forty-niner shops, inc. financial statements june...
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FORTY-NINER SHOPS INC
FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 Allocated General
Statements of Changes in Net Assets 6
and Administrative Expenses 29
Schedule of Net Position 30
Schedu~ofRevenues Expenses and Changes in Net Position 31
Schedule of Other Information 32 - 38
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 302016 and 2015 and the related statements of activities 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 pertorm the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement
An audit involves pertorming 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 2016 and 2015 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 38 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
Guzlb~ Long Beach California September 14 2016
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 2016
$ 3499447 6722616 1633078
45646 272666 500000
2504477 14000
15191930
8594558
768432 768432
$24554920
2015
$ 4340279 5910297
931104
7992 456697 500000
2244713 59250
14450332
8818616
768432 768432
$24037380
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 post retirement benefits
Total Liabilities
NET ASSETS Unrestricted
Invested in capital assets Other unrestricted
Total Net Assets
TOTAL LIABILITIES AND NET ASSETS
JUNE 30 2016 2015
$ 85000 $ 85000 131345 880840 213860 215335 312882 298850 459047 302753 548772 336696 459963 421978 930299 859910 474416 344770 409000 411000
4024584 4157132
3491328 3585260 3724428 3690607 3782913 3280576
10998669 10556443 15023253 14713575
8594558 8818616 937109 505189
9531667 9323805
l24554920 $24037380
See Independent Auditors Report and Notes to Financial Statements 4
FORTY-NINER SHOPS INC STATEMENTS OF ACTIVITIES
ENTERPRISE OPERATING REVENUES Sales Commission Vending Other
ENTERPRISE OPERATING EXPENSES Cost of sales Operating expenses Depreciation and amortization
ENTERPRISE OPERATING 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 BEFORE RECOGNITION OF CALPERS PENSION OBLIGATION 207862
EFFECT OF RECOGNITION OF CALPERS PENSION OBLIGATION
INCREASE (DECREASE) IN NET ASSETS $ 207862
JUNE 30 2016
$ 36636425 954401 339183
82305 38012314
16550622 18356171
985A66 35892259
2120055
279561
1843 ( 171911) ( 311727) ( 157672) ( 6788 ( 366694
( 314829)
( 1230670
2015
$ 34846706 1043522
380154 7587
36346169
16820626 16712547
947850 34481023
t865146
230775
( 181568) ( 155366)
38312 11601 56 1246
( 319158)
66917
1556659
4035377
($ 2478718)
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
2016 2015
BEGINNING NET ASSETS $ 9323805 $ 11802523
INCREASE (DECREASE) IN NET ASSETS $ 207862 (2478718)
ENDING NET ASSETS $ 9531667 $ 9323805
See Independent Auditors Report and Notes to Financial Statements 6
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30
2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES Increase (decrease) in net assets $ 207862 ($ 2478718) Adjustments to reconcile change in net assets
to net cash from operating activities Depreciation 985466 947008 Amortization of loan discount 842 Interest imputed from net loan
premiums and costs ( 1843) Unrealized loss on investments 311727 155366 Realized (gain) loss on investments 157672 ( 38312) Net (gain) loss on disposal of fixed assets 6788 ( 11601) (Increase) decrease in
Accounts receivable ( 701974) ( 73274) Accounts receivable from CSU 5258 Accounts receivable CSULB auxiliary
organizations ( 37654) 44761 Accounts receivable CSULB 184031 187646 Note receivable CS ULB ( 500000) Inventories ( 259764) ( 286537) Prepaid expenses 45250 ( 29496)
Increase (decrease) in Accounts payable ( 749495) 240010 Accounts payable CSULB auxiliary
organizations ( 11274) Accounts payable CSULB ( 1475) ( 117822) Accounts payable other CSU
auxiliary organizations ( 10135) Accounts payable CSU Refundable campus debit card deposits 14032 72221 Accrued liabilities 156294 ( 15398) Accrued payroll 212076 72458 Accrued vacation 37985 29169 Accrued sick pay 70389 100633 Accrued pension obligation 163467 4035377 Accrued post retirement benefits 1000337 ( 169286)
Net Cash From Operating Activities 1801171 2148896
See Independent Auditors Report and Notes to Financial Statements 7
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
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
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
CHANGE IN CASH AND CASH EQUIVALENTS
BEGINNING CASH AND CASH EQUIVALENTS
ENDING CASH AND CASH EQUIVALENTS
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest
FOR THE YEARS ENDED JUNE 30
2016 2015
345007) ( 424089) ( 3 177541 )
1895823 900
( 2 1049914)
( ( (
(
545005) 61629)
686023) 640764
13 1000 638 1893)
(
( (
375000) 282911 500 1000) 592 1089)
(
( (
80000)
500 1000 580 1000)
840 1832) 930003
4 1340279 3A10276
$ 3499A47 $ 4340279
$ 179000 $ 181568
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 30 2016 AND 2015
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 2016 AND 2015
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
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 14 2016 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 3~ 2016 2015
CSULB Research Foundation Forty-Niner Foundation Associated Students
$ 28234 6029
11383
$ 7992 NONE NONE
$ 45646 $ 7992
11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 bears interest at 4 semi annual and had an original due date of September 23 2015 The loan is secured by commissions and sponsorship fees defined by the agreement between the Organization and Department of Athletics dated October 28 2010 The parties may agree to renew the loan for additional six month terms not to exceed a total term of two years Interest is payable at each maturity date
During the year 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 The new due date for repayment of principal and interest is September 25 2016
In September 2016 the Organization received full payment for the note
NOTE 4 - INVENTORIES
Inventories consist of the following June 30 2016 2015
New textbooks $ 715117 $ 823647 Computer equipment supplies and software 473322 180064 Supplies 481274 444457 Used textbooks 513978 471818 Trade books 20493 24361 Food service 300293 300366
$ 2504477 $ 2244713
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 5 - INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2016 June 30 2015 Cost Market Cost Market
CURRENT ASSETS Mutual funds $5044679 $5041438 $3878598 $4126641 Common stocks 1000598 1181323 688975 881429 Investments in alternative funds 499136 499855 865214 902227
$6544413 16e722616 $5432787 5910297
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432 $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
June 30 2016 2015
Buildings and improvements $ 19681399 $19606835 Equipment furniture and fixtures 6168813 6000238 Automobiles 46734 46734
25896946 25653807 Less accumulated depreciation (17796296) (16905010)
8100650 8748797 Construction in progress 493908 69819
$ 8594558 ~ 8818616
Construction in progress at June 30 2016 and 2015 consists primarily of capital leasehold improvement expenditures for the bookstore food service facilities and construction of the Amazon merchandise sales lockers facility
Depreciation expense for the years ended June 30 2016 and 2015 was $985466 and $947008 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2016 and 2015
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2016 2015
Note payable to CSU is payable semiannually on May 1 and November 1 of each year including interest and matures May 1 2039
$ 3300000 $ 3675000
Unamortized net deferred amount on refinancing 276328 3576328
( 4740) 3670260
Less Current portion ( 85000) ( 85000)
Noncurrent portion $ 3491328 $ 3585260
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 30 2016 AND 2015
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 1 2016 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 2017 $ 85000 2018 95000 2019 90000 2020 90000 2021 95000 Thereafter 2845000
$3300000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley SmithBarney which has a zero balance at June 30 2016 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 SmithBarney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2007 2008 2011 and 2012 and expire in 2016 2018 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 2019
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 2016 are as follows
Year ending June 30
2017 $ 167455 2018 130683 2019 90821 2020 78000
$ 466959
Rent expense was $114000 and $113500 for the years ended June 302016 and 2015 respectively
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
In April 2016 the Organization entered into an agreement with Amazon to develop operate and maintain Amazon merchandise sale lockers on campus The cost of building the facility will be shared by the parties The total cost of building the facility is expected to be $1174486 the Organizations expected share of the cost is $567486 and Amazons share of the cost will be $607000 To the extent the construction costs exceeds the budgeted amount the Organizations future commissions will be reduced
Based on the terms of the agreement the Organization is guaranteed a minimum commission payment Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2017 $ 125000 2018 175000 2019 200000 2021 200000 2021 200000
$ 900000
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 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
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 Allocated General
Statements of Changes in Net Assets 6
and Administrative Expenses 29
Schedule of Net Position 30
Schedu~ofRevenues Expenses and Changes in Net Position 31
Schedule of Other Information 32 - 38
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 302016 and 2015 and the related statements of activities 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 pertorm the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement
An audit involves pertorming 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 2016 and 2015 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 38 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
Guzlb~ Long Beach California September 14 2016
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 2016
$ 3499447 6722616 1633078
45646 272666 500000
2504477 14000
15191930
8594558
768432 768432
$24554920
2015
$ 4340279 5910297
931104
7992 456697 500000
2244713 59250
14450332
8818616
768432 768432
$24037380
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 post retirement benefits
Total Liabilities
NET ASSETS Unrestricted
Invested in capital assets Other unrestricted
Total Net Assets
TOTAL LIABILITIES AND NET ASSETS
JUNE 30 2016 2015
$ 85000 $ 85000 131345 880840 213860 215335 312882 298850 459047 302753 548772 336696 459963 421978 930299 859910 474416 344770 409000 411000
4024584 4157132
3491328 3585260 3724428 3690607 3782913 3280576
10998669 10556443 15023253 14713575
8594558 8818616 937109 505189
9531667 9323805
l24554920 $24037380
See Independent Auditors Report and Notes to Financial Statements 4
FORTY-NINER SHOPS INC STATEMENTS OF ACTIVITIES
ENTERPRISE OPERATING REVENUES Sales Commission Vending Other
ENTERPRISE OPERATING EXPENSES Cost of sales Operating expenses Depreciation and amortization
ENTERPRISE OPERATING 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 BEFORE RECOGNITION OF CALPERS PENSION OBLIGATION 207862
EFFECT OF RECOGNITION OF CALPERS PENSION OBLIGATION
INCREASE (DECREASE) IN NET ASSETS $ 207862
JUNE 30 2016
$ 36636425 954401 339183
82305 38012314
16550622 18356171
985A66 35892259
2120055
279561
1843 ( 171911) ( 311727) ( 157672) ( 6788 ( 366694
( 314829)
( 1230670
2015
$ 34846706 1043522
380154 7587
36346169
16820626 16712547
947850 34481023
t865146
230775
( 181568) ( 155366)
38312 11601 56 1246
( 319158)
66917
1556659
4035377
($ 2478718)
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
2016 2015
BEGINNING NET ASSETS $ 9323805 $ 11802523
INCREASE (DECREASE) IN NET ASSETS $ 207862 (2478718)
ENDING NET ASSETS $ 9531667 $ 9323805
See Independent Auditors Report and Notes to Financial Statements 6
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30
2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES Increase (decrease) in net assets $ 207862 ($ 2478718) Adjustments to reconcile change in net assets
to net cash from operating activities Depreciation 985466 947008 Amortization of loan discount 842 Interest imputed from net loan
premiums and costs ( 1843) Unrealized loss on investments 311727 155366 Realized (gain) loss on investments 157672 ( 38312) Net (gain) loss on disposal of fixed assets 6788 ( 11601) (Increase) decrease in
Accounts receivable ( 701974) ( 73274) Accounts receivable from CSU 5258 Accounts receivable CSULB auxiliary
organizations ( 37654) 44761 Accounts receivable CSULB 184031 187646 Note receivable CS ULB ( 500000) Inventories ( 259764) ( 286537) Prepaid expenses 45250 ( 29496)
Increase (decrease) in Accounts payable ( 749495) 240010 Accounts payable CSULB auxiliary
organizations ( 11274) Accounts payable CSULB ( 1475) ( 117822) Accounts payable other CSU
auxiliary organizations ( 10135) Accounts payable CSU Refundable campus debit card deposits 14032 72221 Accrued liabilities 156294 ( 15398) Accrued payroll 212076 72458 Accrued vacation 37985 29169 Accrued sick pay 70389 100633 Accrued pension obligation 163467 4035377 Accrued post retirement benefits 1000337 ( 169286)
Net Cash From Operating Activities 1801171 2148896
See Independent Auditors Report and Notes to Financial Statements 7
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
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
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
CHANGE IN CASH AND CASH EQUIVALENTS
BEGINNING CASH AND CASH EQUIVALENTS
ENDING CASH AND CASH EQUIVALENTS
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest
FOR THE YEARS ENDED JUNE 30
2016 2015
345007) ( 424089) ( 3 177541 )
1895823 900
( 2 1049914)
( ( (
(
545005) 61629)
686023) 640764
13 1000 638 1893)
(
( (
375000) 282911 500 1000) 592 1089)
(
( (
80000)
500 1000 580 1000)
840 1832) 930003
4 1340279 3A10276
$ 3499A47 $ 4340279
$ 179000 $ 181568
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 30 2016 AND 2015
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 2016 AND 2015
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
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 14 2016 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 3~ 2016 2015
CSULB Research Foundation Forty-Niner Foundation Associated Students
$ 28234 6029
11383
$ 7992 NONE NONE
$ 45646 $ 7992
11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 bears interest at 4 semi annual and had an original due date of September 23 2015 The loan is secured by commissions and sponsorship fees defined by the agreement between the Organization and Department of Athletics dated October 28 2010 The parties may agree to renew the loan for additional six month terms not to exceed a total term of two years Interest is payable at each maturity date
During the year 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 The new due date for repayment of principal and interest is September 25 2016
In September 2016 the Organization received full payment for the note
NOTE 4 - INVENTORIES
Inventories consist of the following June 30 2016 2015
New textbooks $ 715117 $ 823647 Computer equipment supplies and software 473322 180064 Supplies 481274 444457 Used textbooks 513978 471818 Trade books 20493 24361 Food service 300293 300366
$ 2504477 $ 2244713
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 5 - INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2016 June 30 2015 Cost Market Cost Market
CURRENT ASSETS Mutual funds $5044679 $5041438 $3878598 $4126641 Common stocks 1000598 1181323 688975 881429 Investments in alternative funds 499136 499855 865214 902227
$6544413 16e722616 $5432787 5910297
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432 $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
June 30 2016 2015
Buildings and improvements $ 19681399 $19606835 Equipment furniture and fixtures 6168813 6000238 Automobiles 46734 46734
25896946 25653807 Less accumulated depreciation (17796296) (16905010)
8100650 8748797 Construction in progress 493908 69819
$ 8594558 ~ 8818616
Construction in progress at June 30 2016 and 2015 consists primarily of capital leasehold improvement expenditures for the bookstore food service facilities and construction of the Amazon merchandise sales lockers facility
Depreciation expense for the years ended June 30 2016 and 2015 was $985466 and $947008 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2016 and 2015
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2016 2015
Note payable to CSU is payable semiannually on May 1 and November 1 of each year including interest and matures May 1 2039
$ 3300000 $ 3675000
Unamortized net deferred amount on refinancing 276328 3576328
( 4740) 3670260
Less Current portion ( 85000) ( 85000)
Noncurrent portion $ 3491328 $ 3585260
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 30 2016 AND 2015
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 1 2016 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 2017 $ 85000 2018 95000 2019 90000 2020 90000 2021 95000 Thereafter 2845000
$3300000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley SmithBarney which has a zero balance at June 30 2016 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 SmithBarney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2007 2008 2011 and 2012 and expire in 2016 2018 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 2019
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 2016 are as follows
Year ending June 30
2017 $ 167455 2018 130683 2019 90821 2020 78000
$ 466959
Rent expense was $114000 and $113500 for the years ended June 302016 and 2015 respectively
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
In April 2016 the Organization entered into an agreement with Amazon to develop operate and maintain Amazon merchandise sale lockers on campus The cost of building the facility will be shared by the parties The total cost of building the facility is expected to be $1174486 the Organizations expected share of the cost is $567486 and Amazons share of the cost will be $607000 To the extent the construction costs exceeds the budgeted amount the Organizations future commissions will be reduced
Based on the terms of the agreement the Organization is guaranteed a minimum commission payment Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2017 $ 125000 2018 175000 2019 200000 2021 200000 2021 200000
$ 900000
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 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
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 302016 and 2015 and the related statements of activities 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 pertorm the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement
An audit involves pertorming 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 2016 and 2015 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 38 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
Guzlb~ Long Beach California September 14 2016
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 2016
$ 3499447 6722616 1633078
45646 272666 500000
2504477 14000
15191930
8594558
768432 768432
$24554920
2015
$ 4340279 5910297
931104
7992 456697 500000
2244713 59250
14450332
8818616
768432 768432
$24037380
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 post retirement benefits
Total Liabilities
NET ASSETS Unrestricted
Invested in capital assets Other unrestricted
Total Net Assets
TOTAL LIABILITIES AND NET ASSETS
JUNE 30 2016 2015
$ 85000 $ 85000 131345 880840 213860 215335 312882 298850 459047 302753 548772 336696 459963 421978 930299 859910 474416 344770 409000 411000
4024584 4157132
3491328 3585260 3724428 3690607 3782913 3280576
10998669 10556443 15023253 14713575
8594558 8818616 937109 505189
9531667 9323805
l24554920 $24037380
See Independent Auditors Report and Notes to Financial Statements 4
FORTY-NINER SHOPS INC STATEMENTS OF ACTIVITIES
ENTERPRISE OPERATING REVENUES Sales Commission Vending Other
ENTERPRISE OPERATING EXPENSES Cost of sales Operating expenses Depreciation and amortization
ENTERPRISE OPERATING 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 BEFORE RECOGNITION OF CALPERS PENSION OBLIGATION 207862
EFFECT OF RECOGNITION OF CALPERS PENSION OBLIGATION
INCREASE (DECREASE) IN NET ASSETS $ 207862
JUNE 30 2016
$ 36636425 954401 339183
82305 38012314
16550622 18356171
985A66 35892259
2120055
279561
1843 ( 171911) ( 311727) ( 157672) ( 6788 ( 366694
( 314829)
( 1230670
2015
$ 34846706 1043522
380154 7587
36346169
16820626 16712547
947850 34481023
t865146
230775
( 181568) ( 155366)
38312 11601 56 1246
( 319158)
66917
1556659
4035377
($ 2478718)
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
2016 2015
BEGINNING NET ASSETS $ 9323805 $ 11802523
INCREASE (DECREASE) IN NET ASSETS $ 207862 (2478718)
ENDING NET ASSETS $ 9531667 $ 9323805
See Independent Auditors Report and Notes to Financial Statements 6
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30
2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES Increase (decrease) in net assets $ 207862 ($ 2478718) Adjustments to reconcile change in net assets
to net cash from operating activities Depreciation 985466 947008 Amortization of loan discount 842 Interest imputed from net loan
premiums and costs ( 1843) Unrealized loss on investments 311727 155366 Realized (gain) loss on investments 157672 ( 38312) Net (gain) loss on disposal of fixed assets 6788 ( 11601) (Increase) decrease in
Accounts receivable ( 701974) ( 73274) Accounts receivable from CSU 5258 Accounts receivable CSULB auxiliary
organizations ( 37654) 44761 Accounts receivable CSULB 184031 187646 Note receivable CS ULB ( 500000) Inventories ( 259764) ( 286537) Prepaid expenses 45250 ( 29496)
Increase (decrease) in Accounts payable ( 749495) 240010 Accounts payable CSULB auxiliary
organizations ( 11274) Accounts payable CSULB ( 1475) ( 117822) Accounts payable other CSU
auxiliary organizations ( 10135) Accounts payable CSU Refundable campus debit card deposits 14032 72221 Accrued liabilities 156294 ( 15398) Accrued payroll 212076 72458 Accrued vacation 37985 29169 Accrued sick pay 70389 100633 Accrued pension obligation 163467 4035377 Accrued post retirement benefits 1000337 ( 169286)
Net Cash From Operating Activities 1801171 2148896
See Independent Auditors Report and Notes to Financial Statements 7
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
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
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
CHANGE IN CASH AND CASH EQUIVALENTS
BEGINNING CASH AND CASH EQUIVALENTS
ENDING CASH AND CASH EQUIVALENTS
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest
FOR THE YEARS ENDED JUNE 30
2016 2015
345007) ( 424089) ( 3 177541 )
1895823 900
( 2 1049914)
( ( (
(
545005) 61629)
686023) 640764
13 1000 638 1893)
(
( (
375000) 282911 500 1000) 592 1089)
(
( (
80000)
500 1000 580 1000)
840 1832) 930003
4 1340279 3A10276
$ 3499A47 $ 4340279
$ 179000 $ 181568
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 30 2016 AND 2015
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 2016 AND 2015
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
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 14 2016 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 3~ 2016 2015
CSULB Research Foundation Forty-Niner Foundation Associated Students
$ 28234 6029
11383
$ 7992 NONE NONE
$ 45646 $ 7992
11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 bears interest at 4 semi annual and had an original due date of September 23 2015 The loan is secured by commissions and sponsorship fees defined by the agreement between the Organization and Department of Athletics dated October 28 2010 The parties may agree to renew the loan for additional six month terms not to exceed a total term of two years Interest is payable at each maturity date
During the year 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 The new due date for repayment of principal and interest is September 25 2016
In September 2016 the Organization received full payment for the note
NOTE 4 - INVENTORIES
Inventories consist of the following June 30 2016 2015
New textbooks $ 715117 $ 823647 Computer equipment supplies and software 473322 180064 Supplies 481274 444457 Used textbooks 513978 471818 Trade books 20493 24361 Food service 300293 300366
$ 2504477 $ 2244713
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 5 - INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2016 June 30 2015 Cost Market Cost Market
CURRENT ASSETS Mutual funds $5044679 $5041438 $3878598 $4126641 Common stocks 1000598 1181323 688975 881429 Investments in alternative funds 499136 499855 865214 902227
$6544413 16e722616 $5432787 5910297
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432 $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
June 30 2016 2015
Buildings and improvements $ 19681399 $19606835 Equipment furniture and fixtures 6168813 6000238 Automobiles 46734 46734
25896946 25653807 Less accumulated depreciation (17796296) (16905010)
8100650 8748797 Construction in progress 493908 69819
$ 8594558 ~ 8818616
Construction in progress at June 30 2016 and 2015 consists primarily of capital leasehold improvement expenditures for the bookstore food service facilities and construction of the Amazon merchandise sales lockers facility
Depreciation expense for the years ended June 30 2016 and 2015 was $985466 and $947008 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2016 and 2015
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2016 2015
Note payable to CSU is payable semiannually on May 1 and November 1 of each year including interest and matures May 1 2039
$ 3300000 $ 3675000
Unamortized net deferred amount on refinancing 276328 3576328
( 4740) 3670260
Less Current portion ( 85000) ( 85000)
Noncurrent portion $ 3491328 $ 3585260
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 30 2016 AND 2015
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 1 2016 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 2017 $ 85000 2018 95000 2019 90000 2020 90000 2021 95000 Thereafter 2845000
$3300000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley SmithBarney which has a zero balance at June 30 2016 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 SmithBarney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2007 2008 2011 and 2012 and expire in 2016 2018 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 2019
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 2016 are as follows
Year ending June 30
2017 $ 167455 2018 130683 2019 90821 2020 78000
$ 466959
Rent expense was $114000 and $113500 for the years ended June 302016 and 2015 respectively
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
In April 2016 the Organization entered into an agreement with Amazon to develop operate and maintain Amazon merchandise sale lockers on campus The cost of building the facility will be shared by the parties The total cost of building the facility is expected to be $1174486 the Organizations expected share of the cost is $567486 and Amazons share of the cost will be $607000 To the extent the construction costs exceeds the budgeted amount the Organizations future commissions will be reduced
Based on the terms of the agreement the Organization is guaranteed a minimum commission payment Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2017 $ 125000 2018 175000 2019 200000 2021 200000 2021 200000
$ 900000
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 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
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 2016 and 2015 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 38 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
Guzlb~ Long Beach California September 14 2016
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 2016
$ 3499447 6722616 1633078
45646 272666 500000
2504477 14000
15191930
8594558
768432 768432
$24554920
2015
$ 4340279 5910297
931104
7992 456697 500000
2244713 59250
14450332
8818616
768432 768432
$24037380
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 post retirement benefits
Total Liabilities
NET ASSETS Unrestricted
Invested in capital assets Other unrestricted
Total Net Assets
TOTAL LIABILITIES AND NET ASSETS
JUNE 30 2016 2015
$ 85000 $ 85000 131345 880840 213860 215335 312882 298850 459047 302753 548772 336696 459963 421978 930299 859910 474416 344770 409000 411000
4024584 4157132
3491328 3585260 3724428 3690607 3782913 3280576
10998669 10556443 15023253 14713575
8594558 8818616 937109 505189
9531667 9323805
l24554920 $24037380
See Independent Auditors Report and Notes to Financial Statements 4
FORTY-NINER SHOPS INC STATEMENTS OF ACTIVITIES
ENTERPRISE OPERATING REVENUES Sales Commission Vending Other
ENTERPRISE OPERATING EXPENSES Cost of sales Operating expenses Depreciation and amortization
ENTERPRISE OPERATING 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 BEFORE RECOGNITION OF CALPERS PENSION OBLIGATION 207862
EFFECT OF RECOGNITION OF CALPERS PENSION OBLIGATION
INCREASE (DECREASE) IN NET ASSETS $ 207862
JUNE 30 2016
$ 36636425 954401 339183
82305 38012314
16550622 18356171
985A66 35892259
2120055
279561
1843 ( 171911) ( 311727) ( 157672) ( 6788 ( 366694
( 314829)
( 1230670
2015
$ 34846706 1043522
380154 7587
36346169
16820626 16712547
947850 34481023
t865146
230775
( 181568) ( 155366)
38312 11601 56 1246
( 319158)
66917
1556659
4035377
($ 2478718)
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
2016 2015
BEGINNING NET ASSETS $ 9323805 $ 11802523
INCREASE (DECREASE) IN NET ASSETS $ 207862 (2478718)
ENDING NET ASSETS $ 9531667 $ 9323805
See Independent Auditors Report and Notes to Financial Statements 6
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30
2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES Increase (decrease) in net assets $ 207862 ($ 2478718) Adjustments to reconcile change in net assets
to net cash from operating activities Depreciation 985466 947008 Amortization of loan discount 842 Interest imputed from net loan
premiums and costs ( 1843) Unrealized loss on investments 311727 155366 Realized (gain) loss on investments 157672 ( 38312) Net (gain) loss on disposal of fixed assets 6788 ( 11601) (Increase) decrease in
Accounts receivable ( 701974) ( 73274) Accounts receivable from CSU 5258 Accounts receivable CSULB auxiliary
organizations ( 37654) 44761 Accounts receivable CSULB 184031 187646 Note receivable CS ULB ( 500000) Inventories ( 259764) ( 286537) Prepaid expenses 45250 ( 29496)
Increase (decrease) in Accounts payable ( 749495) 240010 Accounts payable CSULB auxiliary
organizations ( 11274) Accounts payable CSULB ( 1475) ( 117822) Accounts payable other CSU
auxiliary organizations ( 10135) Accounts payable CSU Refundable campus debit card deposits 14032 72221 Accrued liabilities 156294 ( 15398) Accrued payroll 212076 72458 Accrued vacation 37985 29169 Accrued sick pay 70389 100633 Accrued pension obligation 163467 4035377 Accrued post retirement benefits 1000337 ( 169286)
Net Cash From Operating Activities 1801171 2148896
See Independent Auditors Report and Notes to Financial Statements 7
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
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
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
CHANGE IN CASH AND CASH EQUIVALENTS
BEGINNING CASH AND CASH EQUIVALENTS
ENDING CASH AND CASH EQUIVALENTS
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest
FOR THE YEARS ENDED JUNE 30
2016 2015
345007) ( 424089) ( 3 177541 )
1895823 900
( 2 1049914)
( ( (
(
545005) 61629)
686023) 640764
13 1000 638 1893)
(
( (
375000) 282911 500 1000) 592 1089)
(
( (
80000)
500 1000 580 1000)
840 1832) 930003
4 1340279 3A10276
$ 3499A47 $ 4340279
$ 179000 $ 181568
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 30 2016 AND 2015
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 2016 AND 2015
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
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 14 2016 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 3~ 2016 2015
CSULB Research Foundation Forty-Niner Foundation Associated Students
$ 28234 6029
11383
$ 7992 NONE NONE
$ 45646 $ 7992
11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 bears interest at 4 semi annual and had an original due date of September 23 2015 The loan is secured by commissions and sponsorship fees defined by the agreement between the Organization and Department of Athletics dated October 28 2010 The parties may agree to renew the loan for additional six month terms not to exceed a total term of two years Interest is payable at each maturity date
During the year 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 The new due date for repayment of principal and interest is September 25 2016
In September 2016 the Organization received full payment for the note
NOTE 4 - INVENTORIES
Inventories consist of the following June 30 2016 2015
New textbooks $ 715117 $ 823647 Computer equipment supplies and software 473322 180064 Supplies 481274 444457 Used textbooks 513978 471818 Trade books 20493 24361 Food service 300293 300366
$ 2504477 $ 2244713
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 5 - INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2016 June 30 2015 Cost Market Cost Market
CURRENT ASSETS Mutual funds $5044679 $5041438 $3878598 $4126641 Common stocks 1000598 1181323 688975 881429 Investments in alternative funds 499136 499855 865214 902227
$6544413 16e722616 $5432787 5910297
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432 $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
June 30 2016 2015
Buildings and improvements $ 19681399 $19606835 Equipment furniture and fixtures 6168813 6000238 Automobiles 46734 46734
25896946 25653807 Less accumulated depreciation (17796296) (16905010)
8100650 8748797 Construction in progress 493908 69819
$ 8594558 ~ 8818616
Construction in progress at June 30 2016 and 2015 consists primarily of capital leasehold improvement expenditures for the bookstore food service facilities and construction of the Amazon merchandise sales lockers facility
Depreciation expense for the years ended June 30 2016 and 2015 was $985466 and $947008 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2016 and 2015
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2016 2015
Note payable to CSU is payable semiannually on May 1 and November 1 of each year including interest and matures May 1 2039
$ 3300000 $ 3675000
Unamortized net deferred amount on refinancing 276328 3576328
( 4740) 3670260
Less Current portion ( 85000) ( 85000)
Noncurrent portion $ 3491328 $ 3585260
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 30 2016 AND 2015
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 1 2016 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 2017 $ 85000 2018 95000 2019 90000 2020 90000 2021 95000 Thereafter 2845000
$3300000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley SmithBarney which has a zero balance at June 30 2016 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 SmithBarney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2007 2008 2011 and 2012 and expire in 2016 2018 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 2019
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 2016 are as follows
Year ending June 30
2017 $ 167455 2018 130683 2019 90821 2020 78000
$ 466959
Rent expense was $114000 and $113500 for the years ended June 302016 and 2015 respectively
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
In April 2016 the Organization entered into an agreement with Amazon to develop operate and maintain Amazon merchandise sale lockers on campus The cost of building the facility will be shared by the parties The total cost of building the facility is expected to be $1174486 the Organizations expected share of the cost is $567486 and Amazons share of the cost will be $607000 To the extent the construction costs exceeds the budgeted amount the Organizations future commissions will be reduced
Based on the terms of the agreement the Organization is guaranteed a minimum commission payment Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2017 $ 125000 2018 175000 2019 200000 2021 200000 2021 200000
$ 900000
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 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
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 2016
$ 3499447 6722616 1633078
45646 272666 500000
2504477 14000
15191930
8594558
768432 768432
$24554920
2015
$ 4340279 5910297
931104
7992 456697 500000
2244713 59250
14450332
8818616
768432 768432
$24037380
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 post retirement benefits
Total Liabilities
NET ASSETS Unrestricted
Invested in capital assets Other unrestricted
Total Net Assets
TOTAL LIABILITIES AND NET ASSETS
JUNE 30 2016 2015
$ 85000 $ 85000 131345 880840 213860 215335 312882 298850 459047 302753 548772 336696 459963 421978 930299 859910 474416 344770 409000 411000
4024584 4157132
3491328 3585260 3724428 3690607 3782913 3280576
10998669 10556443 15023253 14713575
8594558 8818616 937109 505189
9531667 9323805
l24554920 $24037380
See Independent Auditors Report and Notes to Financial Statements 4
FORTY-NINER SHOPS INC STATEMENTS OF ACTIVITIES
ENTERPRISE OPERATING REVENUES Sales Commission Vending Other
ENTERPRISE OPERATING EXPENSES Cost of sales Operating expenses Depreciation and amortization
ENTERPRISE OPERATING 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 BEFORE RECOGNITION OF CALPERS PENSION OBLIGATION 207862
EFFECT OF RECOGNITION OF CALPERS PENSION OBLIGATION
INCREASE (DECREASE) IN NET ASSETS $ 207862
JUNE 30 2016
$ 36636425 954401 339183
82305 38012314
16550622 18356171
985A66 35892259
2120055
279561
1843 ( 171911) ( 311727) ( 157672) ( 6788 ( 366694
( 314829)
( 1230670
2015
$ 34846706 1043522
380154 7587
36346169
16820626 16712547
947850 34481023
t865146
230775
( 181568) ( 155366)
38312 11601 56 1246
( 319158)
66917
1556659
4035377
($ 2478718)
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
2016 2015
BEGINNING NET ASSETS $ 9323805 $ 11802523
INCREASE (DECREASE) IN NET ASSETS $ 207862 (2478718)
ENDING NET ASSETS $ 9531667 $ 9323805
See Independent Auditors Report and Notes to Financial Statements 6
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30
2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES Increase (decrease) in net assets $ 207862 ($ 2478718) Adjustments to reconcile change in net assets
to net cash from operating activities Depreciation 985466 947008 Amortization of loan discount 842 Interest imputed from net loan
premiums and costs ( 1843) Unrealized loss on investments 311727 155366 Realized (gain) loss on investments 157672 ( 38312) Net (gain) loss on disposal of fixed assets 6788 ( 11601) (Increase) decrease in
Accounts receivable ( 701974) ( 73274) Accounts receivable from CSU 5258 Accounts receivable CSULB auxiliary
organizations ( 37654) 44761 Accounts receivable CSULB 184031 187646 Note receivable CS ULB ( 500000) Inventories ( 259764) ( 286537) Prepaid expenses 45250 ( 29496)
Increase (decrease) in Accounts payable ( 749495) 240010 Accounts payable CSULB auxiliary
organizations ( 11274) Accounts payable CSULB ( 1475) ( 117822) Accounts payable other CSU
auxiliary organizations ( 10135) Accounts payable CSU Refundable campus debit card deposits 14032 72221 Accrued liabilities 156294 ( 15398) Accrued payroll 212076 72458 Accrued vacation 37985 29169 Accrued sick pay 70389 100633 Accrued pension obligation 163467 4035377 Accrued post retirement benefits 1000337 ( 169286)
Net Cash From Operating Activities 1801171 2148896
See Independent Auditors Report and Notes to Financial Statements 7
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
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
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
CHANGE IN CASH AND CASH EQUIVALENTS
BEGINNING CASH AND CASH EQUIVALENTS
ENDING CASH AND CASH EQUIVALENTS
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest
FOR THE YEARS ENDED JUNE 30
2016 2015
345007) ( 424089) ( 3 177541 )
1895823 900
( 2 1049914)
( ( (
(
545005) 61629)
686023) 640764
13 1000 638 1893)
(
( (
375000) 282911 500 1000) 592 1089)
(
( (
80000)
500 1000 580 1000)
840 1832) 930003
4 1340279 3A10276
$ 3499A47 $ 4340279
$ 179000 $ 181568
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 30 2016 AND 2015
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 2016 AND 2015
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
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 14 2016 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 3~ 2016 2015
CSULB Research Foundation Forty-Niner Foundation Associated Students
$ 28234 6029
11383
$ 7992 NONE NONE
$ 45646 $ 7992
11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 bears interest at 4 semi annual and had an original due date of September 23 2015 The loan is secured by commissions and sponsorship fees defined by the agreement between the Organization and Department of Athletics dated October 28 2010 The parties may agree to renew the loan for additional six month terms not to exceed a total term of two years Interest is payable at each maturity date
During the year 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 The new due date for repayment of principal and interest is September 25 2016
In September 2016 the Organization received full payment for the note
NOTE 4 - INVENTORIES
Inventories consist of the following June 30 2016 2015
New textbooks $ 715117 $ 823647 Computer equipment supplies and software 473322 180064 Supplies 481274 444457 Used textbooks 513978 471818 Trade books 20493 24361 Food service 300293 300366
$ 2504477 $ 2244713
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 5 - INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2016 June 30 2015 Cost Market Cost Market
CURRENT ASSETS Mutual funds $5044679 $5041438 $3878598 $4126641 Common stocks 1000598 1181323 688975 881429 Investments in alternative funds 499136 499855 865214 902227
$6544413 16e722616 $5432787 5910297
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432 $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
June 30 2016 2015
Buildings and improvements $ 19681399 $19606835 Equipment furniture and fixtures 6168813 6000238 Automobiles 46734 46734
25896946 25653807 Less accumulated depreciation (17796296) (16905010)
8100650 8748797 Construction in progress 493908 69819
$ 8594558 ~ 8818616
Construction in progress at June 30 2016 and 2015 consists primarily of capital leasehold improvement expenditures for the bookstore food service facilities and construction of the Amazon merchandise sales lockers facility
Depreciation expense for the years ended June 30 2016 and 2015 was $985466 and $947008 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2016 and 2015
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2016 2015
Note payable to CSU is payable semiannually on May 1 and November 1 of each year including interest and matures May 1 2039
$ 3300000 $ 3675000
Unamortized net deferred amount on refinancing 276328 3576328
( 4740) 3670260
Less Current portion ( 85000) ( 85000)
Noncurrent portion $ 3491328 $ 3585260
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 30 2016 AND 2015
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 1 2016 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 2017 $ 85000 2018 95000 2019 90000 2020 90000 2021 95000 Thereafter 2845000
$3300000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley SmithBarney which has a zero balance at June 30 2016 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 SmithBarney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2007 2008 2011 and 2012 and expire in 2016 2018 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 2019
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 2016 are as follows
Year ending June 30
2017 $ 167455 2018 130683 2019 90821 2020 78000
$ 466959
Rent expense was $114000 and $113500 for the years ended June 302016 and 2015 respectively
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
In April 2016 the Organization entered into an agreement with Amazon to develop operate and maintain Amazon merchandise sale lockers on campus The cost of building the facility will be shared by the parties The total cost of building the facility is expected to be $1174486 the Organizations expected share of the cost is $567486 and Amazons share of the cost will be $607000 To the extent the construction costs exceeds the budgeted amount the Organizations future commissions will be reduced
Based on the terms of the agreement the Organization is guaranteed a minimum commission payment Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2017 $ 125000 2018 175000 2019 200000 2021 200000 2021 200000
$ 900000
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 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
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 post retirement benefits
Total Liabilities
NET ASSETS Unrestricted
Invested in capital assets Other unrestricted
Total Net Assets
TOTAL LIABILITIES AND NET ASSETS
JUNE 30 2016 2015
$ 85000 $ 85000 131345 880840 213860 215335 312882 298850 459047 302753 548772 336696 459963 421978 930299 859910 474416 344770 409000 411000
4024584 4157132
3491328 3585260 3724428 3690607 3782913 3280576
10998669 10556443 15023253 14713575
8594558 8818616 937109 505189
9531667 9323805
l24554920 $24037380
See Independent Auditors Report and Notes to Financial Statements 4
FORTY-NINER SHOPS INC STATEMENTS OF ACTIVITIES
ENTERPRISE OPERATING REVENUES Sales Commission Vending Other
ENTERPRISE OPERATING EXPENSES Cost of sales Operating expenses Depreciation and amortization
ENTERPRISE OPERATING 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 BEFORE RECOGNITION OF CALPERS PENSION OBLIGATION 207862
EFFECT OF RECOGNITION OF CALPERS PENSION OBLIGATION
INCREASE (DECREASE) IN NET ASSETS $ 207862
JUNE 30 2016
$ 36636425 954401 339183
82305 38012314
16550622 18356171
985A66 35892259
2120055
279561
1843 ( 171911) ( 311727) ( 157672) ( 6788 ( 366694
( 314829)
( 1230670
2015
$ 34846706 1043522
380154 7587
36346169
16820626 16712547
947850 34481023
t865146
230775
( 181568) ( 155366)
38312 11601 56 1246
( 319158)
66917
1556659
4035377
($ 2478718)
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
2016 2015
BEGINNING NET ASSETS $ 9323805 $ 11802523
INCREASE (DECREASE) IN NET ASSETS $ 207862 (2478718)
ENDING NET ASSETS $ 9531667 $ 9323805
See Independent Auditors Report and Notes to Financial Statements 6
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30
2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES Increase (decrease) in net assets $ 207862 ($ 2478718) Adjustments to reconcile change in net assets
to net cash from operating activities Depreciation 985466 947008 Amortization of loan discount 842 Interest imputed from net loan
premiums and costs ( 1843) Unrealized loss on investments 311727 155366 Realized (gain) loss on investments 157672 ( 38312) Net (gain) loss on disposal of fixed assets 6788 ( 11601) (Increase) decrease in
Accounts receivable ( 701974) ( 73274) Accounts receivable from CSU 5258 Accounts receivable CSULB auxiliary
organizations ( 37654) 44761 Accounts receivable CSULB 184031 187646 Note receivable CS ULB ( 500000) Inventories ( 259764) ( 286537) Prepaid expenses 45250 ( 29496)
Increase (decrease) in Accounts payable ( 749495) 240010 Accounts payable CSULB auxiliary
organizations ( 11274) Accounts payable CSULB ( 1475) ( 117822) Accounts payable other CSU
auxiliary organizations ( 10135) Accounts payable CSU Refundable campus debit card deposits 14032 72221 Accrued liabilities 156294 ( 15398) Accrued payroll 212076 72458 Accrued vacation 37985 29169 Accrued sick pay 70389 100633 Accrued pension obligation 163467 4035377 Accrued post retirement benefits 1000337 ( 169286)
Net Cash From Operating Activities 1801171 2148896
See Independent Auditors Report and Notes to Financial Statements 7
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
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
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
CHANGE IN CASH AND CASH EQUIVALENTS
BEGINNING CASH AND CASH EQUIVALENTS
ENDING CASH AND CASH EQUIVALENTS
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest
FOR THE YEARS ENDED JUNE 30
2016 2015
345007) ( 424089) ( 3 177541 )
1895823 900
( 2 1049914)
( ( (
(
545005) 61629)
686023) 640764
13 1000 638 1893)
(
( (
375000) 282911 500 1000) 592 1089)
(
( (
80000)
500 1000 580 1000)
840 1832) 930003
4 1340279 3A10276
$ 3499A47 $ 4340279
$ 179000 $ 181568
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 30 2016 AND 2015
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 2016 AND 2015
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
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 14 2016 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 3~ 2016 2015
CSULB Research Foundation Forty-Niner Foundation Associated Students
$ 28234 6029
11383
$ 7992 NONE NONE
$ 45646 $ 7992
11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 bears interest at 4 semi annual and had an original due date of September 23 2015 The loan is secured by commissions and sponsorship fees defined by the agreement between the Organization and Department of Athletics dated October 28 2010 The parties may agree to renew the loan for additional six month terms not to exceed a total term of two years Interest is payable at each maturity date
During the year 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 The new due date for repayment of principal and interest is September 25 2016
In September 2016 the Organization received full payment for the note
NOTE 4 - INVENTORIES
Inventories consist of the following June 30 2016 2015
New textbooks $ 715117 $ 823647 Computer equipment supplies and software 473322 180064 Supplies 481274 444457 Used textbooks 513978 471818 Trade books 20493 24361 Food service 300293 300366
$ 2504477 $ 2244713
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 5 - INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2016 June 30 2015 Cost Market Cost Market
CURRENT ASSETS Mutual funds $5044679 $5041438 $3878598 $4126641 Common stocks 1000598 1181323 688975 881429 Investments in alternative funds 499136 499855 865214 902227
$6544413 16e722616 $5432787 5910297
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432 $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
June 30 2016 2015
Buildings and improvements $ 19681399 $19606835 Equipment furniture and fixtures 6168813 6000238 Automobiles 46734 46734
25896946 25653807 Less accumulated depreciation (17796296) (16905010)
8100650 8748797 Construction in progress 493908 69819
$ 8594558 ~ 8818616
Construction in progress at June 30 2016 and 2015 consists primarily of capital leasehold improvement expenditures for the bookstore food service facilities and construction of the Amazon merchandise sales lockers facility
Depreciation expense for the years ended June 30 2016 and 2015 was $985466 and $947008 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2016 and 2015
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2016 2015
Note payable to CSU is payable semiannually on May 1 and November 1 of each year including interest and matures May 1 2039
$ 3300000 $ 3675000
Unamortized net deferred amount on refinancing 276328 3576328
( 4740) 3670260
Less Current portion ( 85000) ( 85000)
Noncurrent portion $ 3491328 $ 3585260
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 30 2016 AND 2015
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 1 2016 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 2017 $ 85000 2018 95000 2019 90000 2020 90000 2021 95000 Thereafter 2845000
$3300000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley SmithBarney which has a zero balance at June 30 2016 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 SmithBarney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2007 2008 2011 and 2012 and expire in 2016 2018 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 2019
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 2016 are as follows
Year ending June 30
2017 $ 167455 2018 130683 2019 90821 2020 78000
$ 466959
Rent expense was $114000 and $113500 for the years ended June 302016 and 2015 respectively
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
In April 2016 the Organization entered into an agreement with Amazon to develop operate and maintain Amazon merchandise sale lockers on campus The cost of building the facility will be shared by the parties The total cost of building the facility is expected to be $1174486 the Organizations expected share of the cost is $567486 and Amazons share of the cost will be $607000 To the extent the construction costs exceeds the budgeted amount the Organizations future commissions will be reduced
Based on the terms of the agreement the Organization is guaranteed a minimum commission payment Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2017 $ 125000 2018 175000 2019 200000 2021 200000 2021 200000
$ 900000
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 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC STATEMENTS OF ACTIVITIES
ENTERPRISE OPERATING REVENUES Sales Commission Vending Other
ENTERPRISE OPERATING EXPENSES Cost of sales Operating expenses Depreciation and amortization
ENTERPRISE OPERATING 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 BEFORE RECOGNITION OF CALPERS PENSION OBLIGATION 207862
EFFECT OF RECOGNITION OF CALPERS PENSION OBLIGATION
INCREASE (DECREASE) IN NET ASSETS $ 207862
JUNE 30 2016
$ 36636425 954401 339183
82305 38012314
16550622 18356171
985A66 35892259
2120055
279561
1843 ( 171911) ( 311727) ( 157672) ( 6788 ( 366694
( 314829)
( 1230670
2015
$ 34846706 1043522
380154 7587
36346169
16820626 16712547
947850 34481023
t865146
230775
( 181568) ( 155366)
38312 11601 56 1246
( 319158)
66917
1556659
4035377
($ 2478718)
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
2016 2015
BEGINNING NET ASSETS $ 9323805 $ 11802523
INCREASE (DECREASE) IN NET ASSETS $ 207862 (2478718)
ENDING NET ASSETS $ 9531667 $ 9323805
See Independent Auditors Report and Notes to Financial Statements 6
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30
2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES Increase (decrease) in net assets $ 207862 ($ 2478718) Adjustments to reconcile change in net assets
to net cash from operating activities Depreciation 985466 947008 Amortization of loan discount 842 Interest imputed from net loan
premiums and costs ( 1843) Unrealized loss on investments 311727 155366 Realized (gain) loss on investments 157672 ( 38312) Net (gain) loss on disposal of fixed assets 6788 ( 11601) (Increase) decrease in
Accounts receivable ( 701974) ( 73274) Accounts receivable from CSU 5258 Accounts receivable CSULB auxiliary
organizations ( 37654) 44761 Accounts receivable CSULB 184031 187646 Note receivable CS ULB ( 500000) Inventories ( 259764) ( 286537) Prepaid expenses 45250 ( 29496)
Increase (decrease) in Accounts payable ( 749495) 240010 Accounts payable CSULB auxiliary
organizations ( 11274) Accounts payable CSULB ( 1475) ( 117822) Accounts payable other CSU
auxiliary organizations ( 10135) Accounts payable CSU Refundable campus debit card deposits 14032 72221 Accrued liabilities 156294 ( 15398) Accrued payroll 212076 72458 Accrued vacation 37985 29169 Accrued sick pay 70389 100633 Accrued pension obligation 163467 4035377 Accrued post retirement benefits 1000337 ( 169286)
Net Cash From Operating Activities 1801171 2148896
See Independent Auditors Report and Notes to Financial Statements 7
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
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
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
CHANGE IN CASH AND CASH EQUIVALENTS
BEGINNING CASH AND CASH EQUIVALENTS
ENDING CASH AND CASH EQUIVALENTS
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest
FOR THE YEARS ENDED JUNE 30
2016 2015
345007) ( 424089) ( 3 177541 )
1895823 900
( 2 1049914)
( ( (
(
545005) 61629)
686023) 640764
13 1000 638 1893)
(
( (
375000) 282911 500 1000) 592 1089)
(
( (
80000)
500 1000 580 1000)
840 1832) 930003
4 1340279 3A10276
$ 3499A47 $ 4340279
$ 179000 $ 181568
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 30 2016 AND 2015
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 2016 AND 2015
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
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 14 2016 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 3~ 2016 2015
CSULB Research Foundation Forty-Niner Foundation Associated Students
$ 28234 6029
11383
$ 7992 NONE NONE
$ 45646 $ 7992
11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 bears interest at 4 semi annual and had an original due date of September 23 2015 The loan is secured by commissions and sponsorship fees defined by the agreement between the Organization and Department of Athletics dated October 28 2010 The parties may agree to renew the loan for additional six month terms not to exceed a total term of two years Interest is payable at each maturity date
During the year 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 The new due date for repayment of principal and interest is September 25 2016
In September 2016 the Organization received full payment for the note
NOTE 4 - INVENTORIES
Inventories consist of the following June 30 2016 2015
New textbooks $ 715117 $ 823647 Computer equipment supplies and software 473322 180064 Supplies 481274 444457 Used textbooks 513978 471818 Trade books 20493 24361 Food service 300293 300366
$ 2504477 $ 2244713
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 5 - INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2016 June 30 2015 Cost Market Cost Market
CURRENT ASSETS Mutual funds $5044679 $5041438 $3878598 $4126641 Common stocks 1000598 1181323 688975 881429 Investments in alternative funds 499136 499855 865214 902227
$6544413 16e722616 $5432787 5910297
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432 $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
June 30 2016 2015
Buildings and improvements $ 19681399 $19606835 Equipment furniture and fixtures 6168813 6000238 Automobiles 46734 46734
25896946 25653807 Less accumulated depreciation (17796296) (16905010)
8100650 8748797 Construction in progress 493908 69819
$ 8594558 ~ 8818616
Construction in progress at June 30 2016 and 2015 consists primarily of capital leasehold improvement expenditures for the bookstore food service facilities and construction of the Amazon merchandise sales lockers facility
Depreciation expense for the years ended June 30 2016 and 2015 was $985466 and $947008 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2016 and 2015
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2016 2015
Note payable to CSU is payable semiannually on May 1 and November 1 of each year including interest and matures May 1 2039
$ 3300000 $ 3675000
Unamortized net deferred amount on refinancing 276328 3576328
( 4740) 3670260
Less Current portion ( 85000) ( 85000)
Noncurrent portion $ 3491328 $ 3585260
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 30 2016 AND 2015
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 1 2016 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 2017 $ 85000 2018 95000 2019 90000 2020 90000 2021 95000 Thereafter 2845000
$3300000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley SmithBarney which has a zero balance at June 30 2016 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 SmithBarney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2007 2008 2011 and 2012 and expire in 2016 2018 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 2019
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 2016 are as follows
Year ending June 30
2017 $ 167455 2018 130683 2019 90821 2020 78000
$ 466959
Rent expense was $114000 and $113500 for the years ended June 302016 and 2015 respectively
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
In April 2016 the Organization entered into an agreement with Amazon to develop operate and maintain Amazon merchandise sale lockers on campus The cost of building the facility will be shared by the parties The total cost of building the facility is expected to be $1174486 the Organizations expected share of the cost is $567486 and Amazons share of the cost will be $607000 To the extent the construction costs exceeds the budgeted amount the Organizations future commissions will be reduced
Based on the terms of the agreement the Organization is guaranteed a minimum commission payment Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2017 $ 125000 2018 175000 2019 200000 2021 200000 2021 200000
$ 900000
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 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30
2016 2015
BEGINNING NET ASSETS $ 9323805 $ 11802523
INCREASE (DECREASE) IN NET ASSETS $ 207862 (2478718)
ENDING NET ASSETS $ 9531667 $ 9323805
See Independent Auditors Report and Notes to Financial Statements 6
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30
2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES Increase (decrease) in net assets $ 207862 ($ 2478718) Adjustments to reconcile change in net assets
to net cash from operating activities Depreciation 985466 947008 Amortization of loan discount 842 Interest imputed from net loan
premiums and costs ( 1843) Unrealized loss on investments 311727 155366 Realized (gain) loss on investments 157672 ( 38312) Net (gain) loss on disposal of fixed assets 6788 ( 11601) (Increase) decrease in
Accounts receivable ( 701974) ( 73274) Accounts receivable from CSU 5258 Accounts receivable CSULB auxiliary
organizations ( 37654) 44761 Accounts receivable CSULB 184031 187646 Note receivable CS ULB ( 500000) Inventories ( 259764) ( 286537) Prepaid expenses 45250 ( 29496)
Increase (decrease) in Accounts payable ( 749495) 240010 Accounts payable CSULB auxiliary
organizations ( 11274) Accounts payable CSULB ( 1475) ( 117822) Accounts payable other CSU
auxiliary organizations ( 10135) Accounts payable CSU Refundable campus debit card deposits 14032 72221 Accrued liabilities 156294 ( 15398) Accrued payroll 212076 72458 Accrued vacation 37985 29169 Accrued sick pay 70389 100633 Accrued pension obligation 163467 4035377 Accrued post retirement benefits 1000337 ( 169286)
Net Cash From Operating Activities 1801171 2148896
See Independent Auditors Report and Notes to Financial Statements 7
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
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
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
CHANGE IN CASH AND CASH EQUIVALENTS
BEGINNING CASH AND CASH EQUIVALENTS
ENDING CASH AND CASH EQUIVALENTS
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest
FOR THE YEARS ENDED JUNE 30
2016 2015
345007) ( 424089) ( 3 177541 )
1895823 900
( 2 1049914)
( ( (
(
545005) 61629)
686023) 640764
13 1000 638 1893)
(
( (
375000) 282911 500 1000) 592 1089)
(
( (
80000)
500 1000 580 1000)
840 1832) 930003
4 1340279 3A10276
$ 3499A47 $ 4340279
$ 179000 $ 181568
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 30 2016 AND 2015
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 2016 AND 2015
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
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 14 2016 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 3~ 2016 2015
CSULB Research Foundation Forty-Niner Foundation Associated Students
$ 28234 6029
11383
$ 7992 NONE NONE
$ 45646 $ 7992
11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 bears interest at 4 semi annual and had an original due date of September 23 2015 The loan is secured by commissions and sponsorship fees defined by the agreement between the Organization and Department of Athletics dated October 28 2010 The parties may agree to renew the loan for additional six month terms not to exceed a total term of two years Interest is payable at each maturity date
During the year 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 The new due date for repayment of principal and interest is September 25 2016
In September 2016 the Organization received full payment for the note
NOTE 4 - INVENTORIES
Inventories consist of the following June 30 2016 2015
New textbooks $ 715117 $ 823647 Computer equipment supplies and software 473322 180064 Supplies 481274 444457 Used textbooks 513978 471818 Trade books 20493 24361 Food service 300293 300366
$ 2504477 $ 2244713
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 5 - INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2016 June 30 2015 Cost Market Cost Market
CURRENT ASSETS Mutual funds $5044679 $5041438 $3878598 $4126641 Common stocks 1000598 1181323 688975 881429 Investments in alternative funds 499136 499855 865214 902227
$6544413 16e722616 $5432787 5910297
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432 $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
June 30 2016 2015
Buildings and improvements $ 19681399 $19606835 Equipment furniture and fixtures 6168813 6000238 Automobiles 46734 46734
25896946 25653807 Less accumulated depreciation (17796296) (16905010)
8100650 8748797 Construction in progress 493908 69819
$ 8594558 ~ 8818616
Construction in progress at June 30 2016 and 2015 consists primarily of capital leasehold improvement expenditures for the bookstore food service facilities and construction of the Amazon merchandise sales lockers facility
Depreciation expense for the years ended June 30 2016 and 2015 was $985466 and $947008 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2016 and 2015
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2016 2015
Note payable to CSU is payable semiannually on May 1 and November 1 of each year including interest and matures May 1 2039
$ 3300000 $ 3675000
Unamortized net deferred amount on refinancing 276328 3576328
( 4740) 3670260
Less Current portion ( 85000) ( 85000)
Noncurrent portion $ 3491328 $ 3585260
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 30 2016 AND 2015
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 1 2016 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 2017 $ 85000 2018 95000 2019 90000 2020 90000 2021 95000 Thereafter 2845000
$3300000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley SmithBarney which has a zero balance at June 30 2016 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 SmithBarney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2007 2008 2011 and 2012 and expire in 2016 2018 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 2019
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 2016 are as follows
Year ending June 30
2017 $ 167455 2018 130683 2019 90821 2020 78000
$ 466959
Rent expense was $114000 and $113500 for the years ended June 302016 and 2015 respectively
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
In April 2016 the Organization entered into an agreement with Amazon to develop operate and maintain Amazon merchandise sale lockers on campus The cost of building the facility will be shared by the parties The total cost of building the facility is expected to be $1174486 the Organizations expected share of the cost is $567486 and Amazons share of the cost will be $607000 To the extent the construction costs exceeds the budgeted amount the Organizations future commissions will be reduced
Based on the terms of the agreement the Organization is guaranteed a minimum commission payment Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2017 $ 125000 2018 175000 2019 200000 2021 200000 2021 200000
$ 900000
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 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30
2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES Increase (decrease) in net assets $ 207862 ($ 2478718) Adjustments to reconcile change in net assets
to net cash from operating activities Depreciation 985466 947008 Amortization of loan discount 842 Interest imputed from net loan
premiums and costs ( 1843) Unrealized loss on investments 311727 155366 Realized (gain) loss on investments 157672 ( 38312) Net (gain) loss on disposal of fixed assets 6788 ( 11601) (Increase) decrease in
Accounts receivable ( 701974) ( 73274) Accounts receivable from CSU 5258 Accounts receivable CSULB auxiliary
organizations ( 37654) 44761 Accounts receivable CSULB 184031 187646 Note receivable CS ULB ( 500000) Inventories ( 259764) ( 286537) Prepaid expenses 45250 ( 29496)
Increase (decrease) in Accounts payable ( 749495) 240010 Accounts payable CSULB auxiliary
organizations ( 11274) Accounts payable CSULB ( 1475) ( 117822) Accounts payable other CSU
auxiliary organizations ( 10135) Accounts payable CSU Refundable campus debit card deposits 14032 72221 Accrued liabilities 156294 ( 15398) Accrued payroll 212076 72458 Accrued vacation 37985 29169 Accrued sick pay 70389 100633 Accrued pension obligation 163467 4035377 Accrued post retirement benefits 1000337 ( 169286)
Net Cash From Operating Activities 1801171 2148896
See Independent Auditors Report and Notes to Financial Statements 7
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
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
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
CHANGE IN CASH AND CASH EQUIVALENTS
BEGINNING CASH AND CASH EQUIVALENTS
ENDING CASH AND CASH EQUIVALENTS
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest
FOR THE YEARS ENDED JUNE 30
2016 2015
345007) ( 424089) ( 3 177541 )
1895823 900
( 2 1049914)
( ( (
(
545005) 61629)
686023) 640764
13 1000 638 1893)
(
( (
375000) 282911 500 1000) 592 1089)
(
( (
80000)
500 1000 580 1000)
840 1832) 930003
4 1340279 3A10276
$ 3499A47 $ 4340279
$ 179000 $ 181568
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 30 2016 AND 2015
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 2016 AND 2015
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
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 14 2016 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 3~ 2016 2015
CSULB Research Foundation Forty-Niner Foundation Associated Students
$ 28234 6029
11383
$ 7992 NONE NONE
$ 45646 $ 7992
11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 bears interest at 4 semi annual and had an original due date of September 23 2015 The loan is secured by commissions and sponsorship fees defined by the agreement between the Organization and Department of Athletics dated October 28 2010 The parties may agree to renew the loan for additional six month terms not to exceed a total term of two years Interest is payable at each maturity date
During the year 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 The new due date for repayment of principal and interest is September 25 2016
In September 2016 the Organization received full payment for the note
NOTE 4 - INVENTORIES
Inventories consist of the following June 30 2016 2015
New textbooks $ 715117 $ 823647 Computer equipment supplies and software 473322 180064 Supplies 481274 444457 Used textbooks 513978 471818 Trade books 20493 24361 Food service 300293 300366
$ 2504477 $ 2244713
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 5 - INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2016 June 30 2015 Cost Market Cost Market
CURRENT ASSETS Mutual funds $5044679 $5041438 $3878598 $4126641 Common stocks 1000598 1181323 688975 881429 Investments in alternative funds 499136 499855 865214 902227
$6544413 16e722616 $5432787 5910297
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432 $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
June 30 2016 2015
Buildings and improvements $ 19681399 $19606835 Equipment furniture and fixtures 6168813 6000238 Automobiles 46734 46734
25896946 25653807 Less accumulated depreciation (17796296) (16905010)
8100650 8748797 Construction in progress 493908 69819
$ 8594558 ~ 8818616
Construction in progress at June 30 2016 and 2015 consists primarily of capital leasehold improvement expenditures for the bookstore food service facilities and construction of the Amazon merchandise sales lockers facility
Depreciation expense for the years ended June 30 2016 and 2015 was $985466 and $947008 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2016 and 2015
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2016 2015
Note payable to CSU is payable semiannually on May 1 and November 1 of each year including interest and matures May 1 2039
$ 3300000 $ 3675000
Unamortized net deferred amount on refinancing 276328 3576328
( 4740) 3670260
Less Current portion ( 85000) ( 85000)
Noncurrent portion $ 3491328 $ 3585260
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 30 2016 AND 2015
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 1 2016 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 2017 $ 85000 2018 95000 2019 90000 2020 90000 2021 95000 Thereafter 2845000
$3300000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley SmithBarney which has a zero balance at June 30 2016 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 SmithBarney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2007 2008 2011 and 2012 and expire in 2016 2018 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 2019
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 2016 are as follows
Year ending June 30
2017 $ 167455 2018 130683 2019 90821 2020 78000
$ 466959
Rent expense was $114000 and $113500 for the years ended June 302016 and 2015 respectively
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
In April 2016 the Organization entered into an agreement with Amazon to develop operate and maintain Amazon merchandise sale lockers on campus The cost of building the facility will be shared by the parties The total cost of building the facility is expected to be $1174486 the Organizations expected share of the cost is $567486 and Amazons share of the cost will be $607000 To the extent the construction costs exceeds the budgeted amount the Organizations future commissions will be reduced
Based on the terms of the agreement the Organization is guaranteed a minimum commission payment Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2017 $ 125000 2018 175000 2019 200000 2021 200000 2021 200000
$ 900000
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 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC STATEMENTS OF CASH FLOWS (CONTINUED)
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
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
CHANGE IN CASH AND CASH EQUIVALENTS
BEGINNING CASH AND CASH EQUIVALENTS
ENDING CASH AND CASH EQUIVALENTS
SUPPLEMENTAL DISCLOSURE Cash disclosure
Cash paid for interest
FOR THE YEARS ENDED JUNE 30
2016 2015
345007) ( 424089) ( 3 177541 )
1895823 900
( 2 1049914)
( ( (
(
545005) 61629)
686023) 640764
13 1000 638 1893)
(
( (
375000) 282911 500 1000) 592 1089)
(
( (
80000)
500 1000 580 1000)
840 1832) 930003
4 1340279 3A10276
$ 3499A47 $ 4340279
$ 179000 $ 181568
See Independent Auditors Report and Notes to Financial Statements 8
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 30 2016 AND 2015
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 2016 AND 2015
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
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 14 2016 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 3~ 2016 2015
CSULB Research Foundation Forty-Niner Foundation Associated Students
$ 28234 6029
11383
$ 7992 NONE NONE
$ 45646 $ 7992
11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 bears interest at 4 semi annual and had an original due date of September 23 2015 The loan is secured by commissions and sponsorship fees defined by the agreement between the Organization and Department of Athletics dated October 28 2010 The parties may agree to renew the loan for additional six month terms not to exceed a total term of two years Interest is payable at each maturity date
During the year 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 The new due date for repayment of principal and interest is September 25 2016
In September 2016 the Organization received full payment for the note
NOTE 4 - INVENTORIES
Inventories consist of the following June 30 2016 2015
New textbooks $ 715117 $ 823647 Computer equipment supplies and software 473322 180064 Supplies 481274 444457 Used textbooks 513978 471818 Trade books 20493 24361 Food service 300293 300366
$ 2504477 $ 2244713
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 5 - INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2016 June 30 2015 Cost Market Cost Market
CURRENT ASSETS Mutual funds $5044679 $5041438 $3878598 $4126641 Common stocks 1000598 1181323 688975 881429 Investments in alternative funds 499136 499855 865214 902227
$6544413 16e722616 $5432787 5910297
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432 $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
June 30 2016 2015
Buildings and improvements $ 19681399 $19606835 Equipment furniture and fixtures 6168813 6000238 Automobiles 46734 46734
25896946 25653807 Less accumulated depreciation (17796296) (16905010)
8100650 8748797 Construction in progress 493908 69819
$ 8594558 ~ 8818616
Construction in progress at June 30 2016 and 2015 consists primarily of capital leasehold improvement expenditures for the bookstore food service facilities and construction of the Amazon merchandise sales lockers facility
Depreciation expense for the years ended June 30 2016 and 2015 was $985466 and $947008 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2016 and 2015
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2016 2015
Note payable to CSU is payable semiannually on May 1 and November 1 of each year including interest and matures May 1 2039
$ 3300000 $ 3675000
Unamortized net deferred amount on refinancing 276328 3576328
( 4740) 3670260
Less Current portion ( 85000) ( 85000)
Noncurrent portion $ 3491328 $ 3585260
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 30 2016 AND 2015
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 1 2016 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 2017 $ 85000 2018 95000 2019 90000 2020 90000 2021 95000 Thereafter 2845000
$3300000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley SmithBarney which has a zero balance at June 30 2016 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 SmithBarney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2007 2008 2011 and 2012 and expire in 2016 2018 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 2019
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 2016 are as follows
Year ending June 30
2017 $ 167455 2018 130683 2019 90821 2020 78000
$ 466959
Rent expense was $114000 and $113500 for the years ended June 302016 and 2015 respectively
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
In April 2016 the Organization entered into an agreement with Amazon to develop operate and maintain Amazon merchandise sale lockers on campus The cost of building the facility will be shared by the parties The total cost of building the facility is expected to be $1174486 the Organizations expected share of the cost is $567486 and Amazons share of the cost will be $607000 To the extent the construction costs exceeds the budgeted amount the Organizations future commissions will be reduced
Based on the terms of the agreement the Organization is guaranteed a minimum commission payment Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2017 $ 125000 2018 175000 2019 200000 2021 200000 2021 200000
$ 900000
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 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 30 2016 AND 2015
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 2016 AND 2015
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
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 14 2016 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 3~ 2016 2015
CSULB Research Foundation Forty-Niner Foundation Associated Students
$ 28234 6029
11383
$ 7992 NONE NONE
$ 45646 $ 7992
11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 bears interest at 4 semi annual and had an original due date of September 23 2015 The loan is secured by commissions and sponsorship fees defined by the agreement between the Organization and Department of Athletics dated October 28 2010 The parties may agree to renew the loan for additional six month terms not to exceed a total term of two years Interest is payable at each maturity date
During the year 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 The new due date for repayment of principal and interest is September 25 2016
In September 2016 the Organization received full payment for the note
NOTE 4 - INVENTORIES
Inventories consist of the following June 30 2016 2015
New textbooks $ 715117 $ 823647 Computer equipment supplies and software 473322 180064 Supplies 481274 444457 Used textbooks 513978 471818 Trade books 20493 24361 Food service 300293 300366
$ 2504477 $ 2244713
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 5 - INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2016 June 30 2015 Cost Market Cost Market
CURRENT ASSETS Mutual funds $5044679 $5041438 $3878598 $4126641 Common stocks 1000598 1181323 688975 881429 Investments in alternative funds 499136 499855 865214 902227
$6544413 16e722616 $5432787 5910297
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432 $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
June 30 2016 2015
Buildings and improvements $ 19681399 $19606835 Equipment furniture and fixtures 6168813 6000238 Automobiles 46734 46734
25896946 25653807 Less accumulated depreciation (17796296) (16905010)
8100650 8748797 Construction in progress 493908 69819
$ 8594558 ~ 8818616
Construction in progress at June 30 2016 and 2015 consists primarily of capital leasehold improvement expenditures for the bookstore food service facilities and construction of the Amazon merchandise sales lockers facility
Depreciation expense for the years ended June 30 2016 and 2015 was $985466 and $947008 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2016 and 2015
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2016 2015
Note payable to CSU is payable semiannually on May 1 and November 1 of each year including interest and matures May 1 2039
$ 3300000 $ 3675000
Unamortized net deferred amount on refinancing 276328 3576328
( 4740) 3670260
Less Current portion ( 85000) ( 85000)
Noncurrent portion $ 3491328 $ 3585260
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 30 2016 AND 2015
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 1 2016 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 2017 $ 85000 2018 95000 2019 90000 2020 90000 2021 95000 Thereafter 2845000
$3300000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley SmithBarney which has a zero balance at June 30 2016 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 SmithBarney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2007 2008 2011 and 2012 and expire in 2016 2018 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 2019
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 2016 are as follows
Year ending June 30
2017 $ 167455 2018 130683 2019 90821 2020 78000
$ 466959
Rent expense was $114000 and $113500 for the years ended June 302016 and 2015 respectively
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
In April 2016 the Organization entered into an agreement with Amazon to develop operate and maintain Amazon merchandise sale lockers on campus The cost of building the facility will be shared by the parties The total cost of building the facility is expected to be $1174486 the Organizations expected share of the cost is $567486 and Amazons share of the cost will be $607000 To the extent the construction costs exceeds the budgeted amount the Organizations future commissions will be reduced
Based on the terms of the agreement the Organization is guaranteed a minimum commission payment Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2017 $ 125000 2018 175000 2019 200000 2021 200000 2021 200000
$ 900000
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 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2016 AND 2015
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
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 14 2016 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 3~ 2016 2015
CSULB Research Foundation Forty-Niner Foundation Associated Students
$ 28234 6029
11383
$ 7992 NONE NONE
$ 45646 $ 7992
11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 bears interest at 4 semi annual and had an original due date of September 23 2015 The loan is secured by commissions and sponsorship fees defined by the agreement between the Organization and Department of Athletics dated October 28 2010 The parties may agree to renew the loan for additional six month terms not to exceed a total term of two years Interest is payable at each maturity date
During the year 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 The new due date for repayment of principal and interest is September 25 2016
In September 2016 the Organization received full payment for the note
NOTE 4 - INVENTORIES
Inventories consist of the following June 30 2016 2015
New textbooks $ 715117 $ 823647 Computer equipment supplies and software 473322 180064 Supplies 481274 444457 Used textbooks 513978 471818 Trade books 20493 24361 Food service 300293 300366
$ 2504477 $ 2244713
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 5 - INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2016 June 30 2015 Cost Market Cost Market
CURRENT ASSETS Mutual funds $5044679 $5041438 $3878598 $4126641 Common stocks 1000598 1181323 688975 881429 Investments in alternative funds 499136 499855 865214 902227
$6544413 16e722616 $5432787 5910297
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432 $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
June 30 2016 2015
Buildings and improvements $ 19681399 $19606835 Equipment furniture and fixtures 6168813 6000238 Automobiles 46734 46734
25896946 25653807 Less accumulated depreciation (17796296) (16905010)
8100650 8748797 Construction in progress 493908 69819
$ 8594558 ~ 8818616
Construction in progress at June 30 2016 and 2015 consists primarily of capital leasehold improvement expenditures for the bookstore food service facilities and construction of the Amazon merchandise sales lockers facility
Depreciation expense for the years ended June 30 2016 and 2015 was $985466 and $947008 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2016 and 2015
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2016 2015
Note payable to CSU is payable semiannually on May 1 and November 1 of each year including interest and matures May 1 2039
$ 3300000 $ 3675000
Unamortized net deferred amount on refinancing 276328 3576328
( 4740) 3670260
Less Current portion ( 85000) ( 85000)
Noncurrent portion $ 3491328 $ 3585260
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 30 2016 AND 2015
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 1 2016 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 2017 $ 85000 2018 95000 2019 90000 2020 90000 2021 95000 Thereafter 2845000
$3300000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley SmithBarney which has a zero balance at June 30 2016 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 SmithBarney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2007 2008 2011 and 2012 and expire in 2016 2018 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 2019
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 2016 are as follows
Year ending June 30
2017 $ 167455 2018 130683 2019 90821 2020 78000
$ 466959
Rent expense was $114000 and $113500 for the years ended June 302016 and 2015 respectively
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
In April 2016 the Organization entered into an agreement with Amazon to develop operate and maintain Amazon merchandise sale lockers on campus The cost of building the facility will be shared by the parties The total cost of building the facility is expected to be $1174486 the Organizations expected share of the cost is $567486 and Amazons share of the cost will be $607000 To the extent the construction costs exceeds the budgeted amount the Organizations future commissions will be reduced
Based on the terms of the agreement the Organization is guaranteed a minimum commission payment Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2017 $ 125000 2018 175000 2019 200000 2021 200000 2021 200000
$ 900000
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 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
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 14 2016 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 3~ 2016 2015
CSULB Research Foundation Forty-Niner Foundation Associated Students
$ 28234 6029
11383
$ 7992 NONE NONE
$ 45646 $ 7992
11
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 bears interest at 4 semi annual and had an original due date of September 23 2015 The loan is secured by commissions and sponsorship fees defined by the agreement between the Organization and Department of Athletics dated October 28 2010 The parties may agree to renew the loan for additional six month terms not to exceed a total term of two years Interest is payable at each maturity date
During the year 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 The new due date for repayment of principal and interest is September 25 2016
In September 2016 the Organization received full payment for the note
NOTE 4 - INVENTORIES
Inventories consist of the following June 30 2016 2015
New textbooks $ 715117 $ 823647 Computer equipment supplies and software 473322 180064 Supplies 481274 444457 Used textbooks 513978 471818 Trade books 20493 24361 Food service 300293 300366
$ 2504477 $ 2244713
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 5 - INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2016 June 30 2015 Cost Market Cost Market
CURRENT ASSETS Mutual funds $5044679 $5041438 $3878598 $4126641 Common stocks 1000598 1181323 688975 881429 Investments in alternative funds 499136 499855 865214 902227
$6544413 16e722616 $5432787 5910297
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432 $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
June 30 2016 2015
Buildings and improvements $ 19681399 $19606835 Equipment furniture and fixtures 6168813 6000238 Automobiles 46734 46734
25896946 25653807 Less accumulated depreciation (17796296) (16905010)
8100650 8748797 Construction in progress 493908 69819
$ 8594558 ~ 8818616
Construction in progress at June 30 2016 and 2015 consists primarily of capital leasehold improvement expenditures for the bookstore food service facilities and construction of the Amazon merchandise sales lockers facility
Depreciation expense for the years ended June 30 2016 and 2015 was $985466 and $947008 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2016 and 2015
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2016 2015
Note payable to CSU is payable semiannually on May 1 and November 1 of each year including interest and matures May 1 2039
$ 3300000 $ 3675000
Unamortized net deferred amount on refinancing 276328 3576328
( 4740) 3670260
Less Current portion ( 85000) ( 85000)
Noncurrent portion $ 3491328 $ 3585260
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 30 2016 AND 2015
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 1 2016 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 2017 $ 85000 2018 95000 2019 90000 2020 90000 2021 95000 Thereafter 2845000
$3300000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley SmithBarney which has a zero balance at June 30 2016 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 SmithBarney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2007 2008 2011 and 2012 and expire in 2016 2018 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 2019
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 2016 are as follows
Year ending June 30
2017 $ 167455 2018 130683 2019 90821 2020 78000
$ 466959
Rent expense was $114000 and $113500 for the years ended June 302016 and 2015 respectively
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
In April 2016 the Organization entered into an agreement with Amazon to develop operate and maintain Amazon merchandise sale lockers on campus The cost of building the facility will be shared by the parties The total cost of building the facility is expected to be $1174486 the Organizations expected share of the cost is $567486 and Amazons share of the cost will be $607000 To the extent the construction costs exceeds the budgeted amount the Organizations future commissions will be reduced
Based on the terms of the agreement the Organization is guaranteed a minimum commission payment Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2017 $ 125000 2018 175000 2019 200000 2021 200000 2021 200000
$ 900000
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 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 bears interest at 4 semi annual and had an original due date of September 23 2015 The loan is secured by commissions and sponsorship fees defined by the agreement between the Organization and Department of Athletics dated October 28 2010 The parties may agree to renew the loan for additional six month terms not to exceed a total term of two years Interest is payable at each maturity date
During the year 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 The new due date for repayment of principal and interest is September 25 2016
In September 2016 the Organization received full payment for the note
NOTE 4 - INVENTORIES
Inventories consist of the following June 30 2016 2015
New textbooks $ 715117 $ 823647 Computer equipment supplies and software 473322 180064 Supplies 481274 444457 Used textbooks 513978 471818 Trade books 20493 24361 Food service 300293 300366
$ 2504477 $ 2244713
12
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 5 - INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2016 June 30 2015 Cost Market Cost Market
CURRENT ASSETS Mutual funds $5044679 $5041438 $3878598 $4126641 Common stocks 1000598 1181323 688975 881429 Investments in alternative funds 499136 499855 865214 902227
$6544413 16e722616 $5432787 5910297
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432 $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
June 30 2016 2015
Buildings and improvements $ 19681399 $19606835 Equipment furniture and fixtures 6168813 6000238 Automobiles 46734 46734
25896946 25653807 Less accumulated depreciation (17796296) (16905010)
8100650 8748797 Construction in progress 493908 69819
$ 8594558 ~ 8818616
Construction in progress at June 30 2016 and 2015 consists primarily of capital leasehold improvement expenditures for the bookstore food service facilities and construction of the Amazon merchandise sales lockers facility
Depreciation expense for the years ended June 30 2016 and 2015 was $985466 and $947008 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2016 and 2015
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2016 2015
Note payable to CSU is payable semiannually on May 1 and November 1 of each year including interest and matures May 1 2039
$ 3300000 $ 3675000
Unamortized net deferred amount on refinancing 276328 3576328
( 4740) 3670260
Less Current portion ( 85000) ( 85000)
Noncurrent portion $ 3491328 $ 3585260
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 30 2016 AND 2015
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 1 2016 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 2017 $ 85000 2018 95000 2019 90000 2020 90000 2021 95000 Thereafter 2845000
$3300000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley SmithBarney which has a zero balance at June 30 2016 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 SmithBarney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2007 2008 2011 and 2012 and expire in 2016 2018 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 2019
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 2016 are as follows
Year ending June 30
2017 $ 167455 2018 130683 2019 90821 2020 78000
$ 466959
Rent expense was $114000 and $113500 for the years ended June 302016 and 2015 respectively
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
In April 2016 the Organization entered into an agreement with Amazon to develop operate and maintain Amazon merchandise sale lockers on campus The cost of building the facility will be shared by the parties The total cost of building the facility is expected to be $1174486 the Organizations expected share of the cost is $567486 and Amazons share of the cost will be $607000 To the extent the construction costs exceeds the budgeted amount the Organizations future commissions will be reduced
Based on the terms of the agreement the Organization is guaranteed a minimum commission payment Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2017 $ 125000 2018 175000 2019 200000 2021 200000 2021 200000
$ 900000
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 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 5 - INVESTMENTS
Investments are recorded at market value The historical and market values are as follows
June 30 2016 June 30 2015 Cost Market Cost Market
CURRENT ASSETS Mutual funds $5044679 $5041438 $3878598 $4126641 Common stocks 1000598 1181323 688975 881429 Investments in alternative funds 499136 499855 865214 902227
$6544413 16e722616 $5432787 5910297
OTHER ASSETS Designated for sick pay benefits
Mutual funds $ 768432 $ 768432 $ 768432 $ 768432
NOTE 6 - CAPITAL ASSETS
Capital assets and the related accumulated depreciation consist of the following
June 30 2016 2015
Buildings and improvements $ 19681399 $19606835 Equipment furniture and fixtures 6168813 6000238 Automobiles 46734 46734
25896946 25653807 Less accumulated depreciation (17796296) (16905010)
8100650 8748797 Construction in progress 493908 69819
$ 8594558 ~ 8818616
Construction in progress at June 30 2016 and 2015 consists primarily of capital leasehold improvement expenditures for the bookstore food service facilities and construction of the Amazon merchandise sales lockers facility
Depreciation expense for the years ended June 30 2016 and 2015 was $985466 and $947008 respectively
13
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2016 and 2015
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2016 2015
Note payable to CSU is payable semiannually on May 1 and November 1 of each year including interest and matures May 1 2039
$ 3300000 $ 3675000
Unamortized net deferred amount on refinancing 276328 3576328
( 4740) 3670260
Less Current portion ( 85000) ( 85000)
Noncurrent portion $ 3491328 $ 3585260
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 30 2016 AND 2015
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 1 2016 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 2017 $ 85000 2018 95000 2019 90000 2020 90000 2021 95000 Thereafter 2845000
$3300000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley SmithBarney which has a zero balance at June 30 2016 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 SmithBarney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2007 2008 2011 and 2012 and expire in 2016 2018 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 2019
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 2016 are as follows
Year ending June 30
2017 $ 167455 2018 130683 2019 90821 2020 78000
$ 466959
Rent expense was $114000 and $113500 for the years ended June 302016 and 2015 respectively
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
In April 2016 the Organization entered into an agreement with Amazon to develop operate and maintain Amazon merchandise sale lockers on campus The cost of building the facility will be shared by the parties The total cost of building the facility is expected to be $1174486 the Organizations expected share of the cost is $567486 and Amazons share of the cost will be $607000 To the extent the construction costs exceeds the budgeted amount the Organizations future commissions will be reduced
Based on the terms of the agreement the Organization is guaranteed a minimum commission payment Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2017 $ 125000 2018 175000 2019 200000 2021 200000 2021 200000
$ 900000
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 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2016 and 2015
NOTE 9 - LONG TERM DEBT
Long term debt is summarized as follows JUNE 30
2016 2015
Note payable to CSU is payable semiannually on May 1 and November 1 of each year including interest and matures May 1 2039
$ 3300000 $ 3675000
Unamortized net deferred amount on refinancing 276328 3576328
( 4740) 3670260
Less Current portion ( 85000) ( 85000)
Noncurrent portion $ 3491328 $ 3585260
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 30 2016 AND 2015
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 1 2016 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 2017 $ 85000 2018 95000 2019 90000 2020 90000 2021 95000 Thereafter 2845000
$3300000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley SmithBarney which has a zero balance at June 30 2016 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 SmithBarney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2007 2008 2011 and 2012 and expire in 2016 2018 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 2019
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 2016 are as follows
Year ending June 30
2017 $ 167455 2018 130683 2019 90821 2020 78000
$ 466959
Rent expense was $114000 and $113500 for the years ended June 302016 and 2015 respectively
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
In April 2016 the Organization entered into an agreement with Amazon to develop operate and maintain Amazon merchandise sale lockers on campus The cost of building the facility will be shared by the parties The total cost of building the facility is expected to be $1174486 the Organizations expected share of the cost is $567486 and Amazons share of the cost will be $607000 To the extent the construction costs exceeds the budgeted amount the Organizations future commissions will be reduced
Based on the terms of the agreement the Organization is guaranteed a minimum commission payment Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2017 $ 125000 2018 175000 2019 200000 2021 200000 2021 200000
$ 900000
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 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 1 2016 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 2017 $ 85000 2018 95000 2019 90000 2020 90000 2021 95000 Thereafter 2845000
$3300000
Line of Credit The Organization has a line of credit of $2000000 with MorganStanley SmithBarney which has a zero balance at June 30 2016 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 SmithBarney
15
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2007 2008 2011 and 2012 and expire in 2016 2018 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 2019
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 2016 are as follows
Year ending June 30
2017 $ 167455 2018 130683 2019 90821 2020 78000
$ 466959
Rent expense was $114000 and $113500 for the years ended June 302016 and 2015 respectively
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
In April 2016 the Organization entered into an agreement with Amazon to develop operate and maintain Amazon merchandise sale lockers on campus The cost of building the facility will be shared by the parties The total cost of building the facility is expected to be $1174486 the Organizations expected share of the cost is $567486 and Amazons share of the cost will be $607000 To the extent the construction costs exceeds the budgeted amount the Organizations future commissions will be reduced
Based on the terms of the agreement the Organization is guaranteed a minimum commission payment Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2017 $ 125000 2018 175000 2019 200000 2021 200000 2021 200000
$ 900000
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 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 2007 2008 2011 and 2012 and expire in 2016 2018 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 2019
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 2016 are as follows
Year ending June 30
2017 $ 167455 2018 130683 2019 90821 2020 78000
$ 466959
Rent expense was $114000 and $113500 for the years ended June 302016 and 2015 respectively
16
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
In April 2016 the Organization entered into an agreement with Amazon to develop operate and maintain Amazon merchandise sale lockers on campus The cost of building the facility will be shared by the parties The total cost of building the facility is expected to be $1174486 the Organizations expected share of the cost is $567486 and Amazons share of the cost will be $607000 To the extent the construction costs exceeds the budgeted amount the Organizations future commissions will be reduced
Based on the terms of the agreement the Organization is guaranteed a minimum commission payment Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2017 $ 125000 2018 175000 2019 200000 2021 200000 2021 200000
$ 900000
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 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
In April 2016 the Organization entered into an agreement with Amazon to develop operate and maintain Amazon merchandise sale lockers on campus The cost of building the facility will be shared by the parties The total cost of building the facility is expected to be $1174486 the Organizations expected share of the cost is $567486 and Amazons share of the cost will be $607000 To the extent the construction costs exceeds the budgeted amount the Organizations future commissions will be reduced
Based on the terms of the agreement the Organization is guaranteed a minimum commission payment Commissions are due to the Organization based on a percentage of qualifying revenues The guaranteed annual payments are as follows
Year ending June 30
2017 $ 125000 2018 175000 2019 200000 2021 200000 2021 200000
$ 900000
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 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016 and 2015 were derived from the most recent Accounting Valuation Reports provided by CaIPERS The measurement dates for the reports were June 30 2015 and 2014 respectively
The plans proportionate share of the fiduciarys unfunded accumulated net pension liability as of June 30 2015 and June 30 2014 (the measurement dates) were $4198844 and $4035377 respectively
The plans proportionate share of fiduciary net asset position which is the total assets less certain reserve and expense requirements at June 30 2015 and June 30 2014 (the measu rement dates) were $17974101 and $ 17055903 respectively
The actuarially assumed investment return after June 30 2015 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 2016 the total employers contribution rate is 1747 of annual payroll This rate is comprised of 851 of normal cost and 896 of the funding improvement side fund which is estimated to be paid over 28 years The active employee contribution rate is 6891 of annual pay For employees hired on and after January 1 2013 the total employer and employee contribution rates are 625 and 631 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 2014 the plan was at least 80 funded
Employer and employee contributions were $467466 and $239051 for the years ended June 30 2016
18
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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
2017 $ 474416 2018 489215 2019 503891 2020 519008 2021 534578 2022 - 2026 2923295
$ 5444403
NOTE 13 - RETIREMENT PLAN (4038)
Effective July 2009 the Organization adopted an Internal Revenue Code 403(b) tax deferred retirement plan for all eUgible 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 $23513 and $27201 for the years ended June 30 2016 and 2015
19
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
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 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 2016 and 2015 the Organization contributed $500000 per year to the VEBA Trust Since 2011 the total amount invested was $3500000 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 2016 and 2015 the VEBA trust held assets at fair market value of $4011 312 and $3486075 respectively
As of June 30 2016 and 2015 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 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continuted)
The following table sets forth the funded status of the plan reconciled to the recorded post-retirement benefits cost recognized in the Organizations financial statements
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 Expected Return on assets Actuarial loss (gain) Benefits paid
Benefit Obligation at end of year
June 3O 2016 2015
$ 5086708 3116517 8203225
$ 4331688 2845963 7177651
( 4011 312) ( 3486075)
4191913 ( 1465955)
NONE ( (
3691576 244)
79)
$ 272Q9Q8 Ii 3691 2Q3
June 30 2016
$ 3691576 32327
305550 ( 500000)
222930 ( 248167)
1101610 413913)
~4191913
2015
$ 4360862 48033
304743 ( 500000)
195898 ( 199921) ( 129060) ( 388979)
Ii 3691 Q76
21
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 14 - POST RETIREMENT MEDICAL BENEFITS (Continued)
Pension-related changes other than net periodic pension cost Amortization of transition obligation $ NONE $ 79 Net gain (loss) ( 1230670) 66838
($1230670) $ 66917
Net periodic post retirement benefit cost Service cost $ 32327 $ 48033 Interest cost 305550 304815 Asset return loss 222930 Expected return on assets ( 248167) Amortization of transition obligation 79
Net periodic benefit cost $ 312640 $ 352927
The weighted average discount rate used in determining the accumulated post retirement benefit obligation is 375 The Consumer Price Index assumed is 3 less than the discount rate assumption Medical costs are assumed to increase 5 during the year beginning July 1 2016 with the rate of increase decreasing each year thereafter until the year beginning July 1 2021 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 2016
The following benefit payments which reflect expected future service as appropriate are expected to be paid
Year ending June 30
2017 $ 409000 2018 433000 2019 453000 2020 462000 2021 456000 2022 - 2026 2309000
$ 4522000
22
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
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 2016
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 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 30 2016 AND 2015
NOTE 16 - FAIR VALUE MEASUREMENTS (Continued)
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 499855
6722616 6222761 499855 Other Assets
Mutual funds 768432 768432
S 7491046 S699j 193
The following table presents assets that are measured at fair value on a recurring basis at June 30 2015
Investments Mutual funds Cornman stocks Investments in alternative funds
Fair Market Value
$ 4126641 881429
902227
Quoted Prices in Active
Markets for Identical
Assets Level 1
$ 4126641 881429
NONE
Significant Other
Observable UInputs
Level 2
902227
Significant nobservable
Input Level 3
5910297 5008070 902227
Other Assets Mutual funds 768432 768432
S 6676729 S 5Z76502 $ 90222Z S NONE
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
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 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
The Organization paid reimbursements to CSULB for the year ended June 30 2015 in the amount of $1 286737
These reimbursements have been included in the financial statements as follows
Buildings and improvements $ 189579 Repairs and maintenance 177939 Communications 58263 Allocated general and administrative expenses 6380 Utilities and rent 574643 Supplies 17208 Interest and principal on note payable 262725
$ 1286737
25
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC NOTES TO FINANCIAL STATEMENTS
JUNE 302016 AND 2015
NOTE 18 - OTHER RELATED PARTY TRANSACTIONS
The Organization charged CSULB $441679 and $377671 at June 30 2016 and 2015 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 $3206737 and $3599746 at June 30 2016 and 2015 respectively
26
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES
FOR THE YEAR ENDED JUNE 30 2016
ENTERPRISE OPERATING REVENUES Sales Contracted revenue and commissions Other
$
TOTAL
36636431 1293584
82299 38012314
BOOKSTORE
$ 19053033 623472
56144 19732649
10 CARD SERVICES
$ 441679
26155 467834
TOTAL
$ 17141719 670112
17811831
RESIDENCE HALL
$ 8308500
8308500
FOOD SERVICE
RESIDENTIAL LEARNING COLLEGE
$ 2379313
2379313
VENDING
$ 339183
339183
CASH OPERATIONS
$ 6453906 330929
6784835
COST OF SALES 16550622 11704-489 4846133 2184402 571513 2090218
GROSS PROFIT 21461692 8028160 467834 12965698 6124098 1807800 339183 4694617
See Independent Auditors Report and Notes to Financial Statements 27
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY -NINER SHOPS INC SCHEDULE OF ENTERPRISE ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
OPERATING EXPENSES Salaries and wages Employee benefits Retirees health insurance Advertising Repairs and maintenance Utilities and rent Communications Other Allocated general and
administrative Supplies Insurance Travel Professional services Commissions General expenses Bank and credit card fees Promotional markdowns and
employee discounts Royalties Dues and subSCriptions Bad debts Equipment rental Training
$
TOTAL
6858549 2337190
461929 114555
1208132 485153
55046
3241485 734129
90908 18684 24523
1222143 141572 475678
412715 222512
88498 39553 69820 53397
18356171
BOOKSTORE
$ 2528238 731695 235583
74688 322493 187972 23485
1653157 229734
41970 7330
24023
29958 294105
412715 222512
73381 40473 42249 30944
7206705
10 CARD SERVICES
$ 127846 40585
4619 2620
173994 9600 4758
32415 39332
393
12323
10298 458783
TOTAL
$ 4202465 1564910
221727 37247
711645 287581
26803
1555913 465063
48545 11354
500 1222143
111614 169250
15117 (920)
27571 12155
10690683
RESIDENCE HALL
$ 1663832 650041
87767 6314
152226
7271
615882 196230
2892 500
658794 7301 3923
3600 94
5209 7310
4069186
RESIDENTIAL LEARNING COLLEGE
$ 481575 212341
27716 2121
60508
1413
194489 58608
55 280
188551 3838
254
1801 23
VENDING
$ 49122 30040
79162
CASH OPERATIONS
$ 2007936 672488 106244 28812
498911 287581
18119
745542 210225 48490
8182
374798 100475 165073
9716 (1037) 22362
3666 5307583
DEPRECIATION AND AMORTIZATION Amortization DepreCiation Allocated general and administrative
depreciation
TOTAL EXPENSES
898191
87275 985466
19341637
326164
44510 370674
7577379
1232
873 2105
460888
570795
41892 612687
11303370
6994
16582 23576
4092762
1088
5237 6325
1241077 79162
562713
20073 582786
5890369
ENTERPRISE OPERATING INCOME(LOSS) $ 2120055 $ 450781 $ 1662328 $ 2031336 _$_ 56672L _$__~OJl2J _$(1195752)
See Independent Auditors Report and Notes to Financial Statements 28
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC SCHEDULE OF ALLOCATED GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED JUNE 30 2016
FOOD SERVICE
ALLOCATED EXPENSES Salaries and wages Employee benefits Advertising Repairs and maintenance Communications Supplies Insurance Travel Professional services General expenses Bank service charges Dues and subscriptions Equipment rental Training
Depreciation
$
TOTAL
1784696 746830 (25316) 232549
36661 76495
3797 24816
220523 52430 32193
9193 5188
41430 3241485
87275
BOOKSTORE
$ 910195 380883 (12911) 118601
18696 39012
1937 12656
112468 26739 16418
4688 2646
21129 1653157
44510
IDCARD SERVICES
$ 17848 7468 (253)
2325 367 765
38 248
2205 524 322
92 52
414 32415
873
TOTAL
$ 856653 358479 (12152) 111623 17598 36718
1822 11912
105850 25167 15453 4413 2490
19887 1555913
41892
RESIDENCE HALL
$ 339091 141898
(4810) 44184 6966
14534 721
4715 41899
9962 6117 1747
986 7872
615882 16582
RESIDENTIAL LEARNING COLLEGE
$ 107080 44810 (1519) 13953 2200 4590
228 1489
13231 3146 1932
552 311
2486 194489
5237
CASH OPERATIONS
$ 410482 171771
(5823) 53486
8432 17594
873 5708
50720 12059
7404 2114 1193 9529
745542 20073
$ 3328760 $ 1697667 $ 33288 $ 1597805 $ 632464 $ 199726 $ 765615
See Independent Auditors Report and Notes to Financial Statements 29
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SIlOPS INC Schedule of Net Position
June 30 20]6 (for mdusion In the California State Umversity)
Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable net Leases receivable current ponion ~otes recervable current portion PJedges receivable net Prepaid expenses and other current assets
Total current assets
Koncurrent assets Restricied cash and cash equivaenls Accounts receivable net Leases receivable net ofcurrent portion Notes receivabJe net ofcurrent portion Student loans receivable net Pledges receivabTe net Endowment investments Other long-term investments Capital assets net Other assets
Total noncurrent assets
Total assets
Deferred outflows of resources Unamortized loss on debt refunding Net pension liability Others
Total deferred outflows ofresources
Liabilities
Current liabilities Accounts payable Accrued salaries and benefits Accrued compensated ahsences current portion Lnearned revenue Capitalized lease obligations current portion Long~term debt obligations current portlOn Claims liabIlity for losses and loss adjustment expenses current portion Depository accounts Other liabilities
Tola) current liabilities
Noncurrent liahilities Accrued compensated absences net ofcurrent portion Unearned revenue Grants refundable Capitalized lease ohligations net of current portion Long~term debt obligations net ofcurrent portion Claims liabihty for losses and loss adjustment expenses net of current portIOn Depositor) accounts Other poslempioyment benefits obligations Net pension liability Other liabilities
TOlal noncurrent liabilities
Total liabilities
Deferred inflows ofresources Service concession arrangements Net pensIOn liability Unamortized gain on debt refunding Nonexchange transactions Others
Total deferred inflows of resources
Net Position Net IOvestment Ifl capital assets Restricted formiddot
Nonexpendabte - endowments Expendable
Soholarships and fellowship Research Loans Capital projects Debt service Others
Unrestricted
Total net position
3499447 6722616 1951390
500000
2518477
15191930
768432 8594558
9362990
24554920
1117134 548772
1390262
85000
3141168
3491328
4191913 4198844
11882085
15023253
5018230
4513437
9531667
See independent auditors report and notes to the financial statements 30
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SIIOPS INC
Schedule of Revenues Expenses and Changes in Net Position
Year Ended June 30 2016
(for inclusion in the California State University)
Revenues
Operating revenues Student tuition and fees (net of scholarship allowances $ Grants and contracts noncapital
Federal State Local Nongovernmental
Sales and services of educational activities Sales and services of auxiliary enterprises (net of scholarship
allowances 38012314 Other operating revenues
Total operating revenues 38012314
Expenses
Operating expenses Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Student grants and scholarships Auxiliary enterprise expenses Depreciation and amortization
34906793 985466
Total operating expenses
Operating income (loss)
35892259
Nonoperating revenues (expenses) State appropriations noncapital Federal financial aid grants noncapital State financial aid grants non capital Local financial aid grants noncapital Nongovernmental and other financial aid grants noncapital Other federal nonoperating grants noncapital Gifts noncapital Investment income (Joss) net Endowment income (loss) net Interest expense Other nonoperating revenues (expenses)
(189838)
(170068) (l552287)
Net nonoperating revenues (expenses) (1912193)
Income (loss) before other revenues (expenses) 207862
State appropriations capital Grants and gifts capital Additions (reductions) to pennanent endowments
Increase (decrease) in net position 207862
Net position Net position at beginning of year as previously reported Restatements Net position at begil1l1ing of year as restated
9323805
9323805
Net position at end of year $ ~===9=5=31=6=6=7=
See independent auditors report and notes to the financial statements 31
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTYNINER SHOPS INC FORTY NINER SHOPS INC
June 30 20 16
(for indusion in the California Slate Uniersity)
Restricted cash and cash equivalents at JUDe 30 2OCV Portioo of restricted cash and cash equivalents related to endowments All other restricted cash and cash equivalents
Total rest1lcted cash and cash equlnlents
21 Composition of investments at June 30 20ltY Current
Unrestricted Current Kestricttd Total Current NoocurNlIt Unrestricted
Noncurrent Restricted Total Noncurrent Total
Corporate bonds Certificates of deposit Muwalfunds 5041438 504143amp 768432 768432 5809870
Money Market funds RepWCnnse agreements Commercial paper Asset backed secunties Mortgagc backed secuntics Municipal bonds US agency securities US treasury st(unllcs Eqmty socUlilies IJ81323 1181323 1181123
E(Jhange traded funds (ETFs) Alternau--C investments
Managed futures Rcal estate lmcslments (includmg RElTs) CommodIUes JXrhatlcs
499855 499855
Add descriptIon
Add descnption Other maior jm~stmcnLS
Add description Add descnptiun Add descriptloo Add description Add descnplion A4d desenption
Tatal mnstmems 6722616 6722616 768432 768432 7491048
Less endowment Inestments (enter as negalm number)
Tota investments 6722616 6722616 768412 768A32 7491048
Investnwnts held by the University under contractual ae~nelJts at JURe 30 20( Portion of IncsunenlS m note 2 1 held bvhe UniwfSlh undCl contractual
agreements at June 30 20CY
Restricted current investments at June 30 lOCY retated to Add description Add description Add description Add description Add description Add description Add description
TUbl restricted turrent investnlentlst June 30 10(Y
Amount
Restncted noncurrent investments at June 30 20(Y related to Amount
See independent auditors report and notes to the financial statements 32
499855
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
Endmunent imcstmcnl Add description Add de5f-npLion Add description Add description Add description
Tohtl restricted noncurrent itlVutments at JUbr 30 lOCY
25 Fair value hierarchy in investments at June 30 2OCY
Tots)
Mutual funds 5809lt870
Money Market funds
Repurchase agrCltnents COOlITlClCial paper Asset backed secutllies Mortgage backed secunlies Municipal bonds US agency securities UltS
1181323
Altcmahvc imcstrnenLO
Managed fUhlres Rcal estntc investments (including REITs) Commodilles Derivatlves
499855
Add dcscnptlon Add description Add dercription
T ulal mvcstn1etlts H91048
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 30 2016 (for InClusion in the California State Uruersjty)
Fair Value Measurements Using
QUQted Prices in Active Markets ror
Identical Assets (Levell)
5809lt870
URl323
Signifiunt Other ObsefVable Inputs
(Level 2)
49U55
Significant Unobservable
Inputs (Level 31
Net Asset Value (NAV)
699 LJ 93 499855
See independent auditors report and notes to the financial statements 33
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTYJI~NER SHOPS INC fORTY NINER SHOPS INC
June 30 2016 (for inclusion in the California State UniYCTSltj)
) Composition of caprtal assets at June 30 lOIS
Bainer June 302015
Prior period Adjustments Redusifiutions
Baluce J 302015
(restated) Additions Reductions
Transfers of Completed
CWIP Batanee
June 30 2016
Nondeprcciablclnonarnortuable capital assets Land and land improyements Works ofart and historical treasw-es
CoostnMtion work in progress CWIP) 69819 69819 769096 (345007) 493908
Patents copyrights and trademarks fn1Cmally generated intangible assets in progress Licen~ and permits Other intangible assets
Total intangible assets
ToW nondeprcclabtclnonamortl7able capital assets 69819 69819 769096 (34i007) 493908
19569171 74164 37664
Leasehold imPloyCTllt-nlS Personal pIoperty
Equipment 6J146972 6046971 (101868) 270443 6215547
Librarv books and materials
Rights and easements Patents copright and trademarks Licenses and penllits Other intanglble assets
Total intangible assets
Total depnxaablefamortiAble capital assets 25653807 21M3S07 (IOl88 ~45OO7 25896946
25723626 25723626 769096 (101868) 26390854Total capital assets
(11612145) (677007) (37664)
Infraslructure Leasehold improemenlS Personal propert
(5255201) (525201) (308459) 94180 (5469480)
Rights and easen1lmts
Add descnption Add deSCliption Add dcscnptioo
Total intangible assets
(16905010) (16105010) (985466) 94180 ( 17796296) Total accumulated deprcclatJonIamortizallOn
See independent auditors report and notes to the financial statements 34
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC FORTY NINER SHOPS INC
June 302016 (for inclusion In the Caltfomia State Uninrsity)
3 Detail ofdepreciation and amortiution expense for the year nded June 30 20J6
Depreciation and amortization expense relalCd to capital assets 985466
Amortization expense related to other assets
T(tal depreciation and amorlization 985466
4 Long-term liabilities ativity schedule
Bailuuf
Balancc Prior period June 30 2015 Balance Current Loftl-term June 302015 adjustments ReclassificatIons (restated) Additions Reductions June lOt 2016 ~rtion portion
128 L88g 1281888 563651 (455277) 1390262 1390262Aarued compensaied absences Claims Ilability for losses and loss adJUS1n1lt~l expenses
Unamortlled premium I (dISCOunt) on capiWtpoundd lease obligation
1tal capilaliJid lease obligations
Commerclal paper Notes p3vable Jelated to SRB Olhety (list bvt~pe)
Add description Add description ADd descnptloo Add descnpuon Add dcsenplion Add description
Tolallong-term debt obligations
3675000
367500)
3675_000
36750UO
(175000)
p750001
3300000
33UO00O
85000
85000
32l50UO
3215000
Tota long~tenn habllllies 4)2148 4952148 846562 ___(_g~li2QL____ 4middot~)59()
85000
1415262 3A91328
5 utu miaimum lease payments ~ capitalu-ed lease obti2ariOfts
Year ending June 30 2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032 - 20gt6 2037 - 2041 2042 - 2046 2047-2051 2052middot2056 2057 - 2061 2062- 2066
Totalminimum easepa~mcnu
Le$s an1OilllUl representing Interest
Present value of future mmimum Jea~ psmenis
UnamorUlJid net premium (discount)
Capi~lI~lea~I~llgations rclated to SM Principal and
Principal Only Interest Only Interest
AU other capitall7ed teAse obligAtions Principal snd
Principii I Only Interest OnlY Interest
Total tapitalu-ed lease obligations Principal and
Principal Only IntffUt Only ~
See independent auditors report and notes to the financial statements 35
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY middotNINER SHOPS INC FORTY NINER SHOPS INC
June H 2016 (fOr mcluoilon mhe Cahfornla State UnJeTSlty
6 Long-term debt ohligaboa scbedule All othf It)nl~term
Auxiliary rtgtVenue bonds debt obligations TotAllong~term debt oblgarioM
PrincipalOntv 1 nteres1 Only
Principal and Interest PrinepalOnly Interest On~
PriRcipal and Interest Principal Only (nreTest Onll
Principalnd Interest
Ycar cndtng June 30 2017 115000 1500 241500 g~OOO 156500 241500 2018 2)19
2020 2021
95-lOO 90000 90000 95J)(X)
14K6ltXl J4495tl 140900 136175
243600 234950 230900 23L275
9~O()()
90000 900I)(J
95000
148600 144950 140900 1-6275
243600 234_950 23U900
231275 2021 w 2026 2027middot201 I 2031 ~ 2030 2037 - 2041
5550()O nOnoo 915000 655000
603125 443750 244475
40950
115amp125 LJ63750 LI59475
69950
555000 noooo 9ISJ)OO 655DOO
60115 441750 244471
40950
USB12S 1163750 U59475
61)5950 2()42 ~ 2M6
2047 - 2051 2052 w 206 2057middot2(J61 2062middot2066
Total nummum paymentgt 3300()0 1059525 i59525 3300JI()( 2059 ~25 5359525
Less amounts lcpH~smtU1g mLCresl (2059525)
Pr~Il aluc of fulure mlJUnllnn pa~ IllCtIlS 300000
Unamortued net prcrruUffi (d)scounl) 276328
Totallong-lelTll debt OOl183tlooS ~57632g
Less current poJ1Jcm (~middotO()())
Long-term debt obiteR ions net of urreat pornon 349) 328
7 Cliliculatton of nd position
71 Calulation of net positioD net inWStlDtnt 1ft npilal Hsset~
taprud assets nct of lJC(umulalcd depnrl3tJon case obhgatI011S
8594558
Long~term debt obhAlluons net of cumml1)()rtJOO (85JIOIII
(3-+91328)
Add dCScnpllOTl Add de$CJlpllOJl
Net posrtlon net 1OCslmcnt In tllIpllaiassct 501820
72 Cakulluion of net position resfriltted for no1ltxpendabk- ~ ~pdowments
P0f110fl of restnctcd cash and cash equlalents related to cridovmenll $
Endowment mcSlments
Other adjustments (pkase list Add descnptloo Add descnptlon
Add descnpllon Add descnpllOTl Add dc-scnpllOlU Add descnpuon Add dtcnpuoli Add descnphon
Add descnptlOn Add desenpholl
See independent auditors report and notes to the financial statements 36
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
FORTY-NINER SHOPS INC
FORTY NINER SHOPS INC JtIllC t 2016
(for IOCitlSlf)O In theCahforma St3te UOHcrsll~)
8 T -npctions tb rrlatrd e-ntlties Amount
and olhcr program PnmCnlS to Unncr5lt for other than salanes ofllnl ersll personnel 1-447876 PaYments rcceed from Von etSlh for seT IceS space and programs 2301011 Gms-m-kmd 10 1111 Uni crsfty from dlscrctch presented component I (ffii9O GIfts (cash or assltlS) Lo the UnnOSJI from dlcrdch Accounts pavable In) Urn ersll (enlCr as JiCglllJc nu 213Jl60 Other amounts (payable to) UIm crSt (-nla as netau e number) Accounts Jece1 able [TOm Um emt 212666 Other amount reccn able [tom Unn er-II
9 Other postcmploYmfnl Mdt ohIiRation tOPED)
Annual reqmrcd oontnPUllQll (ARC COUUlQuUons dunnglhe qOaJ 5(X)337
Increase (decrease m net OPEB ob1Jgahofl (NDO) 5tlO337
Other adjustments
NOO - begmnme of HaJ 369L576
NOO - end of val 4191913
10 POUUtlOIl remediation lIabairies Dnder ASB Sttement No 49
)escription Amo~ltt
Add dscnpllon Add deSCflf)llOn
Adddlscnphoo AdddescnPllOlt AdddcsLTIptJon Add dcscnpuon Add descnrt10n Add dsnml-lOn Add descnptlOn Add dcscnpuon
Total pollutlon remedJallon 11ablltKS
Less (UInnl porhor
PolJuwm rcmedJllOfl habdlucs net of current portJon
See independent auditors report and notes to the financial statements 37
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38
fORTYmiddotNINER SHOPSINC fORTY NfNER SHOPS INC
June ~o 206 (for Inclusion In the Cahromul State Unn ersl~)
11 The ftlUure snd moun~ oftht prior perlod djusfments) flaquoQIded 10 ~innIlC Rei positioo Nlff Position
Class
NCIIlOSlliOTI as of ltmC 30 )015 as prelousl~ nportOO Pllor penod 3dllLlttmenls
I (lIs1 descnpuon ofeacb adlustment)
Amount Dr (Cr)
) 323amp05
2
(list dcscnptlon of eacb adlUS~--nl) (lisl descnptu)f) of each adultlrnem)
) (IIS1 dScflptum ofeach ad1ustmCn) HI (iJst dcscnptJon of IMtCh adjustment)
NC1 posItion 3$ ofJUM 0 lOIS 3S rC5latcd 02)805
Provide it detai1ed breakdown of the jornal entrles tau be fjQantial statement line elll lltrvel booked to rlaquoord each pnor period adjustment
~---= NC~ ~~u~~so-f-ad-Ul--m-~-cio-u-m-J-en----)-
Nct POSition class 2 (hrcakdoTI of adluohng lownal enltv)
Net POSltlOO class 5 (brealooyTI ofadlllstmR 10urnal COIl)
Net ~l$III01J class 7 (breakdown of adluSllOg IOWTIal entry)
Net poslhon dass 8 (brcakdmn of achustmg Dumal enlT)
(brC4kdon of adlusung IOUlnal entf)
Net f)OSlUon dass In (breakdOwn of adjustmg lournd c-ntr)
See independent auditors report and notes to the financial statements 38