Building the Future Transforming Lives Annual - University of ...

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UNIVERSITY OF COLORADO FOUNDATIONConsolidated Statements of Cash FlowsYears ended June 30, 2007 2006Cash flows from operating activities:Change in net assets: $ 180,192,821 $ 65,393,257Adjustments to reconcile change in net assets to net cash provided by operating activities:Depreciation and amortization expense 2,846,461 3,006,443Gain on sale of student housing facilities (6,231,171) –Amortization of deferred bond issuance costs 47,891 52,245Loss on disposal of property and equipment 1,126 –Other changes in operating assets and liabilities:Accounts receivable, net 1,033,373 (1,354,402)Accrued interest and dividends receivable (9,297) (34,565)Contributions receivable, net (16,867,769) 625,232Other assets 158,649 203,562Beneficial interest in charitable remainder trusts held by others 111,332 (57,283)Beneficial interest in perpetual trusts held by others – (146,317)Assets held under split-interest agreements (3,234,567) 1,744,540Accounts payable and accrued liabilities (including University) 1,796,083 2,342,745Deposits held for others (392,797) 59,012Liabilities under split-interest agreements 433,879 (1,184,617)Custodial funds 29,204,282 22,648,037Deferred revenue 607,296 (695,654)Funds held in trust for others 261,188 (473,641)Net investment return (132,500,849) (68,547,978)Permanently restricted contributions (18,340,362) (11,547,249)Net cash provided by operating activities 39,117,569 12,033,367Cash flows from investing activities:Net purchases of investments (52,195,736) (21,912,848)Proceeds from the sale of student housing facilities 65,500,000 –Purchases of property and equipment (160,166) (428,414)Net cash provided by (used in) investing activities 13,144,098 (22,341,262)Cash flows from financing activities:Permanently restricted contributions 18,340,362 11,547,249Change in cash restricted for bond fund requirements 5,994,750 357,898Change in bonds payable, net (67,894,953) (1,205,403)Cash paid in connection with bond defeasance (259,332) –Payments on capital lease liability (281,822) (240,813)Net cash provided by (used in) financing activities (44,100,995) 10,458,931Net increase in cash and cash equivalents 8,160,672 151,037Cash and cash equivalents, beginning of year 8,919,737 8,768,700Cash and cash equivalents, end of year $ 17,080,409 $ 8,919,737Supplemental disclosures:Cash paid for interest (interest expensed $3,583,830 and $3,930,662) $ 5,230,778 $ 3,945,662Unrelated business income taxes paid 18,895 390,221See accompanying notes to consolidated financial statements.– 26 –
UNIVERSITY OF COLORADO FOUNDATIONNotes to Consolidated Financial Statements1. ORGANIZATIONThe University of Colorado Foundation (the Foundation) wasincorporated in 1967 and is authorized by the Board of Regentsof the University of Colorado (the Regents) to solicit, receive,hold, invest, and transfer funds for the benefit of the Universityof Colorado (the University). The Foundation receives fee revenuefrom the University pursuant to an Agreement forDevelopment Services between the Regents and the Foundationthat has been renewed annually (see Note 13). The AlumniAssociation of the University of Colorado at Boulder (BoulderAlumni Association) is a division of the Foundation. TheBoulder Alumni Association connects alumni, students, friends,and all members of the University community to each other andto the University through activities and programs that stimulateinterest, loyalty, and support for the University. Subsequent toJune 30, 2007, the Foundation transferred the operations of theBoulder Alumni Association to the University (see Note 14).In 1998, the Foundation established the CU FoundationCharitable Gift Fund as a separate tax-exempt entity whereindonors could create a donor-advised fund to pay or distributeincome, principal, or both to or for the benefit or support of theUniversity of Colorado, or to benefit or support other organizationsthat are not private foundations. The CU FoundationCharitable Gift Fund was dissolved in June of 2006.In 1998, the Foundation established CU Foundation Holdings,Inc. as a separate tax-exempt entity for the purpose of providingfor the acquisition, improvement, operation, maintenance, andsale of real and personal property from time to time for the ultimatebenefit of the University of Colorado Foundation in furtheranceof its charitable purposes. At June 30, 2006, no propertyassets were held by CU Foundation Holdings, Inc. At June 30,2007, property assets of $7,248,500 were held by CU FoundationHoldings, Inc.In June 2002, the Foundation established Bear Creek I, LLC (BearCreek), a Colorado limited liability company, whose sole memberis the Foundation. Bear Creek was established for the purposeof financing and developing a student housing facility andrelated facilities on land located at the University’s WilliamsVillage property in Boulder, Colorado. In June 2007, Bear Creeksold the student housing and related facilities (see Notes 6and 7).2. SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIESREPORTING ENTITY AND PRINCIPLES OFCONSOLIDATIONThe accompanying consolidated financial statements include theaccounts of the University of Colorado Foundation, CUFoundation Holdings, Inc., and Bear Creek I, LLC because theUniversity of Colorado Foundation has both control and aneconomic interest in each of the organizations. All significantintercompany balances and transactions have been eliminated inconsolidation. Collectively, these consolidated entities are hereinafterreferred to as “the Foundation” unless otherwise noted.BASIS OF ACCOUNTINGThe accompanying consolidated financial statements have beenprepared on the accrual basis of accounting.FINANCIAL STATEMENT PRESENTATIONFinancial statement presentation follows the requirements of theFinancial Accounting Standards Board (FASB) in its Statement ofFinancial Accounting Standards (SFAS) No. 117, FinancialStatements of Not-for-Profit Organizations. Under SFAS No. 117,the net assets, support and revenue, program services, and supportingservices in the accompanying consolidated financialstatements are classified based on the existence or absence ofdonor-imposed restrictions. Accordingly, net assets of theFoundation and changes therein are classified and reported asfollows:Unrestricted Net Assets—Net assets that are generally notsubject to donor-imposed restrictions. In general, the unrestrictednet assets of the Foundation may be used at thediscretion of the Foundation’s management and board ofdirectors to support the Foundation’s purposes, operations,and mission.Temporarily Restricted Net Assets—Net assets subject todonor-imposed restrictions that may or will be met eitherthrough actions of the Foundation and/or the passage of time.When a restriction expires, temporarily restricted net assets arereclassified to unrestricted net assets and reported in the consolidatedstatements of activities as net assets released fromrestrictions.Permanently Restricted Net Assets—Net assets subject todonor-imposed restrictions that are maintained permanentlyby the Foundation. Generally, the donors of these assets permitthe Foundation to use all or part of the income earned onrelated investments for specific purposes.USE OF ESTIMATESThe preparation of financial statements in conformity withaccounting principles generally accepted in the United States ofAmerica requires management to make estimates and assumptionsthat affect the reported amounts of assets and liabilities,disclosure of contingent assets and liabilities at the date of thefinancial statements, and the reported amounts of support, revenue,expenses, and distributions during the reporting period.Actual results could differ from those estimates, and those differencescould be material.– 27 –
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