food service facilities from California State University Long Beach (CSULB) and other unrelated third parties The agreements with CSULB require the Organization to manage and operate the facilities for the benefit of the University Under the terms of the leases the Organization is required to make monthly lease payments totaling $3000 and is responsible for repairs maintenance alterations and insurance The leases for the facilities are non-cancellable and expire in 2017 and 2018 with an option to renew for five years Non-cancellable operating lease agreements with Associated Students Inc and other unrelated third parties for retail and food service facilities commenced in 200720082011 and 2012 and expire in 20162018 and 2020 Monthly lease payments for these facilities total $8440
Also the Organization maintains equipment under non-cancellable operating leases The lease agreements expire between 2018 and 2022
Future minimum rental payments required for equipment and facilities under operating leases that have an initial or remaining non-cancellable lease term in excess of one year as of June 30 2017 are as follows
Year ending June 30
2018 $ 190842 2019 150981 2020 138161 2021 60161 2022 5316
$ 595461
Rent expense was $119384 and $114000 for the years ended June 30 2017 and 2016 respectiveIy
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 11 - OPERATING AGREEMENTS
The Organization has entered into certain non-cancellable operating agreements with selected food service providers for catering vending and other food services Royalties are due to the Organization based on a percentage of monthly gross sales of the Operator or a set annual amount whichever is greater Also the Operators will pay a percent of monthly gross sales for common area maintenance charges Initial terms of the leases vary from one to fifteen years and have varying expiration dates
The Organization has also entered into an agreement that contains guaranteed minimum commission payments Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2018 $ 175000 2019 200000 2020 200000 2021 200000
$ 775000
NOTE 12 - PENSION PLAN (CALPERS)
The Organization participates in a cost-sharing multiple-employer defined benefit plan through the California Public Employees Retirement System plan (CaIPERS) which covers substantially all regular salaried full-time employees of the Organization CalPERS acts as a common investment and administrative agent for partiCipating public entities within the State of California
17
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30
2017 2016
BEGINNING NET ASSETS $ 9531667 $ 9323805
INCREASE IN NET ASSETS 1502900 207862
ENDING NET ASSETS $ 11034567 $ 9531667
See Independent Auditors Report and Notes to Financial Statements 6
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES Increase in net assets Adjustments to reconcile change in net assets
to net cash from operating activities Depreciation Amortization of loan discount Interest imputed from net loan
premiums and costs Unrealized (gain) loss on investments Realized (gain) loss on investments Net (gain) loss on disposal of fixed assets (Increase) decrease in
Accounts receivable Accounts receivable CSULB auxiliary
organizations Accounts receivable CSULB Note receivable CSULB Inventories Prepaid expenses
Increase (decrease) in Accounts payable Accounts payable CSULB Refundable campus debit card deposits Accrued liabilities Accrued payroll Accrued vacation Accrued sick pay Accrued pension obligation Accrued post retirement benefits
Net Cash From Operating Activities
FOR THE YEARS ENDED
2017 JUNE 30
2016
$1502900 $ 207862
977635 985466
12560) 552937) 326159)
5984
1843) 311727 157672
6788
367946 701974)
36832 25333)
500000 222929)
8071 )
37654) 184031
259764) 45250
9115) 1602) 4338) 1960
115346 26486 59304
1039313 ( 506522)
2964140
749495) 1475)
14032 156294 212076
37985 70389
163467 1000337 1801171
See Independent Auditors Report and Notes to Financial Statements 7
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED JUNE 30
2017 2016
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of capital assets Construction in progress additions Purchase of investments Proceeds from sale of investments Proceeds from sale of capital assets
Net Cash From Investment Activities
905471 )
( 5742895) 5065278
( 1 583088)
( ( (
345007) 424089)
3177541) 1895823
900 2049914)
CASH FLOWS FROM FINANCING ACTIVITIES Repayment of long term debt Proceeds from refinancing of long term debt Contributions to post retirement benefit trust
Net Cash From Financing Activities ( (
85000)
500000) 585000)
375000) 282911 500000 592089)
CHANGE IN CASH AND CASH EQUIVALENTS 796052 840832)
BEGINNING CASH AIID CASH EQUIVALENTS 3499447 4340279
ENDING CASH AND CASH EQUIVALENTS ~ 4295499 $ 3499447
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest $ 152000 $ 179000
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General The Organization is a nonprofit auxiliary organization organized to operate food services and bookstore activities at California State University Long Beach for the benefit of the University Campus The Organizations customer base consists primarily of students enrolled at California State University Long Beach
Basis of Presentation The Organizations financial statements are presented in accordance with guidelines established for auxiliary organizations issued by the Office of the Chancellor of the California State University
Contributions received are recorded as unrestricted temporarily restricted or permanently restricted support depending on the existence andor the nature of any donor restrictions The Organization has not received any contributions with donor-imposed restrictions that would result in temporarily or permanently restricted net assets
The Organization is required to report information regarding their financial position and activities according to three classes of net assets unrestricted net assets temporarily restricted net assets and permanently restricted assets The Organization does not have any temporarily or permanently restricted net assets
Basis of Accounting The accounting records of the Forty-Niner Shops Inc are maintained on the accrual basis of accounting
Change in Accounting Principle In April of 2015 the Financial Accounting Standards Board issued ASU-2015-03 Imputation of Interest ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability Similarly the discount on premium resulting from the determination of present value shall be reported in the statement of financial position as a direct deduction from or addition to the face amount of the note and shall not be classified as a deferred charge or deferred credit Amortization of discounts premiums and debt issuance costs shall be reported as either interest expense or interest income ASU 2015shy03 is effective for financial statements issued for fiscal years beginning after December 15 2015 Early adoption is permitted for financial statements that have not been previously issued
The Organization has adopted the new standard for the year ended June 30 2016
9
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounting 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 Significant estimates include annual depreciation the carrying value of property plant and equipment and the actuarial estimate of postretirement benefits Actual results could differ from those estimates
Fair Value of Financial Instruments Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer liability in an orderly transaction between market participants at the measurement date
Cash and Cash Equivalents Cash and cash equivalents includes highly liquid investments such as money market funds that are readily convertible to known amounts of cash within 90 days from the date of purchase All cash balances are held at major banking and broker institutions
Investments The Organization accounts for all investments at fair market value Net realized and unrealized gains and losses on investments are reflected in the statement of activities
Allowance for Doubtful Accounts No allowance for doubtful accounts has been established because management believes that all accounts are collectible and no allowance is needed
Inventories Inventories for the bookstore are valued using the lower of cost or market by the conventional retail inventory method Inventories for the food service are valued using the lower of cost (first-in first-out) or market method
Capital Assets and Depreciation Capital asset accounts are stated at cost less accumulated depreciation Betterments and major improvements are added to the respective assets cost while ordinary repairs that do not extend useful lives are expensed as incurred All direct and indirect costs incurred in constructing assets are accumulated in an asset account and no depreciation is recognized until the asset is put into operation When an asset is sold or otherwise disposed of the cost of the asset and the related accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the statement of activities
10
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Capital Assets and Depreciation (Continued) Depreciation and amortization of capital assets are provided on the straight-line method over the estimated useful lives of the various classes of property which are ten to fifty years for buildings and improvements five to ten years for equipment furniture and fixtures and three to five years for automobiles The capitalization thresholds are as follows buildings and building improvements - $10000 equipment and furniture - $2500 vehicles - all purchases are capitalized
Equipment acquired under capital leases are recorded at the lower of the fair value or the present value of future minimum lease payments These leases are amortized over their estimated useful lives of five years or the lease term whichever is shorter Amortization of equipment acquired under capitalized leases is included with depreciation expense
Accrued Vacation and Sick Pay Accruals for vacation and sick pay are made on a monthly basis as such benefits become payable to employees Pay rate increases are applied to the hours earned in prior periods if any and are reported as a current expense in the statement of activities
Income Taxes The Organization is exempt from federal income and state franchise taxes under Section 501 (c)(3) of the Internal Revenue Code and Section 23701 (d) of the California Revenue and Taxation Code respectively
Reclassifications Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation in the current year financial statements
Reporting of Subsequent Events The Organization has evaluated events and transactions for potential recognition or disclosure through September 7 2017 which represents the date the financial statements were available to be issued
NOTE 2 - ACCOUNTS RECEIVABLE CSULB AUXILIARY ORGANIZATIONS
Accounts receivable from CSULB auxiliary organizations are comprised of the following
June 30 2017 2016
CSULB Research Foundation $ $ 28234 Employee 3732 University Student Union 2650 Forty-Niner Foundation 6029 Associated Students 2432 11383
$ 45646 11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 3 - NOTE RECEIVABLE CSULB DEPARTMENT OF ATHLETICS
On March 23 2015 the Organization loaned $500000 to the Department of Athletics for the campus track and field improvement project The loan bared interest at 4 on a semiannual basis and had an original due date of September 23 2015 Interest was payable at each maturity date
During the year ended June 30 2016 the Department of Athletics paid the required interest installments of $20000 in September 2015 and again in March 2016 The parties agreed to extend the repayment of the loan
In September 2016 the Organization received full payment for the note
NOTE 4 -INVENTORIES
Inventories consist of the following June 30 2017 2016
New textbooks $ 884762 $ 715117 Computer equipment supplies and software 409232 473322 Supplies 488844 481274 Used textbooks 552565 513978 Trade books 5924 20493 Food service 386979 300293
$ 2727406 $ 2504477
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
Cost Market
NOTE 5 -INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2017 Cost Market
CURRENT ASSETS Mutual funds $4071190 $4375070 $5044679 $5041438 Common stocks 2539668 2940992 1000598 1181323 Investments in alternative funds 982884 993030 499136 499855
$7593742 $8309092 $6722616
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
2017 Buildings and improvements Equipment furniture and fixtures Automobiles
Less accumulated depreciation
Construction in progress
$ 19003699 6685136
46734 25735569
(17392621 ) 8342948
$19681399 6168813
25896946 (17796296)
8100650 493908
$ 8594558
Construction in progress at June 30 2017 consists primarily of capital leasehold improvement expenditures for the bookstore and food service facilities
DepreCiation expense for the years ended June 30 2017 and 2016 was $977635 and $985466 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 7 - INVESTMENTS DESIGNATED FOR SICK PAY
Investments designated for sick pay benefits are funds designated by the Organizations Board of Directors primarily for the funding of accumulated and vested sick pay
NOTE 8 - ACCOUNTS PAYABLE CSULB AUXILIARY ORGANIZATIONS
There were no accounts payable to CSULB auxiliary organizations at June 30 2017 and 2016
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2017 2016
Note payable to CSU is payable semiannually on May 1 and November 1 of each year includininterest and matures May 1 2039
g
$ 3215000 $ 3300000
Unamortized net deferred amount on refinancing 263768 3478768 3
276328 576328
Less Current portion 95000) ( 85000)
Noncurrent portion $ 3383768 $ 3491328
In 2008 the Organization borrowed $4110000 from CSU in connection with the construction of certain food service leasehold improvements The CSU assisted in financing the construction through the issuance of System wide Revenue Bonds Series 2008A by the State of California in the amount of $4110000
14
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 9 - LONG TERM DEBT (Continued)
On April 20 2016 CSU refinanced $3415000 of the System wide Revenue Bonds Series 2008A by issuing a $3125000 of System wide Revenue Bonds Series 2016A
Interest rates range from 2 to 5 with an average face coupon rate of 461 and effective rate of 332 The bonds will mature over the next 23 years with an average maturity of 1425 years
On May 12016 the loan agreement between the Organization and CSU was amended to reflect the refinancing of the bonds
The Organization is obligated to repay the CSU the amount of the indenture obligations interest and costs by making payments to the CSU equal to the CSUs debt service on the bonds The debt obligation is secured by the Organizations revenues
The future scheduled maturities of long term debt for the next five years and thereafter are as follows
Year ending June 30 2018 $ 95000 2019 90000 2020 90000 2021 95000 2022 100000 Thereafter 2745000
$3215000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley Smith Barney which has a zero balance at June 30 2017 The line of credit has a variable rate not to exceed the Open Federal rate plus 50 basis points and is secured by the Organizations investments held at MorganStanley Smith Barney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 10 - LEASE COMMITMENTS
The Organization leases certain property for the bookstore and food service facilities from California State University Long Beach (CSULB) and other unrelated third parties The agreements with CSULB require the Organization to manage and operate the facilities for the benefit of the University Under the terms of the leases the Organization is required to make monthly lease payments totaling $3000 and is responsible for repairs maintenance alterations and insurance The leases for the facilities are non-cancellable and expire in 2017 and 2018 with an option to renew for five years Non-cancellable operating lease agreements with Associated Students Inc and other unrelated third parties for retail and food service facilities commenced in 200720082011 and 2012 and expire in 20162018 and 2020 Monthly lease payments for these facilities total $8440
Also the Organization maintains equipment under non-cancellable operating leases The lease agreements expire between 2018 and 2022
Future minimum rental payments required for equipment and facilities under operating leases that have an initial or remaining non-cancellable lease term in excess of one year as of June 30 2017 are as follows
Year ending June 30
2018 $ 190842 2019 150981 2020 138161 2021 60161 2022 5316
$ 595461
Rent expense was $119384 and $114000 for the years ended June 30 2017 and 2016 respectiveIy
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 11 - OPERATING AGREEMENTS
The Organization has entered into certain non-cancellable operating agreements with selected food service providers for catering vending and other food services Royalties are due to the Organization based on a percentage of monthly gross sales of the Operator or a set annual amount whichever is greater Also the Operators will pay a percent of monthly gross sales for common area maintenance charges Initial terms of the leases vary from one to fifteen years and have varying expiration dates
The Organization has also entered into an agreement that contains guaranteed minimum commission payments Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2018 $ 175000 2019 200000 2020 200000 2021 200000
$ 775000
NOTE 12 - PENSION PLAN (CALPERS)
The Organization participates in a cost-sharing multiple-employer defined benefit plan through the California Public Employees Retirement System plan (CaIPERS) which covers substantially all regular salaried full-time employees of the Organization CalPERS acts as a common investment and administrative agent for partiCipating public entities within the State of California
17
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES Increase in net assets Adjustments to reconcile change in net assets
to net cash from operating activities Depreciation Amortization of loan discount Interest imputed from net loan
premiums and costs Unrealized (gain) loss on investments Realized (gain) loss on investments Net (gain) loss on disposal of fixed assets (Increase) decrease in
Accounts receivable Accounts receivable CSULB auxiliary
organizations Accounts receivable CSULB Note receivable CSULB Inventories Prepaid expenses
Increase (decrease) in Accounts payable Accounts payable CSULB Refundable campus debit card deposits Accrued liabilities Accrued payroll Accrued vacation Accrued sick pay Accrued pension obligation Accrued post retirement benefits
Net Cash From Operating Activities
FOR THE YEARS ENDED
2017 JUNE 30
2016
$1502900 $ 207862
977635 985466
12560) 552937) 326159)
5984
1843) 311727 157672
6788
367946 701974)
36832 25333)
500000 222929)
8071 )
37654) 184031
259764) 45250
9115) 1602) 4338) 1960
115346 26486 59304
1039313 ( 506522)
2964140
749495) 1475)
14032 156294 212076
37985 70389
163467 1000337 1801171
See Independent Auditors Report and Notes to Financial Statements 7
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED JUNE 30
2017 2016
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of capital assets Construction in progress additions Purchase of investments Proceeds from sale of investments Proceeds from sale of capital assets
Net Cash From Investment Activities
905471 )
( 5742895) 5065278
( 1 583088)
( ( (
345007) 424089)
3177541) 1895823
900 2049914)
CASH FLOWS FROM FINANCING ACTIVITIES Repayment of long term debt Proceeds from refinancing of long term debt Contributions to post retirement benefit trust
Net Cash From Financing Activities ( (
85000)
500000) 585000)
375000) 282911 500000 592089)
CHANGE IN CASH AND CASH EQUIVALENTS 796052 840832)
BEGINNING CASH AIID CASH EQUIVALENTS 3499447 4340279
ENDING CASH AND CASH EQUIVALENTS ~ 4295499 $ 3499447
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest $ 152000 $ 179000
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General The Organization is a nonprofit auxiliary organization organized to operate food services and bookstore activities at California State University Long Beach for the benefit of the University Campus The Organizations customer base consists primarily of students enrolled at California State University Long Beach
Basis of Presentation The Organizations financial statements are presented in accordance with guidelines established for auxiliary organizations issued by the Office of the Chancellor of the California State University
Contributions received are recorded as unrestricted temporarily restricted or permanently restricted support depending on the existence andor the nature of any donor restrictions The Organization has not received any contributions with donor-imposed restrictions that would result in temporarily or permanently restricted net assets
The Organization is required to report information regarding their financial position and activities according to three classes of net assets unrestricted net assets temporarily restricted net assets and permanently restricted assets The Organization does not have any temporarily or permanently restricted net assets
Basis of Accounting The accounting records of the Forty-Niner Shops Inc are maintained on the accrual basis of accounting
Change in Accounting Principle In April of 2015 the Financial Accounting Standards Board issued ASU-2015-03 Imputation of Interest ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability Similarly the discount on premium resulting from the determination of present value shall be reported in the statement of financial position as a direct deduction from or addition to the face amount of the note and shall not be classified as a deferred charge or deferred credit Amortization of discounts premiums and debt issuance costs shall be reported as either interest expense or interest income ASU 2015shy03 is effective for financial statements issued for fiscal years beginning after December 15 2015 Early adoption is permitted for financial statements that have not been previously issued
The Organization has adopted the new standard for the year ended June 30 2016
9
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounting 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 Significant estimates include annual depreciation the carrying value of property plant and equipment and the actuarial estimate of postretirement benefits Actual results could differ from those estimates
Fair Value of Financial Instruments Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer liability in an orderly transaction between market participants at the measurement date
Cash and Cash Equivalents Cash and cash equivalents includes highly liquid investments such as money market funds that are readily convertible to known amounts of cash within 90 days from the date of purchase All cash balances are held at major banking and broker institutions
Investments The Organization accounts for all investments at fair market value Net realized and unrealized gains and losses on investments are reflected in the statement of activities
Allowance for Doubtful Accounts No allowance for doubtful accounts has been established because management believes that all accounts are collectible and no allowance is needed
Inventories Inventories for the bookstore are valued using the lower of cost or market by the conventional retail inventory method Inventories for the food service are valued using the lower of cost (first-in first-out) or market method
Capital Assets and Depreciation Capital asset accounts are stated at cost less accumulated depreciation Betterments and major improvements are added to the respective assets cost while ordinary repairs that do not extend useful lives are expensed as incurred All direct and indirect costs incurred in constructing assets are accumulated in an asset account and no depreciation is recognized until the asset is put into operation When an asset is sold or otherwise disposed of the cost of the asset and the related accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the statement of activities
10
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Capital Assets and Depreciation (Continued) Depreciation and amortization of capital assets are provided on the straight-line method over the estimated useful lives of the various classes of property which are ten to fifty years for buildings and improvements five to ten years for equipment furniture and fixtures and three to five years for automobiles The capitalization thresholds are as follows buildings and building improvements - $10000 equipment and furniture - $2500 vehicles - all purchases are capitalized
Equipment acquired under capital leases are recorded at the lower of the fair value or the present value of future minimum lease payments These leases are amortized over their estimated useful lives of five years or the lease term whichever is shorter Amortization of equipment acquired under capitalized leases is included with depreciation expense
Accrued Vacation and Sick Pay Accruals for vacation and sick pay are made on a monthly basis as such benefits become payable to employees Pay rate increases are applied to the hours earned in prior periods if any and are reported as a current expense in the statement of activities
Income Taxes The Organization is exempt from federal income and state franchise taxes under Section 501 (c)(3) of the Internal Revenue Code and Section 23701 (d) of the California Revenue and Taxation Code respectively
Reclassifications Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation in the current year financial statements
Reporting of Subsequent Events The Organization has evaluated events and transactions for potential recognition or disclosure through September 7 2017 which represents the date the financial statements were available to be issued
NOTE 2 - ACCOUNTS RECEIVABLE CSULB AUXILIARY ORGANIZATIONS
Accounts receivable from CSULB auxiliary organizations are comprised of the following
June 30 2017 2016
CSULB Research Foundation $ $ 28234 Employee 3732 University Student Union 2650 Forty-Niner Foundation 6029 Associated Students 2432 11383
$ 45646 11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 3 - NOTE RECEIVABLE CSULB DEPARTMENT OF ATHLETICS
On March 23 2015 the Organization loaned $500000 to the Department of Athletics for the campus track and field improvement project The loan bared interest at 4 on a semiannual basis and had an original due date of September 23 2015 Interest was payable at each maturity date
During the year ended June 30 2016 the Department of Athletics paid the required interest installments of $20000 in September 2015 and again in March 2016 The parties agreed to extend the repayment of the loan
In September 2016 the Organization received full payment for the note
NOTE 4 -INVENTORIES
Inventories consist of the following June 30 2017 2016
New textbooks $ 884762 $ 715117 Computer equipment supplies and software 409232 473322 Supplies 488844 481274 Used textbooks 552565 513978 Trade books 5924 20493 Food service 386979 300293
$ 2727406 $ 2504477
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
Cost Market
NOTE 5 -INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2017 Cost Market
CURRENT ASSETS Mutual funds $4071190 $4375070 $5044679 $5041438 Common stocks 2539668 2940992 1000598 1181323 Investments in alternative funds 982884 993030 499136 499855
$7593742 $8309092 $6722616
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
2017 Buildings and improvements Equipment furniture and fixtures Automobiles
Less accumulated depreciation
Construction in progress
$ 19003699 6685136
46734 25735569
(17392621 ) 8342948
$19681399 6168813
25896946 (17796296)
8100650 493908
$ 8594558
Construction in progress at June 30 2017 consists primarily of capital leasehold improvement expenditures for the bookstore and food service facilities
DepreCiation expense for the years ended June 30 2017 and 2016 was $977635 and $985466 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 7 - INVESTMENTS DESIGNATED FOR SICK PAY
Investments designated for sick pay benefits are funds designated by the Organizations Board of Directors primarily for the funding of accumulated and vested sick pay
NOTE 8 - ACCOUNTS PAYABLE CSULB AUXILIARY ORGANIZATIONS
There were no accounts payable to CSULB auxiliary organizations at June 30 2017 and 2016
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2017 2016
Note payable to CSU is payable semiannually on May 1 and November 1 of each year includininterest and matures May 1 2039
g
$ 3215000 $ 3300000
Unamortized net deferred amount on refinancing 263768 3478768 3
276328 576328
Less Current portion 95000) ( 85000)
Noncurrent portion $ 3383768 $ 3491328
In 2008 the Organization borrowed $4110000 from CSU in connection with the construction of certain food service leasehold improvements The CSU assisted in financing the construction through the issuance of System wide Revenue Bonds Series 2008A by the State of California in the amount of $4110000
14
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 9 - LONG TERM DEBT (Continued)
On April 20 2016 CSU refinanced $3415000 of the System wide Revenue Bonds Series 2008A by issuing a $3125000 of System wide Revenue Bonds Series 2016A
Interest rates range from 2 to 5 with an average face coupon rate of 461 and effective rate of 332 The bonds will mature over the next 23 years with an average maturity of 1425 years
On May 12016 the loan agreement between the Organization and CSU was amended to reflect the refinancing of the bonds
The Organization is obligated to repay the CSU the amount of the indenture obligations interest and costs by making payments to the CSU equal to the CSUs debt service on the bonds The debt obligation is secured by the Organizations revenues
The future scheduled maturities of long term debt for the next five years and thereafter are as follows
Year ending June 30 2018 $ 95000 2019 90000 2020 90000 2021 95000 2022 100000 Thereafter 2745000
$3215000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley Smith Barney which has a zero balance at June 30 2017 The line of credit has a variable rate not to exceed the Open Federal rate plus 50 basis points and is secured by the Organizations investments held at MorganStanley Smith Barney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 10 - LEASE COMMITMENTS
The Organization leases certain property for the bookstore and food service facilities from California State University Long Beach (CSULB) and other unrelated third parties The agreements with CSULB require the Organization to manage and operate the facilities for the benefit of the University Under the terms of the leases the Organization is required to make monthly lease payments totaling $3000 and is responsible for repairs maintenance alterations and insurance The leases for the facilities are non-cancellable and expire in 2017 and 2018 with an option to renew for five years Non-cancellable operating lease agreements with Associated Students Inc and other unrelated third parties for retail and food service facilities commenced in 200720082011 and 2012 and expire in 20162018 and 2020 Monthly lease payments for these facilities total $8440
Also the Organization maintains equipment under non-cancellable operating leases The lease agreements expire between 2018 and 2022
Future minimum rental payments required for equipment and facilities under operating leases that have an initial or remaining non-cancellable lease term in excess of one year as of June 30 2017 are as follows
Year ending June 30
2018 $ 190842 2019 150981 2020 138161 2021 60161 2022 5316
$ 595461
Rent expense was $119384 and $114000 for the years ended June 30 2017 and 2016 respectiveIy
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 11 - OPERATING AGREEMENTS
The Organization has entered into certain non-cancellable operating agreements with selected food service providers for catering vending and other food services Royalties are due to the Organization based on a percentage of monthly gross sales of the Operator or a set annual amount whichever is greater Also the Operators will pay a percent of monthly gross sales for common area maintenance charges Initial terms of the leases vary from one to fifteen years and have varying expiration dates
The Organization has also entered into an agreement that contains guaranteed minimum commission payments Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2018 $ 175000 2019 200000 2020 200000 2021 200000
$ 775000
NOTE 12 - PENSION PLAN (CALPERS)
The Organization participates in a cost-sharing multiple-employer defined benefit plan through the California Public Employees Retirement System plan (CaIPERS) which covers substantially all regular salaried full-time employees of the Organization CalPERS acts as a common investment and administrative agent for partiCipating public entities within the State of California
17
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED JUNE 30
2017 2016
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of capital assets Construction in progress additions Purchase of investments Proceeds from sale of investments Proceeds from sale of capital assets
Net Cash From Investment Activities
905471 )
( 5742895) 5065278
( 1 583088)
( ( (
345007) 424089)
3177541) 1895823
900 2049914)
CASH FLOWS FROM FINANCING ACTIVITIES Repayment of long term debt Proceeds from refinancing of long term debt Contributions to post retirement benefit trust
Net Cash From Financing Activities ( (
85000)
500000) 585000)
375000) 282911 500000 592089)
CHANGE IN CASH AND CASH EQUIVALENTS 796052 840832)
BEGINNING CASH AIID CASH EQUIVALENTS 3499447 4340279
ENDING CASH AND CASH EQUIVALENTS ~ 4295499 $ 3499447
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest $ 152000 $ 179000
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General The Organization is a nonprofit auxiliary organization organized to operate food services and bookstore activities at California State University Long Beach for the benefit of the University Campus The Organizations customer base consists primarily of students enrolled at California State University Long Beach
Basis of Presentation The Organizations financial statements are presented in accordance with guidelines established for auxiliary organizations issued by the Office of the Chancellor of the California State University
Contributions received are recorded as unrestricted temporarily restricted or permanently restricted support depending on the existence andor the nature of any donor restrictions The Organization has not received any contributions with donor-imposed restrictions that would result in temporarily or permanently restricted net assets
The Organization is required to report information regarding their financial position and activities according to three classes of net assets unrestricted net assets temporarily restricted net assets and permanently restricted assets The Organization does not have any temporarily or permanently restricted net assets
Basis of Accounting The accounting records of the Forty-Niner Shops Inc are maintained on the accrual basis of accounting
Change in Accounting Principle In April of 2015 the Financial Accounting Standards Board issued ASU-2015-03 Imputation of Interest ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability Similarly the discount on premium resulting from the determination of present value shall be reported in the statement of financial position as a direct deduction from or addition to the face amount of the note and shall not be classified as a deferred charge or deferred credit Amortization of discounts premiums and debt issuance costs shall be reported as either interest expense or interest income ASU 2015shy03 is effective for financial statements issued for fiscal years beginning after December 15 2015 Early adoption is permitted for financial statements that have not been previously issued
The Organization has adopted the new standard for the year ended June 30 2016
9
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounting 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 Significant estimates include annual depreciation the carrying value of property plant and equipment and the actuarial estimate of postretirement benefits Actual results could differ from those estimates
Fair Value of Financial Instruments Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer liability in an orderly transaction between market participants at the measurement date
Cash and Cash Equivalents Cash and cash equivalents includes highly liquid investments such as money market funds that are readily convertible to known amounts of cash within 90 days from the date of purchase All cash balances are held at major banking and broker institutions
Investments The Organization accounts for all investments at fair market value Net realized and unrealized gains and losses on investments are reflected in the statement of activities
Allowance for Doubtful Accounts No allowance for doubtful accounts has been established because management believes that all accounts are collectible and no allowance is needed
Inventories Inventories for the bookstore are valued using the lower of cost or market by the conventional retail inventory method Inventories for the food service are valued using the lower of cost (first-in first-out) or market method
Capital Assets and Depreciation Capital asset accounts are stated at cost less accumulated depreciation Betterments and major improvements are added to the respective assets cost while ordinary repairs that do not extend useful lives are expensed as incurred All direct and indirect costs incurred in constructing assets are accumulated in an asset account and no depreciation is recognized until the asset is put into operation When an asset is sold or otherwise disposed of the cost of the asset and the related accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the statement of activities
10
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Capital Assets and Depreciation (Continued) Depreciation and amortization of capital assets are provided on the straight-line method over the estimated useful lives of the various classes of property which are ten to fifty years for buildings and improvements five to ten years for equipment furniture and fixtures and three to five years for automobiles The capitalization thresholds are as follows buildings and building improvements - $10000 equipment and furniture - $2500 vehicles - all purchases are capitalized
Equipment acquired under capital leases are recorded at the lower of the fair value or the present value of future minimum lease payments These leases are amortized over their estimated useful lives of five years or the lease term whichever is shorter Amortization of equipment acquired under capitalized leases is included with depreciation expense
Accrued Vacation and Sick Pay Accruals for vacation and sick pay are made on a monthly basis as such benefits become payable to employees Pay rate increases are applied to the hours earned in prior periods if any and are reported as a current expense in the statement of activities
Income Taxes The Organization is exempt from federal income and state franchise taxes under Section 501 (c)(3) of the Internal Revenue Code and Section 23701 (d) of the California Revenue and Taxation Code respectively
Reclassifications Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation in the current year financial statements
Reporting of Subsequent Events The Organization has evaluated events and transactions for potential recognition or disclosure through September 7 2017 which represents the date the financial statements were available to be issued
NOTE 2 - ACCOUNTS RECEIVABLE CSULB AUXILIARY ORGANIZATIONS
Accounts receivable from CSULB auxiliary organizations are comprised of the following
June 30 2017 2016
CSULB Research Foundation $ $ 28234 Employee 3732 University Student Union 2650 Forty-Niner Foundation 6029 Associated Students 2432 11383
$ 45646 11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 3 - NOTE RECEIVABLE CSULB DEPARTMENT OF ATHLETICS
On March 23 2015 the Organization loaned $500000 to the Department of Athletics for the campus track and field improvement project The loan bared interest at 4 on a semiannual basis and had an original due date of September 23 2015 Interest was payable at each maturity date
During the year ended June 30 2016 the Department of Athletics paid the required interest installments of $20000 in September 2015 and again in March 2016 The parties agreed to extend the repayment of the loan
In September 2016 the Organization received full payment for the note
NOTE 4 -INVENTORIES
Inventories consist of the following June 30 2017 2016
New textbooks $ 884762 $ 715117 Computer equipment supplies and software 409232 473322 Supplies 488844 481274 Used textbooks 552565 513978 Trade books 5924 20493 Food service 386979 300293
$ 2727406 $ 2504477
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
Cost Market
NOTE 5 -INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2017 Cost Market
CURRENT ASSETS Mutual funds $4071190 $4375070 $5044679 $5041438 Common stocks 2539668 2940992 1000598 1181323 Investments in alternative funds 982884 993030 499136 499855
$7593742 $8309092 $6722616
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
2017 Buildings and improvements Equipment furniture and fixtures Automobiles
Less accumulated depreciation
Construction in progress
$ 19003699 6685136
46734 25735569
(17392621 ) 8342948
$19681399 6168813
25896946 (17796296)
8100650 493908
$ 8594558
Construction in progress at June 30 2017 consists primarily of capital leasehold improvement expenditures for the bookstore and food service facilities
DepreCiation expense for the years ended June 30 2017 and 2016 was $977635 and $985466 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 7 - INVESTMENTS DESIGNATED FOR SICK PAY
Investments designated for sick pay benefits are funds designated by the Organizations Board of Directors primarily for the funding of accumulated and vested sick pay
NOTE 8 - ACCOUNTS PAYABLE CSULB AUXILIARY ORGANIZATIONS
There were no accounts payable to CSULB auxiliary organizations at June 30 2017 and 2016
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2017 2016
Note payable to CSU is payable semiannually on May 1 and November 1 of each year includininterest and matures May 1 2039
g
$ 3215000 $ 3300000
Unamortized net deferred amount on refinancing 263768 3478768 3
276328 576328
Less Current portion 95000) ( 85000)
Noncurrent portion $ 3383768 $ 3491328
In 2008 the Organization borrowed $4110000 from CSU in connection with the construction of certain food service leasehold improvements The CSU assisted in financing the construction through the issuance of System wide Revenue Bonds Series 2008A by the State of California in the amount of $4110000
14
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 9 - LONG TERM DEBT (Continued)
On April 20 2016 CSU refinanced $3415000 of the System wide Revenue Bonds Series 2008A by issuing a $3125000 of System wide Revenue Bonds Series 2016A
Interest rates range from 2 to 5 with an average face coupon rate of 461 and effective rate of 332 The bonds will mature over the next 23 years with an average maturity of 1425 years
On May 12016 the loan agreement between the Organization and CSU was amended to reflect the refinancing of the bonds
The Organization is obligated to repay the CSU the amount of the indenture obligations interest and costs by making payments to the CSU equal to the CSUs debt service on the bonds The debt obligation is secured by the Organizations revenues
The future scheduled maturities of long term debt for the next five years and thereafter are as follows
Year ending June 30 2018 $ 95000 2019 90000 2020 90000 2021 95000 2022 100000 Thereafter 2745000
$3215000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley Smith Barney which has a zero balance at June 30 2017 The line of credit has a variable rate not to exceed the Open Federal rate plus 50 basis points and is secured by the Organizations investments held at MorganStanley Smith Barney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 10 - LEASE COMMITMENTS
The Organization leases certain property for the bookstore and food service facilities from California State University Long Beach (CSULB) and other unrelated third parties The agreements with CSULB require the Organization to manage and operate the facilities for the benefit of the University Under the terms of the leases the Organization is required to make monthly lease payments totaling $3000 and is responsible for repairs maintenance alterations and insurance The leases for the facilities are non-cancellable and expire in 2017 and 2018 with an option to renew for five years Non-cancellable operating lease agreements with Associated Students Inc and other unrelated third parties for retail and food service facilities commenced in 200720082011 and 2012 and expire in 20162018 and 2020 Monthly lease payments for these facilities total $8440
Also the Organization maintains equipment under non-cancellable operating leases The lease agreements expire between 2018 and 2022
Future minimum rental payments required for equipment and facilities under operating leases that have an initial or remaining non-cancellable lease term in excess of one year as of June 30 2017 are as follows
Year ending June 30
2018 $ 190842 2019 150981 2020 138161 2021 60161 2022 5316
$ 595461
Rent expense was $119384 and $114000 for the years ended June 30 2017 and 2016 respectiveIy
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 11 - OPERATING AGREEMENTS
The Organization has entered into certain non-cancellable operating agreements with selected food service providers for catering vending and other food services Royalties are due to the Organization based on a percentage of monthly gross sales of the Operator or a set annual amount whichever is greater Also the Operators will pay a percent of monthly gross sales for common area maintenance charges Initial terms of the leases vary from one to fifteen years and have varying expiration dates
The Organization has also entered into an agreement that contains guaranteed minimum commission payments Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2018 $ 175000 2019 200000 2020 200000 2021 200000
$ 775000
NOTE 12 - PENSION PLAN (CALPERS)
The Organization participates in a cost-sharing multiple-employer defined benefit plan through the California Public Employees Retirement System plan (CaIPERS) which covers substantially all regular salaried full-time employees of the Organization CalPERS acts as a common investment and administrative agent for partiCipating public entities within the State of California
17
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General The Organization is a nonprofit auxiliary organization organized to operate food services and bookstore activities at California State University Long Beach for the benefit of the University Campus The Organizations customer base consists primarily of students enrolled at California State University Long Beach
Basis of Presentation The Organizations financial statements are presented in accordance with guidelines established for auxiliary organizations issued by the Office of the Chancellor of the California State University
Contributions received are recorded as unrestricted temporarily restricted or permanently restricted support depending on the existence andor the nature of any donor restrictions The Organization has not received any contributions with donor-imposed restrictions that would result in temporarily or permanently restricted net assets
The Organization is required to report information regarding their financial position and activities according to three classes of net assets unrestricted net assets temporarily restricted net assets and permanently restricted assets The Organization does not have any temporarily or permanently restricted net assets
Basis of Accounting The accounting records of the Forty-Niner Shops Inc are maintained on the accrual basis of accounting
Change in Accounting Principle In April of 2015 the Financial Accounting Standards Board issued ASU-2015-03 Imputation of Interest ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability Similarly the discount on premium resulting from the determination of present value shall be reported in the statement of financial position as a direct deduction from or addition to the face amount of the note and shall not be classified as a deferred charge or deferred credit Amortization of discounts premiums and debt issuance costs shall be reported as either interest expense or interest income ASU 2015shy03 is effective for financial statements issued for fiscal years beginning after December 15 2015 Early adoption is permitted for financial statements that have not been previously issued
The Organization has adopted the new standard for the year ended June 30 2016
9
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounting 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 Significant estimates include annual depreciation the carrying value of property plant and equipment and the actuarial estimate of postretirement benefits Actual results could differ from those estimates
Fair Value of Financial Instruments Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer liability in an orderly transaction between market participants at the measurement date
Cash and Cash Equivalents Cash and cash equivalents includes highly liquid investments such as money market funds that are readily convertible to known amounts of cash within 90 days from the date of purchase All cash balances are held at major banking and broker institutions
Investments The Organization accounts for all investments at fair market value Net realized and unrealized gains and losses on investments are reflected in the statement of activities
Allowance for Doubtful Accounts No allowance for doubtful accounts has been established because management believes that all accounts are collectible and no allowance is needed
Inventories Inventories for the bookstore are valued using the lower of cost or market by the conventional retail inventory method Inventories for the food service are valued using the lower of cost (first-in first-out) or market method
Capital Assets and Depreciation Capital asset accounts are stated at cost less accumulated depreciation Betterments and major improvements are added to the respective assets cost while ordinary repairs that do not extend useful lives are expensed as incurred All direct and indirect costs incurred in constructing assets are accumulated in an asset account and no depreciation is recognized until the asset is put into operation When an asset is sold or otherwise disposed of the cost of the asset and the related accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the statement of activities
10
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Capital Assets and Depreciation (Continued) Depreciation and amortization of capital assets are provided on the straight-line method over the estimated useful lives of the various classes of property which are ten to fifty years for buildings and improvements five to ten years for equipment furniture and fixtures and three to five years for automobiles The capitalization thresholds are as follows buildings and building improvements - $10000 equipment and furniture - $2500 vehicles - all purchases are capitalized
Equipment acquired under capital leases are recorded at the lower of the fair value or the present value of future minimum lease payments These leases are amortized over their estimated useful lives of five years or the lease term whichever is shorter Amortization of equipment acquired under capitalized leases is included with depreciation expense
Accrued Vacation and Sick Pay Accruals for vacation and sick pay are made on a monthly basis as such benefits become payable to employees Pay rate increases are applied to the hours earned in prior periods if any and are reported as a current expense in the statement of activities
Income Taxes The Organization is exempt from federal income and state franchise taxes under Section 501 (c)(3) of the Internal Revenue Code and Section 23701 (d) of the California Revenue and Taxation Code respectively
Reclassifications Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation in the current year financial statements
Reporting of Subsequent Events The Organization has evaluated events and transactions for potential recognition or disclosure through September 7 2017 which represents the date the financial statements were available to be issued
NOTE 2 - ACCOUNTS RECEIVABLE CSULB AUXILIARY ORGANIZATIONS
Accounts receivable from CSULB auxiliary organizations are comprised of the following
June 30 2017 2016
CSULB Research Foundation $ $ 28234 Employee 3732 University Student Union 2650 Forty-Niner Foundation 6029 Associated Students 2432 11383
$ 45646 11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 3 - NOTE RECEIVABLE CSULB DEPARTMENT OF ATHLETICS
On March 23 2015 the Organization loaned $500000 to the Department of Athletics for the campus track and field improvement project The loan bared interest at 4 on a semiannual basis and had an original due date of September 23 2015 Interest was payable at each maturity date
During the year ended June 30 2016 the Department of Athletics paid the required interest installments of $20000 in September 2015 and again in March 2016 The parties agreed to extend the repayment of the loan
In September 2016 the Organization received full payment for the note
NOTE 4 -INVENTORIES
Inventories consist of the following June 30 2017 2016
New textbooks $ 884762 $ 715117 Computer equipment supplies and software 409232 473322 Supplies 488844 481274 Used textbooks 552565 513978 Trade books 5924 20493 Food service 386979 300293
$ 2727406 $ 2504477
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
Cost Market
NOTE 5 -INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2017 Cost Market
CURRENT ASSETS Mutual funds $4071190 $4375070 $5044679 $5041438 Common stocks 2539668 2940992 1000598 1181323 Investments in alternative funds 982884 993030 499136 499855
$7593742 $8309092 $6722616
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
2017 Buildings and improvements Equipment furniture and fixtures Automobiles
Less accumulated depreciation
Construction in progress
$ 19003699 6685136
46734 25735569
(17392621 ) 8342948
$19681399 6168813
25896946 (17796296)
8100650 493908
$ 8594558
Construction in progress at June 30 2017 consists primarily of capital leasehold improvement expenditures for the bookstore and food service facilities
DepreCiation expense for the years ended June 30 2017 and 2016 was $977635 and $985466 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 7 - INVESTMENTS DESIGNATED FOR SICK PAY
Investments designated for sick pay benefits are funds designated by the Organizations Board of Directors primarily for the funding of accumulated and vested sick pay
NOTE 8 - ACCOUNTS PAYABLE CSULB AUXILIARY ORGANIZATIONS
There were no accounts payable to CSULB auxiliary organizations at June 30 2017 and 2016
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2017 2016
Note payable to CSU is payable semiannually on May 1 and November 1 of each year includininterest and matures May 1 2039
g
$ 3215000 $ 3300000
Unamortized net deferred amount on refinancing 263768 3478768 3
276328 576328
Less Current portion 95000) ( 85000)
Noncurrent portion $ 3383768 $ 3491328
In 2008 the Organization borrowed $4110000 from CSU in connection with the construction of certain food service leasehold improvements The CSU assisted in financing the construction through the issuance of System wide Revenue Bonds Series 2008A by the State of California in the amount of $4110000
14
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 9 - LONG TERM DEBT (Continued)
On April 20 2016 CSU refinanced $3415000 of the System wide Revenue Bonds Series 2008A by issuing a $3125000 of System wide Revenue Bonds Series 2016A
Interest rates range from 2 to 5 with an average face coupon rate of 461 and effective rate of 332 The bonds will mature over the next 23 years with an average maturity of 1425 years
On May 12016 the loan agreement between the Organization and CSU was amended to reflect the refinancing of the bonds
The Organization is obligated to repay the CSU the amount of the indenture obligations interest and costs by making payments to the CSU equal to the CSUs debt service on the bonds The debt obligation is secured by the Organizations revenues
The future scheduled maturities of long term debt for the next five years and thereafter are as follows
Year ending June 30 2018 $ 95000 2019 90000 2020 90000 2021 95000 2022 100000 Thereafter 2745000
$3215000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley Smith Barney which has a zero balance at June 30 2017 The line of credit has a variable rate not to exceed the Open Federal rate plus 50 basis points and is secured by the Organizations investments held at MorganStanley Smith Barney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 10 - LEASE COMMITMENTS
The Organization leases certain property for the bookstore and food service facilities from California State University Long Beach (CSULB) and other unrelated third parties The agreements with CSULB require the Organization to manage and operate the facilities for the benefit of the University Under the terms of the leases the Organization is required to make monthly lease payments totaling $3000 and is responsible for repairs maintenance alterations and insurance The leases for the facilities are non-cancellable and expire in 2017 and 2018 with an option to renew for five years Non-cancellable operating lease agreements with Associated Students Inc and other unrelated third parties for retail and food service facilities commenced in 200720082011 and 2012 and expire in 20162018 and 2020 Monthly lease payments for these facilities total $8440
Also the Organization maintains equipment under non-cancellable operating leases The lease agreements expire between 2018 and 2022
Future minimum rental payments required for equipment and facilities under operating leases that have an initial or remaining non-cancellable lease term in excess of one year as of June 30 2017 are as follows
Year ending June 30
2018 $ 190842 2019 150981 2020 138161 2021 60161 2022 5316
$ 595461
Rent expense was $119384 and $114000 for the years ended June 30 2017 and 2016 respectiveIy
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 11 - OPERATING AGREEMENTS
The Organization has entered into certain non-cancellable operating agreements with selected food service providers for catering vending and other food services Royalties are due to the Organization based on a percentage of monthly gross sales of the Operator or a set annual amount whichever is greater Also the Operators will pay a percent of monthly gross sales for common area maintenance charges Initial terms of the leases vary from one to fifteen years and have varying expiration dates
The Organization has also entered into an agreement that contains guaranteed minimum commission payments Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2018 $ 175000 2019 200000 2020 200000 2021 200000
$ 775000
NOTE 12 - PENSION PLAN (CALPERS)
The Organization participates in a cost-sharing multiple-employer defined benefit plan through the California Public Employees Retirement System plan (CaIPERS) which covers substantially all regular salaried full-time employees of the Organization CalPERS acts as a common investment and administrative agent for partiCipating public entities within the State of California
17
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounting 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 Significant estimates include annual depreciation the carrying value of property plant and equipment and the actuarial estimate of postretirement benefits Actual results could differ from those estimates
Fair Value of Financial Instruments Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer liability in an orderly transaction between market participants at the measurement date
Cash and Cash Equivalents Cash and cash equivalents includes highly liquid investments such as money market funds that are readily convertible to known amounts of cash within 90 days from the date of purchase All cash balances are held at major banking and broker institutions
Investments The Organization accounts for all investments at fair market value Net realized and unrealized gains and losses on investments are reflected in the statement of activities
Allowance for Doubtful Accounts No allowance for doubtful accounts has been established because management believes that all accounts are collectible and no allowance is needed
Inventories Inventories for the bookstore are valued using the lower of cost or market by the conventional retail inventory method Inventories for the food service are valued using the lower of cost (first-in first-out) or market method
Capital Assets and Depreciation Capital asset accounts are stated at cost less accumulated depreciation Betterments and major improvements are added to the respective assets cost while ordinary repairs that do not extend useful lives are expensed as incurred All direct and indirect costs incurred in constructing assets are accumulated in an asset account and no depreciation is recognized until the asset is put into operation When an asset is sold or otherwise disposed of the cost of the asset and the related accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the statement of activities
10
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Capital Assets and Depreciation (Continued) Depreciation and amortization of capital assets are provided on the straight-line method over the estimated useful lives of the various classes of property which are ten to fifty years for buildings and improvements five to ten years for equipment furniture and fixtures and three to five years for automobiles The capitalization thresholds are as follows buildings and building improvements - $10000 equipment and furniture - $2500 vehicles - all purchases are capitalized
Equipment acquired under capital leases are recorded at the lower of the fair value or the present value of future minimum lease payments These leases are amortized over their estimated useful lives of five years or the lease term whichever is shorter Amortization of equipment acquired under capitalized leases is included with depreciation expense
Accrued Vacation and Sick Pay Accruals for vacation and sick pay are made on a monthly basis as such benefits become payable to employees Pay rate increases are applied to the hours earned in prior periods if any and are reported as a current expense in the statement of activities
Income Taxes The Organization is exempt from federal income and state franchise taxes under Section 501 (c)(3) of the Internal Revenue Code and Section 23701 (d) of the California Revenue and Taxation Code respectively
Reclassifications Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation in the current year financial statements
Reporting of Subsequent Events The Organization has evaluated events and transactions for potential recognition or disclosure through September 7 2017 which represents the date the financial statements were available to be issued
NOTE 2 - ACCOUNTS RECEIVABLE CSULB AUXILIARY ORGANIZATIONS
Accounts receivable from CSULB auxiliary organizations are comprised of the following
June 30 2017 2016
CSULB Research Foundation $ $ 28234 Employee 3732 University Student Union 2650 Forty-Niner Foundation 6029 Associated Students 2432 11383
$ 45646 11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 3 - NOTE RECEIVABLE CSULB DEPARTMENT OF ATHLETICS
On March 23 2015 the Organization loaned $500000 to the Department of Athletics for the campus track and field improvement project The loan bared interest at 4 on a semiannual basis and had an original due date of September 23 2015 Interest was payable at each maturity date
During the year ended June 30 2016 the Department of Athletics paid the required interest installments of $20000 in September 2015 and again in March 2016 The parties agreed to extend the repayment of the loan
In September 2016 the Organization received full payment for the note
NOTE 4 -INVENTORIES
Inventories consist of the following June 30 2017 2016
New textbooks $ 884762 $ 715117 Computer equipment supplies and software 409232 473322 Supplies 488844 481274 Used textbooks 552565 513978 Trade books 5924 20493 Food service 386979 300293
$ 2727406 $ 2504477
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
Cost Market
NOTE 5 -INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2017 Cost Market
CURRENT ASSETS Mutual funds $4071190 $4375070 $5044679 $5041438 Common stocks 2539668 2940992 1000598 1181323 Investments in alternative funds 982884 993030 499136 499855
$7593742 $8309092 $6722616
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
2017 Buildings and improvements Equipment furniture and fixtures Automobiles
Less accumulated depreciation
Construction in progress
$ 19003699 6685136
46734 25735569
(17392621 ) 8342948
$19681399 6168813
25896946 (17796296)
8100650 493908
$ 8594558
Construction in progress at June 30 2017 consists primarily of capital leasehold improvement expenditures for the bookstore and food service facilities
DepreCiation expense for the years ended June 30 2017 and 2016 was $977635 and $985466 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 7 - INVESTMENTS DESIGNATED FOR SICK PAY
Investments designated for sick pay benefits are funds designated by the Organizations Board of Directors primarily for the funding of accumulated and vested sick pay
NOTE 8 - ACCOUNTS PAYABLE CSULB AUXILIARY ORGANIZATIONS
There were no accounts payable to CSULB auxiliary organizations at June 30 2017 and 2016
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2017 2016
Note payable to CSU is payable semiannually on May 1 and November 1 of each year includininterest and matures May 1 2039
g
$ 3215000 $ 3300000
Unamortized net deferred amount on refinancing 263768 3478768 3
276328 576328
Less Current portion 95000) ( 85000)
Noncurrent portion $ 3383768 $ 3491328
In 2008 the Organization borrowed $4110000 from CSU in connection with the construction of certain food service leasehold improvements The CSU assisted in financing the construction through the issuance of System wide Revenue Bonds Series 2008A by the State of California in the amount of $4110000
14
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 9 - LONG TERM DEBT (Continued)
On April 20 2016 CSU refinanced $3415000 of the System wide Revenue Bonds Series 2008A by issuing a $3125000 of System wide Revenue Bonds Series 2016A
Interest rates range from 2 to 5 with an average face coupon rate of 461 and effective rate of 332 The bonds will mature over the next 23 years with an average maturity of 1425 years
On May 12016 the loan agreement between the Organization and CSU was amended to reflect the refinancing of the bonds
The Organization is obligated to repay the CSU the amount of the indenture obligations interest and costs by making payments to the CSU equal to the CSUs debt service on the bonds The debt obligation is secured by the Organizations revenues
The future scheduled maturities of long term debt for the next five years and thereafter are as follows
Year ending June 30 2018 $ 95000 2019 90000 2020 90000 2021 95000 2022 100000 Thereafter 2745000
$3215000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley Smith Barney which has a zero balance at June 30 2017 The line of credit has a variable rate not to exceed the Open Federal rate plus 50 basis points and is secured by the Organizations investments held at MorganStanley Smith Barney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 10 - LEASE COMMITMENTS
The Organization leases certain property for the bookstore and food service facilities from California State University Long Beach (CSULB) and other unrelated third parties The agreements with CSULB require the Organization to manage and operate the facilities for the benefit of the University Under the terms of the leases the Organization is required to make monthly lease payments totaling $3000 and is responsible for repairs maintenance alterations and insurance The leases for the facilities are non-cancellable and expire in 2017 and 2018 with an option to renew for five years Non-cancellable operating lease agreements with Associated Students Inc and other unrelated third parties for retail and food service facilities commenced in 200720082011 and 2012 and expire in 20162018 and 2020 Monthly lease payments for these facilities total $8440
Also the Organization maintains equipment under non-cancellable operating leases The lease agreements expire between 2018 and 2022
Future minimum rental payments required for equipment and facilities under operating leases that have an initial or remaining non-cancellable lease term in excess of one year as of June 30 2017 are as follows
Year ending June 30
2018 $ 190842 2019 150981 2020 138161 2021 60161 2022 5316
$ 595461
Rent expense was $119384 and $114000 for the years ended June 30 2017 and 2016 respectiveIy
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 11 - OPERATING AGREEMENTS
The Organization has entered into certain non-cancellable operating agreements with selected food service providers for catering vending and other food services Royalties are due to the Organization based on a percentage of monthly gross sales of the Operator or a set annual amount whichever is greater Also the Operators will pay a percent of monthly gross sales for common area maintenance charges Initial terms of the leases vary from one to fifteen years and have varying expiration dates
The Organization has also entered into an agreement that contains guaranteed minimum commission payments Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2018 $ 175000 2019 200000 2020 200000 2021 200000
$ 775000
NOTE 12 - PENSION PLAN (CALPERS)
The Organization participates in a cost-sharing multiple-employer defined benefit plan through the California Public Employees Retirement System plan (CaIPERS) which covers substantially all regular salaried full-time employees of the Organization CalPERS acts as a common investment and administrative agent for partiCipating public entities within the State of California
17
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Capital Assets and Depreciation (Continued) Depreciation and amortization of capital assets are provided on the straight-line method over the estimated useful lives of the various classes of property which are ten to fifty years for buildings and improvements five to ten years for equipment furniture and fixtures and three to five years for automobiles The capitalization thresholds are as follows buildings and building improvements - $10000 equipment and furniture - $2500 vehicles - all purchases are capitalized
Equipment acquired under capital leases are recorded at the lower of the fair value or the present value of future minimum lease payments These leases are amortized over their estimated useful lives of five years or the lease term whichever is shorter Amortization of equipment acquired under capitalized leases is included with depreciation expense
Accrued Vacation and Sick Pay Accruals for vacation and sick pay are made on a monthly basis as such benefits become payable to employees Pay rate increases are applied to the hours earned in prior periods if any and are reported as a current expense in the statement of activities
Income Taxes The Organization is exempt from federal income and state franchise taxes under Section 501 (c)(3) of the Internal Revenue Code and Section 23701 (d) of the California Revenue and Taxation Code respectively
Reclassifications Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation in the current year financial statements
Reporting of Subsequent Events The Organization has evaluated events and transactions for potential recognition or disclosure through September 7 2017 which represents the date the financial statements were available to be issued
NOTE 2 - ACCOUNTS RECEIVABLE CSULB AUXILIARY ORGANIZATIONS
Accounts receivable from CSULB auxiliary organizations are comprised of the following
June 30 2017 2016
CSULB Research Foundation $ $ 28234 Employee 3732 University Student Union 2650 Forty-Niner Foundation 6029 Associated Students 2432 11383
$ 45646 11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 3 - NOTE RECEIVABLE CSULB DEPARTMENT OF ATHLETICS
On March 23 2015 the Organization loaned $500000 to the Department of Athletics for the campus track and field improvement project The loan bared interest at 4 on a semiannual basis and had an original due date of September 23 2015 Interest was payable at each maturity date
During the year ended June 30 2016 the Department of Athletics paid the required interest installments of $20000 in September 2015 and again in March 2016 The parties agreed to extend the repayment of the loan
In September 2016 the Organization received full payment for the note
NOTE 4 -INVENTORIES
Inventories consist of the following June 30 2017 2016
New textbooks $ 884762 $ 715117 Computer equipment supplies and software 409232 473322 Supplies 488844 481274 Used textbooks 552565 513978 Trade books 5924 20493 Food service 386979 300293
$ 2727406 $ 2504477
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
Cost Market
NOTE 5 -INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2017 Cost Market
CURRENT ASSETS Mutual funds $4071190 $4375070 $5044679 $5041438 Common stocks 2539668 2940992 1000598 1181323 Investments in alternative funds 982884 993030 499136 499855
$7593742 $8309092 $6722616
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
2017 Buildings and improvements Equipment furniture and fixtures Automobiles
Less accumulated depreciation
Construction in progress
$ 19003699 6685136
46734 25735569
(17392621 ) 8342948
$19681399 6168813
25896946 (17796296)
8100650 493908
$ 8594558
Construction in progress at June 30 2017 consists primarily of capital leasehold improvement expenditures for the bookstore and food service facilities
DepreCiation expense for the years ended June 30 2017 and 2016 was $977635 and $985466 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 7 - INVESTMENTS DESIGNATED FOR SICK PAY
Investments designated for sick pay benefits are funds designated by the Organizations Board of Directors primarily for the funding of accumulated and vested sick pay
NOTE 8 - ACCOUNTS PAYABLE CSULB AUXILIARY ORGANIZATIONS
There were no accounts payable to CSULB auxiliary organizations at June 30 2017 and 2016
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2017 2016
Note payable to CSU is payable semiannually on May 1 and November 1 of each year includininterest and matures May 1 2039
g
$ 3215000 $ 3300000
Unamortized net deferred amount on refinancing 263768 3478768 3
276328 576328
Less Current portion 95000) ( 85000)
Noncurrent portion $ 3383768 $ 3491328
In 2008 the Organization borrowed $4110000 from CSU in connection with the construction of certain food service leasehold improvements The CSU assisted in financing the construction through the issuance of System wide Revenue Bonds Series 2008A by the State of California in the amount of $4110000
14
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 9 - LONG TERM DEBT (Continued)
On April 20 2016 CSU refinanced $3415000 of the System wide Revenue Bonds Series 2008A by issuing a $3125000 of System wide Revenue Bonds Series 2016A
Interest rates range from 2 to 5 with an average face coupon rate of 461 and effective rate of 332 The bonds will mature over the next 23 years with an average maturity of 1425 years
On May 12016 the loan agreement between the Organization and CSU was amended to reflect the refinancing of the bonds
The Organization is obligated to repay the CSU the amount of the indenture obligations interest and costs by making payments to the CSU equal to the CSUs debt service on the bonds The debt obligation is secured by the Organizations revenues
The future scheduled maturities of long term debt for the next five years and thereafter are as follows
Year ending June 30 2018 $ 95000 2019 90000 2020 90000 2021 95000 2022 100000 Thereafter 2745000
$3215000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley Smith Barney which has a zero balance at June 30 2017 The line of credit has a variable rate not to exceed the Open Federal rate plus 50 basis points and is secured by the Organizations investments held at MorganStanley Smith Barney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 10 - LEASE COMMITMENTS
The Organization leases certain property for the bookstore and food service facilities from California State University Long Beach (CSULB) and other unrelated third parties The agreements with CSULB require the Organization to manage and operate the facilities for the benefit of the University Under the terms of the leases the Organization is required to make monthly lease payments totaling $3000 and is responsible for repairs maintenance alterations and insurance The leases for the facilities are non-cancellable and expire in 2017 and 2018 with an option to renew for five years Non-cancellable operating lease agreements with Associated Students Inc and other unrelated third parties for retail and food service facilities commenced in 200720082011 and 2012 and expire in 20162018 and 2020 Monthly lease payments for these facilities total $8440
Also the Organization maintains equipment under non-cancellable operating leases The lease agreements expire between 2018 and 2022
Future minimum rental payments required for equipment and facilities under operating leases that have an initial or remaining non-cancellable lease term in excess of one year as of June 30 2017 are as follows
Year ending June 30
2018 $ 190842 2019 150981 2020 138161 2021 60161 2022 5316
$ 595461
Rent expense was $119384 and $114000 for the years ended June 30 2017 and 2016 respectiveIy
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 11 - OPERATING AGREEMENTS
The Organization has entered into certain non-cancellable operating agreements with selected food service providers for catering vending and other food services Royalties are due to the Organization based on a percentage of monthly gross sales of the Operator or a set annual amount whichever is greater Also the Operators will pay a percent of monthly gross sales for common area maintenance charges Initial terms of the leases vary from one to fifteen years and have varying expiration dates
The Organization has also entered into an agreement that contains guaranteed minimum commission payments Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2018 $ 175000 2019 200000 2020 200000 2021 200000
$ 775000
NOTE 12 - PENSION PLAN (CALPERS)
The Organization participates in a cost-sharing multiple-employer defined benefit plan through the California Public Employees Retirement System plan (CaIPERS) which covers substantially all regular salaried full-time employees of the Organization CalPERS acts as a common investment and administrative agent for partiCipating public entities within the State of California
17
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 3 - NOTE RECEIVABLE CSULB DEPARTMENT OF ATHLETICS
On March 23 2015 the Organization loaned $500000 to the Department of Athletics for the campus track and field improvement project The loan bared interest at 4 on a semiannual basis and had an original due date of September 23 2015 Interest was payable at each maturity date
During the year ended June 30 2016 the Department of Athletics paid the required interest installments of $20000 in September 2015 and again in March 2016 The parties agreed to extend the repayment of the loan
In September 2016 the Organization received full payment for the note
NOTE 4 -INVENTORIES
Inventories consist of the following June 30 2017 2016
New textbooks $ 884762 $ 715117 Computer equipment supplies and software 409232 473322 Supplies 488844 481274 Used textbooks 552565 513978 Trade books 5924 20493 Food service 386979 300293
$ 2727406 $ 2504477
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
Cost Market
NOTE 5 -INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2017 Cost Market
CURRENT ASSETS Mutual funds $4071190 $4375070 $5044679 $5041438 Common stocks 2539668 2940992 1000598 1181323 Investments in alternative funds 982884 993030 499136 499855
$7593742 $8309092 $6722616
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
2017 Buildings and improvements Equipment furniture and fixtures Automobiles
Less accumulated depreciation
Construction in progress
$ 19003699 6685136
46734 25735569
(17392621 ) 8342948
$19681399 6168813
25896946 (17796296)
8100650 493908
$ 8594558
Construction in progress at June 30 2017 consists primarily of capital leasehold improvement expenditures for the bookstore and food service facilities
DepreCiation expense for the years ended June 30 2017 and 2016 was $977635 and $985466 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 7 - INVESTMENTS DESIGNATED FOR SICK PAY
Investments designated for sick pay benefits are funds designated by the Organizations Board of Directors primarily for the funding of accumulated and vested sick pay
NOTE 8 - ACCOUNTS PAYABLE CSULB AUXILIARY ORGANIZATIONS
There were no accounts payable to CSULB auxiliary organizations at June 30 2017 and 2016
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2017 2016
Note payable to CSU is payable semiannually on May 1 and November 1 of each year includininterest and matures May 1 2039
g
$ 3215000 $ 3300000
Unamortized net deferred amount on refinancing 263768 3478768 3
276328 576328
Less Current portion 95000) ( 85000)
Noncurrent portion $ 3383768 $ 3491328
In 2008 the Organization borrowed $4110000 from CSU in connection with the construction of certain food service leasehold improvements The CSU assisted in financing the construction through the issuance of System wide Revenue Bonds Series 2008A by the State of California in the amount of $4110000
14
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 9 - LONG TERM DEBT (Continued)
On April 20 2016 CSU refinanced $3415000 of the System wide Revenue Bonds Series 2008A by issuing a $3125000 of System wide Revenue Bonds Series 2016A
Interest rates range from 2 to 5 with an average face coupon rate of 461 and effective rate of 332 The bonds will mature over the next 23 years with an average maturity of 1425 years
On May 12016 the loan agreement between the Organization and CSU was amended to reflect the refinancing of the bonds
The Organization is obligated to repay the CSU the amount of the indenture obligations interest and costs by making payments to the CSU equal to the CSUs debt service on the bonds The debt obligation is secured by the Organizations revenues
The future scheduled maturities of long term debt for the next five years and thereafter are as follows
Year ending June 30 2018 $ 95000 2019 90000 2020 90000 2021 95000 2022 100000 Thereafter 2745000
$3215000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley Smith Barney which has a zero balance at June 30 2017 The line of credit has a variable rate not to exceed the Open Federal rate plus 50 basis points and is secured by the Organizations investments held at MorganStanley Smith Barney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 10 - LEASE COMMITMENTS
The Organization leases certain property for the bookstore and food service facilities from California State University Long Beach (CSULB) and other unrelated third parties The agreements with CSULB require the Organization to manage and operate the facilities for the benefit of the University Under the terms of the leases the Organization is required to make monthly lease payments totaling $3000 and is responsible for repairs maintenance alterations and insurance The leases for the facilities are non-cancellable and expire in 2017 and 2018 with an option to renew for five years Non-cancellable operating lease agreements with Associated Students Inc and other unrelated third parties for retail and food service facilities commenced in 200720082011 and 2012 and expire in 20162018 and 2020 Monthly lease payments for these facilities total $8440
Also the Organization maintains equipment under non-cancellable operating leases The lease agreements expire between 2018 and 2022
Future minimum rental payments required for equipment and facilities under operating leases that have an initial or remaining non-cancellable lease term in excess of one year as of June 30 2017 are as follows
Year ending June 30
2018 $ 190842 2019 150981 2020 138161 2021 60161 2022 5316
$ 595461
Rent expense was $119384 and $114000 for the years ended June 30 2017 and 2016 respectiveIy
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 11 - OPERATING AGREEMENTS
The Organization has entered into certain non-cancellable operating agreements with selected food service providers for catering vending and other food services Royalties are due to the Organization based on a percentage of monthly gross sales of the Operator or a set annual amount whichever is greater Also the Operators will pay a percent of monthly gross sales for common area maintenance charges Initial terms of the leases vary from one to fifteen years and have varying expiration dates
The Organization has also entered into an agreement that contains guaranteed minimum commission payments Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2018 $ 175000 2019 200000 2020 200000 2021 200000
$ 775000
NOTE 12 - PENSION PLAN (CALPERS)
The Organization participates in a cost-sharing multiple-employer defined benefit plan through the California Public Employees Retirement System plan (CaIPERS) which covers substantially all regular salaried full-time employees of the Organization CalPERS acts as a common investment and administrative agent for partiCipating public entities within the State of California
17
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
Cost Market
NOTE 5 -INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2017 Cost Market
CURRENT ASSETS Mutual funds $4071190 $4375070 $5044679 $5041438 Common stocks 2539668 2940992 1000598 1181323 Investments in alternative funds 982884 993030 499136 499855
$7593742 $8309092 $6722616
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
2017 Buildings and improvements Equipment furniture and fixtures Automobiles
Less accumulated depreciation
Construction in progress
$ 19003699 6685136
46734 25735569
(17392621 ) 8342948
$19681399 6168813
25896946 (17796296)
8100650 493908
$ 8594558
Construction in progress at June 30 2017 consists primarily of capital leasehold improvement expenditures for the bookstore and food service facilities
DepreCiation expense for the years ended June 30 2017 and 2016 was $977635 and $985466 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 7 - INVESTMENTS DESIGNATED FOR SICK PAY
Investments designated for sick pay benefits are funds designated by the Organizations Board of Directors primarily for the funding of accumulated and vested sick pay
NOTE 8 - ACCOUNTS PAYABLE CSULB AUXILIARY ORGANIZATIONS
There were no accounts payable to CSULB auxiliary organizations at June 30 2017 and 2016
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2017 2016
Note payable to CSU is payable semiannually on May 1 and November 1 of each year includininterest and matures May 1 2039
g
$ 3215000 $ 3300000
Unamortized net deferred amount on refinancing 263768 3478768 3
276328 576328
Less Current portion 95000) ( 85000)
Noncurrent portion $ 3383768 $ 3491328
In 2008 the Organization borrowed $4110000 from CSU in connection with the construction of certain food service leasehold improvements The CSU assisted in financing the construction through the issuance of System wide Revenue Bonds Series 2008A by the State of California in the amount of $4110000
14
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 9 - LONG TERM DEBT (Continued)
On April 20 2016 CSU refinanced $3415000 of the System wide Revenue Bonds Series 2008A by issuing a $3125000 of System wide Revenue Bonds Series 2016A
Interest rates range from 2 to 5 with an average face coupon rate of 461 and effective rate of 332 The bonds will mature over the next 23 years with an average maturity of 1425 years
On May 12016 the loan agreement between the Organization and CSU was amended to reflect the refinancing of the bonds
The Organization is obligated to repay the CSU the amount of the indenture obligations interest and costs by making payments to the CSU equal to the CSUs debt service on the bonds The debt obligation is secured by the Organizations revenues
The future scheduled maturities of long term debt for the next five years and thereafter are as follows
Year ending June 30 2018 $ 95000 2019 90000 2020 90000 2021 95000 2022 100000 Thereafter 2745000
$3215000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley Smith Barney which has a zero balance at June 30 2017 The line of credit has a variable rate not to exceed the Open Federal rate plus 50 basis points and is secured by the Organizations investments held at MorganStanley Smith Barney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 10 - LEASE COMMITMENTS
The Organization leases certain property for the bookstore and food service facilities from California State University Long Beach (CSULB) and other unrelated third parties The agreements with CSULB require the Organization to manage and operate the facilities for the benefit of the University Under the terms of the leases the Organization is required to make monthly lease payments totaling $3000 and is responsible for repairs maintenance alterations and insurance The leases for the facilities are non-cancellable and expire in 2017 and 2018 with an option to renew for five years Non-cancellable operating lease agreements with Associated Students Inc and other unrelated third parties for retail and food service facilities commenced in 200720082011 and 2012 and expire in 20162018 and 2020 Monthly lease payments for these facilities total $8440
Also the Organization maintains equipment under non-cancellable operating leases The lease agreements expire between 2018 and 2022
Future minimum rental payments required for equipment and facilities under operating leases that have an initial or remaining non-cancellable lease term in excess of one year as of June 30 2017 are as follows
Year ending June 30
2018 $ 190842 2019 150981 2020 138161 2021 60161 2022 5316
$ 595461
Rent expense was $119384 and $114000 for the years ended June 30 2017 and 2016 respectiveIy
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 11 - OPERATING AGREEMENTS
The Organization has entered into certain non-cancellable operating agreements with selected food service providers for catering vending and other food services Royalties are due to the Organization based on a percentage of monthly gross sales of the Operator or a set annual amount whichever is greater Also the Operators will pay a percent of monthly gross sales for common area maintenance charges Initial terms of the leases vary from one to fifteen years and have varying expiration dates
The Organization has also entered into an agreement that contains guaranteed minimum commission payments Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2018 $ 175000 2019 200000 2020 200000 2021 200000
$ 775000
NOTE 12 - PENSION PLAN (CALPERS)
The Organization participates in a cost-sharing multiple-employer defined benefit plan through the California Public Employees Retirement System plan (CaIPERS) which covers substantially all regular salaried full-time employees of the Organization CalPERS acts as a common investment and administrative agent for partiCipating public entities within the State of California
17
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 7 - INVESTMENTS DESIGNATED FOR SICK PAY
Investments designated for sick pay benefits are funds designated by the Organizations Board of Directors primarily for the funding of accumulated and vested sick pay
NOTE 8 - ACCOUNTS PAYABLE CSULB AUXILIARY ORGANIZATIONS
There were no accounts payable to CSULB auxiliary organizations at June 30 2017 and 2016
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2017 2016
Note payable to CSU is payable semiannually on May 1 and November 1 of each year includininterest and matures May 1 2039
g
$ 3215000 $ 3300000
Unamortized net deferred amount on refinancing 263768 3478768 3
276328 576328
Less Current portion 95000) ( 85000)
Noncurrent portion $ 3383768 $ 3491328
In 2008 the Organization borrowed $4110000 from CSU in connection with the construction of certain food service leasehold improvements The CSU assisted in financing the construction through the issuance of System wide Revenue Bonds Series 2008A by the State of California in the amount of $4110000
14
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 9 - LONG TERM DEBT (Continued)
On April 20 2016 CSU refinanced $3415000 of the System wide Revenue Bonds Series 2008A by issuing a $3125000 of System wide Revenue Bonds Series 2016A
Interest rates range from 2 to 5 with an average face coupon rate of 461 and effective rate of 332 The bonds will mature over the next 23 years with an average maturity of 1425 years
On May 12016 the loan agreement between the Organization and CSU was amended to reflect the refinancing of the bonds
The Organization is obligated to repay the CSU the amount of the indenture obligations interest and costs by making payments to the CSU equal to the CSUs debt service on the bonds The debt obligation is secured by the Organizations revenues
The future scheduled maturities of long term debt for the next five years and thereafter are as follows
Year ending June 30 2018 $ 95000 2019 90000 2020 90000 2021 95000 2022 100000 Thereafter 2745000
$3215000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley Smith Barney which has a zero balance at June 30 2017 The line of credit has a variable rate not to exceed the Open Federal rate plus 50 basis points and is secured by the Organizations investments held at MorganStanley Smith Barney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 10 - LEASE COMMITMENTS
The Organization leases certain property for the bookstore and food service facilities from California State University Long Beach (CSULB) and other unrelated third parties The agreements with CSULB require the Organization to manage and operate the facilities for the benefit of the University Under the terms of the leases the Organization is required to make monthly lease payments totaling $3000 and is responsible for repairs maintenance alterations and insurance The leases for the facilities are non-cancellable and expire in 2017 and 2018 with an option to renew for five years Non-cancellable operating lease agreements with Associated Students Inc and other unrelated third parties for retail and food service facilities commenced in 200720082011 and 2012 and expire in 20162018 and 2020 Monthly lease payments for these facilities total $8440
Also the Organization maintains equipment under non-cancellable operating leases The lease agreements expire between 2018 and 2022
Future minimum rental payments required for equipment and facilities under operating leases that have an initial or remaining non-cancellable lease term in excess of one year as of June 30 2017 are as follows
Year ending June 30
2018 $ 190842 2019 150981 2020 138161 2021 60161 2022 5316
$ 595461
Rent expense was $119384 and $114000 for the years ended June 30 2017 and 2016 respectiveIy
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 11 - OPERATING AGREEMENTS
The Organization has entered into certain non-cancellable operating agreements with selected food service providers for catering vending and other food services Royalties are due to the Organization based on a percentage of monthly gross sales of the Operator or a set annual amount whichever is greater Also the Operators will pay a percent of monthly gross sales for common area maintenance charges Initial terms of the leases vary from one to fifteen years and have varying expiration dates
The Organization has also entered into an agreement that contains guaranteed minimum commission payments Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2018 $ 175000 2019 200000 2020 200000 2021 200000
$ 775000
NOTE 12 - PENSION PLAN (CALPERS)
The Organization participates in a cost-sharing multiple-employer defined benefit plan through the California Public Employees Retirement System plan (CaIPERS) which covers substantially all regular salaried full-time employees of the Organization CalPERS acts as a common investment and administrative agent for partiCipating public entities within the State of California
17
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 9 - LONG TERM DEBT (Continued)
On April 20 2016 CSU refinanced $3415000 of the System wide Revenue Bonds Series 2008A by issuing a $3125000 of System wide Revenue Bonds Series 2016A
Interest rates range from 2 to 5 with an average face coupon rate of 461 and effective rate of 332 The bonds will mature over the next 23 years with an average maturity of 1425 years
On May 12016 the loan agreement between the Organization and CSU was amended to reflect the refinancing of the bonds
The Organization is obligated to repay the CSU the amount of the indenture obligations interest and costs by making payments to the CSU equal to the CSUs debt service on the bonds The debt obligation is secured by the Organizations revenues
The future scheduled maturities of long term debt for the next five years and thereafter are as follows
Year ending June 30 2018 $ 95000 2019 90000 2020 90000 2021 95000 2022 100000 Thereafter 2745000
$3215000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley Smith Barney which has a zero balance at June 30 2017 The line of credit has a variable rate not to exceed the Open Federal rate plus 50 basis points and is secured by the Organizations investments held at MorganStanley Smith Barney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 10 - LEASE COMMITMENTS
The Organization leases certain property for the bookstore and food service facilities from California State University Long Beach (CSULB) and other unrelated third parties The agreements with CSULB require the Organization to manage and operate the facilities for the benefit of the University Under the terms of the leases the Organization is required to make monthly lease payments totaling $3000 and is responsible for repairs maintenance alterations and insurance The leases for the facilities are non-cancellable and expire in 2017 and 2018 with an option to renew for five years Non-cancellable operating lease agreements with Associated Students Inc and other unrelated third parties for retail and food service facilities commenced in 200720082011 and 2012 and expire in 20162018 and 2020 Monthly lease payments for these facilities total $8440
Also the Organization maintains equipment under non-cancellable operating leases The lease agreements expire between 2018 and 2022
Future minimum rental payments required for equipment and facilities under operating leases that have an initial or remaining non-cancellable lease term in excess of one year as of June 30 2017 are as follows
Year ending June 30
2018 $ 190842 2019 150981 2020 138161 2021 60161 2022 5316
$ 595461
Rent expense was $119384 and $114000 for the years ended June 30 2017 and 2016 respectiveIy
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 11 - OPERATING AGREEMENTS
The Organization has entered into certain non-cancellable operating agreements with selected food service providers for catering vending and other food services Royalties are due to the Organization based on a percentage of monthly gross sales of the Operator or a set annual amount whichever is greater Also the Operators will pay a percent of monthly gross sales for common area maintenance charges Initial terms of the leases vary from one to fifteen years and have varying expiration dates
The Organization has also entered into an agreement that contains guaranteed minimum commission payments Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2018 $ 175000 2019 200000 2020 200000 2021 200000
$ 775000
NOTE 12 - PENSION PLAN (CALPERS)
The Organization participates in a cost-sharing multiple-employer defined benefit plan through the California Public Employees Retirement System plan (CaIPERS) which covers substantially all regular salaried full-time employees of the Organization CalPERS acts as a common investment and administrative agent for partiCipating public entities within the State of California
17
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 10 - LEASE COMMITMENTS
The Organization leases certain property for the bookstore and food service facilities from California State University Long Beach (CSULB) and other unrelated third parties The agreements with CSULB require the Organization to manage and operate the facilities for the benefit of the University Under the terms of the leases the Organization is required to make monthly lease payments totaling $3000 and is responsible for repairs maintenance alterations and insurance The leases for the facilities are non-cancellable and expire in 2017 and 2018 with an option to renew for five years Non-cancellable operating lease agreements with Associated Students Inc and other unrelated third parties for retail and food service facilities commenced in 200720082011 and 2012 and expire in 20162018 and 2020 Monthly lease payments for these facilities total $8440
Also the Organization maintains equipment under non-cancellable operating leases The lease agreements expire between 2018 and 2022
Future minimum rental payments required for equipment and facilities under operating leases that have an initial or remaining non-cancellable lease term in excess of one year as of June 30 2017 are as follows
Year ending June 30
2018 $ 190842 2019 150981 2020 138161 2021 60161 2022 5316
$ 595461
Rent expense was $119384 and $114000 for the years ended June 30 2017 and 2016 respectiveIy
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 11 - OPERATING AGREEMENTS
The Organization has entered into certain non-cancellable operating agreements with selected food service providers for catering vending and other food services Royalties are due to the Organization based on a percentage of monthly gross sales of the Operator or a set annual amount whichever is greater Also the Operators will pay a percent of monthly gross sales for common area maintenance charges Initial terms of the leases vary from one to fifteen years and have varying expiration dates
The Organization has also entered into an agreement that contains guaranteed minimum commission payments Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2018 $ 175000 2019 200000 2020 200000 2021 200000
$ 775000
NOTE 12 - PENSION PLAN (CALPERS)
The Organization participates in a cost-sharing multiple-employer defined benefit plan through the California Public Employees Retirement System plan (CaIPERS) which covers substantially all regular salaried full-time employees of the Organization CalPERS acts as a common investment and administrative agent for partiCipating public entities within the State of California
17
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 11 - OPERATING AGREEMENTS
The Organization has entered into certain non-cancellable operating agreements with selected food service providers for catering vending and other food services Royalties are due to the Organization based on a percentage of monthly gross sales of the Operator or a set annual amount whichever is greater Also the Operators will pay a percent of monthly gross sales for common area maintenance charges Initial terms of the leases vary from one to fifteen years and have varying expiration dates
The Organization has also entered into an agreement that contains guaranteed minimum commission payments Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2018 $ 175000 2019 200000 2020 200000 2021 200000
$ 775000
NOTE 12 - PENSION PLAN (CALPERS)
The Organization participates in a cost-sharing multiple-employer defined benefit plan through the California Public Employees Retirement System plan (CaIPERS) which covers substantially all regular salaried full-time employees of the Organization CalPERS acts as a common investment and administrative agent for partiCipating public entities within the State of California
17
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
CalPERS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information Copies of the CalPERS annual financial report may be obtained from the California Public Employees Retirement System Executive Office- 400 P Street - Sacramento CA 95814
The recorded unfunded pension liabilities at June 30 2017 and 2016 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2016 and 2015 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 302016 and June 30 2015 (the measurement dates) were $5238154 and $4198844 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2016 and June 30 2015 (the measurement dates) were $17003483 and $ 17974101 respectively
The actuarially assumed investment return after June 30 2016 is 75 per annum The salary scale used assumes salary increases that vary by entry age and service The total increase in any future year includes an assumed 275 inflation rate and no across the board increase and merit increases that vary by length of service
For employees hired before January 1 2013 the Organization is required to contribute at an actuarially determined rate For the year ended June 30 2017 the total employers contribution rate is 1784 of annual payroll This rate is comprised of 888 of normal cost rate and 896 of UAL contribution The active employee contribution rate is 6886 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 6556 and 625 respectively
Payroll is assumed to increase by 300 Employers contribution rates may change if plan contracts are amended There is no contractual maximum contribution required for the Organization by CaIPERS
As of June 30 2015 the plan was between 65-80 funded As of June 30 2015 management estimates that the total unfunded accrued liability was $4574708
Employer and employee contributions were $546840 and $260350 for the year ended June 30 2017
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 12 - PENSION PLAN (CALPERS) (Continued)
The following benefit payments which reflect expected future service are expected to be paid as follows
Year ending June 30 Amount
2018 $ 577603 2019 594055 2020 611877 2021 630233 2022 649140 2023 - 2026 3549766
~6612674
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eligible employees The plan is a defined contribution plan covering part time and full time employees except for student employees performing specified services nonresident aliens and employees who normally work less than twenty hours per week Each year participants may contribute an amount or percentage of their base pay by means of payroll deductions up to the elective deferral limit set by law
The plan provides for an employer matching contribution and an employer non-elective contribution for all employees that have obtained one year of service equivalent to one thousand hours The Organization may contribute a discretionary percentage up to six percent of the amount of the employees elective deferral This contribution is allocated to all participants in proportion to each eligible employees compensation The employer contribution amounted to $22444 and $23513 for the years ended June 30 2017 and 2016
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS
The Organization provides post-retirement health care and dental insurance benefits for certain qualified retired employees Only full time salaried employees hired prior to January 1 2009 and that were participating in CalPERS as of January 1 2009 that terminate employment after attaining five years of service time and have reached age 50 while working for the Organization are eligible for the plan
On September 30 2011 the board of directors approved the participation in the Auxiliary Multiple Employer VEBA a consortium of CSU Auxiliary organizations organized to provide retiree health care benefits through a Voluntary Employees Benefit Association (VEBA) recognized under 501 (c)(9) In 2011 the board of directors approved investing $4000000 to the VEBA trust over the next seven years During the year ended June 30 2017 and 2016 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $4000000 The assets of the VEBA Trust are invested primarily in equity and fixed income securities The assets held in the VEBA trust reduce the accumulated post retirement obligation as reported in the statement of financial position As of June 30 2017 and 2016 the VEBA trust held assets at fair market value of $4956112 and $4011312 respectively
As of June 30 2017 and 2016 the entire unfunded accumulated post retirement benefit obligation amount has been accrued in the statements of financial position
20
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded postshyretirement benefits cost recognized in the Organizations financial statements
June 30
Accumulated Post Retirement Benefit Obligation Retirees Active Employees
Fair Value of Assets
Unfunded APBO Unamortized gain (loss) Unamortized transition obligation
Accrued Post Retirement Benefit Cost
Reconciliation of Benefit Obligation Benefit obligation at beginning of year Service cost Interest cost Contributions Asset return loss (gain) Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
2017
$ 4941809 3199694 8141503
(4956112)
3185391 (1261853)
NONE
$ 1923538
2016
$ 5086708 3116517 8203225
(4011312)
4191913 ( 1465955)
NONE
$ 2725958
June 30
$4191913 38934
299953 500000) 167815) 276985) 32617
433226)
$ 3185391
2016
$ 3691576 32327
305550 500000) 222930 248167)
1101610 413913)
$ 4191913
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation Net gain (loss)
$ NONE 1068993
$ NONE (1 230670)
1 068993 ($ 1230670)
Net periodic post retirement benefit cost Service cost Interest cost Expected return on assets Amortized gain (loss)
$
(
38934 299953 276985)
68904
$ 32327 305550
( 248167) NONE
Net period ic benefit cost $ 130806 $ 89)10
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 4 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 55 during the year beginning July 1 2017 with the rate of increase decreasing each year thereafter until the year beginning July 1 2022 and thereafter the Medical Cost trend rate is assumed to be the same as Consumer Price Index Increases The measurement date of the plan was July 1 2017
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2018 $ 407000 2019 444000 2020 462000 2021 461000 2022 467000 2023 - 2026 2400000
$ 4641000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 15 - SELF-INSURANCE
The California State University System (System) and certain auxiliary organizations have established a public entity risk pool California State University Risk Management Authority (CSURMA) a blended component unit of the System to manage centrally workers compensation general liability industrial and nonindustrial disability unemployment insurance coverage and other risk-related programs The Organization has a commitment in the self-insurance coverage Management believes the CSURMA self-insurance claims liability is fully funded at June 30 2017
NOTE 16- FAIR VALUE MEASUREMENTS
Generally Accepted Accounting Principles (GAAP) establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs The fair value hierarchy ranks the quality and reliability of the information used to determine fair values
The fair value hierarchy is as follows
Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2 Observable inputs other than quoted prices included in Level 1 that are not observable for the asset or liability either directly or indirectly These inputs may include quoted prices for the identical instrument on an inactive market prices for similar instruments interest rates prepayment speeds credit risk yield curves default rates and similar data
Level 3 Inputs that are unobservable inputs for assets and liabilities are based on the Organizations assumptions These include inputs that are internally developed and estimated
The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair measurement in its entirety
23
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2017 AND 2016
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
The following table presents assets that are measured at fair value on a recurring basis at June 302017
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 4375070 $ 4375070 Common stocks 2940992 2940992 Investments in alternative funds 993030 993030
8309092 7316062 993030 Other Assets
Mutual funds 768432 768432
S 9077524 S 8084A94 S 993030 ~O~E
The following table presents assets that are measured at fair value on a recurring basis at June 30 2016
Quoted Prices in Active Significant
Markets for Other Significant Identical Observable Unobservable
Fair Market Assets Inputs Input Value Level 1 Level 2 Level 3
Investments Mutual funds $ 5041438 $ 5041438 Common stocks 1181323 1181323 Investments in alternative funds 499855 NONE 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
~7491048 S 6991193 S 499855 S NO~E
24
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 17 - REIMBURSEMENTS TO AND FROM CSULB
The Organization paid reimbursements to CSULB for the year ended June 30 2017 in the amount of $1031500
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 6194 Repairs and maintenance 170388 Communications 62008 Allocated general and administrative expenses 81562 Utilities and rent 438040 Supplies 31808 Interest and principal on note payable 241500
$1031500
The Organization paid reimbursements to CSULB for the year ended June 30 2016 in the amount of $1447876
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 185923 Repairs and maintenance 172654 Communications 63976 Allocated general and administrative expenses 35683 Utilities and rent 711890 Supplies 13750 Interest and principal on note payable 264000
$ 1447876
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302017 AND 2016
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $468058 and $441679 at June 30 2017 and 2016 respectively for reimbursement of expenses to operate the ID Card Services
CSU and CSULB charges the Organization a fee from 3 to 7 to oversee any on campus construction projects
NOTE 19 - CONCENTRATIONS AND CREDIT RISK
The Organization maintains cash in various financial institutions which may at times exceed federally insured limits All accounts at an insured depository institution including all non-interest bearing accounts are insured by the FDIC up to the standard maximum deposit insurance amount of $250000 Uninsured balances were $4300801 and $3206737 at June 30 2017 and 2016 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVICE
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36290437 1746894
116646 38153977
BOOKSTORE
$ 19001472 978923
79575 20059970
10 CARD SERVICES
$ 468058 27548 37071
532677
TOTAL
$ 16820907 740423
RESIDENCE HALL
$ 7743020
RESIDENTIAL LEARNING COLLEGE
$ 2073952
VENDING
S 352627
352627
CASH OPERATIONS
$ 7003935 387796
7391731
COST OF SALES 16440145 11580682 4859463 2108964 514062 2236437
GROSS PROFIT 21713832 8479288 532677 12701867 5634056 1559890 352627 5155294
See Independent Auditors Report and Notes to Financial Statements 27
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVlTIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2017
FOOD SERVlCE
OPERATING EXPENSES Salaries and wages Employee benefits Advertisingpromo Bad debts Bank and credit card fees Board Discounts and markdowns Employees appreciation Equipment rental Freight outpostage General expenses Insurance Inventory adjustment Professional services RlH commissions Rent Repairs amp maintenance Royalties amp commissions Services Subscriptions amp dues Supplies Telephonedata lines Training Travel Utilities
$
TOTAL
9252660 5238762
96370 57299
600895 32512
433066 55355 70883 (9812)
91387 85035
191795 785042 119384
1184926 607921 573626 62034
858812 98888
117776 41604
285293 20931513
$
GampA
1817896 2922859
(7979)
79862 32512
47918 4405 3585 2559 3844
145057
429446
5858 8165
47241 33177 52220 20212
BOOKSTORE
$ 2651847 672932
70968 37592
291578
433066 3842
42355 (13412) 30797 38037
44938
95284 319965 230419
78335 47833
290233 36888 32627
5731 72987
5514842
IDCARD SERVlCES
$ 141542 40329
671
14382
301
15 215 257
9600 168189
895 62507
4053 6529 1376
TOTAL
$ 4641375 1602642
32710 19707
215073
3294 24123
57816 42897
1800 785042
14500 267326 377502 489433
5141 458831
24770 26400 14285
212306 9316973
RESIDENCE HALL
$ 1809101 716380
4538 9420 5378
1256 4572
4459
1500 615737
13803
163971
170829 4957
19603 3519
RESIDENTIAL LEARNING COLLEGE
$ 529993 216947
1923 2849
360
369
1770 68
164772
6048
60777
54184 1433
628 564
1042685
VENDING
$ 49032 29650
2500
CASH OPERATIONS
$ 2253249 639665
26249 7438
209335
1669 19551
51587 42829
300 4533
12000 247475 377502 264685
5141 233818
18380 6169
10202 212306
4644083
DEPRECIATION AND AMORTIZATION Amortization Depreciation 977635 344239 539150 1088 535040
977635 344239 539150 1088 535040 TOTAL EXPENSES 21909148 5859081 9856123 1043773 5179123
ENTERPRISE OPERATING INCOME(LOSS) S (195316) S 2620207 S 2845744 S 516117 S (23829)
See Independent Auditors Report and Notes to Financial Statements 28
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTYNINER SHOPS INC Schedule of Net Positlan
June 30 2017 (for inclusion in lhe Californm State Unlvenilty)
Assets
Current assets Cash and cash equivalents Shon~term Investments Accounts receivable net Leases receivable current portion Notes receivable current portion Pledges receivable net Prepaid expenses and other current assets
Tolal current assets
Noncurrent assets Restncted clsh and cash eqmvatentt Accounts receivable net Leases receivable net of current purtion Notes receivable net of current portIOn Studcm loans receivable nel Pledges receivable ncl Endowment mvestments Other long-term Investments Capital assets net Other assets
Totol noncurrent assets
TO al assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Tolal deferred outflows of resources
LiabIlitiesmiddot
Current labilities Accounts piyable Acc(ued safanes and benefits Accrued compensated absences current portion Unearned revenue Capitalized lease obligltIons current portion Longtenn debt oblIgatIons current portIOn Claims ltabilllY for losses and loss adjustment expenses current portion DepOSItory aceounts Other liabilities
Total current liabihtles
Noncurrent habillties Accrued compensated absences net of current ponion Unearned revenue Grants refundable Capitalized lease obligations net of current portlon Long-term debt obhgahons net of current portion Claims lability for losses and loss adjustment expenses net of current portIon DepOSitory accounts Other postempoynlcnt benefIts obligations Net pension liability Other hablhlles
Total noncurrent liabllltics
Tolal habdilli$
Deferred mflows of resourcesmiddot SerVice concession arrangemcnu Net pensIOn ImbililY UnamortIzed gam on debt refunding Nonexchange transactIOns Others
TOlal deferred intlows of resources
Net POSItion Net mYeslment 111 capital assets Restricted formiddot
Nonexpelldible - endowments Expendable
Scholarslllps and fellowships Research Loans (apllal projects Debt sen Ice Others
Unrestricted
Total net pos1l0n
4295499 8309092 1571945
2749477
768432 8486644
9255076
26181089
18
95000
3339206
3383768
31gS391 5238157
118073 16
15l4()522
5007876
6026691
1IIJJ4567
See independent auditors report and notes to the tinancial statements 29
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NIN~R SlIOIS INC
Schedule of Revenues Expenses and Changes in Net Position
Ycar Ended June 30 2017
(for inclusion in the Calilomia State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances 01$ ____ Grants and contracts noncapital
Federal
$
State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances of $ ) Other operating revenues
38153977
Total operating revenues 38153977
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional Stlpport Operation and maintenance of plant Student grunts and scholarships Auxiliary enterprise expenses Depreciation and amortization
37371658 977635
Total operating expenses 38349293
Operating income (loss) (195316)
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State finaneial aid grants noneapital Local financial aid grants Iloneapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapitai Investment income (loss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
1048244
( 139847) 789819
Net nonopcratll1g revenues (expenses) 1698216
Income (loss) before other revenues (expenses) 1502900
State appropriations capital Grants and gifts eapital Additions (reductions) to permanent endowments
Increase (decrease) in net position 1502900
Net position Net position at beginning of year as previously reported Restatements Net position at beginning of year as restated
9531667
9531667
Net position It end of year $ ==~II~O~34=5=67==
Sec independent auditors report and notes to the financial statements 30
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
22
1 Retrid~ uhandC1~bequjnkftl~ AlJUKlO l(lCY [j QshequiaIcms related to en
FORlY~NINERSHOPSIXC
Othr Information Jure 30 lfH i
(for lllcluslonID tk Cahfonlia State Unnersity)
Total restricted cash aM cash eqUJ~nts
21 COltlPOlIitiou of irnC$(mmts at June 30 lUCY
Stale ofCalilbrma Surplus Money Imeslltlelll Furd (SMIF) Slate (ifCaltlbrrua Local Agervy Imcrutyenlll Fund (LAlF) Corpotltlte bonds Certificates ofdeposit Mutualfuflli Mcuv ~tlrkct fwls Repurchase agR(ITellis Ommrttlal paper AS$Ct backed S((uniles
Mortgage backed SOC1U1tics Municipal b()~
Curllllt
Unrcstrict~d
middotLJ7S0iO
CUlRnl RtS1ricled Total lt-Urnnt
-I-~75JliO
NOOCIUTC1rt
Unn=strictlaquol
76~B2
NuncurTellt
Restmttd Toul NODQIlRft(
76amp[11
Tobl
SU3S02
29-laquo)992 19H1l9Z lJfIU991
~)n010 9IJHlJO )9030
l009091 ~U09Jtn 7Ms-l-11 i6L+l lJJ7751+
gJn9091 8i09(VI2 i68431 i6SAl1 90i751+
liar Unhmiddotcrsit~ tlndercnnfractud agrttmenb lit June JO lUCY hld h the Uru~~ ualcr coruraCh11i
23 Redricted Curttnt Inmiddott)1menfs lit Jurtt 30 2UCY n~hh-d to AmOtiut
TotallmestmnlS
l(s) cndo 11~11 1lllSIIIkuts (enter as oqaTlye IlUnner)
TOl2limHSim=lI1$
Totd tTS1n(hd curttl in eOtnl1nll al June 30 20CY
2A RCflrifl~d RiIIlCUtTtR( inmiddotutmtnts at June JO 2l(Y rrbted (0 Amount Endowmn 1Il~strrenl
See independent auditors report and notes to the financial statements 31
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
Total restricted rullKUfTIru irt~stmentt Junr 30~ lOeV
15 Fair ndue rurraffhJ in ilIfftmut~ at Junr 3OlOY
State of Califomia Surplus Money Lm~s1meu lund (SMIt) State ofCahfoffila Local AgetlC Imetlrnl1l Fnnd (1AlF) Corporale bonds Certificales ofdeposit Mutual fimis MOIlLmiddot ~iarkel fimis Repurchase agrttmellls Cornmcrcnl paper Asset backed setUJ1lics Mon~e backed sccllnncs Muruclpal bonds US agerlL secunlJe~ U S tTeasun SCCUTItJes
Eqwt sccunles ExchatJgc traded fu~ (ETFraquo A1lematle imetlnrnls
Pm ale equity (includmg limited p1nncr~hips) Hedge funds Mallaged futures Real crule imestnlC1ns (mcluding RElT~) Comroomtlc$ Dcm-auns
T(ltaJ
51+3502
29-K1)lt)2
993tnO
Total 1C~tlrscflIS 9(177524
FORTY-N[IER SHOPS LiC Othe Inlomldtlon
June 30 2017 fw ihclusiOtl In tt Uilifonna Stale UIUernty)
Fair VOilue Meuarnntnt Usinz
QunCed frit~ in ctive Ma kds for
Identical AMds (ucll)
5141502
29~O991
Significant Other Obleurorvable Inpuh
(nell)
99UUO
Si~ificant
UnobSltn2blC
Inputs (1013)
Net A~~ Value
(NA1
80ttmiddot(~94 993030
See -1p11 auditors report and notes to the financial statements ~)J~
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
roRTY~NrNER SHOPS INC Othr lnforrnatron
lUrk 30 2017 (for uxIUSlOlllll ttc Cahlonua Statc Unhtrllit~middot)
11 Composition o(CltptcaJ uiCU Itt Jum 401017
NonrkPreciablefmnIIIDr1i7able capital assets Land and land ~fO tnyennis Wolls of iirt and histone-al treasures Omstructioll work in progress laquo-VIP) rmangibk assets
Rlghli and easemcl1Is PleftS wpynhIs and trademarks 1ntcruaU~middot gClllutcd iutangible assets in prognss Ucenses and pcnfli~ Other lruangtble assets
BIace June JO 20H~
49190amp
Priur~ritld Adjuotmrtt1l1 RlaquotllSjlifiCOIlioni
Balance JWItJltI~2616
(rmllted)
491908
Additlul1~
fi75-l71
Reductwn~
Tramfenof Compllttltd
CWIP
(112561)
Bal
~
1436
Total uungibIe llSSCts
Total nondcprocmbldoollatTk)rtJzabk capital assets 49190amp -l3908 g75AIl
(7 jOt)
(L225681) 143c
Inlanglble assetsmiddot Software and middotcbsitct Rights am easenyenrTS
6215547 6215547 0000 (739)19) l21568J ft71Umiddot9I book~ and matenals
I(iltltion~n-ntualjoo
lutnlgttNlt~
Tota lntJflglblc asscts
TOLaI dcpreciablcentlammtzable capital altsels 258926 l5K96116 0000 (l417O-W) 25135(9
TOlal capItal assets w390~3-l 2(d9(Un4 (1+170w) 25Jn9265
(l22KU52) (6lt6391) 6755J5 07Nt-J)
(5469Hm) (A6l-lllaquol) (321242) 705765 (5otU95i)
u1tafltlblcasscts
TQlalaCLIlfllLdilted deprcciatlOiarrnrt17alioll (17716l) (177296) 97i635) tg13W fl7V262t)
Tolal capillil aS$ctS net K5945-g Si9l~3amp (721(gt4) i3571(1) II 4K(j 6ll
See independent auditors report and notes to the financial statements
33
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTV~NINER SHOPS INC Oller InfOtntlllml
11ln 30 2017 (for inclusIon in t~ (alifomm State Uruvers1~
31 Ddn nf dellrtcisttonmt amot1wtwn ~11Kf for 1M yeu ended Juoe 30 Mitt
977J135
Total dtptetlatOn 3M 3n~ruzatJon 977615
-4 wnj-term Jiabititi~ raquo(tn-it) schtdoe
BJlllilnce Balance Junt 30 2016 BaJan(e CurTtnl longo-Cerm
Juoe JO 2016 Rt(b~~ifi(tioQ~ (rtltatcd) AdditioQ$ Reduction~ June 30 2017 ~ol1iun ---I0rtiOD
AccnJed compcllSa[ed absences U9)262 li90262 1611049 (1527259) U7(iOS2 L476052 Clalms habllity fOI losses al~ loss adJWitrrcnt expenses
Capltahzed lease obligatIOns Gross balance Unaroortized premium (diSCOWll) on capiinlized leasc obUgauons
Total capnaluoo lease obhgalJGns
110iU)OO ~1fiOO()H (85000) U1500()
Totallong-tenndebt obligmcns 3~ 13(I(LOnO 32l50un 95001) 1120000
Unaunr11red bond pnmmrn (discounl) T otal klJ~-trm debt obhgallortS oct
TOlIOll-lcrm liabllUes
2637611 563768
4954(J30
16~76jj
~ 56~76~
49SmiddotLmO 16jJl4J ([6122S9)
2(i7(~
J47~7(~
4954~20
95)O()
1571()52 13I(1i68
5 Future minimum lelloe Ilil)mentsmiddot calli1aliu-d Imiddot~ obligations
CapifaIizrd kast ohUIettioll~ retted ttl SRB All othn clpitalbalti lcltk uhlifilltiulU Tntal upitalizrd leLie ohlifttio~
Year cndmg Ju~ n 20P 20Ut 20)9 202n 2021 2H22 ~2()2( 2027 ~ 2011 2032 ~201h
PriD(iplLIOnlv hutnS1 OnJv frincit)JllOn[ menS Onl~ Printipal Onh Interest Onh
2042 ~ 2046
2052 -20(
1ot11 minimum leasc payment5
Less arwunts repoc5(11tiug mterest
PreSoCnt value of future mimmum leaSC p3ynlIIS
Unmllt1uro oct prClI11Wll (dlSCOU111j
Totill capnaJIed kase oblIgations
Less currru pontOll
ClIjlltllluAd Icaji( uhlijltiun net of currenl (WUliuQ
See lntiPtfnti auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
FORTY-NINER SHOPS INC Otoo lnfoltTlaliml
lure 10 2Ui7 (for inclusion ill tIr ClUron1l3 State lilUerslt)
6 ung~erm debt tlbli~lioD K1wdule All other lon2-tenn
AUIiliJlry nnftUl Mnds dlht obligHiolU TotlllltlnlHrrtn debt (lbli~ation5 Princila] and Principalnd Principal and
PrilkipalOatv lnlerlaquoi Oat lnte~1 PrincipalOnI (ntt[6f Principd Onk JntcmdOnh Intue~t~ Ycar ending 1une 1(j
20Ht 95000 14860J 24360iJ 95000 2middot4)6QO 2019 lH950 2010 DO9UO
231275 231275
2013-1017 1 I 59t75 US9475
695950 lQ2g ~20)2
0950 695950
2043 -2047 2048~ 2052
w2067
Total nunimum paymeI1s 1115000 190J025 5 118D25 1215000 1901025 51180H
Less allKlwlls representtng Interest (1903025)
Present value of futwe minirnum paynrtIs 321S0()()
Unarrurtized lyent premmm (diSJOUl1t) 263768
TOlallortg-lcnndebt obhgmoll5 3A71U68
Less CUIlClll portim ()SHOO)
Long-term debe obli~tintU net of -current portion J1amp~7)g
7 CIIkulatlOn o( Pd poitioll
71 CAkulatioIi 4f net p65ltlMt - net im1stment in ltapitti HWI$
841laquo164~
~Cl poslllmmiddot net IIwcstmCnln aplld asset 5JlO7S7(j
72 CIcu11ltion f fttt puition - rHtneflaquoi rljr 1toncxptndllble - tlldltI1mtotll Poruon of nS1nclcd cash ari cash equlilfeUlS related 10 endOgt 1~1U5 EfilowfIpoundn HlesltWms
Other adJIlilllCntS (pfelie list) Add descnpuoll
Add Wsqlptioll
Add description
Add descnpnoll Adddescnprum
Add de5cnpuon Add de5cnptioll
W descnpuolL Add de$cnplloH Add dcscnpll01l
Sd Ilmitioll Re~1rieted fllr nonclIIClldAble - endo mCDt Iler SNP
See nrl1npnrlpnt auditors report and notes to the financial statements
35
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
8
FORTY~NrNER SHOPS INC Other lnfonmtion
JIft ~O 21117 (for inclusiou in th (ltllifOl1tm State University)
Tr~actj(iru i1h related cnliiks Am~uDt
Otller postanplo~1DeDllKDefit~ ubli~tiun (OrtS)
IrlOaSt (decrease il1 ncl OPEE obhgamn (NOO)
Otbr ad]uslnllNs
KOO bull begimuug (If year NOO~end ofYeltlr
10 Pollution nmediatiutt liabilit~ UDder GASB Statemftlt No 49
Deltuiptron
AdddestTlpuon Add G-scnpllon Add desCrIpuon Add dcscnpuon Add desrnphon Add descnpllon
Total pollUTion renlCdiatioliliablilues
CUlTCl11portion
PollutiOn rcnrdillOn habiliues net of CUITClll portion
10$78
1mK)
297999
50000()
500(0)
(15061n)
4191911 31155391
Amount
See dependent auditors report and notes to the financial statements 36
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
---- ----
FORTYmiddotNDlER SHOPS INC Otbt information
June JO loti (for UlcJusion in the Califoffila Staic Ulll-ersi~ )
11 1ltc DAt~ and amoun1 oftht- prior ~rifld adj~m(nt(~) rtturded tu beginning net politillQ ~dPmlilittn
Cla~s Am(~un1
Dr (Cr) reponed 953L667
Net poslllouas of June 3O1Ul5 as restated
Pnraquoid~I detailed brukdoWlill orlh( jlllrnt cftrric~ (at the finaaelI ifatement line ilem 1Cd) booked to re(ord each prior period adjustrrttnt Dtbit Credit
e~ ~1=~Sosrdc=ouma=01=)shy
Ne1~~O~o-r-Cd1=t-8c-J=un=JaI=I1I)-
See independent auditors report and notes to the financial statements 37
top related