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Audited Financial Statements
and Other Financial Information
Antioch University
Years ended June 30,1995 and 1994
with Report of Independent Auditors
Antioch University
Audited Financial Statements
and Other Financial Information
Years ended June 30,1995 and 1994
Contents
Report of Independent Auditors ……………………………………………………………………………… 1
Audited Financial Statements
Statement of Financial Position ……………………………………………………………………………… 2
Statement of Activities ………………………………………………………………………………………….. 3
Statement of Cash Flows ……………………………………………………………………………………….. 5
Notes to Financial Statements ………………………………………………………………………………… 6
Other Financial Information
Report of Independent Auditors on Other Financial Information ………………………………. 17
Combining Balance Sheet ……………………………………………………………………………………. 18
8 1 Citizens Federal Centre
Suite 1800
Dayton, Ohio 45402
8 Phone: 5132232000
Report of Independent Auditors
Board of Trustees
Antioch University
We have audited the accompanying statements of financial position of Antioch
University as of June 30, 1995 and 1994, and the related statements of activities and cash
flows for the years then ended. These financial statements are the responsibility of the
University’s management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the financial position of Antioch University at June 30, 1995 and 1994, and the
related activities and cash flows for the years then ended, in conformity with generally
accepted accounting principles.
As discussed in Notes 1 and 9 to the financial statements, in 1995, the University has
changed its method of accounting for contributions as prescribed by Statement of
Financial Accounting Standards
(SFAS)
No. 116, “Accounting for Contributions
Received and Contributions Made,” and the financial statement presentation prescribed
by
SFAS No. 117, “Financial Statements of Not-For-Profit Organizations.”
September 12, 1995
Antioch University
Statement of Financial Position
June 30
1995 1994
Assets
Cash and cash equivalents
Accounts receivable, less allowance for doubtful
accounts ($310,567 in 1995 and $280,162 in 1994)
Grants receivable
Contributions receivable, less allowance for uncollectible
items ($846,617 in 1995)
Prepaid expenses
Loans to students
Investments
Land, buildings, and equipment, net 25,150,706 23,225.3 19
Total assets $57,598,406 $43,730,345
Liabilities
Accounts payable
Accrued liabilities
Deferred revenue
Notes and bonds payable
Annuities payable
Deposits held on behalf of others
Advances from government for student loans
Total liabilities
Net assets
Unrestricted
Temporarily restricted
Permanently restricted
Total net assets
Total liabilities and net assets
See accompanying notes.
Antioch University
Statement of Activities
Year ended June 30,1995
Revenues, gains, and other support
Tuition and fees
Contributions
Contracts and other exchange transactions
Investment income on life income and annuity
agreements
Investment income on endowment
Other investment income
Net realized and unrealized gains on endowment
Net realized and unrealized gains on other
investments
Sales and service of auxiliary enterprises
Other income
Total revenues and gains
Net assets released from restrictions
Total revenues, gains, and other support
Expenses and losses
Educational and general:
Instruction
Research
Public service
Academic support
Student services
Institutional support
Operation and maintenance of plant
Scholarships and fellowships
Total educational and general expenses
Auxiliary enterprises
Total expenses
Actuarial (gain) loss on annuity obligations
Payments to life income beneficiaries
Total expenses and losses
Unrestricted
Temporarily
Restricted
Permanently
Restricted Total
Increase in net assets prior to cumulative effect of
accounting change 1,075,005 2,165,893 1,249,020 4,489,918
Cumulative effect of change in method of
accounting for contributions – 5,300,147 1,489,936 6,790,083
Increase in net assets 1,075,005 7,466,040 2,738,956 11,280,001
Net assets at beginning of year
Net assets at end of year
See accompanying notes.
Antioch University
Statement of Activities
Year ended June 30,1994
Temporarily Permanently
Unrestricted Restricted Restricted Total
Revenues, gains, and other support
Tuition and fees $32,316,917 $ – $ – $32,316,917
Contributions 2,407,148 2,598,269 130,658 5,136,075
Contracts and other exchange transactions 3,065,880 – – 3,065,880
Investment income on life income and annuity
agreements – 135,045 – 135,045
Investment income on endowment 276,609 277,110 – 553,719
Other investment income 93,336 – – 93,336
Net realized and unrealized losses on endowment (1 15,020) – (1 15,020) (230,040)
Net realized and unrealized losses on other
investments
Sales and service of auxiliary enterprises
Other income
Total revenues and gains
Net assets released from restrictions
Total revenues, gains, and other support
Expenses and losses
Educational and general:
Instruction
Research
Public service
Academic support
Student services
Institutional support
Operation and maintenance of plant
Scholarships and fellowships
Total educational and general expenses
Auxiliary enterprises
Total expenses
Actuarial loss (gain) on annuity obligations
Payments to life income beneficiaries
Total expenses and losses
Increase (decrease) in net assets
Net assets at beginning of year
Net assets at end of year
See accompanying notes.
Antioch University
Statement of Cash Flows
Cash flows from operating activities
Increase in net assets prior to cumulative effect of
accounting change
Adjustments to reconcile increase in net assets to net cash
provided by operating activities:
Depreciation
Increase in accounts and grants receivable
Decrease in reserve for uncollectible loans to students
Increase in contributions receivable
Increase in
prepaids
(Decrease) increase in accounts payable and other
liabilities
(Decrease) increase in annuity liability
Increase in deferred revenues
Contributions restricted for long-term investment
Interest and dividends restricted for reinvestment
Net realized and unrealized (gains) losses on sales of
investments
Net cash provided by operating activities
Year ended June 30
1995 1994
Cash flows from investing activities
Proceeds from sales and maturities of investments 2,924,056 5,932,833
Purchases of investments (6,110,297) (2,453,293)
Purchases of land, building, and equipment (3,735,069) (5,962,152)
Disbursements of loans to students (795,328) (806,485)
Repayments of loans from students 794,550
992,5
14
Net cash used by investing activities (6,922,088) (2,296,583)
Cash flows from financing activities
Proceeds from issuance of indebtedness 2,625,000 –
Repayments of principal of indebtedness (1,179,175) (792,744)
Receipts of interest and dividends restricted for
reinvestment 157,572 135,045
Contributions received restricted for long-term
investment 1,730,036 2,822,263
Decrease in advances from government for student loans (18,947) –
Net cash provided by financing activities 3,314,486 2,164,564
Net (decrease) increase in cash and cash equivalents (1,572,474) 875,092
Cash and cash equivalents at beginning of year 2,516,977 1,641,885
Cash and cash equivalents at end of year $ 944,503 $2,516,977
See accompanying notes.
Antioch University
Notes to Financial Statements
June 30,1995
1. Summary of Significant Accounting Policies
Accrual Basis
The financial statements of the University have been prepared on the accrual basis.
Change in Accounting Principle
In order to ensure observance of limitations and restrictions placed on the use of the
resources available to the University, the accounts of the University are maintained in
accordance with the principles of “fund accounting;” thus, resources for various purposes
are classified into funds that are in accordance with activities or objectives specified.
These financial statements, however, have been prepared to focus on the entity as a whole
and to present transactions according to the existence or absence of donor-imposed
restrictions in conformity with Statements of Financial Accounting Standards
(SFAS)
No.
116, “Accounting for Contributions Received and Contributions Made,” and No. 117,
“Financial Statements of Not-for-Profit Organizations,” issued by the Financial
Accounting Standards Board in June 1993. This has been done by classification of fund
transactions and balances into three categories of net assets: unrestricted net assets which
have no donor-imposed restrictions, temporarily restricted net assets which have
donor-
imposed restrictions that will expire in the future, and permanently restricted net assets
which have donor-imposed restrictions which do not expire, as follows:
Fund Group Net Asset Classification
Unrestricted current fund Unrestricted
Restricted current fund Unrestricted and temporarily restricted
Annuity and life income funds Temporarily restricted and permanently restricted
Endowment funds Unrestricted and permanently restricted
Plant funds Unrestricted
Loan funds Permanently restricted
Antioch University
Notes to Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
Change in Accounting Principle (continued)
In addition, to implement
SFAS
No. 117, the Federal Loan Program fund balance is
required to be reclassified as a liability. The following table shows the impact of this
reclassification:
June 30
1994 1993
Total fund balances as previously reported $25,771,499 $24,363,631
Reclassification of fund balance to a liability (4,606,604) (4,907,255)
Total net asset balances as restated
$21,164,895 $ 19.456.376
Expiration of Donor-Imposed Restrictions
The expiration of a donor-imposed restriction on a contribution or on endowment income
is recognized in the period in which the restriction expires and, at that time, the related
resources are reclassified to unrestricted net assets. A restriction expires when the
stipulated time has elapsed, when the stipulated purpose for which the resource was
restricted has been fulfilled, or both.
Investments
Investments are recorded on a market value basis and gains and losses on such
investments are recognized in the period during which they occur.
SFAS
No. 117 requires that net appreciation on endowment funds, whose income is
unrestricted as to use, be reported as unrestricted net assets unless such net appreciation
has been permanently restricted by the donor or by law. Accordingly, market appreciation
on endowment funds is classified in the accompanying financial statements as part of
unrestricted and permanently restricted net assets. In those cases where a donor has
placed specific restrictions on the use of endowment income, any related net appreciation
is also subject to the same restriction and is reported as a part of temporarily restricted net
assets until such time as the restriction has been met.
Antioch University
Notes to Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
Land, Buildings, and Equipment
Land, buildings, and equipment are recorded at cost at the date of acquisition or fair value
at date of donation in the case of gifts. Depreciation is provided on the straight-line basis
over the estimated useful lives of the applicable assets.
Income Taxes
The University is a qualifying organization under Section 501(c)(3) of the Internal
Revenue Code (IRC) and is, therefore, exempt from income taxes under IRC Section
50 1 (a).
Cash Flows
The University considers all cash and overnight investments to be cash equivalents.
2. Investments
Investments of the University at June 30, 1995 and 1994 are composed of the following:
1995 1994
Market or Market or
Carrying Carrying
Value Cost Value Cost
Certificates of deposit and
money market funds $ 762,161 $ 762,161 $ 355,933 $ 355,933
Securities 13,611,061 12,338,765 10,514,333 9,799,253
Notes receivable 78,694 78,694 82,401 82,401
Rental properties and other
investments, unrestricted 48,500 48,500 48,500 48,500
$14,500,416 $13,228,120 $1 1,001,167 $10,286,087
Antioch University
Notes to Financial Statements (continued)
2. Investments (continued)
The University holds common stock investments in certain companies which are not
publicly traded. The investment is recorded at market value which is determined by the
management of the University and the investee company. The recorded value of these
investments at June 30 is as follows:
Unrestricted net assets $ 10,896 $ 10,466
Temporarily restricted net assets 66,400 47,480
Permanently restricted net assets 2,114,499 1,875,3 19
3. Endowment Assets
Endowment net assets on a market value basis are summarized as follows at June 30:
Pooled
Nonpooled
Each individual endowment in the pool subscribes to or disposes of units on the basis of
the value per unit at market value at the beginning of the fiscal year within which the
transaction takes place. The approximate value of each unit was $12.90 at June 30, 1995
($11.94 at June 30, 1994). The average annual earnings per unit, exclusive of capital
gains or losses, amounted to
$.86
for 1995
($.66
for
1994),
including
$.26
per unit
representing interest on intrafund borrowings
($.29 in 1994).
Antioch University
Notes to Financial Statements (continued)
4. Land, Building and Equipment
The following is a summary of land, building and equipment as of June 30:
1995 1994
Building
Building improvements
Equipment
Furniture and fixtures
Land and land improvements
Library books
Accumulated depreciation
Net book value
Antioch University
Notes to Financial Statements (continued)
5. Notes and Bonds Payable
Notes and bonds payable consist of the following:
June 30
1995 1994
New Hampshire bonds bearing interest at 7.875%; due
in 2022
$2,400,000
adjustable rate mortgage loan bearing
interest at 7.58% during 1995, secured by University
facilities; due in 2008
$1,500,000
construction loan bearing interest at 8.875%
during 1995 and 7.375% during 1994; due in 2008
$1,000,000
adjustable rate mortgage loan bearing
interest at 7.65% during 1995 and 5.65% during 1994,
secured by University facilities; due in 2004
$1,000,000
revolving line of credit due November 30,
1994, plus interest payable monthly at prime rate plus
1%
Demand note bearing interest at prime plus
I%,
payable
to bank, secured by endowment securities
Unsecured demand note to a University benefactor
(non-
interest-bearing)
Other obligations, including capitalized leases
Interest paid to external sources amounted to $786,374 in 1995 ($702,893 in 1994).
Interest expense amounted to $786,374 in 1995 ($739,184 in 1994).
Maturities of the notes and bonds for the five years succeeding June 30, 1995 are:
Antioch University
Notes to Financial Statements (continued)
6. Internal Loan
At June 30, 1995, an internal loan obligation of $1,845,124 exists ($2,094,266 at June 30,
1994) and is repaid through nonmandatory transfers from the operating budget to the
endowment accounts within permanently restricted net assets. The loan bears interest at 8
112
percent, except for $450,000 which bears interest at 7 percent. In fiscal year 1979,
certain endowment and similar funds stocks and bonds, pledged as security for past due
notes payable of the current unrestricted funds, were sold by the holder of the notes. The
Board of Trustees authorized an
intrafund
borrowing to replace these investments. During
fiscal 1981, the Board committed itself to repayment of the endowments to restore the
assets of the endowment fund. To date, approximately $1,492,219 has been repaid to the
endowment fund.
This obligation is not reflected on the June 30, 1995 balance sheet as the obligation is
internal and the balance sheet has been prepared to focus on the entity as a whole.
7. Pension Costs
The University has a defined contribution retirement plan for eligible faculty and
nonfaculty personnel managed by Teachers Insurance and Annuity AssociationÑColleg
Retirement Equities Fund. Contributions to this plan by the University were $1,833,177
for 1995
($1,7
13,045 for 1994). Additional contributions may be made by participants at
their option.
The University also maintains separate, self-administered, noncontributory pension plans
for certain individuals who were faculty employees at June 30, 1970 or nonfaculty
personnel at June 30, 1973. Substantially all benefits previously earned under these plans
are paid directly by the University and amounted to approximately $146,171 in 1995
($120,535 in 1994). The unfunded, actuarially determined liability utilizing an average
interest assumption of 7.5 percent for benefits earned under these plans was
approximately $810,398 at June 30, 1995 ($864,388 at June 30, 1994) and is included in
accrued liabilities in the accompanying statements of financial position.
Antioch University
Notes to Financial Statements (continued)
8. Lease Cornrni tmen ts
The University’s education centers generally lease their facilities. These leases are
noncancelable operating agreements for varying periods through 1998, with renewal
options for additional periods in some cases. Rental expense under these leases was
approximately $1,555,000 in 1995 ($1,702,000 in 1994). Real estate taxes, insurance, and
specified maintenance costs are generally paid by the University.
Future minimum rentals on noncancelable leases are as follows:
Year Amount
Antioch University
Notes to Financial Statements (continued)
9. Unconditional Promises
Effective July 1, 1994, the University early adopted SFAS No. 116, “Accounting for
Contributions Received and Contributions Made.” The cumulative effect of this change
in accounting principle as of July 1, 1994 was to increase temporarily restricted net assets
by $5,300,147 and permanently restricted net assets by $1,489,936. Under the new
method of accounting, the University recognizes unconditional promises to give as
revenues in the period the promise is made.
As of June 30, 1995, contributors to the University have made written unconditional
promises to give, totaling $8,466,169, on which management has set up an allowance for
uncollectible promises of $846,617. Most unconditional promises are restricted by donors
for scholarships and general operating support purposes and are due as follows:
Temporarily Permanently
Restricted Restricted Total
Less than one year
One to five years
More than five years 2,607,322 1,160,826 3,768,148
$6,976,239 $1,489,930 8,466,169
Allowance for uncollectible promises 846,617
Net unconditional promises $7,619,552
The amounts are recorded after discounting to the present value of the future cash flows.
Antioch University
Notes to Financial Statements (continued)
10. Nature and Amount of Temporarily Restricted Net Assets
Temporarily restricted net assets are available for the following purposes at June 30:
Instruction
Research
Public service
Academic support
Student services
Institutional support
Scholarships
Construction
Annuity payments
11. Nature and Amount of Permanently Restricted Net Assets
Permanently restricted net assets are restricted to the following purposes at June 30:
Instruction
Public service
Academic support
Student services
Institutional support
Plant
Scholarships
Loans
Annuity payments
Antioch University
Notes to Financial Statements (continued)
12. Net Assets Released From Restrictions
Donor-imposed restrictions expired on temporarily restricted net assets during the years
ended June 30, as follows:
Purpose restricted contributions for:
Instruction
Research
Public service
Academic support
Student aid
Construction
Other
Total net assets released from restriction
13. Contributed Services
No amounts have been reflected in the financial statements for donated services. The
University pays for most services requiring specific expertise. However, many
individuals volunteer their time and perform a variety of tasks that assist the University.
These volunteers include the Board of Trustee Members; operations of WYSO public
radio; and campaigning solicitors. The University receives more than 2,500 volunteer
hours per year.
14. Investment in Plant
The University’s building and contents were insured for a total of $54,565,000 during
1995 ($49,873,000 during 1994). This represents the estimated replacement cost of the
structures and its contents.
n 1 Citizens Federal Centre
Suite 1800
Dayton, Ohio 45402
n Phone: 51 3 223 2000
Report of Independent Auditors on Other Financial Information
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying Combining Balance Sheet is presented
for purposes of additional analysis and is not a required part of the financial statements.
Such information has not been subjected to the auditing procedures applied in our audit
of the financial statements and, accordingly, we express no opinion on it.
September 12,1995 ^Mt + l/^Mt-lLT
Antioch University
Combining Balance Sheet
June 30,1995
Assets
Cash and cash equivalents
Accounts receivable
Grants receivable
Contributions receivable
Prepaid expenses
Loans to students
Investments
Land, buildings, and equipment
Total assets
New Southern University Total
College England Seattle California
McGregor
Administration University
Liabilities
Accounts payable $ 15,183 $ 17,207 $ – $ – $ – $ 1,091,248 $ 1,123,638
Accrued liabilities 9,383 – 50,567 26,980 – 2,380,941 2,467,871
Deferred revenues 625,781 3,445,873 282,059 460,569 155,157 51,123 5,020,562
Notes and bonds payable 2,073,830 5,530,000 – – – 2,838,562 10,442,392
Annuities payable – – – – – 1,184,225 1,184,225
Deposits held on behalf of others 327,165 – – – – – 327,165
Advances from government for ”
student loans – – – – – 4,587,657 4,587,657
Total liabilities 3,051,342 8,993,080 332,626 487,549 155,157 12,133,756 25,153,510
Net assets
Unrestricted (7,933,429) 2,227,944 1,019,171 2.1 15,434 1,135,879 11,952,379 10,517,378
Temporarily restricted 7,183,692 159,862 6,412 47,791 132,437 1,384,738 8,914,932
Permanently restricted 1,646,7 1 1 – – 986 – 11,364,889 13,012,586
Total net assets 896,974 2,387,806 1,025,583 2,164,211 1,268,316 24,702,006 32,444,896
Total liabilities and net assets
