AMERICAN WELDING SOCIETY, INC., AND AWS FOUNDATION NOTES TO COMBINED FINANCIAL STATEMENTS DECEMBER 31, 2015 Summary of endowment assets at December 31, 2015: Temporarily Permanently Unrestricted Restricted Restricted Total Cash $ 661,571 $ - $ - $ 661,571 Accounts receivable - 263 - 263 Investments 25,638,059 16,085,114 6,836,153 48,559,326 Property and equipment, net 119,962 - - 119,962 Prepaid expenses 20,819 - - 20,819 Liabilities (1,192,518) - - (1,192,518) Total endowment assets $ 25,247,893 $ 16,085,377 $ 6,836,153 $ 48,169,423 Funds with Deficiencies From time to time, the fair value of assets associated with individual donor restricted endowment funds may fall below the level that the donor requires the Foundation to retain as a fund of perpetual duration. There were no such deficiencies in the endowment funds as of December 31, 2015. Return Objectives and Risk Parameters The Foundation has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. The Foundation expects its endowment funds, over time, to provide a rate of return in excess of the principal. Actual returns in any given year may vary. Strategies Employed for Achieving Objectives To satisfy its long-term rate-of-return objectives, the Foundation relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). Spending Policy and How the Investment Objectives Relate to Spending Policy The Foundation has a policy of appropriating for distribution each year 5 percent of its endowment fund's value over the prior 12 months through the calendar year-end preceding the fiscal year in which the distribution is planned. In establishing this policy, the Foundation considered the long-term expected return on its endowment. Accordingly, over the long term, the Foundation expects to maintain the purchasing power of the endowment assets held in perpetuity or for a specified term as well as to provide additional real growth through new gifts and investment return. 13. EMPLOYEE BENEFIT PLAN The Organizations have a simplified employee pension plan for all full-time employees. Full-time employees are eligible for participation in the plan the first day of the month after they are employed. Effective June 1, 2008, the Organizations will contribute a maximum of 8% of the employees’ base salary, composed of a 4% initial contribution and a match up to 4% of an employee’s voluntary contribution. The Organizations made contributions totaling approximately $693,000 during the year ended December 31, 2015. 14. EMPLOYMENT AGREEMENT AWS entered into an employment agreement with its Executive Director on November 13, 2012 for a term of three years. The first year commencing January 1, 2013. The Organizations will provide certain benefits for the period set forth in the agreement. An amendment to the employment agreement was signed in 2014 to include a retirement plan and extend the term until 2017. 56 WELDING JOURNAL / JUNE 2016
Welding Journal | June 2016
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