77 BRONX RIVER ROAD OWNERS, INC FINANCIAL STATEMENTS ...stillmanmanagement.com/forms/assets/pdfs/77 BRR... · Yonkers, New York 10704 I have audited the accompanying financial statements

77 BRONX RIVER ROAD OWNERS, INC

FINANCIAL STATEMENTS

DECEMBER 31, 2014

PAMELA E KAPLAN CPA, PC


Accountant's Report 1 - 2

Comparative Balance SheetDecember 31, 2014 and 2013 3 - 4

Statement of Additional Paid-in CapitalDecember 31, 2014 5

Comparative Statement of Retained Earnings (Deficit)For the Years Ended December 31, 2014 and 2013 6

Comparative Statement of Revenues and ExpensesFor the Years Ended December 31, 2014 and 2013 7

Comparative Schedule of Supplies, Repairsand MaintenanceFor the Years Ended December 31, 2014 and 2013 8

Comparative Statement of Cash FlowsFor the Years Ended December 31, 2014 and 2013 9

Notes to Financial StatementsDecember 31, 2014 and 2013 10 - 13


PAMELA E. KAPLAN CPA, PCCERTIFIED PUBLIC ACCOUNTANT

POST OFFICE BOX 417155 GARTH ROAD, SUITE A

SCARSDALE, NEW YORK 10583

(914)723-6414FAX (914) 723-8487

To the Stockholders77 Bronx River Road Owners, IncYonkers, New York 10704

I have audited the accompanying financial statements of 77 BronxRiver Road Owners, Inc, which comprise the balance sheet as ofDecember 31, 2014 and the related statements of additionalpaid-in capital, retained earnings (deficit), revenues andexpenses and cash flows for the year then ended and the relatednotes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fairpresentation of these financial statements in accordance withU.S. generally accepted accounting principles; this includes thedesign, implementation and maintenance of internal controlrelevant to the preparation and fair presentation of financialstatements that are free from material misstatement whether dueto fraud or error.

Auditor's Responsibility

My responsibility is to express an opinion on these financialstatements based on my audit. I conducted my audit in accordancewith U.S. generally accepted auditing standards. Those standardsrequire that I plan and perform the audit to obtain reasonableassurance about whether the financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidenceabout the amounts and disclosures in the financial statements.The procedures selected depend on the auditor's judgment,including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. Inmaking those risk assessments the auditor considers internalcontrol relevant to the entity's preparation and fairpresentation of the financial statements in order to design auditprocedures that are appropriate in the circumstances, but not forthe purpose of expressing an opinion on the effectiveness of theentity's internal control. Accordingly, I express no suchopinion. An audit also includes evaluating the appropriatenessof accounting policies used and the reasonableness of significantaccounting estimates made by management as well as evaluating theoverall presentation of the financial statements.

To the Stockholders77 Bronx River Road Owners, Inc

Auditor's Responsibility (Continued)

I believe that the audit evidence I have obtained is sufficientand appropriate to provide a basis for my audit opinion.

Opinion

In my opinion the financial statements referred to above presentfairly in all material respects the financial position of 77Bronx River Road Owners, Inc as of December 31, 2014 and 2013 andthe results of its operations and its cash flows for the yearsthen ended in accordance with accounting principles generallyaccepted in the United States of America.

Scarsdale, New YorkFebruary 27, 2015


COMPARATIVE BALANCE SHEET

DECEMBER 31, 2014 AND 2013

ASSETS

Current AssetsCash - checking accountCash - reserve accounts

Total CashProprietary rents receivableEscrow - real estate taxPrepaid insurancePrepaid New York State corporation

tax

Total Current Assets

PropertyLandBuildingBuilding improvementsImprovements-in-progressEquipment

Less: Accumulated depreciation

Total Property

Other AssetsNCB stockMortgage and equity line of credit

refinancing costs

Total Other Assets

Total Assets

26,137,

163,5,10,6,

361 $516

877626905076

188

26380

40616189

1

, 568.072

,640, 307,469,423

, 188

186.672

16,100385,743

1,613,446

29r1242,044,413

758.809

1.285.604

7,776

64f548

72 . 324

452 .027

16,100385,743

1,286,27568,80515 . 124

1,772,047700.573

1.071 .474

7, 776

71.996

79.772

$ 1.544 .600 $ 1.603.273

The accompanying letter and notes are an integral part of thesefinancial statements.

- 3 -PAMELA E KAPLAN CPA, PC


COMPARATIVE BALANCE SHEET


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICITS

2014

Current LiabilitiesAccounts payable and accrued

expenses $ 42,794 $ 27,184STAR abatements payable 32,983 40,849Prepaid proprietary rents 4,964 4,943Mortgage payable - current portion 17,298 16,486

Total Current Liabilities 98,039 89 , 462

Mortgage payable - non-currentportion 2, Q22f150 2 . 039.448

Total Other Liabilities 2, 022,150 2, 039,448

Total Liabilities 2 , 120,189 2,128,910

Stockholders' Equity (Deficit)Capital stock, $ .01 par value;

authorized 20,000 shares; issuedand outstanding 16,470 shares 165 165

Additional paid-in capital 482,598 466,112Retained earnings (deficit) ( 1, 058,352 ) ( 991,914)

Total Stockholders' Equity(Deficit) ( 575,589^ ( 525,637)

Total Liabilities andStockholders' Equity(Deficit) $ 1 . 544.600 $ 1,603,273




STATEMENT OF ADDITIONAL PAID-IN CAPITAL

DECEMBER 31, 2014

Excess of initial tenant-owners'aggregate capital stock purchase priceover the par value thereon

Proceeds in excess of par value fromsale of shares of repossessed unit

Proceeds from retaining wall claimsettlement

special assessmentCapital improvements20112010200920082007

Portion of proprietary rents applicableto mortgage and equity line of creditindebtedness amortization

20142013201220112010200920082007200620052004200320022001200019991998

Additional Paid-in Capital

$ 25,000

21, 000

50, 000

20,83550,00350,00350,00333.335

16,48611,72110,79910,383

456356743437,009,602.906478659

11

71314,1312,885

059472968

1211

204, 179

182 .419

$ 482.598


- 5PAMELA E KAPLAN CPA, PC


COMPARATIVE STATEMENT OF RETAINED EARNINGS (DEFICIT)

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

2014 2013

Retained Earnings (Deficit) -Beginning of Year $ ( 991,914) $ (877 , 337 )

Excess of (expenses over revenues)before extraordinary item anddepreciation and amortization ( 754) ( 15,915)

Extraordinary itemPrepayment penalty - ( 18,383)

Excess of (expenses over revenues)before depreciation & amortization ( 754) ( 34,298)

Provision for depreciation ( 58,236) ( 57,811)

Provision for amortization ofmortgage and equity line of creditrefinancing costs ( 7,448) ( 22,468)

Excess of (expenses over revenues) ( 66,438) (114,577)

Retained Earnings (Deficit) - Endof Year $ (Ir058 . 352^ $ (991 .914 )




COMPARATIVE STATEMENT OF REVENUES AND EXPENSES


RevenuesProprietary rents $ 462,753 $ 447,825Parking revenues 18,200 20,160Transfer fees 7,000 1,239Laundry, late charges andmiscellaneous income 17,775 11,856

Interest income - 84Portion of proprietary rents appli-cable to amortization of mortgage ( 16,486) ( 11,721;

Total Revenues 489,242 469,443

Fixed Charges and Operating ExpensesFixed Charges

Real estate taxes 105,367 103,219Mortgage interest 98,582 66,282Equity line of credit interest - 24,896Insurance 46,463 46,788Corporation income taxes 1, 038 1,094

Total Fixed Charges 251,450 242,279

Operating ExpensesSalaries, payroll taxes andemployee benefits 80,126 81,739

Fuel 39,293 46,307Utilities 12,988 12,005Water and sewer 15,770 11,562Supplies, repairs and maintenance 54,924 57,498Management services 14,967 14,600Professional services 9,887 10,289Administrative and office expense 10, 591 9,079

Total Operating Expenses 238,546 243, 079

Total Fixed Charges andOperating Expenses 489,996 485,358

Excess (Expenses over Revenues)before Extraordinary Item andDepreciation and Amortization $ ( 754\ ( 15,915




COMPARATIVE SCHEDULE OF SUPPLIES, REPAIRS AND MAINTENANCE


Supplies

Repairs and MaintenanceBoiler, heating and plumbingElevator maintenance and repairsExterminating

Landscaping and treesRoofingIntercom and security

ElectricalDoors and locksWindows

CompactorPainting and plasteringGarage doors

EquipmentFire safetyWelding

Rubbish removalGeneral

Total Supplies, Repairsand Maintenance

$ 6,840 $ 10,854

15,4844,8313,657

12,5241,500

716

8581,051

201

737520298

1,900657

1503.QQQ

11,6805,5543,642

12,199

2,260

1, 371125

4, 3891,050

350

2,047657900

420




COMPARATIVE STATEMENT OF CASH FLOWS


2014 2013

Cash Flows from Operating ActivitiesExcess of (expenses) before extra-

ordinary item and depreciation $ ( 754) $ ( 15,915)Adjustments to reconcile excess of

(expenses) before extraordinary itemand depreciation to cash provided by(used in) operating activities:(Increase) decrease in:Proprietary rents receivable 10,681 ( 6,964)Escrow - real estate tax 7,564 ( 6,516)Prepaid insurance 3,347 ( 178)Prepaid NYS corporation taxes 1,000 ( 535)

Increase (decrease) in:Accounts payable 15,610 ( 5,338)STAR abatements payable ( 7,866) 1,518Prepaid proprietary rents 21 ( 2,174)

Cash Provided by (Used in)Operating Activities 29,603 ( 36,102)

Cash Flows from Investing ActivitiesBuilding improvements additions (327,171) ( 34,739)Improvements-in-progress 68,805 ( 37,805)Equipment additions ( 14,000)NCB stock investment - ( 5,600 )

Cash (Used in) InvestingActivities (272, 366) ( 78, 144)

Cash Flows from Financing ActivitiesProceeds of refinanced mortgage - 2,060,000Refinanced mortgage payments ( 16,486) ( 4,066)Increase in paid-in capital 16,486 11,721Mortgage payments - ( 926,815)Equity line of credit payment - ( 750,000)Mortgage refinancing costs - ( 74,479)Prepayment penalty - ( 18,383)

Cash Provided by FinancingActivities - 297f978

Net (Decrease) Increase in Cash (242,763) 183,732

Cash - Beginning of Year 406,640 222,908

Cash - End of Year $ 163.877 $ 406 . 640


— 9 —PAMELA E KAPLAN CPA, PC


NOTES TO FINANCIAL STATEMENTS


1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization

77 Bronx River Road Owners, Inc., which qualifies as acooperative housing corporation in accordance with Section 216of the Internal Revenue Code, was incorporated in the State ofNew York on June 28, 1984.

The land and building are stated at $401,843 in accordancewith the Internal Revenue Code Section 351 guidelines forvaluation of apartment buildings.

Property

Property is stated at cost. Maintenance, repairs andrecurring replacements are charged to operations as incurred.Expenditures which improve or extend the useful lives ofproperties are capitalized.

The building and building improvements are being depreciatedover their estimated useful lives using the straight-linemethod. Equipment purchases are being depreciated over theirestimated useful lives using an accelerated method.

Estimates

The preparation of financial statements in conformity withgenerally accepted accounting principles requires managementto make estimates and assumptions that affect certain reportedamounts and disclosures. Accordingly, actual results coulddiffer from those estimates.

Concentrations of Credit Risk

Financial instruments that potentially subject the Cooperativeto concentrations of credit risk consist principally oftemporary cash investments. The Cooperative maintains itstemporary cash investments with high credit quality financialinstitutions. At times such amounts may exceed Federallyinsured limits.





MORTGAGE REFINANCING:

On August 28, 2013 the Cooperative refinanced its mortgagewith National Consumer Cooperative Bank (NCB) in the amount of$2,060,000. The ten year mortgage bears interest at a fixedrate of 4.75 percent per annum and matures on September 1,2023. Payments of interest and principal in the amount of$9,594.61 are due monthly pursuant to a 40 year amortizationschedule. On December 31, 2014 the outstanding mortgagebalance was $2,039,448.

Proceeds from the refinanced mortgage were used to (a) satisfythe prior mortgage in the amount of $919,160, (b) satisfy theoutstanding balance of the equity line of credit in the amountof $750,000, (c) finance the prepayment penalty of $18,383,(d) increase the Cooperative's reserve account, (e) invest inthe stock of NCB in the amount of $5,600 as required by theBank and (f) finance mortgage refinancing costs of $74,479.

In addition, the Cooperative obtained a ten year line ofcredit loan in the amount of $1,000,000 with NCB. The line ofcredit bears interest at an adjustable rate of LIBOR plus3.85 percent per annum and matures with the mortgage onSeptember 1, 2023. Installment payments of interest only arerequired on a monthly basis for the first three years withmonthly payments of interest and principal of $100 duethereafter. At December 31, 2014 the line of credit has notbeen utilized.

Mortgage refinancing costs of $74,479 are being amortized overthe life of the mortgage.

NCB STOCK:

At December 31, 2014 the Cooperative has an investment in NCBClass B capital stock in the amount of $7,776. In 2010 theCooperative became a member of the Bank with an investment of$2,176. An additional investment of $5,600 was required atthe mortgage refinancing in 2013.

NCB will return this investment to the Cooperative at maturityof the mortgage.





PROPRIETARY RENTS:

Proprietary rents charged to stockholders include funds usedto amortize the mortgage. The mortgage amortization amountreduces the Cooperative's proprietary rents revenue andincreases its additional paid-in capital. Accordingly, thecost basis of each stockholder's unit is increased by his orher proportionate share of the portion of proprietary rentspayments which are being used to amortize the mortgage.

For the years ended December 31, 2014 and 2013 mortgageamortization was $16,486 and $11,721, respectively.

On March 1, 2014 proprietary rents assessed were increased4 percent. The following amounts were billed:

Proprietary rents $ 462,753 $ 447,825

BUILDING IMPROVEMENTS AND IMPROVEMENTS-IN-PROGRESS:

In 2014 building improvements were increased $327,171 for(a) the retaining wall project in the amount of $215,304,(b) guardrail for the retaining wall in the amount of $32,000,(c) driveway paving in the amount of $45,000, (d) renovationof the building stairs in the amount of $9,000, (e) renovationof the lobby in the amount of 19,667 and (f) new mailboxes inthe amount of $6,200.

In 2013 building improvements were increased $34,739 for(a) gas line conversion additional costs in the amount of$2,795, (b) new fire doors in the amount of $14,470, (c) amagnetic door holder in the amount of $550, (d) outdoorspotlights in the amount of $1,600, (e) new windows in theamount of $5,150, (f) new granite steps in the amount of$2,723, (g) new trees and shrubbery in the amount of $1,951,(h) new exhaust fans in the amount of $1,800 and (i) newfencing in the amount of $3,700.

At December 31, 2013 improvements-in-progress were $68,805 forretaining wall project expenditures.





(6) REAL ESTATE TAXES:

Real estate tax expense is reported at full assessed amountswithout reduction for the New York State School Tax Relief(STAR) Program abatements which are directly credited to thequalifying stockholders. Current liabilities include $32,983and $40,849 of credits payable to stockholders by theCooperative at December 31, 2014 and 2013, respectively.

(7) CORPORATION INCOME TAXES:

The Cooperative is subject to Federal and New York Stateincome taxes. No provision was required for Federal incometaxes. New York State corporation taxes were providedbased on capital at reduced rates applicable to cooperativehousing corporations.

The 2014 tax provision was comprised of Federal income tax of$0 and New York State corporation tax of $1,038 and the 2013tax provision was comprised of Federal income tax of $0 andNew York State corporation tax of $1,094.

(8) FUTURE MAJOR REPAIRS AND REPLACEMENTS:

The Cooperative has not conducted a study to determine theremaining useful lives of the components of common propertyand current estimates of costs of major repairs andreplacements that may be required in the future. The Boardhas also not developed a plan to fund those needs. Whenreplacement funds are needed to meet future needs for majorrepairs and replacements the Cooperative has the right toincrease regular assessments, pass special assessments ordelay major repairs and replacements until funds areavailable. The effect on future assessments has not beendetermined at this time.

Notwithstanding the foregoing the Cooperative performsnecessary capital improvement projects and preventivemaintenance on an ongoing, as needed basis and finances samefrom the reserve fund, operating account or via maintenanceincreases or assessments. Furthermore, the Cooperative hasperformed capital improvements during both the current andprior years.


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77 BRONX RIVER ROAD OWNERS, INC FINANCIAL STATEMENTS ...stillmanmanagement.com/forms/assets/pdfs/77 BRR... · Yonkers, New York 10704 I have audited the accompanying financial statements