THE ELEPHANT SANCTUARY IN TENNESSEE AND SUBSIDIARY ...

THE ELEPHANT SANCTUARY IN TENNESSEE AND SUBSIDIARY

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITOR'S REPORT

DECEMBER 31, 2018 AND 2017

THE ELEPHANT SANCTUARY IN TENNESSEE AND SUBSIDIARY CONSOLIDATED FINANCIAL STATEMENTS

AND INDEPENDENT AUDITOR'S REPORT

DECEMBER 31, 2018 AND 2017

TABLE OF CONTENTS

PAGE INDEPENDENT AUDITOR'S REPORT ......................................................................................... 1 - 2

CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statements of Financial Position .................................................................................. 3 Consolidated Statements of Activities ................................................................................................ 4 Consolidated Statements of Cash Flows............................................................................................. 5 Consolidated Statements of Functional Expenses .............................................................................. 6 Notes to Consolidated Financial Statements ...................................................................................... 7 - 23

INDEPENDENT AUDITOR'S REPORT

Board of Directors The Elephant Sanctuary in Tennessee and Subsidiary Hohenwald, Tennessee

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying consolidated financial statements of The Elephant Sanctuary in Tennessee, a nonprofit organization, and Subsidiary (collectively, the "Organization"), which comprise the consolidated statements of financial position as of December 31, 2018 and 2017, and the related consolidated statements of activities, cash flows and functional expenses for the years then ended, and the related notes to the consolidated financial statements.

MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. OPINION In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of The Elephant Sanctuary in Tennessee and Subsidiary as of December 31, 2018 and 2017, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Nashville, Tennessee June 6, 2019

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THE ELEPHANT SANCTUARY IN TENNESSEE AND SUBSIDIARY CONSOLIDATED STATEMENTS OF FINANCIAL POSITION DECEMBER 31, 2018 AND 2017

ASSETS

ASSETS Cash Contributions receivable, net Prepaid expenses Inventory Investments Property and equipment, net Beneficial interest in charitable remainder trust Beneficial interest in trusts

TOTAL ASSETS

LIABILITIES AND NET ASSETS

LIABILITIES Accounts payable Accrued expenses

TOTAL LIABILITIES

COMMITMENTS AND CONTINGENCIES

NET ASSETS Without donor restrictions:

Undesignated Board designated

Total without donor restrictions Total with donor restrictions

TOTAL NET ASSETS

TOTAL LIABILITIES AND NET ASSETS

2018

2017

$ 7,952,631 $ 2,395,237

1,841,603 2,262,293

99,801

113,749

22,885

13,301

26,050,189 27,195,385

10,967,193 11,397,327

158,930

163,321

2,017,856 2,298,047

$ 49,111,088 $ 45,838,660

$

3,923 $ 73,813

3,419

4,238

7,342

78,051

4,381,764 2,809,989 39,533,035 38,348,313

43,914,799 41,158,302 5,188,947 4,602,307

49,103,746 45,760,609

$ 49,111,088 $ 45,838,660

See accompanying notes to consolidated financial statements. -3-

THE ELEPHANT SANCTUARY IN TENNESSEE AND SUBSIDIARY CONSOLIDATED STATEMENTS OF ACTIVITIES

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

SUPPORT AND REVENUE Public support:

Contributions and grants Change in value of beneficial interest agreements In-kind revenue Merchandise sales Less: cost of merchandise sales Investment income (loss) Miscellaneous income Loss on restricted contributions receivable Net assets released from restrictions

TOTAL SUPPORT AND REVENUE

EXPENSES Program Management and general Fundraising

TOTAL EXPENSES

CHANGE IN NET ASSETS

NET ASSETS - BEGINNING OF YEAR

NET ASSETS - END OF YEAR

2018

Without Donor With Donor Restrictions Restrictions

Total

2017

Without Donor With Donor Restrictions Restrictions

Total

$ 8,481,006 $ -

53,044 102,279 (38,524) (1,012,998)

500 -

364,015

1,365,874 $ (158,818)

(225,894) (30,507) (364,015)

9,846,880 (158,818)

53,044 102,279 (38,524) (1,238,892)

500 (30,507)

-

7,949,322

586,640

8,535,962

$ 6,854,490 $ -

51,903 115,279 (41,969) 2,455,529

10,916 -

679,462

678,684 $ 259,503

50,051 (147,532) (679,462)

7,533,174 259,503 51,903 115,279 (41,969)

2,505,580 10,916

(147,532) -

10,125,610

161,244 10,286,854

4,538,958 370,133 283,734

5,192,825

-

4,538,958

-

370,133

-

283,734

-

5,192,825

2,756,497 41,158,302

586,640 4,602,307

3,343,137 45,760,609

$ 43,914,799 $ 5,188,947 $ 49,103,746

4,352,447 280,378 201,254

4,834,079

-

4,352,447

-

280,378

-

201,254

-

4,834,079

5,291,531 35,866,771

161,244 4,441,063

5,452,775 40,307,834

$ 41,158,302 $ 4,602,307 $ 45,760,609

See accompanying notes to consolidated financial statements. -4-

THE ELEPHANT SANCTUARY IN TENNESSEE AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets Adjustments to reconcile change in net assets to

net cash provided by operating activities: Depreciation Loss on restricted contributions receivable Realized and unrealized (gain) loss on investments Change in value of beneficial interest agreements Noncash contributions of investments (Increase) decrease in:

Contributions receivable Prepaid expenses Inventory Increase (decrease) in: Accounts payable Accrued expenses

TOTAL ADJUSTMENTS

NET CASH PROVIDED BY OPERATING ACTIVITIES

CASH FLOWS FROM INVESTING ACTIVITIES Additions to property and equipment Distributions received from beneficial interest agreements Purchases of investments Sales of investments

NET CASH USED IN INVESTING ACTIVITIES

NET INCREASE (DECREASE) IN CASH

CASH - BEGINNING OF YEAR

CASH - END OF YEAR

2018

2017

$ 3,343,137 $ 5,452,775

1,096,576 30,507

1,930,110 158,818 (45,415)

390,183 13,948 (9,584)

(69,890) (819)

3,494,434

6,837,571

1,031,868 147,532

(1,988,828) (487,752) (48,700)

(1,159,590) (12,662) 4,100

22,948 1,110

(2,489,974)

2,962,801

(666,442) 125,764

(6,577,116) 5,837,617

(2,044,126) 124,022

(20,428,659) 16,913,246

(1,280,177) (5,435,517)

5,557,394

(2,472,716)

2,395,237

4,867,953

$ 7,952,631 $ 2,395,237

See accompanying notes to consolidated financial statements. -5-

THE ELEPHANT SANCTUARY IN TENNESSEE AND SUBSIDIARY CONSOLIDATED STATEMENTS OF FUNCTIONAL EXPENSES FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

2018

Salaries and wages Payroll taxes Employee benefit - insurance Employee benefit - retirement Other payroll expenses

SALARIES AND RELATED EXPENSES

Advertising Bank service charges Conferences and meetings Depreciation Donated materials and supplies Donations Dues and subscriptions Education Employee assistance program Employee relocation Employee recruitment and testing Feed and supplements Insurance - liability Insurance - workers' compensation International elephant habitat and

care programs Licenses Meals Merchandise Mileage reimbursement Miscellaneous Newsletter Office supplies and

small equipment Printing Postage and delivery Professional development Professional fees Repairs and maintenance Security Taxes Technology Telephone and internet Travel Utilities Vehicle Veterinary services and medicines

TOTAL EXPENSES

Less: expenses included with revenues on the consolidated statements of activities

TOTAL EXPENSES INCLUDED IN EXPENSE SECTION OF

THE STATEMENTS OF ACTIVITIES

ELEPHANT CARE

PROGRAM SERVICES VET CARE FACILITIES EDUCATION

TOTAL

MANAGEMENT AND

GENERAL

FUNDRAISING

TOTAL

$ 644,060 $ 124,866 $

51,637

10,343

107,053

14,233

15,491 3,807

3,003 738

431,840 $ 33,602 66,786 10,387

2,552

317,508 $ 1,518,274 $

25,467

121,049

36,068

224,140

7,637 1,877

36,518 8,974

165,847 $ 11,423 19,194

3,937 1,031

93,254 7,184

11,023 2,295 500

$ 1,777,375 139,656 254,357 42,750 10,505

822,048

50 -

3,905 -

565 -

439 3,750 1,095 142,252 35,441 22,041

79,300 1,448 1,821 948 -

88,249 180 29

2,275 223,032 28,186

1,393 -

12,714 5,292

12,664 71,982 15,786

-

1,576,885

153,183

645 1,341 49 125 14,177 4,898

759 390

630

-

34,201 23

3,519 -

72,209 343 75 -

9,545 1,439 1,744 4,501 2,227 199,659

505,682

545,167

236 13 -

1,025,305 -

244 -

1,070 -

23,627 8,326

2,439

817 -

598 -

32,035 50

153 1,887 8,193 9,371

631 18,415

6,469 4,595

406 13,463 43,777

-

1,747,287

388,557

4,917 25,522

1,229 48,947

364 171 572 265 12,699 4,751

397 1,050 38,524 651 753 70,118

17,291 14,148 39,116

1,835 16,097

6,017 914 -

38,243 789

2,397 11,294

-

747,628

1,908,955

5,203 25,535

5,779 1,074,252

2,270 903 4,322 2,555 142,252 85,944 40,016

79,300 5,043 4,078

38,524 2,827 753

70,118

171,776 14,401 42,817 5,997

319,531 43,917 3,013 18,415 66,971 12,115 17,211

101,240 61,790

199,659

4,577,482

201,432

1,500 4,714 22,324

1,723 2,698 1,954

98 -

115 -

5,161 2,449

1,274

821 -

371 -

3,101 72 13 -

102,048 170 75 -

6,571 2,333 4,563 2,223 2,330

-

370,133

114,256

1,003 23,000

7,628 49 1,772 686

9,436 1,448

133 3,276 72,260

5,194 7,365 4,420

296 9,977

175 -

17,109 145

3,051 500 555 -

283,734

2,224,643

6,206 50,035 10,493 1,096,576

7,628 1,723 4,968 1,954 1,050 4,322 2,670 142,252 92,877 43,151

79,300 15,753

6,347 38,524

3,331 4,029 142,378

180,071 21,838 47,250 6,293

431,556 44,262 3,088 18,415 90,651 14,593 24,825

103,963 64,675

199,659

5,231,349

-

-

-

(38,524)

(38,524)

-

-

(38,524)

$ 1,576,885 $ 505,682 $ 1,747,287 $

709,104 $ 4,538,958 $ 370,133 $

283,734 $ 5,192,825

See accompanying notes to consolidated financial statements. -6-

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