Download SIGNATURE THEATRE COMPANY, INC. FINANCIAL

SIGNATURE THEATRE COMPANY, INC.
FINANCIAL STATEMENTS
AND
ADDITIONAL INFORMATION
JUNE 30, 2011
SIGNATURE THEATRE COMPANY, INC.
TABLE OF CONTENTS
Page
Independent Auditors’ Report ..........................................................................................
1
Financial Statements
Statement of Financial Position ..................................................................................
2
Statement of Activities ...............................................................................................
3
Statement of Cash Flows ...........................................................................................
4
Notes to Financial Statements ...................................................................................
5-13
Additional Information
Independent Auditors’ Report on Additional Information ............................................
15
Schedule of Functional Expenses - Operations .........................................................
16
Schedule of Functional Expenses - Property and
Equipment and Capital Project ................................................................................
17
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees of
Signature Theatre Company, Inc.
We have audited the accompanying statement of financial position of Signature Theatre
Company, Inc. (a not-for-profit corporation) as of June 30, 2011, and the related
statements of activities and cash flows for the year 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 audit. The prior year
summarized comparative information has been derived from the Organization’s 2010
financial statements, and in our report dated January 14, 2011, we expressed an
unqualified opinion on those financial statements.
We conducted our audit 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
evaluating the overall financial statement presentation. We believe that our audit provides
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 Signature Theatre Company, Inc. as of June 30, 2011,
and the changes in its net assets and its cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.
New York, New York
November 22, 2011
2
SIGNATURE THEATRE COMPANY, INC.
STATEMENT OF FINANCIAL POSITION
JUNE 30, 2011 WITH COMPARATIVE TOTALS FOR 2010
Operating
Unrestricted
Property and
Equipment
and Capital
Project
Total
Unrestricted
Temporarily
Restricted
Assets
Current Assets
Cash and cash equivalents (Notes 1b, 2a, and 11)
Unconditional promises to give (Notes 1c and 3a)
Accounts receivable
Prepaid expenses
Total Current Assets
$ 670,493
124,475
2,440
154,136
951,544
$ 4,579,453
107,100
4,686,553
$ 5,249,946
231,575
2,440
154,136
5,638,097
$
Property and equipment, at cost, net of accumulated
depreciation (Notes 1e, 4a and 9)
Construction in progress (Notes 4b and 9)
Bonds and deposits
63,843
315,742
22,917,515
-
315,742
22,917,515
63,843
$1,015,387
$27,919,810
$28,935,197
$
$
$
Total Assets
Liabilities and Net Assets
Liabilities
Current Liabilities
Notes payable (Note 5)
Accounts payable and accrued expenses
Deferred ticket subscription revenue (Note 1f)
Total Current Liabilities
Long Term Liabilities
Notes payable (Note 5)
Total Liabilities
68,011
127,147
61,444
256,602
3,959,281
3,959,281
68,011
4,086,428
61,444
4,215,883
2011
2010
$ 5,515,988
6,131,850
2,440
154,136
11,804,414
$ 5,191,795
4,077,811
27,690
146,194
9,443,490
315,742
22,917,515
63,843
252,538
7,153,989
69,262
$ 6,166,317
$35,101,514
$16,919,279
$
$
$
266,042
5,900,275
6,166,317
-
-
68,011
4,086,428
61,444
4,215,883
31,389
370,821
539,360
941,570
-
9,372,393
9,372,393
-
9,372,393
6,292,945
256,602
13,331,674
13,588,276
-
13,588,276
7,234,515
221,573
537,212
-
14,588,136
-
221,573
537,212
14,588,136
-
6,166,317
221,573
537,212
14,588,136
6,166,317
151,226
537,212
4,602,691
4,393,634
758,785
14,588,136
15,346,921
6,166,317
21,513,238
9,684,763
$1,015,387
$27,919,810
$28,935,197
$ 6,166,317
$35,101,514
$16,919,278
Commitments and Contingencies (Notes 6, 7, 9 and 12)
Net Assets
Unrestricted
Operating
Board-designated working capital reserve (Note 2a)
Property and equipment and capital project
Temporarily restricted (Note 2b)
Total Net Assets
Total Liabilities and Net Assets
See notes to financial statements.
3
SIGNATURE THEATRE COMPANY, INC.
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE TOTALS FOR 2010
Revenue, Gains and Other Support
Contributions
Capital funds allocated to operations
Fundraising benefits
Less: Direct fundraising benefit costs
Donated services (Note 8)
Donated loan interest (Note 5)
Box office revenue
Subscription revenue
Rental income
Miscellaneous income
Net assets released from restrictions
Satisfaction of time and program restrictions
Total Revenue, Gains and Other Support
Expenses
Program Services
Theatrical production and operations
Supporting Services
Management and general
Fundraising
Total Supporting Services
Total Expenses
Increase in Net Assets
Transfer for acquisition of property and equipment
Net assets, beginning of year
Net Assets, End of Year
See notes to financial statements.
Operating
Unrestricted
Property and
Equipment
and Capital
Project
Total
Unrestricted
Temporarily
Restricted
2011
Total
2010
Total
$ 953,878
368,313
416,749
(75,793)
57,500
2,008,491
403,160
5,138
28,222
4,165,658
$ 9,643,107
(368,313)
15,519
222,852
9,513,165
$10,596,985
416,749
(75,793)
73,019
222,852
2,008,491
403,160
5,138
28,222
13,678,823
$ 4,954,267
4,954,267
$15,551,252
416,749
(75,793)
73,019
222,852
2,008,491
403,160
5,138
28,222
18,633,090
$3,071,329
366,675
(81,307)
4,525
126,834
930,224
276,660
54,650
24,217
4,773,807
1,784,584
1,397,000
3,181,584
(3,181,584)
5,950,242
10,910,165
16,860,407
1,772,683
4,756,607
55,875
4,812,482
594,994
510,751
1,105,745
490,079
396,309
886,388
5,862,352
-
-
18,633,090
4,773,807
-
4,812,482
3,122,567
1,085,073
907,060
1,992,133
-
1,085,073
907,060
1,992,133
643,817
879,765
1,523,582
942,263
6,804,615
-
6,804,615
4,646,149
87,890
9,967,902
10,055,792
1,772,683
11,828,475
127,658
(17,543)
688,438
17,543
4,602,691
5,291,129
4,393,634
9,684,763
9,557,105
$14,588,136
$15,346,921
$ 6,166,317
$21,513,238
$9,684,763
$ 758,785
4
SIGNATURE THEATRE COMPANY, INC.
STATEMENT OF CASH FLOWS
YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE TOTALS FOR 2010
Cash Flows From Operating Activities
Increase in net assets
Adjustments to reconcile increase in net assets to
net cash provided by operating activities:
Depreciation
Bad debt expense
(Increase) decrease in:
Unconditional promises to give
Accounts receivable
Prepaid expenses
Bonds and deposits
Increase (decrease) in:
Accounts payable and accrued expenses
Deferred membership fees and revenue
Net Cash Provided By Operating Activities
2011
2010
$11,828,475
$ 127,658
74,500
25,000
76,483
7,405
(2,079,039)
25,250
(7,942)
5,419
1,975,599
1,556
180,366
(26,796)
3,715,607
(477,916)
13,109,354
(118,523)
186,136
2,409,884
(15,901,231)
(3,479,728)
Cash Flows From Financing Activities
Payments towards notes payable
Principal borrowings of notes payable (Note 5)
Net Cash Provided By Financing Activities
(34,263)
3,150,333
3,116,070
(19,856)
3,589,935
3,570,079
Net increase in cash and cash equivalents
Cash and cash equivalents, beginning of year
324,193
5,191,795
2,500,235
2,691,560
$ 5,515,988
$5,191,795
$
$
Cash Flows From Investing Activities
Acquisition of property and equipment
Cash and Cash Equivalents, End of Year
Supplemental Information
Interest paid
See notes to financial statements.
4,174
8,198
5
SIGNATURE THEATRE COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
Note 1 -
Organization and Summary of Significant Accounting Policies
a - Organization
Signature Theatre Company, Inc. (“Signature”) is a non-profit theatre company
whose mission is to honor and celebrate playwrights through extended explorations
of their work, including artistic residencies and productions. Signature has
presented fully staged productions of new and earlier works in its Peter Norton
Space, a 160-seat, state of the art theatre on West 42nd Street.
In October of 2008, Signature announced the creation of Signature Center, a
permanent home for the company to open in early 2012. The Signature Center site
was identified with the key partnership of The City of New York and will occupy the
entire second floor and second floor mezzanine of a mixed-use development by
Related Companies located at 480 West 42nd Street. This 70,000 square foot facility
has been designed by Frank Gehry Architects to include three theatres, a central
lobby with café and bookstore, two rehearsal studios, and offices all on one level.
This configuration will allow Signature to expand its programming to serve more
writers each year and foster a vibrant cultural community. Signature is in a Capital
Campaign in connection with this project (Note 9).
b - Cash and Cash Equivalents
For purposes of the statement of cash flows, Signature considers all highly liquid
debt instruments, purchased with a maturity of three months or less, to be cash
equivalents.
c - Unconditional Promises to Give and Contributions
Contributions are recognized when the donor makes a promise to give to Signature,
that is, in substance, unconditional. Contributions that are restricted by the donor
are reported as increases in unrestricted net assets if the restrictions expire in the
fiscal year in which the contributions are recognized. All other donor-restricted
contributions are reported as increases in temporarily or permanently restricted net
assets depending on the nature of the restrictions. When a restriction expires,
temporarily restricted net assets are reclassified to unrestricted net assets.
Signature uses the allowance method to determine uncollectible promises to give.
The allowance is based on prior years’ experience and management’s analysis of
specific promises made.
d - Production Costs
Expenditures incurred for Signature’s theatrical productions are prepaid until the
first performance date. For productions which occur within a single fiscal year,
production costs are expensed. For productions which span more than one fiscal
year, production expenses are amortized over the duration of the production using
the income forecast method.
6
SIGNATURE THEATRE COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
Note 1 -
Organization and Summary of Significant Accounting Policies (continued)
e - Property and Equipment
Property and equipment acquired are recorded at cost and are depreciated using
the straight-line method over the estimated useful life of the related asset.
Leasehold improvements are amortized over the lesser of the life of the lease or the
estimated useful life of the asset.
f - Ticket and Subscription Revenue
Ticket and subscription revenue is deferred upon receipt and is then recognized in
the period the performance takes place.
g - Financial Statement Presentation
Signature reports information regarding its financial position and activities according
to three classes of net assets: unrestricted net assets, temporarily restricted net
assets, and permanently restricted net assets.
h - Use of 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. Actual results could differ
from those estimates.
i - Advertising Costs
Advertising costs are charged to operations at the time the advertising occurs.
Advertising expense for the years ended June 30, 2011 and 2010 was $322,102
and $192,950, respectively.
j - Tax Status
Signature Theatre Company, Inc. is a not-for-profit corporation, exempt from federal
income taxes under Section 501(c)(3) of the Internal Revenue Code and has been
designated as an organization which is not a private foundation. Management has
evaluated all income tax positions and concluded that no disclosures relating to
uncertain tax positions are required in the financial statements.
k - Prior Year Information
The financial information shown for 2010 in the accompanying financial statements
is included to provide a basis of comparison with 2011 and presents summarized
totals only. The 2010 amounts are not intended to include all the information
necessary for a fair presentation in accordance with generally accepted accounting
principles. Certain amounts have been reclassified for purposes of comparison.
7
SIGNATURE THEATRE COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
Note 2 -
Restrictions on Assets
a - Board-Designated Working Capital Reserve
Board-designated working capital reserve funds are restricted for a cash reserve
established by the Trustees and funded from the proceeds of a capital campaign
initiative. The fund was initiated during a capital campaign, supported in part by the
Kresge Foundation, for renovation of the Peter Norton Space and the establishment
of a working capital reserve. The Board approves withdrawals from the reserve,
determines the terms of repayments to the reserve, and allocates portions of its
cash balances to be designated as part of the reserve. Signature and its Trustees
continue to replenish and increase the reserve with the support of individual,
corporate, foundation and government contributions. At June 30, 2011, $142,914
had been repaid to the reserve, with the remaining $394,298 borrowed for use in
operations. At June 30, 2010, $142,377 had been repaid to the reserve, with the
remaining $394,835 borrowed for use in operations.
b - Temporarily Restricted
Temporarily restricted net assets at June 30 are restricted for the following:
Signature Center capital project
and transition funding
Future programs
Future periods
Note 3 -
2011
2010
$5,860,217
256,100
50,000
$2,609,050
971,250
813,334
$6,166,317
$4,393,634
Promises to Give
a - Unconditional Promises to Give
Unconditional promises to give are due as follows:
Unrestricted
Signature
Center
Capital
Operations
Project
Less than one year
One to three years
Less: Discount to present value
Temporarily Restricted
Future
Signature
Programs
Center
and
Capital
Periods
Project
2011
Total
2010
Total
$124,475
124,475
-
$107,100
107,100
-
$56,100
56,100
-
$2,862,958
3,213,000
6,075,958
(231,783)
$3,150,633
3,213,000
6,363,633
(231,783)
$2,775,058
1,439,000
4,214,058
(136,247)
$124,475
$107,100
$56,100
$5,844,175
$6,131,850
$4,077,811
8
SIGNATURE THEATRE COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
Note 3 -
Promises to Give (continued)
a - Unconditional Promises to Give (continued)
Uncollectible promises are expected to be insignificant. Unconditional promises to
give due after one year are discounted to present value using a discount rate
ranging from 3 - 5%.
b - Conditional Promises to Give
Signature was awarded $128,500 from the City of New York to cover costs of a new
box office software system. As of June 30, 2011, payment was pending formal
approval by the City of New York. Signature received these funds in October 2011.
Note 4 -
Property and Equipment
a - Property and equipment consist of the following at June 30:
Leasehold improvements
Office and production equipment
Computer equipment and software
Furniture
Less: Accumulated depreciation
Life
2011
2010
Life of lease
3 - 7 years
3 - 10 years
7 years
$2,143,646
181,813
369,800
39,036
2,734,295
(2,418,553)
$2,143,646
61,652
352,257
39,036
2,596,591
(2,344,053)
$ 315,742
$ 252,538
Depreciation for the years ended June 30, 2011 and 2010 was $74,500 and
$76,483, respectively.
b - As a June 30, 2011, Signature has expended capitalized costs totaling $22,917,515
related to the Signature Center capital project. As of year ended June 30, 2011, the
City of New York cumulatively spent $7,973,649 for capital appropriations relating
to the project. The City’s investment of capital funding obligates Signature to
operate the facility as a non-profit entity, open to and used and maintained for the
benefit of the people of the City of New York for cultural, educational or artistic
uses/or related purposes approved by the City.
9
SIGNATURE THEATRE COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
Note 5 -
Notes Payable
Notes payable consist of:
1) A 20-year note in the principal amount of $200,000, maturing November 1,
2011, payable to A.R.T./New York in monthly installments of $3,125, including
interest of 4.25%, with a balloon payment of $50,000 due November 1, 2011.
This loan was fully repaid in October 2011.
2) A construction loan with available borrowings up to $10,000,000 from 42nd and
10th Associates, LLC for hard and soft costs related to the acquisition,
construction, financing, design, programming and fit-out of the new West 42nd
Street location, bearing interest at 3% per annum, payable monthly beginning
on the start date, which is defined in the loan agreement, expected to be the
date that Signature Center opens to the public. No interest is payable or
accrued prior to this start date. The outstanding principal sum, with accrued
interest, is due and payable on maturity date, which is defined as the 10th
anniversary of the start date. The payable balance at June 30, 2011 was
$9,372,393.
Future payments are due as follows:
Year ending June 30, 2012
Years ending June 30, 2013 - 2016
Thereafter, through 2022
$
68,011
9,372,393
Interest expense for the years ended June 30, 2011 and 2010 was $227,026 and
$135,032, respectively. Included in interest expense for 2011 and 2010 is $222,852
and $126,834, respectively, in donated interest for the period prior to the accrual of
interest on the construction loan.
Note 6 -
Pensions and Other Benefits
Signature contributes to various defined benefit and defined contribution multi-employer
plans (under collective bargaining agreements). Signature also contributes to various
health and welfare benefit multi-employer plans. The contributions to certain of the
plans are determined in accordance with provisions of negotiated labor contracts. The
expense related to Signature's union pension, health and welfare benefit plans totaled
$172,493 and $174,069 for the years ended June 30, 2011 and 2010, respectively.
10
SIGNATURE THEATRE COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
Note 7 -
Commitments and Contingencies
a - Leases
Signature occupies office space under a lease expiring June 30, 2013. Signature
also occupies its performance space under a sublease agreement with the tenant of
the facility. The sublease agreement allows for annual renewals and follows the
terms of the tenant’s underlying lease agreement with the landlord, expiring
December 2012, which provides for annual increases based on a formula using the
Consumer Price Index (CPI), periodic fixed sum increases, and real estate tax
escalations. In the event of early termination of its office lease, six months notice
and payment of four month’s rent is required. At June 30, 2011, the current
sublease term in effect is for the period ending June 30, 2012 at a rate of $167,546
per annum.
Minimum annual rentals under these leases are as follows:
Year ending June 30, 2012
Thereafter, through June 30, 2013
$236,546
152,773
Rent expense for the years ended June 30, 2011 and 2010 was $246,875 and
$242,509, respectively.
Signature is currently disputing prior year utilities charges of approximately $98,000
under its office space lease, which were invoiced by the landlord during the year
ended June 30, 2010. Signature’s position is that these charges were not billed on
a timely basis and has not recognized them as a liability in the accompanying
financial statements.
b - For the 2011 and 2010 fiscal years, approximately 20% (2011) and 19% (2010) of
Signature's employees were employed under collective bargaining agreements.
The amounts of salary related to the agreements were $402,977 (2011) and
$427,866 (2010).
c - Government supported projects are subject to audit by the applicable granting
agency.
Note 8 -
Donated Services
During the years ended June 30, 2011 and 2010, Signature received the following
donated services:
Legal fees
Accounting fees
Other professional fees
2011
2010
$15,519
2,500
55,000
$4,525
-
$73,019
$4,525
11
SIGNATURE THEATRE COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
Note 9 -
Signature Center at West 42nd Street
In January 2012, Signature Center will open as a new, permanent home for Signature
Theatre Company on West 42nd Street between Dyer and 10th Avenues. Designed by
Frank Gehry Architects, the Center comprises three theatres (one 299-seat theatre,
one 199-seat theatre, and one flexible 199-seat theatre), a central lobby with café and
bookstore, a studio theatre, rehearsal studio, and administrative offices all on one level,
a unique configuration that fosters natural interaction between artists and audiences. In
its new home, Signature will expand its programming to most fully meet the demands of
its mission. Established 20 years ago, Signature’s season-long explorations of a single
writer’s body of work will continue as Residency One. The Company will expand the
Legacy Program, which was launched during its 10th Anniversary Season, to include
productions by past Playwright-in-Residence each season. Finally, Signature will
launch Residency Five, an unprecedented new program which will host up to seven
writers at a time and encourage the creation of a body of work by guaranteeing each
writer three full productions over the course of a five-year residency.
Signature Center comprises the 2nd Floor and 2nd Floor mezzanine of a large-scale
mixed-use development. The property is subject to a restrictive covenant which
requires that the property is used as a theater for thirty years from the date that
Signature obtains a certificate of occupancy. Construction on the superstructure of the
development was completed in September of 2010. Signature’s fit-out construction for
the Signature Center officially began in October 2010. As of September 30, 2011,
Signature has entered into approximately $48 million in design and professional
services contracts for this project, of which approximately $23 million is recorded as
construction in progress as of June 30, 2011 in the accompanying financial statements.
Following delivery of a warm core and shell by the project developer in July 2011,
Signature purchased the 75,000 square foot condominium for approximately $6.7
million from the developer. The developer provided mortgage financing for the amount
of this purchase, described in Note 12a. The developer has also supported the project
with a loan for the purchase price of the property, as well as a $10 million construction
loan, the terms of and outstanding borrowings under which as of June 30, 2011 are
described in Note 5. These loans have long-term principal maturities and the terms
include initial periods of no interest and where interest accrues but is not due currently,
allowing flexibility during Signature’s transition into its new facility.
The project budget is currently estimated at $66.3 million, including hard and soft costs
and a reserve to fund operations. The City of New York has recognized the importance
and value of this project by including budget appropriations totaling $27.5 million in
capital funding to be used for this project, of which $25.6 million has been secured
under the terms of City funding agreements. In addition to the City’s appropriations of
$27.5 million, through October 2011, Signature has secured $19.6 million toward its
approved $66.3 million capital campaign goal, including $1.2 million of net proceeds
secured through a New Markets Tax Credit transaction that closed on August 30, 2011
(see Note 12b), and approximately $18.4 million in capital pledges toward its campaign.
As of October 2011, Signature continues an aggressive fundraising campaign, currently
focusing its efforts on lead gifts as it moves into a more public phase of the campaign.
12
SIGNATURE THEATRE COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
Note 10 - Functional Allocation of Expenses
The cost of providing the various program and supporting services has been
summarized on a functional basis in the statement of activities. Accordingly, certain
costs have been allocated among the programs and supporting services benefited.
Note 11 - Concentration of Credit Risk
Signature maintains its cash balances at financial institutions located in New York. The
balances are insured by the Federal Deposit Insurance Corporation up to applicable
limits. The cash balances at times may exceed federally insured limits.
Note 12 - Subsequent Events
a - In connection with the purchase of the property for the Signature Center (Note 9),
Signature entered into a promissory note with the developer for the full purchase
price of the property of $6,666,667. The note bears interest at 4.5% per annum.
Interest accrues during the first five years, and monthly interest payments of
$25,000 are due commencing on the fifth anniversary of the note. The principal
amount, and any accrued interest, is due on the forty-ninth anniversary of the
specified start date, when Signature Center opens to the public.
b - On August 30, 2011, under the New Markets Tax Credit Program, a federally
funded program to encourage community development, Signature obtained funding
to finance a portion of the Signature Center West 42nd Street project. Signature has
formed a limited liability company, Signature Center, LLC ("Center"), which will
serve as the tenant of the property, and will contribute its capital expenditures for
the project to Center. Signature owns Center with another not-for-profit minority
owner, and will operate the facility through Center under a sublease agreement.
Center received three loans totaling $23,520,000 through independent third parties
from Signature. The independent third parties included an independent New Market
Tax Credits investor (the “investor”). These parties formed other entities specifically
for this project. Two of the loans bear interest at 1.32788% and the other bears
interest at 0.62000%. Interest only is payable quarterly, beginning on September
15, 2011, through and including June 15, 2018. Equal payments of principal and
accrued and unpaid interest are payable quarterly beginning on September 15,
2018 through and including June 15, 2041, plus a final payment equal to all unpaid
principal and accrued interest on the maturity date of August 30, 2041. The investor
provided a capital contribution to the project and will receive the tax benefits
generated through the New Markets Tax Credit Program.
13
SIGNATURE THEATRE COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
Note 12 - Subsequent Events (continued)
b - (continued)
An Option Agreement includes provisions for Center to acquire the interest of the
investor member. During the option period defined in the Agreement, the investor
member may exercise its option to require Center to purchase its interest for an
amount equal to $1,000. In the event that the investor member does not exercise
this option, Center has an option during the next three month period to acquire the
investor member's interest in an amount equal to fair market value of the investor
interest as determined by mutual agreement among the parties, or if there is no
such agreement, an amount determined by a qualified independent appraiser.
On August 30, 2011, Signature entered into a bridge loan agreement with the
investor in an amount of $5,000,000. Interest on borrowings is to be paid monthly
at a rate of 7% per annum. Signature may draw borrowings on project expenditures
covered by New York City grant funding but not yet reimbursed. The loan
agreement subjects Signature to certain covenants and financial ratios. In addition,
Signature is required to maintain an interest reserve account. Any borrowings and
unpaid interest is due on the maturity date of November 30, 2012.
c - On October 12, 2011, Signature entered into a loan agreement with M&T Bank for
an amount of $5,000,000. Interest on borrowings is to be paid monthly at a rate the
greater of (i) the LIBOR rate plus 3.5% or (ii) 5%. Principal borrowings are to be
repaid on the maturity date of October 12, 2014. Collateral under this loan consists
of substantially all of Signature’s assets. The loan subjects Signature to certain
covenants and financial ratios, and limits Signature from incurring other
indebtedness. In addition, Signature is required to maintain an interest reserve
account.
d - On October 12, 2011, Signature entered into a demand note with M&T Bank for an
amount of $300,000. Interest on borrowings is to be paid monthly at the LIBOR rate
plus 3.25%. Principal borrowings are due on demand.
e - Signature has evaluated subsequent events through November 22, 2011, the date
that the financial statements are considered available to be issued.
ADDITIONAL INFORMATION
INDEPENDENT AUDITORS' REPORT ON
ADDITIONAL INFORMATION
To the Board of Trustees of
Signature Theatre Company, Inc.
Our report on our audit of the basic financial statements of Signature Theatre Company,
Inc. for 2011 appears on page 1. We conducted our audit in accordance with auditing
standards generally accepted in the United States of America for the purpose of forming
an opinion on the basic financial statements taken as a whole. The Schedules of
Functional Expenses for the year ended June 30, 2011 with comparative totals for 2010 is
presented for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a whole.
New York, New York
November 22, 2011
16
SIGNATURE THEATRE COMPANY, INC.
SCHEDULE OF FUNCTIONAL EXPENSES - OPERATIONS
YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE TOTALS FOR 2010
Program
Services
Theatrical
Production
and
Operations
Salaries
Payroll taxes and benefits
Professional fees
Intern stipends
Artistic fees
$1,614,635
421,549
52,211
60,835
205,009
Supporting Services
Management
and General
$
2011
2010
Total
Expenses
Fundraising
Total
Total
Expenses
257,606
49,549
65,807
-
$ 346,281
66,278
4,351
-
$ 603,887
115,827
70,158
-
$2,218,522
537,376
122,369
60,835
205,009
$1,709,475
479,959
59,223
41,775
96,401
Lighting and sound
Costumes
Sets and props
Other direct production expenses
Occupancy and utilities
242,781
193,080
364,179
659,461
341,624
85,405
28,469
113,874
242,781
193,080
364,179
659,461
455,498
64,276
34,000
236,585
206,243
378,981
Advertising
Royalties
Insurance
Printing
Telephone
322,102
27,000
32,200
1,477
33,737
8,050
369
8,435
2,683
123
2,811
10,733
492
11,246
322,102
27,000
42,933
1,969
44,983
192,950
18,875
39,436
8,142
43,890
Repairs and maintenance
Travel and transportation
Stationery and supplies
Postage and messenger
Meeting and conferences
63,071
17,561
47,084
11,353
6,419
15,768
4,390
11,770
2,838
1,605
5,256
1,463
3,924
946
535
21,024
5,853
15,694
3,784
2,140
84,095
23,414
62,778
15,137
8,559
61,512
15,792
66,256
26,242
8,674
Indirect benefit expenses
Interest and bank fees
Dues and subscriptions
Bad debt expense
Miscellaneous
24,553
14,686
73,593
6,138
3,671
44,361
2,046
1,224
44,361
73,593
8,184
4,895
44,361
73,593
32,737
19,581
44,376
60,879
26,500
7,405
20,131
Total Expenses, 2011
$4,756,607
$
594,994
$ 510,751
$1,105,745
$5,862,352
Total Expenses, 2010
$3,059,610
$
493,995
$ 394,373
$ 888,368
See independent auditors' report on additional information.
$3,947,978
17
SIGNATURE THEATRE COMPANY, INC.
SCHEDULE OF FUNCTIONAL EXPENSES PROPERTY AND EQUIPMENT AND CAPITAL PROJECT
YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE TOTALS FOR 2010
Salaries
Payroll taxes and benefits
Professional fees
New theater project costs
Interest expense
Occupancy and utilities
Insurance
Fundraising materials and donor cultivation
Bad debt expense
Miscellaneous
Total expenses before depreciation
Depreciation
Program
Services
Supporting Services
Management
and General
Fundraising
$
$
55,875
248,602
222,852
$
-
Total
$
248,602
222,852
$
2010
Total
Expenses
248,602
222,852
58,118
4,769
102,438
1,905
126,834
-
371,309
25,000
-
371,309
25,000
-
371,309
25,000
-
352
249,075
76,430
1,767
471,454
18,625
396,309
-
867,763
18,625
867,763
74,500
621,688
76,483
$942,263
Total Expenses, 2011
$ 55,875
$
490,079
$
396,309
$886,388
Total Expenses, 2010
$ 62,957
$
149,822
$
485,392
$635,214
See independent auditors' report on additional information.
2011
Total
Expenses
$698,171