National Nurses United

CALIFORNIA NURSES ASSOCIATION NOTES TO FINANCIAL STATEMENTS Note 1 - Summary of Organization and Significant Accounting Policies Summary of the Organization Incorporated on October 4, 1907 under the Laws of the State of California, the California Nurses Association (CNA) is a member organization exempt from federal and state income and franchise taxes. The Organization represents the interests of registered nurses throughout the State of California and advocates for patients and health care consumers for improved health care services. The purpose of CNA is to foster high standards of nursing practice, promote the professional and educational advancement of nurses, and promote the general welfare of nurses through collective bargaining and organizing. With 12 geographical regions the House of Delegates is the governing body of CNA and convenes every other year at which time the House votes on any bylaws changes and by adopting resolutions sets and formulates basic policies and priorities for CNA. The House is made up of accredited Delegates elected by ballot from each region plus all CNA Board members. The Board, consisting of four titled Officers elected by statewide ballot and Directors elected by ballot from each region, carries out and formulates policy when the House is not in session. All Delegates, Officers, and Directors must be members of CNA. The number of Delegates and Directors, representing the members of their respective region, varies based upon the number of facility-based sub-groupings for a particular region. CNA members also elect the Ballot Committee, responsible for overseeing the conduct of CNA's elections; and the Government Relations Commission and Joint Nursing Practice Commission, which make policy recommendations to the Board. The Organization owns and occupies its four-story headquarters building located in Oakland, California. CNA maintains five satellite offices throughout the State of California and one office in Tucson, Arizona. The significant accounting policies of CNA are as follows: Basis of Accounting The financial statements of CNA have been prepared using the accrual basis of accounting in accordance with generally accepted accounting principles. Consequently, revenues, gains and other support are recognized when earned and expenses and losses are recognized when the related obligation is incurred. Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. See Accompanying Notes and Independent Auditors' Report CALIFORNIA NURSES ASSOCIATION STATEMENTS OF CASH FLOWS YEARS ENDED JUNE 30, 2004 AND 2003 CASH FLOWS FROM OPERATING ACTIVITIES 2004 2003 Increase/(Decrease) in Net Assets $ (268,491) $ (31,102) Adjustments to Reconcile Change in Net Assets to Net Cash Provided By Operating Activities Depreciation 504,228 437,156 Net Realized and Unrealized Loss on Investments (30,874) 19,077 Non-Cash Adjustment - - Non-Cash Transactions Resulting in Interest and Dividend Income (15,096) (6,976) Non-Cash Transactions Resulting in Expense 11,141 2,579 (Increase)/Decrease in: Dues and Fees Receivable (899,111) (152,616) Other Receivables 103,325 146,041 Prepaid Expenses 167,207 (186,427) Assets Designated for Specific Programs (39,723) (20,116) Increase/(Decrease) in: Accounts Payable 610,669 182,573 Deferred Revenue (232,580) 373,436 Dues Collected in Advance (640,530) 80,094 Accrued Compensated Absences 438,651 386,999 Net Cash Provided by/(Used in) Operating Activities (291,184 ) 1,230,718 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Fixed Assets (1,866,808) (215,062) Purchase of Investments (92,512 ) (373,204 ) Net Cash Provided by /(Used in) Investing Activities (1,959,320 ) (318,287 ) CASH FLOWS FROM FINANCING ACTIVITIES Loans to Other Organizations - (10,564) Loans Repaid from other Organizations 24,001 4,000 Line of Credit Draws 500,000 - Margin Loan Draws 455,702 - Proceeds from New Mortgage 3,200,000 - Principal Payments on Mortgages (2,485,559 ) (258,311 ) Net Cash Provided by /(Used in) Financing Activities 1,694,144 (264,875 ) Net Increase/(Decrease) in Cash and Cash Equivalents (556,360) 647,556 Cash and Cash Equivalents, Beginning of Year 715,860 68,304 Cash and Cash Equivalents, End of Year $ 159,500 $ 715,860 See Accompanying Notes and Independent Auditors' Report CALIFORNIA NURSES ASSOCIATION COMPARATIVE STATEMENTS OF ACTIVITIES FOR THE YEARS ENDED JUNE 30, 2004 AND 2003 2003 Unrestricted Temporarily Undesignated Designated Totals Restricted Totals Revenues, Gains, and Other Support: Dues and Fees $ 17,558,780 $ 940,277 $ 18,499,057 $ 546,961 $ 19,046,018 Dues and Fees Service Charges 183,964 - 183,964 - 183,964 Conference and Seminar Fees 26,274 - 26,274 - 26,274 Investment Income 67,833 - 67,833 - 67,833 Net Realized and Unrealized Losses on Investments (19,077) - (19,077) - (19,077) Rental Income 446,868 - 446,868 - 446,868 Benefit Program Royalties 332,215 - 332,215 - 332,215 Dues from Regions 86,028 300,500 386,528 (386,528) - Reimbursed Expenses 856,195 - 856,195 - 856,195 Other Income 73,397 33,100 106,497 - 106,497 Total Revenues, Gains, and Other Support 19,612,477 1,273,877 20,886,354 160,433 21,046,787 Assets Released from Restrictions 200,347 - 200,347 (200,347 ) - Assets Designated by Board (671,556 ) 671,556 - - - Expenses and Losses: Salaries and Wages 9,747,769 - 9,747,769 - 9,747,769 Employee Benefits 3,193,381 - 3,193,381 - 3,193,381 Reimbursed Expenses 657,112 - 657,112 - 657,112 Conferences and Seminars 64,059 - 64,059 - 64,059 Professional Services 1,032,355 - 1,032,355 - 1,032,355 Activities 1,418,028 - 1,418,028 - 1,418,028 Administrative Expenses 2,155,019 - 2,155,019 - 2,155,019 House of Delegates - 50,837 50,837 - 50,837 Support - 750,969 750,969 - 750,969 Political Activities - 298,624 298,624 - 298,624 Direct Mail - 887,056 887,056 - 887,056 Regional 200,347 - 200,347 200,347 Building Expenses 622,333 - 622,333 - 622,333 Total Expenses and Losses 19,090,403 1,987,486 21,077,889 - 21,077,889 Change in Net Assets 50,865 (42,053) 8,812 (39,914) (31,102) Net Assets at Beginning of Year 1,545,691 405,495 1,951,186 828,110 2,779,296 Net Assets at End of Year $ 1,596,556 $ 363,442 $ 1,959,998 $ 788,196 $ 2,748,194 See Accompanying Notes and Independent Auditors' Report CALIFORNIA NURSES ASSOCIATION COMPARATIVE STATEMENTS OF ACTIVITIES FOR THE YEARS ENDED JUNE 30, 2004 AND 2003 2004 Unrestricted Temporarily Undesignated Designated Totals Restricted Totals Revenues, Gains, and Other Support: Dues and Fees $ 23,287,951 $ 1,145,024 $ 24,432,975 $ 593,099 $ 25,026,074 Dues and Fees Service Charges 149,990 - 149,990 - 149,990 Conference and Seminar Fees 17,120 - 17,120 - 17,120 Investment Income 25,162 - 25,162 - 25,162 Net Realized and Unrealized Gains on Investments 30,479 - 30,479 - 30,479 Benefit Program Royalties 229,030 - 229,030 - 229,030 Dues from Regions 36,000 197,000 233,000 (233,000) - Reimbursed Expenses 93,688 - 93,688 - 93,688 Other Income 40,630 177,356 217,986 - 217,986 Total Revenues, Gains, and Other Support 23,910,050 1,519,380 25,429,430 360,099 25,789,529 Assets Released from Restrictions 365,095 - 365,095 (365,095 ) - Expenses and Losses: Salaries and Wages 11,614,363 - 11,614,363 - 11,614,363 Employee Benefits 4,139,061 - 4,139,061 - 4,139,061 Reimbursed Expenses 788,637 - 788,637 - 788,637 Conferences and Seminars 51,230 - 51,230 - 51,230 Professional Services 1,241,398 - 1,241,398 - 1,241,398 Activities 2,698,452 - 2,698,452 - 2,698,452 Administrative Expenses 2,407,952 - 2,407,952 - 2,407,952 House of Delegates - 1,045,959 1,045,959 - 1,045,959 Support - 581,951 581,951 - 581,951 Political Activities - 269,906 269,906 - 269,906 Direct Mail 79,249 79,249 - 79,249 Grocery Worker's Fund 100,000 100,000 100,000 Regional 365,095 - 365,095 365,095 Building Expenses 674,767 - 674,767 - 674,767 Total Expenses and Losses 23,980,955 2,077,065 26,058,020 - 26,058,020 Change in Net Assets 294,190 (557,685) (263,495) (4,996) (268,491) Net Assets at Beginning of Year 1,596,556 363,442 1,959,998 788,196 2,748,194 Net Assets at End of Year $ 1,890,746 $ (194,243) $ 1,696,503 $ 783,200 $ 2,479,703

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