American Academy of Ophthalmology and Otolaryngology, Inc

FINANCIAL REPORT AMERICAN ACADEMY OF OPHTHALMOLOGY AND OTOLARYNGOLOGY, INC Annual Audit for Calendar Year 1978

To the Board of Directors American Academy of Ophthalmology and Otolaryngology, Inc Rochester, Minn We have examined the balance sheets of the AMERICAN ACADEMY OF OPHTHALMOLOGY AND OTOLARYNGOLOGY, INC (See Note 3) as of

Dec 31, 1978 and 1977, and the related statements of income, net worth, and changes in financial position for the years then ended. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

In our opinion, the financial statements referred to above present fairly the financial position of the American Academy of Ophthalmology and Otolaryngology, Inc, as of Dec 31, 1978 and 1977, and the results of its operations and the changes in financial position for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis.

McGLADREY HENDRICKSON & CO Rochester, Minn Jan 11, 1979

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FINANCIAL REPORT

VOLUME 86 JUNE 1979

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AMERICAN ACADEMY OF OPHTHALMOLOGY AND OTOLARYNGOLOGY, INC Balance Sheet-Dec 31, 1978 and 1977 ASSETS 1978 Current Assets CashCash on hand ........................................... Demand and savings accounts ......................... . Certificates of deposit ................................... . Interest receivable ........................................ . Dues and accounts receivable (less allowance for doubtful accounts-1978, $4,125; 1977, $4,334) .......... . Inventories ................................................ . Prepayments on publications in process .................. . Prepaid expenses-insurance, postage and other ......... . Total current assets ................................. Investments, at cost or market value on date of gift (market value $384,798) (Note 4) ....................................................

$

50 21,657 1,600,000 94,521

$

50 130,326 1,450,000 44,321

17,527

83,855 103,856 8,000 41,499

$1,891,136

$1,861,907

$ 401,799

$ 703,377

53,522 103,859

Furniture, Library, Films, and Slides Furniture and equipment ................................. . $ 191,259 Library ................................................... . 3,567 Films and slides41,775 Embryology of the Eye ................................. . Embryology of the Ear ................................. . 104,517 Less-accumulated depreciation ........................... .

1977

$ 1137,262 3,567 41,775 104,517

$ 341,118 246,092

$ 307,121 226,616

$

$

95,026

$2,387,961

80,505

$2,645,789

LIABILITIES AND NET WORTH Current Liabilities Current portion of deferred compensation ................. Notes payable-bank ...............•...................... Accounts payable ......................................... . Accrued payroll taxes .................................... . Deferred income .......................................... . Grant-in-aid and special custodial funds ................. . Total current liabilities .............................. Deferred Compensation Liability less current portion shown above (Note 2) ............................. Net Worth

.................................................. See notes to financial statements.

$

4,700 205,000 215,275 4,239 44,492 5,904

$

4,700 144,080 10,574 45,828 13,094

$ 479,610

$ 218,276

$

$

44,600

42,300

$1,863,751

$2,385,213

$2,387,961

$2,645,789

FINANCIAL REPORT

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OPHTH AAO

AMERICAN ACADEMY OF OPHTHALMOLOGY AND OTOLARYNGOLOGY, INC Statements of Income and Net Worth For the Years Ended Dec 31, 1978 and 1977 INCOME 1977

1978

Revenues Membership dues .......................................... $ 965,166 Membership applications ................................. . 80,354 Continuing education ..................................... . 646,925 827,116 Annual meeting receipts .................................. . Publications277,131 Publications of TRANSACTIONS and other ............... . Sa1e of Directory ....................................... . 963 Royalties .................................................. . 3,573 178,435 Interest and dividend income ............................. . 4,000 Contributions ............................................. . 6,460 Other income ............................................. .

$ 774,758 76,888 669,352 585,845 260,427 1,011 4,986 126,194 17,173 13,201

Total revenues ...................................... .

$2,990,123

$2,529,835

Operating Expenses Continuing education ..................................... . Annual meeting expenses ................................. . Publications ............................................... . General and administrative ............................... .

$ 870,017 931,553 625,770 1,054,163

$ 729,197 587,725 525,907 730,988

Total expenses ...................................... .

$3,481,503

$2,573,817

Net (loss) for the year before loss on sale of investments and extraordinary item Loss on Sale of Investments

($ 491,380)

.............................

Extraordinary ItemTransfer of assets from Educational Trust Fund Net income (loss) for the year

($

43,982)

30,082)

........

......................

($

753,656 ($ 521,462)

$ 709,674

$2,385,213

$1,675,539

NET WORTH Balance, beginning of year Net Income (loss) for the Year ......................... . Balance, end of year

521,462) $1,863,751

See notes to financial statements.

709,674 $2,385,213

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AMERICAN ACADEMY OF OPHTHALMOLOGY AND OTOLARYNGOLOGY, INC Statement of Changes in Financial Position For the Years Ended Dec 31, 1978 and 1977 1978 Working Capital Provided From OperationsNet income (loss) for the year ......................... . ($ 521,462) Add-Items not affecting working capital19,532 Deprecia,tion .......................................... . 7,000 Deferred compensation ................................ . 30,082 Loss on sale of investments .......................... . Less-investments received as a contribution (Note 4) ............................................... .

($ 464,848)

1977

$ 709,674 13,835

$ 723,509

703,377

Total from operations ... . .. .. .. .. .. .. .. .. .. .. .. .. ... ($ 464,848) 335,496 Proceeds from sale of investments ........................

$

20,132

Total ................................................. ($ 129,352)

$

20,132

34,053 4,700 64,000

$

48,243

$ 102,753

$

48,243

($

28,111)

41,331 19,867 3 31,972)

($

66,765) 32,655 47,519 13,291

29,229

$

26,700

Working Capital Used to Purchase furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . $ Pay deferred compensation ............................... . Purchase investments ..................................... .

Increase (decrease) in working capital ............... ($ 232,105)

Increase (Decrease) in Working Capital Was Represented By Increase (decrease) in current assetsCash ................................................... $ Receivables ........................................... . Inventories ............................................ . Prepaids .............................................. . Total.................................................

$

Increase (decrease) in current liabilitiesNotes payable ........................................ . $ 205,000 Payables .............................................. . 71,195 Accruals .............................................. . 6,335) Deferred income ...................................... . Grants and custodial funds .......................... . Total .................................................

1,336) 7,190)

$ 261,334

Increase (decrease) in working capital ............... ($ 232,105) See notes to financial statements.

$

67,269 4,192 12,017) 4,633)

$

54,811

($

28,111)

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FINANCIAL REPORT

OPHTH AAO

AMERICAN ACADEMY OF OPHTHALMOLOGY AND OTOLARYNGOLOGY, INC Notes to Financial Statements 1. Summary of Significant Accounting Policies

a. InventoriesInventories are stated at the lower of cost (first-in, first-out) or market.

b. DepreciationIt is the policy of the Academy to provide depreciation based on the estimated useful life of individual units using the straightline method. 2. Deferred Compensation The Academy has a $49,300 deferred compensation liability resulting from two agreements with Dr Kos, Executive VicePresident of the Division of Otolaryngology: The Academy commenced payments of $4,700 per year to Dr Kos in 1978 on the deferred compensation agreement dated Jan 1, 1971. A balance of $42,300 remains to be paid over a nine-year period in equal annual installments of $4,700. The Academy entered into a second deferred compensation agreement with Dr Kos effective Jan 1, 1978. The liability under this agreement accrues at $7,000 per year for two years and will be paid over a ten-year period from the date of termination of the contract. Deferred compensation of $7,000 accrued under this agreement during 1978. 3. Incorporation and Division of the Academy The Council of the Academy, empowered by a resolution approved at the annual business meeting held on Oct 4, 1977, formed a Minnesota nonprofit corporation named the American Academy of Ophthalmology and Otolaryngology, Inc. All assets and liabilities of the unincorporated association were transferred to the new corporation at the close of business on Dec 31, 1977. The Board of Directors of the American Academy of Ophthalmology and Otolaryngology, Inc, empowered by resolutions approved at the 1978 annual business meetings of the respective divisions formed two Minnesota nonprofit corporations named the American Academy of Ophthalmology, Inc, and the American Academy of Otolaryngology, Inc. All assets and liabilities of the respective divisions of the former corporation were transferred to the new corporation at the close of business on Dec 31, 1978.

FINANCIAL REPORT

VOLUME 86 JUNE 1979

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4. Investments

The Educational Trust Fund of the American Academy of Ophthalmology and Otolaryngology was liquidated on May 23, 1977, with all assets being contributed to the Academy. Total value of the assets transferred was $753,657. The market value of the investments on the date of transfer was $703,377.

5. Commitments

The Board of Directors of the newly formed American Academy of Ophthalmology, Inc, have approved a move of its corporate headquarters office from Rochester, Minn, to San Francisco, Calif. The move is expected to occur in early 1979.

FINANCIAL REPORT AMERICAN ACADEMY OF OPHTHALMOLOGY AND OTOLARYNGOLOGY, INC DIVISION OF OPHTHALMOLOGY

To the Board of Directors American Academy of Ophthalmology and Otolaryngology, Inc Rochester, Minn Our examinations have been made primarily for the purpose of formulating an opinion on the basic financial statements as a whole. The supplementary information included in this report, although not considered necessary for a fair presentation of the financial position, results of operations, and changes in financial position in conformity with gen-

erally accepted accounting principles, is presented for supplementary analysis purposes. It has been subjected to the audit procedures applied in the examination of the basic financial statements and is, in our opinion, fairly stated in all material respects in relation to the financial statements, taken as a whole. McGLADREY HENDRICKSON & CO Rochester, Minn Jan 11, 1979

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VOLUME 86 JUNE 1979

AMERICAN ACADEMY OF OPHTHALMOLOGY AND OTOLARYNGOLOGY, INC DIVISION OF OPHTHALMOLOGY

Balance Sheet-Dec 31, 1978 and 1977

ASSETS 1978 Current Assets CashCash on hand .......................................... . $ 30 Demand and savings accounts ......................... . 11,567 790,000 Certificates of deposit ................................... . Interest receivable ........................................ . 48,312 Dues and accounts receivable (less allowance for 27,653 doubtful accounts-1978, $2,400; 1977, $1,688) .......... . Inventories ................................................ . 53,755 Prepayments on publications in progress ................. . Prepaid expenses-insurance, postage, and other ......... . 13,005 Total current assets

1977

$

30 84,027 1,090,000 30,523 57,413 50,605 4,800 20,061

.................................

$ 944,322

$1,337,459

Investments, at cost or market value on date of gift (market value $340,034) ...............................

$ 353,074

$ 351,689

Furniture, Library, Films, and Slides Furniture and equipment ................................. . $ 125,537 Library ................................................... . 2,126 Films and slidesEmbryology of the Eye ................................. . 41,775

$ 100,683 2,126

$ 169,438 102,218

$ 144,584 89,274

$

$

Less-accumulated depreciation ........................... .

67,220

$1,364,616

41,775

55,310

$1,744,458

LIABILITIES AND NET WORTH Current Liabilities Current portion of deferred compensation liability ........ $ 2,820 Notes payable-bank ..................................... . 80,000 Accounts payable ......................................... . 129,513 Accrued payroll taxes .................................... . 2,067 Deferred income .......................................... . 27,699 Grant-in-aid and special custodial funds ................. . 4,540

$

2,820 116,167 14,619 32,990 11,730

$ 246,639

$ 178,326

Deferred Compensation Liability less current portion shown above ......................................

$

$

Net Worth ..................................................

$1,095,417

$1,540,752

$1,364,616

$1,744,458

Total current liabilities ..............................

22,560

25,380

FINANCIAL REPORT

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OPHTH AAO

AMERICAN ACADEMY OF OPHTHALMOLOGY AND OTOLARYNGOLOGY, INC DIVISION OF OPHTHALMOLOGY

Statements of Income and Net Worth For the Years Ended Dec 31, 1978 and 1977

INCOME 1978 Revenues Membership dues .......................................... $ 501,512 59,525 Membership applications ................................. . 328,472 Continuing education ..................................... . 568,347 Annual meeting receipts .................................. . Publications200,342 Publications of TRANSACTIONS and other ............... . Sale of Directory ....................................... . 639 Royalties .................................................. . 3,500 Interest and dividend income ............................. . 108,582 Contributions ............................................. . 4,000 Other income ............................................. . 1,626 Total revenues .......................................

1977 $ 476,174 52,664 423,505 427,146 188,536 546 4,921 83,240 10,004 7,808

$1,776,545

$1,674,544

Operating Expenses Continuing education ...................................... $ 486,056 Annual meeting .......................................... . 576,495 Publications ............................................... . 447,788 General and administrative ............................... . 703,417

$ 433,018 351,939 325,323 480,196

Total expenses .......................................

$2,213,756

Net income (loss) for the year before loss on sale of investments and extraordinary item ... ($ 437,211) Loss on Sale of Investments

$1,590,476 $

84,068

8,124)

Extraordinary ItemTransfer of assets from Educational Trust Fund Net income (loss) for the year

376,828

...................... ($ 445,335)

$ 460,896

NET WORTH Balance, beginning of year Net Income (Loss) for the Year Balance, end of year ...................... . . . . . . . . . . . . . . . . .

$1,540,752

$1,079,856

445,335)

460,896

$1,095,417

$1,540,752

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FINANCIAL REPORT AMERICAN ACADEMY OF OPHTHALMOLOGY AND OTOLARYNGOLOGY, INC DIVISION OF OPHTHALMOLOGY

Statement of Changes in Financial Position For the Years Ended Dec 31, 1978 and 1977 1978

1977

Working Capital Provided From OperationsNet income (loss) for the year .......................... ($ 445,335) Add-Items not affecting working capitalDepreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,850 8,124 Loss on sale of investments ...........................

$460,896

($ 424,361)

$ 468,190 351,689

Total from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ($ 424,361) 54,491 Proceeds from sale of investments .. . . . . . . . . . . . . . . . . . . . . . .

$ 116,501

Total ................................................. ($ 369,870)

$ 116,501

Less-investments received as a contribution

.......... .

Working Capital Used to Purchase furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . .. $ Pay deferred compensation ............................... . Purchase investments ..................................... .

7,294

24,760 2,820 64,000

$

34,791

91,580

$

34,791

Increase (decrease) in working capital ............... ($ 461,450)

$

81,710

Increase (Decrease) in Working Capital Was Represented By Increase (decrease) in current assetsCash ................................................... ($ 372,460) 11,971) Receivables ............................................ ( 3,150 Inventories ............................................ . 11,856) Prepaids .............................................. .

$

80,481 35,013 29,230 11,321

Total .................................................

$

Total ................................................. ($ 393,137) Increase (decrease) in current liabilitiesNotes payable ......................................... Accounts payable ..................................... . Accruals .............................................. . Deferred income ...................................... . Grants and custodial funds .......................... . Total.................................................

$

80,000 13,346 12,552) 5,291) 7,190)

$

68,313

Increase (decrease) in working capital ............... ($ 461,450)

$ 156,045 $

73,425 10,836 12,953) 3,027

$

74,335

$

81,710