WithoutDonorRestrictions
OperationsBoardDesignatedTotal
WithDonor RestrictionsTotal
Revenue:
Contributions6,705,663$316,668 $$7,022,3317,532,826 $ $14,555,157 Contributionsreleasedfromrestriction1,701,064-1,701,064(1,701,064)Specialevents995,663-995,663-995,663 In-kindcontributions105,010-105,010-105,010 Performance6,454,125-6,454,125-6,454,125 Academy2,194,745-2,194,745-2,194,745 Communityengagement173,188-173,188-173,188 Endowmentdraw149,315-149,315(149,315)Otherincome192,4637,500199,963-199,963 18,671,236324,16818,995,4045,682,44724,677,851
Expenses:
Programservices: Performance12,759,071-12,759,071-12,759,071 Academy1,990,112-1,990,112-1,990,112 Communityengagement757,264-757,264-757,264 Supportingservices: Managementandgeneral1,561,147-1,561,147-1,561,147 Fundraising: General1,254,886-1,254,886-1,254,886 Costsanddirectbenefitstodonors relatedtospecialevents40,559-40,559-40,559 18,363,039-18,363,039-18,363,039 Changeinnetassetsbefore otheritems 308,197324,168632,3655,682,4476,314,812
Otheritems: Endowmentinvestmentgain,net-- -220,962220,962 Transfers156,332(156,332)- -Lossonuncollectablepledges-- -(488,609)(488,609) Depreciation(781,309)-(781,309)-(781,309) Changeinnetassets(316,780)167,836(148,944)5,414,8005,265,856
Netassets: Beginningofyear15,127,5092,502,94217,630,45110,719,58628,350,037 Endofyear 14,810,729 $2,670,778$17,481,507$16,134,386$33,615,893 $ Seenotestofinancialstatements.
StatementofActivities
YearEndedJune30,2019
Revenue:
Contributions5,079,919$14,562 $$5,094,4812,131,048 $ $7,225,529 Contributionsreleasedfromrestriction1,454,790-1,454,790(1,454,790)Specialevents1,501,129-1,501,12948,2251,549,354 In-kindcontributions77,616-77,616-77,616 Performance9,186,632-9,186,632-9,186,632 Academy2,454,288-2,454,288-2,454,288 Communityengagement280,434-280,434-280,434 Otherincome1,017,32412,1821,029,506-1,029,506 21,052,13226,74421,078,876724,48321,803,359
Expenses:
Programservices: Performance16,380,022-16,380,022-16,380,022 Academy2,208,516-2,208,516-2,208,516 Communityengagement803,717-803,717-803,717 Supportingservices: Managementandgeneral1,449,681-1,449,681-1,449,681 Fundraising: General1,180,150-1,180,150-1,180,150 Costsanddirectbenefitstodonors relatedtospecialevents424,011-424,011-424,011 22,446,097-22,446,097-22,446,097 Changeinnetassetsbefore otheritems (1,393,965)26,744(1,367,221)724,483(642,738)
Otheritems: Endowmentinvestmentgain,net-- -255,233255,233 Transfers270,735(270,735)- -Depreciation(794,957)-(794,957)-(794,957) Changeinnetassets(1,918,187)(243,991)(2,162,178)979,716(1,182,462)
Netassets: Beginningofyear17,045,6962,746,93319,792,6299,739,87029,532,499 Endofyear 15,127,509 $2,502,942$17,630,451$10,719,586$28,350,037 $
Seenotestofinancialstatements.
NotestoFinancialStatements
Note1.NatureofActivitiesandSignificantAccountingPolicies
TheJoffreyBallet(theOrganization)isanonprofitcorporationincorporatedinthestateofIllinoiswhich commencedoperationsonMay1,1995.TheOrganizationisaclassically-baseddancecompanywhose signatureelementsincludetheincorporationofpopularculture,moderntechnologyandcontemporary ideasintoitsballets.TherepertoireemphasizesworksbycontemporaryAmericanandinternational artistsandrevivalsofthe20th-centurymasterworks.TheOrganization’soperationsincludetheJoffrey AcademyofDance(theAcademy)andcommunityengagementprograms.Classesandprogramsarefor variousagegroupsatvaryinglevelsofdanceinstruction.TheOrganizationconductsitsactivitiesfromthe JoffreyTower,itsbuildinglocatedinChicago,Illinois,andthroughouttheChicagoPublicSchoolssystem. TheOrganizationissupportedprimarilythroughticketsales,Academyrevenueandcontributions(cash andin-kind).
TheOrganizationhasqualifiedasacharitableorganizationexemptfromincometaxesunder Section501(c)(3)oftheInternalRevenueCodeandapplicablestatelaw.
Accountingpolicies:TheOrganizationfollowsaccountingstandardsestablishedbytheFinancial AccountingStandardsBoard(theFASB)toensureconsistentreportingoffinancialposition,resultsof activitiesandcashflows.ReferencestoGenerallyAcceptedAccountingPrinciples(U.S.GAAP)inthese footnotesaretotheFASBAccountingStandardsCodification,sometimesreferredtoasthe“Codification” or“ASC.”
Basisofpresentation:Inaccordancewithlimitations,designationsandrestrictionsplacedontheuseof resourcesavailabletotheOrganization,thefollowingtwoclassificationsareutilizedaccordingtothe natureandpurposeoftheresources:
WithoutDonorRestrictions—Netassetsthatarenotsubjecttodonor-imposedstipulationsorthe donor-imposedstipulationshaveexpired.Includedareamountsdesignatedbytheboardforoperating reservesandotherpurposes.Theboarddesignatescertainunrestrictedcontributionsforspecificfuture usewhenreceived.Contributionsareconsideredtobeavailableforuseinoperationsunless specificallyrestrictedbythedonor.
WithDonorRestrictions—NetassetswhoseusebytheOrganizationissubjecttodonor-imposed restrictions.SomerestrictionsmayorwillbesatisfiedbyactionsoftheOrganizationorbythepassage oftime.Whenarestrictionissatisfied,thesenetassetsaretransferredtonetassetswithoutdonor restrictionsandarereportedinthestatementofactivitiesasnetassetsreleasedfromrestrictions. Restrictedamountsreceivedinthesameperiodinwhichtherestrictionsaresatisfiedarerecordedas netassetswithoutdonorrestrictions.Otherrestrictionsdonotterminatebutinsteadrequirethatfunds beheldinperpetuity,whiletheincomeisavailableforgeneraluse.
Operatingandendowmentcashandcashequivalents:TheOrganizationmaintainsitsdepositsin bankaccountswhich,attimes,mayexceedfederallyinsuredlimits.TheOrganizationhasnot experiencedanylossesinsuchaccountsandbelievesitisnotexposedtoanysignificantcreditriskon cash.
Pledgesreceivable:Pledgesreceivableintendedbydonorstofundtheendowmentandthe Organization’soperationsarestatedatthepresentvalueoftheexpectedfuturecashflows;discountsare amortizedtocontributionrevenueoverthedurationofthepledge.Anallowanceforuncollectiblepledges receivableisprovidedbaseduponmanagement'sjudgmentincludingsuchfactorsaspriorcollection history,typeofcontributionandnatureofthefundraisingactivity.
NotestoFinancialStatements
Note1.NatureofActivitiesandSignificantAccountingPolicies(Continued)
Otherreceivables:OtherreceivablesgenerallyincludetuitionpaymentsfortheAcademyand CommunityEngagementactivities.Additionally,thebalanceatJune30,2020and2019includeda significantreceivablefromtheAustralianBalletrelatedtoajointwork.Anallowancefordoubtfulaccounts isbasedonspecificidentificationofuncollectibleaccountsandtheOrganization'shistoricalcollection experience.NoallowancewasdeemednecessaryatJune30,2020and2019.
Endowmentinvestments:TheOrganization’sendowmentassets,otherthancash,areinvestedinthe JFMCPooledEndowmentPortfolio,LLC(thePEP)whichismaintainedbytheJewishFederationof MetropolitanChicago(theFederation).TheinvestmentinthePEPisrecordedatfairvalue.Investments arepresentedinthefinancialstatementsatfairvalueinaccordancewithU.S.GAAP.Thefairvalueof investmentsisdeterminedbasedontheestimatedfairvalueasreportedbythePEP.Theinvestment income,realizedgains(losses)andthechangeinunrealizedgains(losses)arereflectedinthe statementsofactivities,netofrelatedfeesandcosts.
Propertyandequipment:Propertyandequipmentarerecordedatcost.Donatedpropertyand equipmentarerecordedasassetsandsupportattheirestimatedfairvalueatdateofcontribution.In general,theOrganizationcapitalizesallpropertyandequipmentpurchasesover$1,000,whilegeneral maintenanceandrepairsarechargedtoexpense.Depreciationofpropertyandequipmentisprovided overtheestimatedusefullivesoftherespectiveassetsonastraight-linebasis,3to20yearsforsets, costumesandpropsand4to10yearsforfurnitureandfixtures,equipmentandotherproperty.The JoffreyTowerisbeingdepreciatedoveraperiodof40years.
Otherassets:Otherassetsprimarilyrepresentsthecashsurrendervalueofalifeinsurancepolicyheld bytheOrganization.
Revenuerecognition:ProgramandAcademyrevenuesarerecognizedintheyeartowhichtheyapply. Cashreceivedfromticketsalesforthenextfiscalyear'sprogramsandtuitionpaymentsreceivedin advanceforclassesthattakeplaceafterthefiscalyear-endarerecordedasdeferredrevenue.Revenue earnedinconnectionwithspecialeventsarerecognizedintheyearinwhichtheeventoccurs.
Contributions:Contributions,includingdonors'unconditionalpromisestogive,thatareexpectedtobe collectedwithinoneyeararerecognizedasrevenueatnetrealizablevaluewhenthedonor'scommitment isreceived.Unconditionalpromisestogivethatareexpectedtobecollectedinfutureyearsare recognizedattheirdiscountedcontractualfuturecashflows,netofallowances.Thediscountsonthese amountsarecomputedusingrisk-adjustedinterestratesapplicabletotheyearsinwhichthepromises areexpectedtobereceived.Amortizationofthediscountisincludedincontributionrevenue.Conditional promisesarenotrecognizedasrevenueuntilthedonorconditionsonwhichtheydependhavebeen substantiallymet.
Program,managementandgeneral,andfundraisingexpenses:Inaccordancewiththe Organization'smissiontoraisecontributionstodevelopandmanageaworld-classballetcompany,the Organizationincursprogram,managementandgeneral,andfundraisingexpenseswhichhavebeen summarizedonafunctionalbasisinthestatementsofactivities.Accordingly,certaincostshavebeen allocatedamongtheprogramsandsupportingservicesbenefitted,basedonestimatesmadeby management.Costsrelatedtooccupancyaswellascertaininsuranceandtechnologycostsareallocated toprogramsbasedonsquarefootageusage.Personnelcostsareallocatedonthebasisofestimatesof timeandeffort.
NotestoFinancialStatements
Note1.NatureofActivitiesandSignificantAccountingPolicies(Continued)
Donatedmaterials,goodsandservices:Donatedmaterials,goodsandothernoncashdonationsare recordedascontributionsattheirestimatedfairvaluesonthedatereceived.TheOrganizationrecorded in-kindcontributionrevenuewithcorrespondingexpensesinthestatementsofactivitiesprimarilyfor donatedprofessionalservices,transportation,eventservicesandlodging.
Volunteershavecontributedtheirtimetovariousprograms,performancesandotheractivitieswhichdo notmeetthecriteriaforfinancialstatementrecognition.Accordingly,thevalueofthisdonatedtimeisnot reflectedinthefinancialstatements.Contributionsofservicesarerecognizediftheservicesreceived(a) createorenhancenonfinancialassetsor(b)requirespecializedskills,areprovidedbyindividuals possessingthoseskills,andwouldtypicallyneedtobepurchasedifnotprovidedbydonation.
Otherincome:Otherincomeincludesnetrevenuegeneratedbymerchandisesales,specialevent rentalsanddues.Inaddition,in2019,theOrganizationwaspaidafeeforacontractwiththeAustralian BalletrelatedtothejointproductionoftheballetAnnaKarenina
Incometaxes:TheOrganizationfollowstheaccountingstandardonaccountingforuncertaintyinincome taxes,whichaddressesthedeterminationofwhethertaxbenefitsclaimedorexpectedtobeclaimedona taxreturnshouldberecordedinthefinancialstatements.Underthisguidance,theOrganizationmay recognizethetaxbenefitfromanuncertaintaxpositiononlyifitismorelikelythannotthatthetax positionwillbesustainedonexaminationbytaxingauthorities,basedonthetechnicalmeritsofthe position.Examplesoftaxpositionsincludethetax-exemptstatusoftheOrganizationandvarious positionsrelatedtothepotentialsourcesofunrelatedbusinesstaxableincome.Thetaxbenefits recognizedinthefinancialstatementsfromsuchapositionaremeasuredbasedonthelargestbenefit thathasagreaterthan50percentlikelihoodofbeingrealizeduponultimatesettlement.Therewereno unrecognizedtaxbenefitsidentifiedorrecordedasliabilitiesforthereportingperiodspresentedherein. TheOrganizationfilesForm990intheU.S.federaljurisdictionandthestateofIllinois.
Newlyadoptedaccountingpronouncement:In2020,theOrganizationadoptedAccountingStandards Update(ASU)2018-08,Not-for-ProfitEntities(Topic958):ClarifyingtheScopeandtheAccounting GuidanceforContributionsReceivedandContributionsMade.ThisASUprovidesguidancesurrounding thecategorizationofcertaintransactionsascontributionsorexchangetransactions.Itfurtherclarifies whencontributionsshouldbedeemedconditional.Thisnewstandarddidnothaveasignificanteffecton theOrganization’sfinancialstatements.
Recentaccountingpronouncements:In2014,theFASBissuedASU2014-09,Revenuefrom ContractswithCustomers(Topic606),requiringanentitytorecognizetheamountofrevenuetowhichit expectstobeentitledforthetransferofpromisedgoodsorservicestocustomers.Theupdatedstandard willreplacemostexistingrevenuerecognitionguidanceinU.S.GAAPwhenitbecomeseffectiveand permitstheuseofeitherafullretrospectiveorretrospectivewithcumulativeeffecttransitionmethod.The updatedstandardwillbeeffectivefortheOrganization’s2021financialstatements.
In2016,theFASBissuedASU2016-02,Leases(Topic842).TheguidanceinthisASUsupersedesthe leasingguidanceinTopic840,Leases.UnderthenewASU,lesseesarerequiredtorecognizelease assetsandleaseliabilitiesonthestatementoffinancialpositionforallleaseswithtermslongerthan twelvemonths.Leaseswillbeclassifiedaseitherfinanceoroperating,withclassificationaffectingthe patternofexpenserecognitioninthestatementofactivities.Thenewstandardwillbeeffectiveforthe Organization’s2023financialstatements.
TheOrganizationiscurrentlyevaluatingtheeffectthatthesenewstandardswillhaveonthefinancial statements.
TheJoffreyBallet
NotestoFinancialStatements
Note1.NatureofActivitiesandSignificantAccountingPolicies(Continued)
Estimates:Inpreparingfinancialstatementsinconformitywithaccountingprinciplesgenerallyaccepted intheUnitedStatesofAmerica,managementmakesestimatesandassumptionsaffectingthereported amountsofassetsandliabilitiesanddisclosuresofcontingentassetsandliabilitiesatthedateofthe financialstatements,aswellasreportedamountsofrevenueandexpensesduringthereportingperiod. Actualresultscoulddifferfromthoseestimates.
Subsequentevents:TheOrganizationhasevaluatedsubsequenteventsforpotentialrecognitionand/or disclosurethroughDecember10,2020,thedatethefinancialstatementswereavailabletobeissued.
Note2.PledgesReceivable
Pledgesreceivableexpectedtobereceivedinfutureyearsareasfollows:
Uptooneyear2,752,812$3,428,843 $ Onetotwoyears1,005,500454,700 Morethantwoyears1,650,000200,500 5,408,3124,084,043 Discounttopresentvalue(4percent)(191,602)(36,171) Allowanceforuncollectiblepledges(10,000)(10,000) 5,206,710 $4,037,872 $
InJuly2013,adonormadeasignedcommitmenttosupporttheBridgeCommunityEngagementprogram intheamountof$1millionpayableover10years.Thedonormadepaymentsforthefirst5yearsbuthas subsequentlybecomedelinquentinpaymentsandhasnotrespondedtorepeatedrequestsoverthelast 12months.Uponreview,itwasdeterminedthatthedonordefaultedontheremainderofthe$500,000 pledge,andconsequentlythepledgewaswrittenoffeffectiveJune2020.
Pledgesreceivable,netofdiscountandallowance,arerestrictedasfollowsfortheyearsendedJune30:
20202019
Timerestrictedpledgesforoperations2,934,655$1,525,872 $ Timerestrictedpledgesforendowment2,272,0552,512,000 5,206,710 $4,037,872 $
Note3.InvestmentsandFairValueMeasurements
Theaccountingstandardonfairvaluemeasurementsprovidesaframeworkformeasuringfairvalue underU.S.GAAP.Theaccountingstandarddefinesfairvalue,establishesaframeworkformeasuringfair value,setsoutafairvaluehierarchy,andexpandsdisclosuresaboutfairvaluemeasurements.The standarddefinesfairvalueasthepricethatwouldbereceivedtosellanassetorpaidtotransferaliability inanorderlytransactionbetweenmarketparticipantsatthemeasurementdate.Thefairvaluehierarchy givesthehighestprioritytoquotedpricesinactivemarketsforidenticalassetsorliabilities(Level1)and thelowestprioritytoquotedpricestounobservableinputs(Level3).Inputsarebroadlydefinedunderthe accountingstandardasassumptionsmarketparticipantswoulduseinpricinganassetorliability.
NotestoFinancialStatements
Note3.InvestmentsandFairValueMeasurements(Continued)
Thethreelevelsofthefairvaluehierarchyundertheaccountingstandardaredescribedbelow:
Level1.Inputstothevaluationmethodologyareunadjustedquotedpricesforidenticalassetsorliabilities inactivemarketsthattheOrganizationhastheabilitytoaccess.
Level2.Inputstothevaluationmethodologyinclude:
Quotedpricesforsimilarassetsorliabilitiesinactivemarkets; Quotedpricesforidenticalorsimilarassetsorliabilitiesininactivemarkets; Inputsotherthanquotedpricesthatareobservablefortheassetorliability; Inputsthatarederivedprincipallyfromorcorroboratedbyobservablemarketdataby correlationorothermeans.
Iftheassetorliabilityhasaspecified(contractual)term,theLevel2inputmustbeobservablefor substantiallythefulltermoftheassetorliability.
Level3.Inputstothevaluationmethodologyareunobservableandsignificanttothefairvalue measurement.
Theasset’sorliability’sfairvaluemeasurementlevelwithinthefairvaluehierarchyisbasedonthelowest levelofanyinputthatissignificanttothefairvaluemeasurement.Valuationtechniquesusedneedto maximizetheuseofobservableinputsandminimizetheuseofunobservableinputs.TheOrganization assessesthelevelsofitsinvestmentsateachmeasurementdate,andtransfersbetweenlevelsare recognizedontheactualdateoftheeventorchangeincircumstancesthatcausedthetransfer.Forthe yearsendedJune30,2020and2019,therewerenosuchtransfers.
TheOrganization’sinvestmentsrepresenttheirallocableshareinthePEPandaremeasuredatfairvalue usingthenetassetvaluepersharepracticalexpedientasprovidedbythefundmanagerandhavenot beencategorizedinthefairvaluehierarchy.
TheOrganization,throughitsinvestmentinthePEP,entersintotransactionswithavarietyofsecurities andderivativefinancialinstruments.Thesederivativefinancialinstrumentsmayhavemarketand/orcredit riskinexcessoftheamountsrecordedinthestatementsoffinancialposition.
MarketriskofinvestmentinthePEP:Marketriskarisesprimarilyfromchangesinthemarketvalueof financialinstruments.Exposuretomarketriskisinfluencedbyanumberoffactors,includingthe relationshipsbetweenfinancialinstruments,andthevolatilityandliquidityinthemarketsinwhichthe financialinstrumentsaretraded.Inmanycases,theuseoffinancialinstrumentsservestomodifyoroffset marketriskassociatedwithothertransactionsand,accordingly,servestodecreasetheoverallexposure tomarketrisk.TheFederationattemptstocontrolthePEP’sexposuretomarketriskthroughvarious analyticalmonitoringtechniques.
Creditrisk:Creditriskarisesprimarilyfromthepotentialinabilityofcounterpartiestoperformin accordancewiththetermsofacontract.Exposuretocreditriskassociatedwithcounterparty nonperformanceislimitedtothecurrentcosttoreplaceallcontractsinwhichthereisgain.Exchangetradedfinancialinstrumentsgenerallydonotgiverisetosignificantcounterpartyexposureduetothe cashsettlementproceduresfordailymarketmovementsandthemarginrequirementsofindividual exchanges.
NotestoFinancialStatements
Note3.InvestmentsandFairValueMeasurements(Continued)
Concentrationofcreditrisk:IntheeventthePEPdoesnotfulfillitsobligations,theOrganization’s endowmentmaybeexposedtorisk.Thisriskofdefaultdependsonthecreditworthinessofthe counterpartytothesetransactions.ThePEPattemptstominimizethiscreditriskbymonitoringthe creditworthinessofitscounterparties.
Investmentinfunds:ThemanagersofunderlyinginvestmentfundsinwhichthePEPinvestsmayutilize derivativeinstrumentswithoff-balance-sheetrisk.TheOrganization’sexposureofriskislimitedtotheir allocableshareofthePEP’sinvestment.
ThePEPinvestsinvarioustypesofinvestments,includingmutualfunds,equityanddebtsecurities, alternativeinvestmentsandotherinvestmentvehicles.TheOrganizationdoesnotownorhaveany interestintheunderlyinginvestmentsheldbythePEP.TheOrganizationhastheabilitytocontribute fundsorwithdrawfundsfromitsaccountonthefirstdayofeachmonth.Withdrawalrequestsarerequired tobesubmittedtothePEPinwritingatleast15dayspriortothebeginningofeachmonthand withdrawalsrepresentingmorethan80percentofaninvestor’sassetsarepaidwithin60days.
ThePEP’sinvestmentsinU.S.Treasurybills,commonstock,registeredinvestmentcompanies,and investmentsinvariousequityandcreditassetsarestatedatthelastreportedsalespriceonthedayof valuation.Optionsarevaluedatthemidbetweenthehighestbidandlowestaskpriceonthedayof valuationacrossalllistedexchanges.Commodities,suchaspreciousmetals,arevaluedbasedonthe closingspotprice,derivedfromtheover-the-counterpreciousmetalstradingmarket.Thesefinancial instrumentsareclassifiedasLevel1inthefairvaluehierarchy.
Investmentsinnon-registeredinvestmentcompaniesconsistingofcertainequityfunds,hedgedcredit funds,privatecreditfunds,opportunisticfundsandalsorealassetandrealestatefunds,arevaluedatfair value,asdeterminedbythePEPbasedonnetassetinformation(practicalexpedient)providedbythe underlyinginvestmentmanagers.Indeterminingfairvalue,thePEPutilizesthevaluationreflectedonthe financialstatementsandotherfinancialreportsoftheunderlyinginvestmententities.Theunderlying investmententitiesvaluesecuritiesandotherfinancialinstrumentsatfairvaluebaseduponmarketprice, whenpossible,oratfairvaluedeterminedbytherespectiveentities'investmentmanagerswhenno marketpriceisdeterminable.
AlthoughthePEPandtheunderlyinginvestmentmanagersusetheirbestjudgmentinestimatingthefair valueofinvestmentsinfunds,thereareinherentlimitationsinanyestimationtechnique.Theestimated fairvaluesofcertaininvestmentsoftheunderlyinginvestmententities,whichmayincludederivatives, securitiesandotherdesignatedorsidepocketedinvestmentsforwhichpricesarenotreadilyavailable, maynotreflectamountsthatcouldberealizeduponimmediatesale,noramountsthatmaybeultimately realized.Accordingly,theestimatedfairvaluesmaydiffersignificantlyfromthevaluesthatwouldhave beenusedhadareadymarketexistedfortheseinvestments,anddifferencescouldbematerial.
TheJoffreyBallet
NotestoFinancialStatements
Note4.PropertyandEquipment
Propertyandequipmentareasfollows:
June30,2020
Buildingandimprovements21,448,082$(6,166,324)$15,281,758 $
Furniture,fixturesandequipment1,997,588(1,671,225)326,363 Leaseholdimprovements9,466(8,739) 727 Sets,costumesandprops526,607(400,357)126,250 Nutcrackersets,costumesandprops2,203,254(558,625)1,644,629 WebsiteRedesign128,766(390)128,376
$
June30,2019
Buildingandimprovements21,448,082$(5,630,122)$15,817,960 $ Furniture,fixturesandequipment1,963,392(1,600,202)363,190 Leaseholdimprovements9,466(7,994)1,472 Sets,costumesandprops497,760(383,558)114,202 Nutcrackersets,costumesandprops2,203,254(402,475)1,800,779 26,121,954 $(8,024,351)$18,097,603 $
Note5.DeferredRevenue
TheOrganizationrecordeddeferredrevenuefromthefollowingsourcesasofJune30:
Ticketrevenues1,426,364$1,552,246 $ Tuitionandotherrevenues160,124882,730 1,586,488 $2,434,976 $
Note6.LineofCredit
TheOrganizationhasa$1,500,000revolvinglineofcreditagreementwithTheNorthernTrustCompany maturingonNovember30,2020,withinterestatprimerateless0.5percent(2.75percentatJune30, 2020and5percentatJune30,2019).TheOrganizationhadnooutstandingbalanceonthelineofcredit atJune30,2020and2019,andnoborrowingsonthelineofcreditduringtheyearsendedJune30,2020 and2019.TheOrganizationintendstonegotiatearenewalofthelineofcredit.Thelineofcreditcontains certainnon-financialcovenantsincludingtherequirementtofileauditedfinancialstatementswithin120 daysoffiscalyear-endwithTheNorthernTrustCompany.WhiletheOrganizationisnotcurrentlyin compliancewiththisrequirement,thebankhasprovidedawaiver.
NotestoFinancialStatements
Note7.PPPLoan
InApril2020,theOrganizationappliedforandreceivedaloanintheamountof$2,019,225fromChase BankaspartofthePaycheckProtectionProgram(PPP),aloanprogramadministeredbytheSmall BusinessAdministration(SBA),inconjunctionwiththeCoronavirusAid,Relief,andEconomicSecurity (CARES)Act.TheOrganizationdetermineditwaseligiblefortheloanasthecoronaviruspandemic causedfinancialuncertaintyandanticipateddecreasesinnormalcashinflows.Theoutstandingprincipal accruesinterestatanannualrateof1percent.Alloutstandingprincipalandaccruedinterestisduewhen theloanmaturesinApril2022.Underthetermsoftheloanprogram,alloraportionoftheloanmaybe forgiveniftheOrganizationusestheproceedsforeligiblecostsandmaintainscertainemployeeand wageratethresholds.TheOrganizationintendstoapplyforloanforgivenesswhenitbecomesavailable todoso.
Note8.NetAssets
Board-DesignatedNetAssets
TheOrganizationhasdesignatedaportionofitsunrestrictedfundsforthespecificusesdetailedbelowas ofJune30:
20202019 FutureProjectsFund1,006,000$1,139,000 $ BuildingImprovementsFund275,000275,000 EricB.EatherlyScholarships70,83866,638 Women'sBoardTributeFund14,56015,092 InnovationFund300,0001,666,3981,495,730 Operatingcashreserve1,004,3801,007,212 2,670,778 $2,502,942 $
Transfersfromboarddesignatedfundsinfiscalyear2020representedamountsspentonboarddesignatedpurposes,offsetbytherefundofamountstransferredfromboard-designatedfundstocover operatinglossesinapreviousyear.Transfersfromboarddesignatedfundsinfiscal2019represent amountsspentonboard-designatedpurposesinadditiontoamountstransferredbytheboardtofund operatinglosses.
Note8.NetAssets(Continued) NetAssetsWithDonorRestrictions
TheOrganizationhadnetassetswithdonorrestrictionsconsistingofthefollowingatJune30,2020and 2019:
andappropriation:
TheOrganizationmaintainsendowmentfundswhicharerestrictedinperpetuitybydonorstipulation.Net assetsassociatedwiththeOrganization’sendowmentfundsareclassifiedandreportedbasedonthe existenceofdonor-imposedrestrictions.Inadditiontotheamountsinvestedbelow,atJune30,2020,the Organizationwasholdinganadditional$572,413initsoperatingcashaccountwhichwasrestrictedby donorstobeinvestedintheendowment.
TheOrganization’sendowmentwasinvestedasfollowsatJune30: 20202019
TheUniformPrudentManagementofInstitutionalFundsAct(UPMIFA)governsendowmentfundsinthe stateofIllinois.UPMIFAeliminatesthehistoricdollarvaluerulewithrespecttoendowmentfund spending,updatestheprudencestandardsforthemanagementandinvestmentofcharitablefunds,and amendstheprovisionsgoverningthereleaseandmodificationofrestrictionsoncharitablefunds.
NotestoFinancialStatements
Note8.NetAssets(Continued)
TheOrganization’smanagementhasinterpretedtheUPMIFAasnotrequiringthepreservationofthe purchasingpoweroftheoriginalgiftamountscontributedtoanendowmentfund,unlesstherearedonor stipulationstothecontrary.Asaresultofthisinterpretation,theOrganizationclassifiedasnetassetswith donorrestrictions(a)theoriginalvalueofgiftsdonatedtothepermanentendowment,(b)theoriginal valueofsubsequentgiftstothepermanentendowment,and(c)accumulationstothepermanent endowmentmadeinaccordancewiththedirectionoftheapplicabledonorgiftinstrumentatthetimethe accumulationisaddedtothefund.TheOrganizationconsidersafundtobeunderwaterifitsfairvalueis lessthantheamountrequiredtobemaintainedinperpetuityaspreviouslydescribed.TheOrganization hasinterpretedUPMIFAtopermitspendingfromunderwaterfundsinaccordancewiththestandardsof prudenceprescribedbyUPMIFA.Endowmentfundsarereclassifiedtonetassetswithoutdonor restrictionswhentheyareappropriatedforexpenditurebytheOrganizationinamannerconsistentwith thestandardofprudenceprescribedbyUPMIFA.
InaccordancewithUPMIFA,theOrganizationwillconsiderthefollowingfactorsinmakinga determinationtoappropriateoraccumulateearningsondonor-restrictedendowmentfunds:
(1)Thedurationandpreservationofthefund;(2)thepurposesoftheOrganizationandthedonorrestrictedendowmentfund;(3)generaleconomicconditions;(4)thepossibleeffectofinflationand deflation;(5)theexpectedtotalreturnfromincomeandtheappreciationofinvestments;(6)other resourcesoftheOrganization;and(7)theinvestmentpoliciesoftheOrganization.
TheOrganization’sinvestmentandspendingpoliciesforendowmentassetsattempttoprovidea predictablestreamoffundingtoprogramssupportedbyitsendowmentwhileseekingtomaintainthe purchasingpoweroftheendowmentassets.AsofJune30,2020and2019,endowmentassetsinclude onlythoseassetsofdonor-restrictedfundsthattheOrganizationmustholdinperpetuity.
AsapprovedbytheOrganization’sBoardofDirectors,theendowmentassetsareinvestedinamanner thatisintendedtoprovideadequateliquidity,maximizingreturnsonallfundsinvestedandachievingfull employmentofallavailablefundsasearningassets.
FundswithDeficiencies:Fromtimetotime,thefairvalueofassetsassociatedwiththedonor-restricted endowmentfundmayfallbelowthelevelthatthedonororIllinoisUPMIFArequirestheOrganizationto retainasafundofperpetualduration.TherewerenodeficienciesatJune30,2020and2019.
WithdrawalPolicy:TheOrganizationestablishedawithdrawalpolicyinfiscalyear2019whichallowsfor theappropriationof3percentoftheaveragemarketvalueoftheendowmentoverthepreceding12 quarters.AppropriatedearningsaretobeusedforJoffreyoperationsandexpensesinaccordancewith donorrestrictions,ifany.FortheyearsendedJune30,2020and2019,appropriationsamountedto $93,709and$55,606,respectively.Theendowmentdrawonthe2020statementofactivitiesincludesthe appropriationsforfiscalyears2020and2019.
Note8.NetAssets(Continued)
ThefollowingarechangesinendowmentnetassetsfortheyearsendedJune30,2020and2019:
Note9.LeaseCommitments
TheOrganizationoccupieswarehousespaceforitssets,costumesandpropsandrelatedofficespace underaleaseagreementthatwasrenewedin2018,withtermsthroughJune2024.Theleaseprovides formonthlybaserentsplusoperatingcosts.TheOrganizationhastwofive-yearrenewaloptions.
Baserentsrequiredundertheleasearerecognizedasrentexpenseonastraight-linebasisoverthe leaseterm.Thecumulativedifferencebetweentherecognizedrentexpenseandtheamountpaidis recordedasanimputedrentliabilityincludedinotherliabilitiesonthestatementsoffinancialposition.The valuewas$59,826and$57,674atJune30,2020and2019,respectively.
Totalrentexpenseforthewarehousewas$151,833and$142,867for2020and2019,respectively.
Futureminimumrentalcommitments,exclusiveofoperatingcosts,areasfollows:
YearsendingJune30: 2021153,423 $ 2022157,258 2023161,190 2024165,219 $637,090
TheJoffreyBallet
NotestoFinancialStatements
Note10.CommitmentsandContingencies
TheOrganizationisoccasionallypartytolawsuitsandclaimsarisingoutoftheconductofitsbusiness. TheOrganizationisoftheopinionthattheliabilities,ifany,willnothaveamaterialeffectonthese financialstatementsorontheOrganization'sabilitytocontinueoperations.
TheOrganizationhascommittedtousingtheAuditoriumTheatreinChicagoforitsperformancesunder anagreementwhichextendsthrough2020.Totaltheaterrentalexpenseswere$572,000and$675,000 forfiscalyears2020and2019,respectively.BeginninginJuly2020,theOrganizationhasa7-year commitmentwiththeLyricOperaforallitssubscriptionseriesandholidayperformances.
Note11.EmployeeBenefitPlan
TheOrganizationadministersTheJoffreyBalletTaxDeferredAnnuityPlan,a403(b)definedcontribution benefitplan.Employeesareeligibletoparticipateinthisplanuponhiring.Theplanallowsfor discretionarymatchingcontributionsinanamountequaltothelesseroftheparticipant’sactual contributionsor3percentoftheparticipant’ssalary.TheOrganizationmadecontributionsof$78,504and $74,161totheplanintheyearsendedJune30,2020and2019,respectively.
Note12.LiquidityandAvailability
AsofJune30,2020and2019,theOrganizationhadthefollowingfinancialassetsavailabletocover generaloperationswithinthenextyear:
20202019
Financialassets:
Cashandcashequivalents4,355,836$3,017,098 $
Endowmentcashandcashequivalents2,077,48015,311 Endowmentinvestment6,921,6294,700,667 Operatingpledgesreceivable2,934,6551,525,872
Endowmentpledgesreceivable2,272,0552,512,000 Otherreceivables704,637704,711 19,266,29212,475,659
Lessamountsnotavailableforgeneraloperations withinthenextyear:
Endowmentcashandcashequivalents 2,077,48015,311
Endowmentinvestment 6,921,6294,700,667
Endowmentpledgesreceivable 2,272,0552,512,000
Boarddesignatednetassets 2,670,7782,502,942
Operatingpledgesnotexpectedtobereceived withinoneyear 2,655,500655,200 16,597,44210,386,120
Financialassetsavailableforgeneraloperations withinoneyear2,668,850$2,089,539 $
NotestoFinancialStatements
Note12.LiquidityandAvailability(Continued)
TheOrganizationregularlymonitorsitsliquidityinordertomeetfinancialobligations.Aspartofitsboarddesignatednetassets,theOrganizationhasareservefundthatactsasaninternallineofcredit.Any spendingfromthisaccountthatbringsthebalancebelow$1,000,000mustbeapprovedbytheboardand eventuallyrefunded.AsofJune30,2020and2019,thebalanceinthisaccountwas$1,004,380and $1,007,212,respectively.Theremainingboard-designatednetassetscouldbereleasedbyactionofthe boardinordertocoveranycashdeficits,shouldsuchaneventoccur.Inaddition,theOrganizationhasa commerciallineofcreditwithavailablecreditof$1,500,000.
Note13.ImpactsofCoronavirusPandemic
InMarch2020,theWorldHealthOrganizationdeclaredthecoronavirus(Covid-19)outbreaktobea pandemic.Thecoronavirusandactionstakentomitigatethespreadofithavehadandareexpectedto continuetohaveanadverseimpactonthenationalandlocaleconomies.TheOrganizationhasbeen severelyimpactedbythecoronaviruspandemic.DuetobansonlargepublicgatheringsbytheCityof ChicagoandtheStateofIllinois,thespringproductionofDonQuixotewascancelled,resultinginan estimatedlossof$1millioninticketrevenue.Additionally,thespringCenterStagefundraisingeventwas cancelled;theeventhadbeenexpectedtoraiseapproximately$1million.Withthestayathomeorder, theJoffreyTowertemporarilyclosed,andtheAcademytransitionedtheremainderofitsspringclassesto avirtualformat.Academysummerintensiveclasseswerecancelled,theimpactofwhichwas approximatelya$900,000reductioninrevenues.CommunityEngagementhassuspendedallin-person classeswiththeclosureofChicagoPublicSchoolsandhasbeenprovidingvideoinstructionand workbooksforitsstudents.
Withtheongoingrestrictionsonpublicgatherings,theOrganizationhascancelledallproductionsforthe 2020/2021fiscalyear,includingtheNutcrackerproduction,whichannuallybringsinover$7millionin ticketsales.Giventheactualandanticipatedlostrevenue,theOrganizationhasreduceditsfiscal2021 operatingbudgetfrom$22millionto$11million.Costcontainmenteffortshaveincludedreductionsin salariesandstaffheadcount.
Patronswhohavepurchasedticketsforcancelledperformanceshavebeengiventheoptionsto contributethevalueoftheirpurchaseasadonation,toreceivearefund,ortoapplytheirticketvaluetoa futureperiodwhenliveperformancesonceagaintakeplace.
Re-occupancyguidelineshavebeendevelopedtoallowthedancerartiststoreturntoJoffreyTower effectiveinSeptember2020forclassesandrehearsal.TheOrganizationhasdevelopedadigitalprogram forthe2020/2021seasoninorderprovideengagementandcontentforitsaudiences.TheAcademyis providingonlineclassesforjuniorstudentsandisprovidingahybridprogramformoreseniorand professionallevelstudents.
TheboarddirectorshaslaunchedaCrisisStabilizationFundthatwillraiseaminimumof$12million dollarsinordertosustaintheJoffreyduringaseasonofuncertainty.Additionally,theOrganization obtainedaPPPloanofapproximately$2milliontocoverpayrollforitsartistsandstaffthroughtheendof fiscalyear2020.
