National Nurses United

CALIFORNIA NURSES ASSOCIATION NOTES TO FINANCIAL STATEMENTS (CONTINUED) Note 12 - Regions (Continued) June 30, 2004 Balance Returned Region Balance 2003 Receipts to State Expenses 2004 Region 1 $ 27,110 $ 24,829 $ (2,000) $ (9,847) $ 40,092 Region 2 15,591 21,751 (2,000) (7,187) 28,155 Region 3 13,495 12,973 (5,000) (9,276) 12,192 Region 4 5,191 16,522 (1,000) (6,443) 14,270 Region 5 23,788 35,109 (6,000) (18,004) 34,893 Region 6 72,066 40,564 (5,000) (19,641) 87,989 Region 7 20,087 34,046 (5,000) (15,600) 33,533 Region 8 168,783 104,863 (50,000) (76,832) 146,814 Region 9 103,240 74,295 (51,000) (61,678) 64,857 Region 10 92,519 70,248 (27,000) (59,779) 75,988 Region 11 128,748 73,610 (42,000) (41,114) 119,244 Region 12 117,578 84,289 (37,000 ) (39,694) 125,173 Total $ 788,196 $ 593,099 $ (233,000) $ (365,095) $ 783,200 June 30, 2003 Balance Returned Region Balance 2002 Receipts to State Expenses 2003 Region 1 $ 24,831 $ 17,105 $ (13,000) $ (1,826) $ 27,110 Region 2 16,373 11,343 (11,000) (1,125) 15,591 Region 3 9,454 11,437 (6,000) (1,396) 13,495 Region 4 6,321 13,445 (11,828) (2,747) 5,191 Region 5 14,145 34,917 (17,500) (7,774) 23,788 Region 6 43,685 36,354 - (7,973) 72,066 Region 7 4,004 19,991 - (3,908) 20,087 Region 8 140,064 97,316 (25,000) (43,597) 168,783 Region 9 109,746 74,502 (37,500) (43,508) 103,240 Region 10 111,142 72,239 (35,000) (55,862) 92,519 Region 11 174,336 75,668 (103,200) (18,056) 128,748 Region 12 174,009 82,644 (126,500 ) (12,575 ) 117,578 Total $ 828,110 $ 546,961 $ (386,528) $ (200,347) $ 788,196 CALIFORNIA NURSES ASSOCIATION NOTES TO FINANCIAL STATEMENTS (CONTINUED) Note 13 - Health Care Workers Alliance CNA along with the United Steelworkers of America (USWA) entered into an agreement that established an organizational program known as the Health Care Workers Alliance (Alliance). The purpose of the Alliance is to establish joint organizing projects, including an apprenticeship program, in California and other locations to organize Registered Nurses and other health care professionals by CNA, with the USWA organizing ancillary employees. The agreement calls for CNA to commit staff, offices and other in-kind support and calls for USWA to commit financial and other resources to these projects. CNA received payments and reimbursements from USWA for Alliance activities and programs totaling $52,500 and $1,185,000 during the years ended June 30, 2004, and 2003. Note 14 - Pennsylvania Association of Staff Nurses and Allied Professionals (PASNAP) CNA entered into an agreement with Pennsylvania registered nurses sharing the same goals and objectives as CNA and its members, in helping to establish the Pennsylvania Association of Staff Nurses and Allied Professionals, an unincorporated Association, modeled after the California Nurses Association structure and intended to qualify as a tax exempt organization under Internal Revenue Code section 501(c) (5). Under the Agreement CNA provided PASNAP with administrative, organizational, and accounting support from CNA staff and members plus agreed to advance funds over a 24 month period starting in May 2000 to cover an expected deficit between PASNAP's budgeted receipts and expenditures. During the year ended June 30, 2004 PASNAP agreed to pay back a minimum of $2,000 per month for funds previously advanced until repaid in full. CNA received $24,000 and $4,000 in such payments during the years ended June 30, 2004, and 2003, respectively. The amount that had not been repaid totaled $264,843 and $288,843 at June 30, 2004 and 2003, respectively, and is included in Due from Other Organizations in the Statement of Financial Position. Note 15 - Southern Arizona Nurses Coalition During the year ended June 30, 2003, CNA agreed to assist a group of Arizona registered nurses, known as Southern California Nurses Coalition (SAZNC), in their organizing efforts to create an organization similar in structure to CNA. As part of this assistance CNA is subsidizing certain costs, mainly office rent and general office expenses, in connection with SAZNC's organizing activities. The amounts subsidized were $48,085 and $43,054 during the years ended June 30, 2004 and 2003, respectively, and are included in Activities in the Statement of Activities. Note 16 - Caregivers and Healthcare Employees Union CALIFORNIA NURSES ASSOCIATION NOTES TO FINANCIAL STATEMENTS (CONTINUED) Note 18 - Commitments CNA has leased office space for its five satellite offices in California located in Santa Clara, Sacramento, Fresno, Glendale and San Diego under non-cancelable leases with remaining terms of one to seven years. Additionally, CNA has leased space in Tucson, Arizona. Future minimum rentals under leases at June 30, 2003 have been incorporated into the schedule below. Fiscal Year Ended Operating June 30 Leases 2005 $ 382,857 2006 389,575 2007 392,712 2008 366,334 2009 194,028 &Thereafter 19,778 Total Lease Payments $ 1,745,284 Note 19 - Cash Flow Information During the year ended June 30, 2004, CNA purchased securities worth $199,851, of which $20,597 was purchased using the margin loan. CNA also sold securities for $385,495. Of these proceeds, $298,753 was used to pay down the margin loan. During the year ended June 30, 2003, CNA purchased securities worth $403,042, of which $29,839 was purchased using the margin loan. CNA also sold securities for $364,121. Of these proceeds, $68,715 was used to pay down the margin loan. 2004 2003 Cash Paid for Interest $ 229,736 $ 206,521 CALIFORNIA NURSES ASSOCIATION NOTES TO FINANCIAL STATEMENTS (CONTINUED) The Caregivers and Healthcare Employees Union (CHEU) is a separate, independent, autonomous entity affiliated with CNA under the terms of an Affiliation Agreement entered into by both Organizations. CHEU's purpose is to organize and represent employees of healthcare and related employers for purposes of collective bargaining; advocate on behalf of the interests of CHEU members; and join with other healthcare unions and health advocacy organizations to establish enforceable rights and standards for universal, safe and quality healthcare for all people. CNA provides CHEU with such administrative services reasonably necessary to carry out its duties and responsibilities under terms of the Affiliation Agreement, its Constitution and Bylaws, and law. Such services include, but are not limited to accounting, legal, staff, equipment, supplies, office space and furniture, IT support and research. In return CHEU is required to reimburse CNA for such services rendered by means of the payment of membership dues to CNA, a portion of which shall be returned to CHEU for political action and miscellaneous representational expenses as needed. During the year ended June 30, 2004 CNA received $270,206 in such payments which are included in dues and fees on the Statement of Activities. Note 17 - Contingencies As of the year ended June 30, 2003 CNA was aware of a certain pending litigation, which might have resulted in monetary judgments against the Organization exceeding $100,000. At the time the financial statements were issued it was the opinion of CNA's management and counsel that the likelihood of a substantial damage award against CNA was remote. As of the date of the issuance of the financial statements for June 30, 2004 the matter has been settled with no monetary payment by CNA to the litigant and estimated costs for mediation services of $1,000.

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