AUDIT

Dm1624

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• Publié par: Ussu
• Nombre de lectures: 23
• Langue: English

Extrait

CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2006

and 2005

INDEPENDENT AUDITORS' REPORT Board of Trustees Environmental Defense, Incorporated New York, New York

We have audited the accompanying consolidated statements of financial position of Environmental Defense, Incorporated (the "Organization") as of September 30, 2006 and 2005, and the related consolidated statements of activities, functional expenses and cash flows for the years then ended. These financial statements are the responsibility of the Organization's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free 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 ev aluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements enumerated above present fairly, in all material respects, the financial position of Environmental Defense, Incorporated as of September 30, 2006 and 2005, and the changes in its net assets and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

New York, New York November 9, 2006

ENVIRONMENTAL DEFENSE, INCORPORATED Consolidated Statements of Financial Position

ASSETS Cash and cash equivalents Prepaid expenses and other assets Inventory Pledges receivable Property and equipment, net Investments Total assets LIABILITIES Accounts payable and accrued expenses Deferred revenue Deferred rent payable Annuities payable Notes payable Other liabilities Total liabilities Commitment and contingency (Note K) NET ASSETS Unrestricted: Available for operations Designated for long-term investment Total unrestricted Temporarily restricted Permanently restricted Total net assets Total liabilities and net assets

See notes to consolidated financial statements

September 30, 2006 2005

$ 1,246,878 $ 362,036 1,138,565 1,220,577 228,596 297,963 49,910,377 45,902,378 6,107,830 7,330,125 37,069,683 30,051,649 $ 95,701,929 $ 85,164,728 $ 5,430,772 $ 4,936,844 73,958 217,637 934,859 1,025,399 1,143,026 1,212,248 1,216,334 3,493,127 1,313,726 1,414,237 10,112,675 12,299,492

3,364,286 1,345,993 32,254,402 28,813,181 35,618,688 30,159,174 46,259,068 39,004,564 3,711,498 3,701,498 85,589,254 72,865,236 $ 95,701,929 $ 85,164,728

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ENVIRONMENTAL DEFENSE, INCORPORATED Consolidated Statement of Activities Year Ended September 30, 2006 (with summarized financial information for 2005)

Operating support and revenue: Support: Membership and contributions Major gifts Foundations Government and other grants Bequests (Note A-10) Total support Revenue: Investment income allocated for operations Fees, royalties and other income Total revenue Net assets released from restrictions Total operating support and revenue Operating expenses: Program services: Scientific research, economic analysis, and policy development: Global warming Land, water and wildlife Health Oceans Education Membership activities Total program services Supporting services: Management and general New member acquisition Fund-raising: Membership Development Total supporting services Total operating expenses Change in net assets from operations Change in net assets from non-operating activities: Contributions and other income, net Investment income, net of allocation to operations Change in net assets Net assets - beginning of year Net assets - end of year

See notes to consolidated financial statements

Temporarily Permanently Unrestricted Restricted Restricted Net Assets Net Assets Net Assets

$ 7,628,621 $ 2,436,539 4,449,409 34,113,500 $ 15,991,875 48,494 920,433 3,410,644 15,537,168 53,462,347 1,717,278 41,130 991,483 2,708,761 41,130 46,489,942 (46,489,942) 64,735,871 7,013,535

10,000 10,000 10,000

18,901,233 12,387,596 5,063,650 7,160,507 3,966,082 478,876 47,957,944 2,040,957 1,255,192 2,506,409 6,394,036 12,196,594 60,154,538 4,581,333 7,013,535 10,000 (80,219) 28,199 958,400 212,770 5,459,514 7,254,504 10,000 30,159,174 39,004,564 3,701,498 $ 35,618,688 $ 46,259,068 $ 3,711,498

Year Ended September 30, Total Net 2005 Assets Net Assets

$ 10,065,160 $ 8,546,376 38,572,909 29,246,350 15,991,875 25,462,353 968,927 1,021,698 3,410,644 3,561,422 69,009,515 67,838,199 1,758,408 1,273,050 991,483 583,033 2,749,891 1,856,083 0 0 71,759,406 69,694,282

18,901,233 14,093,594 12,387,596 12,355,400 5,063,650 5,290,331 7,160,507 6,431,728 3,966,082 2,834,254 478,876 448,339 47,957,944 41,453,646 2,040,957 2,405,402 1,255,192 1,309,934 2,506,409 1,670,753 6,394,036 5,180,864 12,196,594 10,566,953 60,154,538 52,020,599 11,604,868 17,673,683 (52,020) 191,333 1,171,170 787,534 12,724,018 18,652,550 72,865,236 54,212,686 $ 85,589,254 $ 72,865,236

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ENVIRONMENTAL DEFENSE, INCORPORATED Consolidated Statement of Activities Year Ended September 30, 2005

Operating support and revenue: Support: Membership and contribution Major gifts Foundations Government and other grants Bequests (Note A-10) Total support Revenue: Investment income allocated for operations Fees, royalties and other income Total revenue Net assets released from restrictions Total operating support and revenue Operating expenses: Program services: Scientific research, economic analysis, and policy development: Global warming Land, water and wildlife Health Oceans Education Membership activities Total program services Supporting services: Management and general New member acquisition Fund-raising: Membership Development Total supporting services Total operating expenses Change in net assets from operations Change in net assets from non-operating activities: Contributions and other income, net Investment income, net of allocation to operations Change in net assets Net assets - beginning of year Net assets - end of year

See notes to consolidated financial statements

Temporarily Permanently Unrestricted Restricted Restricted Total Net Net Assets Net Assets Net Assets Assets

$ 7,058,078 $ 1,488,298 6,011,447 23,234,903 25,462,353 1,021,698 3,561,422 16,630,947 51,207,252 1,035,043 238,007 583,033 1,618,076 238,007 37,035,126 (37,035,126) 55,284,149 14,410,133

$ 8,546,376 29,246,350 25,462,353 1,021,698 3,561,422 67,838,199 1,273,050 583,033 1,856,083 69,694,282

14,093,594 14,093,594 12,355,400 12,355,400 5,290,331 5,290,331 6,431,728 6,431,728 2,834,254 2,834,254 448,339 448,339 41,453,646 41,453,646 2,405,402 2,405,402 1,309,934 1,309,934 1,670,753 1,670,753 5,180,864 5,180,864 10,566,953 10,566,953 52,020,599 52,020,599 3,263,550 14,410,133 17,673,683 186,333 $ 5,000 191,333 693,531 94,003 787,534 4,143,414 14,504,136 5,000 18,652,550 26,015,760 24,500,428 3,696,498 54,212,686 $ 30,159,174 $ 39,004,564 $ 3,701,498 $ 72,865,236

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ENVIRONMENTAL DEFENSE, INCORPORATED Consolidated Statement of Functional Expenses Year Ended September 30, 2006 (with summarized financial information for 2005)

Total Land, Water Total Management New Total Program and Supporting Global and Membership Program and Member  Fund-raising  Supporting  Services Warming Wildlife Health Oceans Education Activities Services General Acquisition Membership Development Services 2006 2005 Salaries and wages $ 6,307,268 $ 4,568,369 $ 2,555,812 $ 2,546,788 $ 1,563,880 $ 7,359 $ 17,549,476 $ 667,719 $ 3,184 $ 559,482 $ 3,322,812 $ 4,553,197 $ 22,102,673 $ 19,603,532 Benefits and other employment costs 1,546,992 1,132,176 633,490 678,728 350,329 1,977 4,343,692 243,865 10,947 212,548 1,017,671 1,485,031 5,828,723 5,874,742 Professional, consulting and intern fees 4,792,162 2,742,322 401,834 2,006,769 284,920 91,102 10,319,109 103,380 69,174 154,756 367,002 694,312 11,013,421 7,637,348 Travel 690,957 408,804 243,304 335,157 96,813 149 1,775,184 39,967 316 29,764 227,619 297,666 2,072,850 2,031,029 Printing 191,415 88,697 57,632 98,496 183,656 31,677 651,573 1,194 3,629 6,367 91,184 102,374 753,947 1,739,588 Postage and delivery 9,656 12,716 4,664 4,104 3,139 1,375 35,654 358 153 434 31,409 32,354 68,008 1,690,756 Occupancy 713,251 516,971 204,975 227,656 228,031 1,890,884 342,716 4,095 341,225 342,581 1,030,617 2,921,501 2,732,747 Telecommunications 207,832 138,544 55,106 73,028 51,531 405 526,446 73,821 492 73,049 94,624 241,986 768,432 810,179 Data management, list rental and fulfillment 2,173,397 303,744 259,292 250,864 338,231 333,182 3,658,710 72,815 1,162,374 641,592 123,169 1,999,950 5,658,660 1,375,389 Office supplies and equipment 333,799 268,399 88,978 173,921 90,362 555 956,014 104,437 182 101,148 302,792 508,559 1,464,573 601,309 Subscriptions and dues 92,651 55,486 43,215 37,473 73,994 765 303,584 5,336 25 3,487 54,846 63,694 367,278 318,359 Advertising and promotions 134,889 117,875 112,414 110,367 435,671 21 911,237 227 36 249 6,108 6,620 917,857 1,141,660 Grants to others 846,832 1,610,472 251,706 440,142 8,080 3,157,232 3,235 2,188 6,532 11,955 3,169,187 3,405,421 Other 373,118 49,238 8,188 12,996 68,590 10,306 522,436 87,392 581 86,455 105,854 280,282 802,718 1,153,221 18,414,219 12,013,813 4,920,610 6,996,489 3,777,227 478,873 46,601,231 1,746,462 1,255,188 2,212,744 6,094,203 11,308,597 57,909,828 50,115,280 Depreciation and amortization 487,014 373,783 143,040 164,018 188,855 3 1,356,713 294,495 4 293,665 299,833 887,997 2,244,710 1,905,319 $ 18,901,233 $ 12,387,596 $ 5,063,650 $ 7,160,507 $ 3,966,082 $ 478,876 $ 47,957,944 $ 2,040,957 $ 1,255,192 $ 2,506,409 $ 6,394,036 $ 12,196,594 $ 60,154,538 $ 52,020,599

See notes to consolidated financial statements

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ENVIRONMENTAL DEFENSE, INCORPORATED

Consolidated Statement of Functional Expenses Year Ended September 30, 2005

Land, Water Global and Warming Wildlife Health

Salaries and wages $ 4,336,822 $ 4,697,653 $ 2,522,381 Benefits and other employment costs 1,334,871 1,320,074 712,892 Professional, consulting and intern fees 2,771,971 2,309,466 444,724 Travel 627,772 484,543 216,331 Printing 350,529 71,099 13,516 Postage and delivery 833,477 32,654 17,262 Occupancy 582,233 647,481 360,222 Telecommunications 187,210 192,191 100,986 Data management, list rental and fulfillment 266,543 51,984 79,386 Office supplies and equipment 133,413 137,402 81,496 Subscriptions and dues 75,865 56,304 41,356 Advertising and promotions 512,556 156,556 178,007 Grants to others 1,318,879 1,479,497 158,267 Other 377,504 289,924 87,057

Depreciation and amortization

13,709,645 11,926,828 5,013,883 383,949 428,572 276,448

$ 14,093,594 $ 12,355,400 $ 5,290,331

See notes to consolidated financial statements

Total Membership Program Oceans Education Activities Services

$ 2,694,366 $ 1,089,728 $ 137,681 $ 15,478,631 759,185 322,195 50,415 4,499,632 894,602 223,145 100,775 6,744,683 293,923 67,156 9,973 1,699,698 47,346 360,795 420 843,705 24,410 153,092 2,503 1,063,398 387,679 188,783 53,938 2,220,336 122,191 50,182 19,435 672,195 46,592 66,762 8,509 519,776 86,989 50,650 9,996 499,946 46,760 44,393 372 265,050 150,428 15,398 5,674 1,018,619 432,863 3,729 1,065 3,394,300 181,374 33,168 15,096 984,123

6,168,708 2,669,176 415,852 39,904,092 263,020 165,078 32,487 1,549,554

$ 6,431,728 $ 2,834,254 $ 448,339 $ 41,453,646

Management New Total and Member  Fund-raising  Supporting General Acquisition Membership Development Services Total

$ 1,113,157 $ 41,122 $ 56,237 $ 2,914,385 $ 4,124,901 $ 19,603,532 383,981 16,392 974,737 1,375,110 5,874,742 134,344 150,451 452,867 155,003 892,665 7,637,348 112,547 980 217,804 331,331 2,031,029 6,085 429,033 365,870 94,895 895,883 1,739,588 7,800 269,239 297,151 53,168 627,358 1,690,756 269,690 242,721 512,411 2,732,747 68,252 213 69,519 137,984 810,179 6,114 330,180 420,241 99,078 855,613 1,375,389 50,647 32 50,684 101,363 601,309 20,241 232 32,836 53,309 318,359 15,141 87,007 80 20,813 123,041 1,141,660 6,327 4,794 11,121 3,405,421 48,003 2,902 45,104 73,089 169,098 1,153,221

2,242,329 1,309,934 1,655,399 5,003,526 10,211,188 50,115,280 163,073 15,354 177,338 355,765 1,905,319

$ 2,405,402 $ 1,309,934 $ 1,670,753 $ 5,180,864 $ 10,566,953 $ 52,020,599

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ENVIRONMENTAL DEFENSE, INCORPORATED Consolidated Statements of Cash Flows

Cash flows from operating activities: Change in net assets Adjustments to reconcile change in net assets to net cash provided by operating activities: Net realized and unrealized gains on investments Depreciation and amortization Contributions restricted for permanent endowment (Increases) decreases in: Prepaid expenses and other assets Inventory Pledges receivable Accounts payable and accrued expenses Deferred revenue Deferred rent payable Annuities payable Other liabilities Net cash provided by operating activities Cash flows from investing activities: Purchases of property and equipment Proceeds from sales of investments Purchases of investments Net cash used in investing activities Cash flows from financing activities: Proceeds from contributions restricted for investment in permanent endowment Net contributions and payments subject to split-interest agreements Borrowings under line of credit Repayments of borrowings Repayments of notes Net cash (used in) provided by financing activities Net change in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Supplementary disclosure of cash flow information: Interest paid

See notes to consolidated financial statements

Year Ended September 30, 2006 2005 $ 12,724,018 $ 18,652,550 (2,295,853) (1,806,479) 2,244,710 1,905,319 (10,000) (5,000) 82,012 402,579 69,367 (10,157) (4,007,999) (18,787,759) 493,928 230,029 (143,679) 45,153 (90,540) (132,800) (69,222) (29,201) (100,511) 411,546 8,896,231 875,780 (1,022,415) (2,415,213) 2,525,000 5,725,000 (7,397,062) (6,420,506) (5,894,477) (3,110,719) 10,000 5,000 149,881 (170,114) 3,584,340 (1,946,529) (1,637,811) (330,264) (330,264) (2,116,912) 1,451,151 884,842 (783,788) 362,036 1,145,824 $ 1,246,878 $ 362,036

$ 93,633 $ 123,908

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ENVIRONMENTAL DEFENSE, INCORPORATED Notes to Consolidated Financial Statements September 30, 2006 and 2005

N OTE A - O RGANIZATION AND S UMMARY OF S IGNIFICANT A CCOUNTING P OLICIES [1] Organization: The accompanying consolidated financial statements reflect the transactions of Environmental Defense, Incorporated and its wholly controlled entity, the Environmental Defense Action Fund (together the "Organization") for the years ended September 30, 2006 and 2005. Environmental Defense, Incorporated was originally organized as the Environmental Defense Fund, Incorporated, under the laws of New York State in 1967. It has been classified as a public charity and is exempt from federal income taxes under Section 501(c)(3) of the U.S. Internal Revenue Code, and from state and local taxes under comparable laws. It is dedicated to protecting the environmental rights of all people, including the right to clean air, clean water, healthy food and flourishing ecosystems. It employs scientists, economists, attorneys and other professionals in an effort both to educate the public, and to create practical solutions to environmental problems that win lasting political, economic and social support because they are nonpartisan and fair. Environmental Defense, Incorporated receives support from its membership and other contributors, as well as through foundation and gov ernment grants. The Environmental Defense Action Fund was incorporated in Delaware in July 2002, to educate the public about sound environmental policy and to advocate for effective environmental laws to protect the environmental rights of all people. It has been classified as exempt from federal income taxes under Section 501(c)(4) of the U.S. Internal Revenue Code. It receives support from individuals and other contributors (see Note J). The two organizations have some common officers and directors, and they share staff and other resources under a cost-sharing agreement. All intercompany accounts hav e been eliminated in consolidation. Financial reporting: (a) Basis of accounting: The accompanying consolidated financial statements of the Organization hav e been prepared using the accrual basis of accounting and conform to accounting principles generally accepted in the United States of America as applicable to not-for-profit organizations. (b) Functional allocation of expenses: The cost of providing the various programs and supporting services has been summarized on a functional basis in the accompanying consolidated statements of activities. Accordingly, certain expenses have been allocated among the programs and supporting services in reasonable ratios determined by management. (c) Use of estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. The Organization makes significant estimates regarding the v alue of split-interest agreements, discounts for pledges receivable and the useful lives of property and equipment. Actual results could differ from those estimates.

[2]

8

ENVIRONMENTAL DEFENSE, INCORPORATED Notes to Consolidated Financial Statements September 30, 2006 and 2005

N OTE A - O RGANIZATION AND S UMMARY OF S IGNIFICANT A CCOUNTING P OLICIES ( CONTINUED ) [2] Financial reporting: (continued) (d) Net assets: The net assets of the Organization and changes therein are classified and reported as follows: (i) Unrestricted: Unrestricted net assets represent those resources for which there are no donor restrictions as to their use and which have been categorized by the Organization as follows: Available for operations Funds that are undesignated and for general purposes and are used for the ongoing activity and working capital needs of the Organization. Designated for long-term investment Funds set aside by the Board of Trustees to prov ide for asset growth over time and to support prudent fiscal management of the Organization's resources. (ii) Temporarily restricted: Temporarily restricted net assets represent those resources restricted by donors, the release of which results from either the satisfaction of the restricted purposes specified by the donors or from the passage of time. (iii) Permanently restricted: Permanently restricted net assets represent those resources restricted by donors from use by the Organization except to generate additional income, which may or may not be directed to specifi c use by the donor. (e) Cash and cash equivalents: The cash equivalents reported in the accompanying financial statements consist primarily of highly liquid investments that have been purchased with original maturities of three months or less. (f) Measure of operations: The Organization includes in its measure of operations: · all revenues and expenses that are an integral part of its programs and supporting activities; · net assets released from restrictions to support operating expenditures; · an amount equal to 5% of the average value of endowment assets (restricted and unrestricted assets designated for long-term investment) at the end of the prior four fiscal quarters; and · an amount equal to the lower of (a) the average unrestricted bequests over the immediate past five fiscal years or (b) the unrestricted bequests in the current fiscal year.

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ENVIRONMENTAL DEFENSE, INCORPORATED Notes to Consolidated Financial Statements September 30, 2006 and 2005

[3] [4] [5]

N OTE A - O RGANIZATION AND S UMMARY OF S IGNIFICANT A CCOUNTING P OLICIES ( CONTINUED ) [2] Financial reporting: (continued) (f) Measure of operations: (continued) The Organization excludes from its measure of operations: · contributions from and changes in the value of split-interest agreements, until the death of the donor, unless specified otherwise; · investment return, net of amounts made available for operating purposes; and · additions to permanently restricted net assets. Inventory: Inventory, which consists of promotional materials and donor premiums, is stated at the lower of cost or market value. Cost is determined on a first-in, first-out basis. Property, equipment and depreciation: Property and equipment are recorded at their original costs and are depreciated ov er their estimated useful lives, which range from 3 to 10 years, using the straight-line method. Leasehold improvements are amortized using the straight-line method over the terms of the underlying leases, which may be less than the estimated useful lives of the improvements. Investments: The investments in the accompanying financial statements consist of marketable debt and equity securities, several money-market accounts, and certain limited partnership, alternative investments. Debt, equity and money-market investments are reported at their fair values, which are based upon quoted market prices. The investments in investment partnership funds are carried at their original cost bases and are adjusted annually to fair values based upon the valuation of the underlying assets, as provided by the investment managers. Management routinely reviews and evaluates the values provided by the investment managers and believes the carrying amounts of these investments to be reasonable estimates of fair value. However, estimated fair values may differ significantly from the values that would have been reported had a ready market for these investments existed. Net investment income is recorded as unrestricted unless specifically restricted by the donors. Unrealized appreciation or depreciation of investments is included in the accompanying statements of activities. It is the Organization's policy to sell donated stock upon receipt.

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