2014 Financials. April 17, 2015 Salem, Oregon

Transcription

1 2014 Financials April 17, 2015 Salem, Oregon

2 OREGON ASSOCIATION OF REALTORS REPORT TO MANAGEMENT YEAR ENDED DECEMBER 31, 2014

3 BOTTAINI, GALLUCCI & O'HANLON, P.C. ACCOUNTANTS & CONSULTANTS 1500 NE Irving St., Suite 440 PHONE: (503) Portland, OR FAX: (503) Home Page: To the Executive Committee and Management Oregon Association of Realtors Salem, Oregon In planning and performing our audit of the consolidated financial statements of the Oregon Association of Realtors as of and for the year ended December 31, 2014 in accordance with auditing standards generally accepted in the United States of America, we considered the Oregon Association of Realtors' internal control over financial reporting (internal control) as a basis for designing auditing procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the consolidated financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Association's internal control. Accordingly, we do not express an opinion on the effectiveness of the Association's internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as discussed below, we identified certain deficiencies in internal control that we consider to be significant deficiencies. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency or combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the organization's consolidated financial statements will not be prevented or detected and corrected on a timely basis. We did not identify any deficiencies in internal control that we consider to be material weaknesses. A significant deficiency is a deficiency or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the following deficiencies in Oregon Association of Realtors' internal control to be significant deficiencies: OREGON SOCltTY OF CERTIFIED PUBLIC ACCOUNTANTS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS - PCPS \f1][i)~!

4 Preparation of Full Disclosure Financial Statements Oregon Association of Realtors March 10, 2015 Page 2 Creating full disclosure financial statements including footnote disclosures, involves two necessary steps. First, management must identify and analyze the risks of material misstatement to the Association's audited financial statements. Second, management must determine how to control those identified risks. By doing this process, management maintains internal control over the consolidated financial statements and helps ensure that they are properly presented. In order to perform this process, an organization would need sophisticated staff knowledgeable about disclosure requirements. Small organizations often do not have personnel with such expertise so they delegate that role to their auditors. Oregon Association of Realtors has elected to have its auditors prepare the consolidated financial statements and disclosures. This delegation is a significant deficiency common to small nonprofit organizations. At this point, given your organization, no action is required. Intercompany Accounts Intercompany accounts between entities need to balance. The intercompany balances were different prior to our adjustments. We recommend the Association create a spreadsheet to reconcile the intercompany accounts. A review of intercompany balances should be done monthly to make sure the accounts are reconciled and the financial statements are accurate. The Association should record funds collected or paid for intercompany items as an intercompany liability or asset; not as revenue or expenses. More detail should be required for intercompany transactions to ensure proper recording of the transactions and proper authorization. Proper reconciliations need to be done and reviewed. In 2015, the Association has new accounting personnel who is addressing the above recommendations and is currently taking steps to remedy the intercompany account issues. Budget The usefulness of a budget is found by closely approximating expected expenditures and receipts to the actual amounts. While reviewing the budgeted amounts to amounts actually incurred, it was found that many of the revenues and expenses were over budgeted, while many were under budget. The Association currently does not have a budget for the Oregon Realtors Political Action Committee and the Oregon Association of Realtors Home Foundation. We recommend the Association create a budget in compliance with industry guidelines for each entity. Due to the transition of finance staff in 2014, the Association did not have a budget team in place and the budget was created on a best guess scenario with the staff available. For 2015, the Association has the appropriate staff that has created the budget and has implemented strong budgeting procedures and processes.

5 Oregon Association of Realtors March 10, 2015 Page 3 Rental Income Rent paid to the Oregon Realtors Plaza, LLC (LLC) should be at the proper amount each month. While reviewing rental income for the LLC we found two renters that were missing July rent. After further review, it was found one payment was incorrectly inputted in QuickBooks while the other renter did not pay rent in July. The LLC did not increase the rent according to the rental agreements. This happened due to a change in accounting personnel. In the future, every effort should be made to insure all renters are making the correct monthly payments according to the lease agreement. The LLC will send out a letter stating rent will increase if the LLC does not invoice the renter monthly. The finance director will make sure the correct rent is paid by each renter monthly and will make a best effort attempt to collect the amount due. We will work with the accounting personnel to ensure that the above recommendations are implemented. This communication is intended solely for the information and use of Management, the Executive Committee and others within the Association, and is not intended to be and should not be used by anyone other than these specified parties. Bottaini, Gallucci & O'Hanlon, PC Portland, Oregon March 10, 2015

6 OREGON ASSOCIATION OF REALTORS CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2014 AND 2013

7 OREGON ASSOCIATION OF REALTORS CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2014 AND 2013 TABLE OF CONTENTS Page Independent Auditors' Report 1-2 Consolidated Financial Statements Consolidated Statements of Financial Position 3-4 Consolidated Statements of Activities 5 Consolidated Statements of Cash Flows 6 Notes to the Consolidated Financial Statements 7-19 Independent Auditors' Report on Supplementary Consolidating Information 20 Supplementary Financial Information Consolidated Schedule offinancial Position 21 Consolidated Schedule ofactivities 22 Consolidated Schedules of Operating Expenses 23

8 1500 NE Irving St., Suite 440 Portland, OR BOTTAINI, GALLUCCI & O'HANLON, P.C. ACCOUNTANTS & CONSULTANTS PHONE: (503) FAX: (503) Home Page: Independent Auditors' Report To the Board of Directors and Management Oregon Association ofrealtors Salem, Oregon We have audited the accompanying consolidated financial statements ofthe Oregon Association ofrealtors (a non-profit organization), which comprise the consolidated statements offinancial position as ofdecember 31, 2014 and 2013, and the related consolidated statements ofactivities and cash flows for the year then ended, and the related notes to the consolidated financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation ofthese consolidated financial statements in accordance with accounting principles generally accepted in the United States ofamerica; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States ofamerica. Those standards require that we plan and perform the au.ditto obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors' judgment, including the assessment ofthe risks ofmaterial misstatement ofthe consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation ofthe consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness ofthe entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation ofthe consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. c"jf OREGON SOCIETY Of CHTlflED PUHi( ACCOUNTANTS ' AMER ICAN INSTITUTE Of CERTlf led ru BLI C ACCOUNTANTS - rcrs 61E'

9 BOTTAINI, GALLUCCI & O'HANLON, P.C. ACCOUNTANTS & CONSULTANTS 1500 NE Irving St., Suite 440 PHONE: {503) Portland, OR FAX: (503) Home Page: Opinion Independent Auditors' Report (continued) In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Oregon Association ofrealtors as of December 31; 2014 and 2013, and the changes in their net assets and their cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Bottaini, Gallucci & O'Hanlon, P.C. Portland, Oregon March 10, 2015 c~. OREGON sornty Of CERTlfl(D PU BLIC ACCOUNTANTS. A!.HRICAN INSTITUTE Of CERTIFIED rublic AC COUNT ANTS - rcrs ~

10 OREGON ASSOCIATION OF REALTORS 3 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION YEARS ENDED DECEMBER 31, 2014 AND 2013 ASSETS Current assets Cash and cash equivalents Cash and cash equivalents held in investments Investments Contributions receivable Accounts receivable Prepaid expenses and deposits Other receivables Current portion ofdeferred lease incentive $ 701,074 1,881, ,840 35,250 28,992 55,873 23,244 $ 740,423 1,022, ,096 22,725 19,323 62,866 17,480 Total current assets 3,003,226 2,160,267 Property and equipment Land Building and improvements Furniture and equipment Less accumulated depreciation 388,730 5,120, ,760 5,855,126 1,246, ,730 5,120, ,657 5,853,023 1,100,585 Total property and equipment Other assets Investment in Oregon Real Estate Forms, LLC Total other assets Total assets 4,609,095 4,752,438 75,276 60,418 75,276 60,418 $ 7,687,597 $6,973,123 See Accompanying Notes and Independent Auditors' Report.

11 OREGON ASSOCIATION OF REAL TORS 4 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (continued) YEARS ENDED DECEMBER 31, 2014 AND 2013 LIABILITIES AND NET ASSETS Current liabilities Current portion of note payable $ 112,405 $ 95,237 Accounts payable 12,834 62,656 Deferred revenue 826, ,203 Region 12 Strategic Funds liability 102, ,283 Accrued vacation payable 69,819 50,273 Pension liability 25,488 15,236 Tenant deposits 10,452 10,452 Due to National Association ofrealtors 1,395 3,227 Total current liabilities 1,160, ,567 Note payable - net of current portion 2,897,527 3,007,212 Total liabilities 4,058,257 3,910,779 Net assets Umestricted net assets 3,591,340 3,033,844 Temporarily restricted net assets 38,000 28,500 Total net assets 3,629,340 3,062,344 Total liabilities and net assets $ 7,687,597 $6,973,123 See Accompanying Notes and Independent Auditors' Report.

12 OREGON ASSOCIATION OF REALTORS 5 CONSOLIDATED STATEMENTS OF ACTIVITIES YEARS ENDED DECEMBER 31, 2014 AND Unrestricted net assets WJ Operating revenues and support Dues $ 2,473,218 $ 2,338,654 Rental income 258, ,046 Contributions 221, ,818 Adve11ising and sponsorships 92,806 77,888 Registration 87,436 66,772 Gain from Oregon Real Estate Forms, LLC 69,948 63,579 Event income 67,564 60,113 Seminar packages and webinars 29,734 13,859 Subscription fees 25,875 24,546 Miscellaneous 22,322 19,076 Local boards strategic planning 13,500 Multi board administration fees 9,440 15,039 Capital gain income 9,009 4,670 Interest and dividend income 8,691 9,487 Realized gain (loss) on sale ofinvestments 6,959 3,373 Unrealized gain (loss) on investments (9,414) 18,022 Insurance commission 7,204 Grants 5,000 In-kind contributions 650 Net assets released from restrictions 28,500 29,550 Total operating revenues and support 3,415,251 3,151,346 Operating expenses Program services 2,055,592 2,164, 168 General and administrative 595, , 189 Grants 168, ,925 Event expenses 31,366 24,860 Total operating expenses 2,851,123 2,871,142 Increase (decrease) in net assets from operating activities 564, ,204 Other income (expense) Other non-operating activities (6,632) (8,194) Issues mobilization income 95,966 Legal action dues allocation 37,500 Gain on sale ofassets 230 Issues mobilization expense (93,299) Total other income (expense) (6,632) 32,203 Increase (decrease) in unrestricted net assets 557, ,407 Temporarily restricted net assets Sponsorships 38,000 28,500 Net assets released from restrictions (28,500) (29,550) Increase (decrease) in temporarily restricted net assets 9,500 (1,050) Change in net assets 566, ,357 Net assets at beginning of year 3,062,344 2,750,987 Net assets at end ofyear $ 3,629,340 $ 3,062,344 See Accompanying Notes and Independent Auditors' Report.

13 OREGON ASSOClATION OF REAL TORS 6 CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2014 AND Cash flows from operating activities Change in net assets $ 566,996 $ 311,357 Adjustments to reconcile change in net assets to net cash provided (used) by operating activities Depreciation 145, ,752 Deferred lease incentives and lease commissions 17,480 22,059 Realized and unrealized (gain) loss on investments 2,455 (21,395) Dividend reinvested (9,239) 88,160 Net income from Oregon Real Estate Forms, LLC (69,948) (63,579) (Increase) decrease in Contributions receivable (12,525) (4,575) Accounts receivable (9,669) 62,951 Prepaid expenses and deposits 6,993 28,080 Other receivables (23,244) Increase (decrease) in Accounts payable (49,822) 30,840 Deferred revenue 277,060 75,443 Region 12 Strategic Funds liability (15,209) 117,283 Accrued vacation payable 19,546 1,603 Pension liability 10,252 15,236 Tenant deposits 8,424 Due to National Association ofrealtors (1,832) 3,227 Net cash provided (used) by operating activities 854, ,866 Cash flows from investing activities Proceeds from sale of investments 6,365,702 3,394, 115 Distributions from Oregon Real Estate Forms, LLC 55,090 46,293 Purchase of property and equipment (2, 103) (313,499) Net transfers to investment accounts (850,000) Purchase of investments (6,370,261) (3,436, 132) Net cash provided (used) by investing activities (801,572) (309,223) Cash flows from financing activities Payments on note payable (92,517) (89,896) Net cash provided (used) by financing activities (92,517) (89,896) Net increase (decrease) in cash and cash equivalents (39,349) 418,747 Cash and cash equivalents at beginning ofyear 740, ,676 Cash and cash equivalents at end ofyear $ 701,074 $ 740,423 Supplemental disclosures of cash flow information Cash paid during the year for interest $ 158,472 $ 255,238 Cash paid during the year for taxes $ 150 $ 150 See Accompanying Notes and Independent Auditors' Report.

14 OREGON ASSOCIATION OF REALTORS 7 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2014 AND 2013 Note 1- Nature of Activities and Summary of Significant Accounting Policies Nature ofactivities The Oregon Association of Realtors (Association) is a nonprofit organization incorporated on April 5, The primary purpose ofthe Association is to enhance its members' freedom and ability to conduct their individual real estate related businesses ethically and competently and to promote and preserve private property rights. The Association operates in and serves its member realtors in the State oforegon. Oregon Realtors Political Action Committee The Oregon Realtors Political Action Committee (PAC) was established to allocate and disburse funds to those candidates for public office who are supportive of the real estate industry, in order to assist the Association and its members to more effectively achieve political goals. The Board ofdirectors of the Association controls the PAC through the appointment ofthe PAC trustees. Oregon Realtors Plaza, LLC The Oregon Realtors Plaza, LLC (LLC) was established in July The Association is the sole member. The primary purpose ofthe LLC is to acquire, finance, own, lease and operate the building and all related real property. Oregon Association ofrealtors Home Foundation The purpose of the Oregon Association ofrealtors Home Foundation (Foundation) is to create, expand and encourage home ownership opportunities for Oregonians at or below local median income. The Foundation promotes awareness of affordable housing issues by educating Oregonians and their representatives about the barriers to home ownership and the resources needed to increase housing affordability. Basis of Accounting The financial statements of the Association have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and, accordingly, reflect all significant receivables, payables and other liabilities. Principles of Consolidation The consolidated financial statements are presented using the accrual basis of accounting. Consolidated financial statement presentation follows the recommendation of the FASB Accounting Standards Codification (ASC). These consolidated financial statements include the accounts ofthe Oregon Association of Realtors, Oregon Realtors Political Action Committee, Oregon Realtors Plaza, LLC and the Oregon Association of Realtors Home Foundation. All material inter-entity balances and transactions have been eliminated. See Independent Auditors' Report.

15 OREGON ASSOCIATION OF REALTORS 8 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2014 AND 2013 Note 1 - Nature of Activities and Summary of Significant Accounting Policies (continued) Basis of Presentation The Association reports information r~garding its financial position and activities according to three classes ofnet assets; unrestricted net assets, temporarily restricted net assets and permanently restricted net assets depending on the existence and/or nature of any donor restrictions. These net asset classifications are described as follows: Unrestricted Net Assets - not subject to donor-imposed restrictions or stipulations as to purpose or use. Unrestricted net assets may be designated for specific purposes by actions of the Board of Directors. Temporarily Restricted Net Assets - subject to donor-imposed restrictions or stipulations that may be fulfilled by actions of the Association to meet the stipulations or become unrestricted at the date specified by the donor or by the passage oftime. Permanently Restricted Net Assets - subject to donor-imposed restrictions or stipulations that they be retained and invested permanently by the Association. The Association had no permanently restricted net assets as of December 31, 2014 and Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date ofthe financial statements. Estimates also affect the reported amounts ofrevenues and expenses during the reporting period. Accordingly, actual results could differ from these estimates. Cash and Cash Equivalents The Association and its controlled entities consider all highly liquid investments having initial maturities of three months or less to be cash equivalents. Fair value approximates carrying value due to the initial maturities ofthe instruments being three months or less. See Independent Auditors' Report.

16 OREGON ASSOCIATION OF REAL TORS 9 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2014 AND 2013 Note 1- Nature of Activities and Summary of Significant Accounting Policies (continued) Receivables The Association receives unconditional promises to provide future cash receipts. Pledges receivable consist ofamounts awarded but not yet paid. There were no long term contributions receivable at December 3 1, 2014 and Accounts receivable are stated at the amount management expects to collect from unpaid balances. Accounts receivable are recognized as services are provided. At the discretion ofmanagement, certain delinquent accounts may be assessed finance changes, which are recognized as income when charged. Interest is not assessed. The Association grants credit on an unsecured basis. The Association uses the allowance method to account for uncollectible accounts receivable. The Association periodically evaluates the balances in the various aging categories as well as the status ofany significant past due accounts to determine ifany balances are uncollectible. The allowance for doubtful accounts is estimated by management based on various factors, including past history and current economic conditions. All balances are deemed collectable by management and therefore, no allowance for doubtful accounts is deemed necessary at December 31, 2014 and Balances are written off when they are determined uncollectible. Ifamounts become uncollectible, they will be charged to operations when that determination is made. The aging analysis ofpast due receivables as ofdecember 31, 2014 is as follows: Over Total days days past 90 past Total ~ast due due days due Current receivables Total SQ SQ $ $ $ $ The aging analysis ofpast due receivables as ofdecember 31, 2013 is as follows: Over Total days days past 90 past Total ~ast due due days due Current receivables Total $349 Sil S2.Q1 $1125Q $ $ See Independent Auditors' Report.

17 OREGON ASSOCIATION OF REALTORS 10 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2014 AND 2013 Note 1- Nature of Activities and Summary of Significant Accounting Policies (continued) Property and Equipment Property and equipment, consisting ofa commercial office building, building improvements, furniture and equipment are stated at cost and are depreciated or amortized over the estimated useful lives of thirty-nine years for the office building, seven to thirty-nine years for building improvements, and three to seven years for furniture and equipment using the straight-line method. Major additions to property and equipment in excess of$1,000 are capitalized. Repairs and maintenance charges are expensed as incurred. Depreciation expense for the years ended December 31, 2014 and 2013 was $145,446 and $142,752, respective I y. Investments Investments in fixed income and equity mutual funds are recorded at fair value and are considered as available for sale. Unrealized gains and losses are included in the changes in net assets in the Consolidated Statements of Activities. The Association maintains certificates ofdeposit that have been issued by various financial institutions with the expectation of keeping the individual deposits under the federally insured limits. All of the certificates mature within the next nine months and interest rates range from 0.300% to 0.700%. The Association invests excess cash not expected to be used in current operations in money market funds, mutual funds and certificates of deposit. Revenue Recognition The Association's membership is primarily comprised ofrealtors. Membership dues are recognized as revenue in the period to which they relate. Cash received from members for dues and services relating to future periods are recorded as deferred revenue. Contribution Recognition Contributions, which include unconditional promises to give, are recognized in the period received. The Association reports gifts and cash as restricted support if they are received with donor stipulations that limit the use ofthe donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and are reported in the Consolidated Statements of Activities as net assets released from restrictions. Temporarily restricted contributions are ~lassified as unrestricted when the restriction is met in the same fiscal year the contribution is received. See Independent Auditors' Report.

18 OREGON ASSOCIATION OF REALTORS 11 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2014 AND 2013 Note 1- Nature of Activities and Summary of Significant Accounting Policies (continued) Contribution Recognition (continued) The Association reports gifts ofproperty and equipment as unrestricted support unless explicit donor stipulations specify how the donated assets must be used. Gifts of long-lived assets with explicit restrictions that specify how the assets are to be used and gifts ofcash or other assets that must be used to acquire long-lived assets are reported as restricted support. Absent explicit donor stipulations regarding the length oftime these long-lived assets must be maintained, expirations ofdonor restrictions are reported when the donated or acquired long-lived assets are placed in service. Tax Status The Association is a tax-exempt organization under Section 501(c)(6) ofthe Internal Revenue Code and similar state provisions. The Association includes a portion ofthe operations ofthe LLC as unrelated business income. The Association's unrelated business activities resulted in no taxable income in 2014 and The Oregon Association ofrealtors Home Foundation is exempt from income taxes under Section 50l(c)(3) ofthe Internal Revenue Code and similar state provisions..the Oregon Realtors Political Action Committee is exempt from income taxes under Section 527 of the Internal Revenue Code and similar state provisions, but is taxed on interest and dividends earned from its interest-bearing accounts and investments. Management does not believe the Association or affiliated entities have any tax positions that do not meet the more likely than not criteria. Accordingly, the Association has not recorded any liability for uncertain tax positions to its major tax jurisdictions. The Association did not record any penalty or interest related to its tax positions and, if any were recorded, those amounts would be included in general and administrative expenses. The tax years that remain open for examination by the appropriate taxing authorities for the Association as ofdecember 31, 2014 are 2013, 2012 and 2011, generally three years from the date the return was filed. Total state taxes paid by for the Oregon Realtors Political Action Committee for the years ended December 31, 2014 and 2013 were $150 and $150 respectively. Advertising The Association expenses all non-direct advertising costs as incurred. Total advertising expenses for the years ended December 31, 2014 and 2013 were $8 99 and $8, 184 respectively. See Independent Auditors' Report.

19 OREGON ASSOCIATION OF REALTORS 12 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2014 AND 2013 Note 1 - Nature of Activities and Summary of Significant Accounting Policies (continued) Pension Plan The Association has a 401 (k) profit sharing plan for all eligible employees. Employees are eligible to participate in the plan ifthey have been employed by the Association for one year and have attained age 21. Under the plan, eligible employees may elect to defer a percentage oftheir salary, from one percent up to fifteen percent. The Association may make matching contributions to the plan of 3% and the Association may make additional profit sharing contributions on a quarterly basis. Total Association contributions to the retirement plan for the years ended December 31, 2014 and 2013 were $41,076 and $40,278 respectively. In-Kind Contributions The Association records various types ofin-kind contributions. Contributed services are recognized at fair market value if the services received (a) create or enhance long-lived assets or (b) require specialized skills and are provided by individuals processing those skills and (c) the services would typically need to be purchased if not provided by donation. Contributions of tangible assets are recognized at fair market value when received. Staff time was donated but not recognized since it was not deemed specialized. The Foundation received various items from its members for its annual auction fund raiser held as part ofthe Taste of Portland. These donations are not recorded in the consolidated financial statements. The Association also received in-kind donations ofoffice equipment in In-kind contributions for the years ended December 31, 2014 and 2013 were $0 and $650 respectively. Comparative Financial Statements The consolidated financial statements include certain prior-year summarized comparative information in total but not by organization. Such information does not include sufficient detail to constitute a presentation in accordance with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Association's consolidated financial statements for the year ended December 31, 2013, from which the summarized information was derived. See Independent Auditors' Report.

20 OREGON ASSOCIATION OF REALTORS 13 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2014 AND 2013 Note 2 - Fair Value Measurements The fair value of financial assets and liabilities is measured according to the Fair Value Measurements and Disclosures topic ofthe FASB Accounting Standards Codification (ASC). Fair value is required to be evaluated and adjusted according to the following valuation techniques: Level 1 - Quoted prices (unadjusted) in active markets for identical assets and liabilities. Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable for the asset or liability.. Level 3 - Unobservable inputs for the asset or liability, including situations where there is little, if any, market activity for the asset or liability. Investments consist of only level 1, as of December 31, 2014 and 2013 as follows: 2014 Total DescriQtion of Securities Fair Value Level 1 Mutual funds ~276,840 $276,840 Total investments $ $ Total Descri(!tion of Securities Fair Value Level 1 Mutual funds $275,096 $275,096 Total investments $215iQ26 $ The fair value of assets measured on a recurring basis is the market value based on quoted market prices, when available, third-party pricing services for the same or similar investment, or market prices provided by recognized broker dealers. If listed prices or quotes are not available, fair value is based upon externally developed models that us e unobservable inputs due to the limited market activity ofthe instrument. Fair value of the Association's other financial instruments approximate their carrying amounts because the terms are similar to market terms. See Independent Auditors' Report.

21 OREGON ASSOCIATION OF REALTORS 14 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31,-2014 AND 2013 Note 3 - Investments Investments stated at fair value as ofdecember 31, 2014 and 2013 consist of the following: Description of Securities FMV Cost FMV Cost Certificates ofdeposit $1,047,462 $1,047,129 $ 786,940 $ 786,766 Nfoney1narketfunds 834, , , ,314 Nfutual funds 276, , , ,955 Cash Total investments $2,158,123 $ ~1) $11267,135 Investment gain during the years ended December 31, 2014 and 2013 include the following: Capital gain dividend income $ 9,009 $ 4,670 Interest and dividends 8,691 9,487 Realized gains 6,959 3,373 Investment fees (3,661) (2,838) Unrealized gain (loss) (9,414) 18,022 Net investment gain $1 L584 $ Note 4 - Concentrations of Credit Risk Financial instruments which potentially subject the Association to concentrations of credit risk consist principally of cash and cash equivalents, certificates of deposit and investments. Throughout the year, the Association's cash and cash equivalents balances include amounts that are not insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA). Cash balances are insured by the FDIC or NCUA up to $250,000. As of December 31, 2014 and 2013, the Associations uninsured balance was $276,974 and $273,142 respectively. See Independent Auditors' Report.

22 OREGON ASSOCIATION OF REAL TORS 15 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2014 AND 2013 Note 4 - Concentrations of Credit Risk (continued) The Association's investments, including certificates ofdeposit, are exposed to various risks, such as interest rate, market and credit risk. The value, liquidity and related income of these investments are sensitive to changes in economic conditions, and may be adversely affected by shifts in the market's perception of the issuers and changes in interest rates. Due to the level ofrisk associated with certain investments, it is at least reasonably possible that change in the values of investments will occur in the near term and that such changes could materially affect account balances and the amounts reported in the consolidated financial statements. Note 5 - Investment in Oregon Real Estate Forms, LLC The Association is a member of Oregon Real Estate Forms, LLC (OREF) and currently maintains a twenty percent interest in OREF. The purpose ofthe OREF is to develop and market high quality, standardized real estate forms for purchase and use by all real estate licensees in the State of Oregon. The investment in OREF is accounted for using the equity method. Total assets of OREF as of December 31, 2014 and 2013 were $590,065 and $492,628 respectively. Total liabilities of OREF as of December 31, 2014 and 2013 were $216,173 and $193,026 respectively. Total members' equity (deficit) of OREF as of December 31, 2014 and 2013 was $373,892 and $299,602 respectively. Net income, per the tax return, for OREF for the years ended of December 31, 2014 and 2013 was $354,950 and $321,325 respectively. Net income, per the books, for OREF for the years ended December 31, 2014 and 2013 was $349,739 and $317,894 respectively. The Association's share of OREF's equity (deficit) reported in the consolidated financial statements as of December 31, 2014 and 2013 was $75,276 and $60,418 respectively. The change in investment in OREF reported in the consolidated financial statements for the years ended December 31, 2014 and 2013 was $14,858 and $17,286 respectively. Note 6- Note Payable The Association, through the LLC has a note payable to Valley Credit Union in care of Centennial Lending, LLC for the purchase of its office building that was modified on December 5, The note is payable in monthly installments of $21,228 including interest at 4.9% per annum. A final balloon payment of $2,031,828 is due August The loan is secured by the land, building and assignment of rents. See Independent Auditors' Report.

23 OREGON ASSOCIATION OF REALTORS 16 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2014 AND 2013 Note 6 NotePayable (continued) The balance as ofdecember 31, 2014 was as follows: Note payable to Valley Health and Postal Employees Credit Union Less current portion Long-term portion $3,009, ,405 $ Future principal maturities ofthe note payable are as follows: Year ended December 31, Amount 2015 $ 112, , , , ,549 Thereafter 2,400,370 $ The Association incurred note interest expense for the years ended December 31, 2014 and 2013 of $140,992 and $227,187 respectively. Note 7 - Long-Term Rental Leases The Association, through the LLC, leased office space to three tenants on long-term lease agreements. One lease has the option to terminate with 120 days notice or may continue through September 24, This lease can increase or decrease annually based on the Consumer Price Index. One lease expires in October 2016 while another lease expires in April 2018 and both of these leases have the option to renew for up to ten years. Both leases include annual increases of rent ofthree percent. In addition, the tenants are required to pay their pro-rata portion of certain common area costs. Rental income from the leases for the years ended December 31, 2014 and 2013 was $258,017 and $185,046 respectively. See Independent Auditors' Report.

24 OREGON ASSOCIATION OF REALTORS 17 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2014 AND 2013 Note 7 - Long-Term Rental Leases (continued) - Future annual minimum lease payments are as follows: Year ended December 31, Amount 2015 $ 226, , , , ,900 Total $ As part ofthe long-term lease agreements, the Association has offered the tenants allowances for tenant improvements and has paid lease commissions for a total of $233,695. This allowance terminated in These deferred lease incentives are being amortized over the life of the lease. The unamortized deferred lease incentives and lease commissions as ofdecember 31, 2014 and 2013 was $0 and $17,480 respectively. Interest expense for the years ended December 31, 2014 and 2013 was $17,480 and $28,051 respectively. Rental properties are comprised of the following: Land $ 310,984 Buildings and improvements 4,096,509 Furniture and equipment 44,640 Less accumulated depreciation 778,185 Total $ Note 8 - Functional Allocation of Expenses Expenses by function for the Association for the years ended December 31, 2014 and 2013 was as follows: Program services Member services and grants $2,224,128 $2,289,093 Support services Management and general 595, ,189 Fundraising and events 31,366 24,860 $2,85li123 $2,87Ll12 See Independent Auditors' Report.

25 OREGON ASSOCIATION OF REALTORS 18 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2014 AND 2013 Note 9 - Equipment Leases The Association leased certain office equipment under a 63-month non-cancelable operating lease agreement calling for basic monthly payments totaling $1,717 per month. At the end ofeach successive twelve-month period, the basic monthly payment may increase by a maximum offive percent. There may be additional charges monthly based on the actual usage ofthe equipment and can include property taxes. The lease expired on October 24, The Association leases copier equipment under a 60-month non-cancelable operating lease agreement calling for basic monthly payments totaling $2,000 per month. Monthly payments for the lease can increase depending on the total images printed each month and can include property taxes. At the end of each successive twelve-month period, the basic monthly payment may increase by a maximum of ten percent. The lease will automatically renew for an additional year if at the end ofthe lease agreement the equipment is not returned or a 60 day termination notice is not received. The lease expires July 31, Future minimum rental payments under the non-cancelable operating lease are as follows: Year ended December 31, Amount 2015 $ 26, , ,730 $ The Association also leases a postage machine on an operating lease that is paid every three months, and is not long-term. The Association also leased office space and storage on a month-to-month basis. Total rental expense for the years ended December 31, 2014 and 2013 was $46,010 and $54,154 respectively. See Independent Auditors' Report.

26 OREGON ASSOCIATION OF REALTORS 19 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2014 AND 2013 Note 10- Miscellaneous Income The breakdown of miscellaneous income is as follows: Commissions Reinstatement fees Contract services Royalties Mailing lists and CD's Late fee income Total miscellaneous income $11,246 5,000 4,086 1, $ $ 784 6,950 4, , $ Note 11 Subsequent Events Management has evaluated subsequent events through March 10, 2015, the date on which the financial statements were available to be issued. Management is not aware of any subsequent events that require recognition or disclosure in the financial statements. Note 12 - Temporarily Restricted Net Assets Temporarily restricted net assets as of December 31, 2014 and 2013 totaled $38,000 and $28,500 respectively. These amounts consisted ofdonations to be specifically used for the Foundation's annual Taste of Portland event totaling $10,500 and $13,000 at December 31, 2014 and 2013, and for the annual golf tournament of $8,500.and $15,500 at December 31, 2014 and 2013 respectively. The Association also received pledged donations to sponsor the 2015 Sunriver Convention totaling $19,000 at December 31, See Independent Auditors' Report.

27 SUPPLEMENTARY FINANCIAL INFORMATION

28 1500 NE Irving St., Suite 440 Portland, OR BOTTAINI, GALLUCCI & O'HANLON, P.C. ACCOUNTANTS & CONSULTANTS PHONE: (503) FAX: (503) Home Page: Independent Auditors' Report on Consolidating Information To the Board of Directors and Management Oregon Association of Realtors Salem, Oregon We have audited the consolidated financial statements ofthe Oregon Association of Realtors as of and for the years ended December 31, 2014 and 2013, and our report thereon dated March 10, 2015, which expressed an unmodified opinion on those consolidated financial statements, appears on page 1. Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The consolidated information in the consolidated schedule of financial position, consolidated schedule of activities and consolidated schedules of operating expenses are presented for purposes of additional analysis of the consolidated financial statements rather than to present the financial position, results of operations and cash flows of the individual entities and are not a required part ofthe consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The consolidated information has been subjected to the auditing procedures applied in the audits ofthe consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accountirrg and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves and other additional procedures in accordance with auditing standards generally accepted in the United States ofamerica. In our opinion, the consolidating information is fairly stated in all material respects in relation to the consolidated financial statements as a whole. Bottaini, Gallucci & O'Hanlon, P.C. Portland, Oregon March 10, 2015 c~ OREGON SOCIETY OF CERTIFIED rublic ACCOUNTANTS. AM[RICAN INSTITUTE OF CERTIFIED rurnc ACCOUNTANTS - rcrs ~)

29 OREGON ASSOCIATION OF REALTORS 21 CONSOLIDATED SCHEDULE OF FlNANCIAL POSITION VEAR ENDED DECEMBER 31, 2014 ASSETS Oregon Oregon Realtors Association Consolidating Oregon Political Ortgon of Realtors and Association of Action Realtors Home Eliminating Realtors Committee Plaza, LLC Foundation Entries Total Current assets Cash and cash equivalents $ 539,097 $ 72,442 $ 26,471 $ 63,064 $ 701,074 Cash and cash equivalents held in investments 1,856,659 25,294 1,881,953 Investments 276, ,840 Contributions receivable 19,000 16,250 35,250 Accounts receivable 21,678 7,314 28,992 Prepaid expenses and deposits 17,718 35,535 2,620 55,873 Other receivables 23,244 23,244 Due from Oregon Realtors Political Action Committee 4,862 (4,862) Due from Oregon Association of Realtors 9,750 (9,750) Total current assets 2,759,098 97,736 69,320 91,684 (14,612) 3,003,226 Property and equipment Land 388, ,730 Building and improvements 5,120,636 5,120,636 Furniture and equipment 301,120 44, , ,120 5,554,006 5,855,126 Less accumulated depreciation 283, ,634 1,246,031 Total property and equipment 17,723 4,591,372 4,609,095 Other assets Investment in Oregon Real Estate Forms, LLC 75,276 75,276 Investment in Oregon Realtors Plaza, LLC 582,886 (582,886) Due tram Oregon Realtors Plaza, LLC 1,055,163 (1,055,163) Total other assets 1,713,325 (1,638,049) 75,276 Total assets $ 4,490,146 $ 97,736 $ 4,660,692 $ 91,684 $ (1,652,661) $ 7,687,597 LIABILITIES AND NET ASSETS Oregon Oregon Realtors Assoclntion Consolidating Oregon Political Oregon of Realtors nnd Associntion of Action Realtors Home Eliminating Realtors Committee Plaza, LLC Foundation Entries Total Current liabilities Current portion ofnote payable $ 112,405 $ I 12,405 Accounts payable $ 10,575 2,259 12,834 Deferred revenue 826, ,263 Region 12 Strategic Funds liability 102, ,074 Accmed vacation payable 69,819 69,819 Pension liability 25,488 25,488 Tenanl deposits 10,452!0,452 Due to National Association of Realtors 1,395 1,395 Due to Oregon Association of Realtors $ 4,862 $ (4,862) Due to Oregon Association of Realtors Home Foundation 9,750 9,750 Total cmtenl liabilities l,045,364 4, ,116 p4,612) 1,160,730 Note payable net ofcurrent portion 2,897,527 2,897,527 Due to Oregon Association ofrealtors l,055,163 (1,055,163) Total liabilities 1,045,364 4,862 4,077,806 (1,069,775) 4,058,257 Net assets Unrestricted net assets 3,425,782 92, ,886 72,684 (582,886) 3,591,340 Temporarily restricted net assets 19,000 19,000 38,000 Total net assets 3,444,782 92, ,886 91,684 (582,886) 3,629,340 Total liabilities and net assets $ 4,490,146 $ 97,736 $ 4,660,692 $ 91,684 s (1,652,661) $ 7,687,597 See Accompanying Notes and Independent Auditors' Report.

30 OREGON ASSOCJA TION OF REAL TORS 22 CONSOLIDATED SCHEDULE OF ACTIVITIES YEAR ENDED DECEMBER 31, 2014 Oregon Oregon Association Realtors of Consolidating Oregon Political Oregon Realtors and Association Action Realtors Home Eliminating of Realtors Committee Plaza,LLC Foundation Entries Total Unrestricted net assets Operating revenues and support Dues $ 2,473,21 8 $ 2,473,218 Rental income $ 346,301 s (88,284) 258,017 Contributions $ 215,967 $ 25,179 (19,500) 221,646 Advertising and sponsorships 48,860 43,946 92,806 Registration 87,436 87,436 Gain from Oregon Real Estate Fonns, LLC 69,948 69,948 Event income 67,564 67,564 Seminar packages and webiners 29,734 29,734 Subscription fees 25,875 25,875 Miscellaneous 22,322 22,322 Local boards strategic planning 13,500 13,500 Multi board administration fees 9,440 9,440 Capital gain income 9,009 9,009 Interest and dividend income 8, ,691 Realized gain on sale of investment 6,959 6,959 Unrealized gain (loss) on investments (9,4 14) (9,414) Net assets released from restrictions 28,500 28,500 Total operating revenues and support 2,795, , , ,278 (107,784) 3,4 15,251 Operating expenses Program services General and administrative Grants Event expenses 1,465, ,610 44, , ,546 91,387 2, ,000 31,366 (88,284) (19,500) 2,055, , , ,366 Total operating expenses 2,098, , , ,282 (107,784) 2,85 1,123 Increase (decrease) in net assets from operating activities 696,758 (8,994) {110,632) (13,004) 564,128 Other income (expenses) Other non-operating activities Loss from Oregon Realtors Plaza, LLC (6,632) (110,632) 110,632 (6,632) Total other!ncome (expense) (J 17,264) JJ0,632 (6,632) Increase (decrease) in unrestricted net assets 579,494 {8,994) (I ) (13,004) I 10, ,496 Temporarily restricted net assets Sponsorships Net assets released from resttictions 19,000 19,000 (28,500) 38,000 (28,500) Increase (decrease) in temporarily restricted net assets 19,000 (9,500) 9,500 Change in net assets 598,494 (8,994) (110,632) (22,504) l 10, ,996 Net assets at beginning ofyear 2,846, , , ,188 (693,518) 3,062,344 Net assets at end ofyear $ 3,444,782 $ 92,874 $ $ 91,684 $ {582,886l $ 3,629,340 See Accompanying Notes and Independent Auditors' Report.

31 OREGON ASSOCIATION OF REALTORS 23 CONSOLIDATED SCHEDULES OF OPERATING EXPENSES YEAR ENDED DECEMBER 31, 2014 (With summarized infonnation for the year ended December 31, 2013) Oregon Association of Realtors Oregon Realtors Political Action Committee 2014 Oregon Association of Consolidating Oregon Realtors and Realtors Home Eliminating Plaza, LLC Foundation Entries Total 2013 Total Payroll and related expenses $ 944,422 $ 944,422 $ 961,296 Sponsorships, contributions and grants 24,536 $ 210,308 $ 144,000 $ (19,500) 359, ,544 Professional fees 237,794 5, , ,228 Travel 228, , ,319 interest expense $ 158, , ,238 Depreciation and amortization 6, , , ,752 Conventions 104, ,002 Employee benefits 84,040 84,040 83,812 Catering and entertainment 64, , ,096 Taxes and licenses , ,8~6 61,328 Bank and credit card charges 37,304 3, ,662 48,580 53,916 Equipment rental 44,593 44,593 67,890 Utilities 41,575 41,575 34,544 Pension expense 41,076 41,076 40,278 Computer services 38,752 38,752 16,470 Repairs and maintenance ,116 33,221 21,209 Event rental 21,949 21,949 16,274 lnstn1ctor and speaker fees 21,613 21,613 18,839 Copying and printing 19, ,425 21,285 24,270 Supplies and materials 18, ,828 20,300 24,984 Communications 20,162 20,162 22,211 Staff rel;itions and expenses 16,015 i6,015 16,302 Miscellaneous 8,071 4,615 12,686 22,421 Awards and gifts 11, ,239 4,921 Lease commissions 10,701 10,701 36,460 Meeting room rental and materials i0,128 10,128 21,414 Dues and subscriptions 8, ,491 12,954 Postage 5,403 2, ,515 7,089 Insurance 2,940 3,785 6,725 10,935 Jnvestmenl fees 3,661 3,661 2,838 Landscaping 3,559 3,559 5,483 Penalties 2,641 2,641 1,444 Workers compensation insurance 2,354 2,354 3,355 Registration fees 2,081 2,081 16,676 REBAC/student fees 1,900 1,900 1,000 Office rent 89,701 (88,284) i,417 2,1 68 Advertising ,184 $ 2,098,7i 8 224,974 $ 456,933 $ 178,282 $ (107,784) $ 2,851,123 $ 2,871, 142 See Accompanying Notes and Independent Auditors' Report.

32 OREGON ASSOCIATION OF REALTORS COMMENTS AND SUGGESTIONS YEAR ENDED DECEMBER 31, 2014

33

34 BOTTAINI, GALLUCCI & O'HANLON, P.C. ACCOUNT ANTS & CONSULTANTS 1500 NE Irving St., Suite 440 PHONE: (503 ) e-mai l: info@bgocpas.com Portland, OR FAX : (503) : Home Page: March 10, 2015 To John Wallace, CEO Oregon Association of Realtors Salem, Oregon In planning and performing our audit of the consolidated financial statements of Oregon Association of Realtors as of and for the year ended December 31, 2014, in accordance with auditing standards generally accepted in the United States of America, we considered Oregon Association of Realtors' internal control over financial reporting (internal control) as a basis for designing auditing procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the consolidated financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Association's internal control. Accordingly, we do not express an opinion on the effectiveness of the Association's internal control. However, during our audit we became aware of deficiencies in internal control other than significant deficiencies and material weaknesses and matters that are opportunities for strengthening internal controls and operating efficiency. The memorandum that accompanies this letter summarizes our comments and suggestions regarding those matters. We previously communicated to you about the Association's internal control in our letter dated March 10, This letter does not affect our report dated March 10, 2015 on the consolidated financial statements of Oregon Association of Realtors. We will review the status of these comments during our next audit engagement. We have already discussed many ofthese comments and suggestions with various Association personnel, and we will be pleased to discuss them in further detail at your convenience, to perform any additional study of these matters or to assist you in implementing the recommendations. This communication is intended solely for the information and use of management and others within the Association, and is not intended to be and should not be used by anyone other than those specified parties. Very truly yours, Bo~O'Hanlon, P.C.

35

36 Oregon Association of Realtors March 10, 2015 Page 2 Expense Classification GiveSmart and Eventbright expenses were netted against income. Credit card fees should be recorded as its own expense not a reduction of revenue. Expense Reimbursement Receipts Employees need to turn in receipts to verify monthly allowances in order for the allowances to be excluded from income. Ifreceipts are not provided, an allowance is required to be reported as regular compensation. The Association should make sure employees tum in receipts or mileage to justify the allowances given to avoid taxation to the employee. The Association is addressing the above recommendations and is currently taking steps to remedy the issues. Temporarily Restricted Net Assets and Multi Board Administration Fees 2015 sponsorships pledged and received in 2014 should be recorded as a temporarily restricted net asset in a separate account and not as deferred revenue. Multi Board administration fees should be included as income; amounts were incorrectly recorded as income and expenses. Amounts owed to a specific Organization for the Multi Board should be recorded as a liability at year end and not as income and expenses of the Association. Outstanding Checks The Association needs a written policy regarding old outstanding checks and deposits. The cash reconciliations had a few checks still listed as outstanding that were over six months old. While the Association is completing the bank reconciliations, outstanding checks and deposits should be reviewed and investigated. We recommend outstanding checks over six months old be canceled and re-issued, if necessary. Currently the accounting staff is reviewing outstanding checks at the end of each month and investigating any checks that are more than six months old. The finance director plans to bring a motion to the appropriate committee to get a policy in place as soon as possible.

37

38 OAR Budget vs Actual January through December 2014 Dues Billing Jan - Dec 14 2,441,800 Bud~et 2,405,000 $(Over) I Under Budget 36,800 % of Bud~et 102% 1. Legislative Advocacy* 2. Administrative 3. Political Action (ORPAC) 4. Political Affairs* 5. Legal Affairs* 6. Membership Records Maint 7. Association Governance* 8. Marketing & Communication 9. My Realtor Party 10. Board/Association Services* 11. Leadership Development* 12. Education 13. NAR Director Support* 14. NAR Political Support* 15. NAR Liason* 16. Replacement Fund 17. Research & Service Center 18. Home Foundation 19. Website Improvement 20. Commercial Division (179,204) (385,987) (132,782) (47,170) (100,284) (38,614) (259,713) (97,022) (25,906) (76,341) (84,639) (12,582) (45,051) (16,213) (99,250) (13,446) (5,546) (52,367) (21.428) (10,915) (209,720) (287,512) (185,729) (97,670) (150,841 ) (126,022) (277,436) (11 4,009) (60,446) (68,084) (74.780) (69,691) (49,582) (16,408) (82,394) (17,673) (5.484) (58,584) (10,071) 30,516 (98,475) 52,947 50,500 50,557 87,408 17,723 16,987 34,540 (8,257) (9,859) 57,109 4, (16,856) 4,227 (62) 6,217 (21,428) (844) TOTAL (1, 704, 460~ (1,962,136) 257,676 Plaza (316) Unclassified (138,530) (138,530) 85% 134% 71% 48% 66% 31% 94% 85% 43% 112% 11 3% 18% 91% 99% 120% 76% 101% 89% 108% 87% ICASH & RESERVES Cash & Assets Checking/Savine:s 102 US BANK 527, NAR FCU Investment Acct 52, Morgan Stanley MMF 593, Total Checkin2/Savin2s 1,173, Other Current Assets Morl!:an Stanley 1,487, Investment in OREF 75, Investment in OR Plaza LLC 1,638, ,200,684.92!TOTAL CASH & ASSETS 4,374, CASH RESERVES (LIABILITIES) 311 Building Reserve 48, Replacement Fund 58, Contingency Fund- Restricted 500, Risk Reduction Fund 129, Issues Mob Fund- Restricted 148, Lel!:al Action Fund- Restricted 172,876.30!TOTAL CASH RESERVES (LIABILITIES) 1,057 '704.48

39 Maior Variances: 1. Legislative Advocacy* $30,516 Under Budget 2. Administrative ($98,475) Over Budget 3. Political Action (ORPAC) $52,947 Under Budget 4. Political Affairs* $50,500 Under Budget 5. Legal Affairs* $50,557 Under Budget 6. Membership Records Maint $87,408 Under Budget 8. Marketing & Communication $16,987 Under Budget 9. My Realtor Party $34,540 Under Budget 10. Board/Association Services* ($8,257) Over Budget 11. Leadership Development* ($9,859) Over Budget 12. Education $57,109 Under Budi:iet 15. NAR Liason* ($16,856) Over Budget 19. Website Improvement ($21,428) Over Budget Notes: 1 Under budget mostly due to staffing vacancies 2 Over budget mostly due to Professional Contracts in the Accounting and Gov't Affairs Departments 3 Under budget mostly due to budget to fighting some campaigns didn't happen 4 Under budget mostly due to staffing vacancy 5 Income was down from projections in all categories (Reg Fees, Subscription, and Contract), expenses overall were lower than anticipated also. 6 RAMCO a project that we budgeted for not taking place until Expenses were quite lower than budgeted for. 9 Some things that were budgeted for did not happen. 10 Did not earn as much income in Multi Board Mgmt as budgeted, higher expenses for AEI than budgeted 11 Expenses for Leadership Conference were higher than budgeted 12 Webinars provided more income that budgeted for 15 Several expenses came in that were unbudgeted for and travel was a little higher than budgeted 19 Prior Year Budget Item

40 1:30 PM Accrual Basis ORPAC Profit & Loss January through December 2014 Ordinary lncomelexpense Income Hard (Hard Contributions) Soft (Soft Contributions) Jan - Dec , , Total Income 215, Expense EXPENSES (Contributions) BANK FEES Bank Service Charges (Bank Service Charges) Credit Card Fees 2, Total BANK FEES 3, CANDIDATES Candidate Contributions - Hard Candidate Contributions - Soft 124, ,00 Total CANDIDATES 126, LOCAL BOARD REIMBURSEMENT NAR Fair Share PAF 30% I Soft RPAC 30% I Hard 19, , Total Fair Share 68, , Total NAR 68, OFFICE EXPENSES Awards I Promotions Fundraising Office Supplies (Office Supplies) Postage Printing & Production ,00 25 Total OFFICE EXPENSES 3, OTHER Soft Total OTHER PROFESSIONAL FEES (Professional Fees) Consulting (Consulting Expense) Penalty Fee 5,00 2, Total PROFESSIONAL FEES (Professional Fees) 7, PROGRAMS (Program Expense) American Dream Award Dinner 10 Total PROGRAMS (Program Expense) 10 Total EXPENSES (Contributions) 224, Suspense Taxes 15 Total Expense 224, Net Ordinary Income -9, Other lncomelexpense Other Income Interest Income (Interest Income) Other Investment Income Unrealized Gainl(Loss) Invest (Loss or Gain on Market Value) Total Other Investment Income 3.09 Total Other Income Page 1

41 1:30 PM ORPAC Profit & Loss Accrual Basis January through December 2014 Jan - Dec 14 Net Other Income Net Income -8, Page 2

42 1:30 PM 03/08/15 Accrual Basis ORPAC Balance Sheet As of December 31, 2014 Dec31, 14 ASSETS Current Assets Checking/Savings US Bank Total Checking/Savings Other Current Assets Current Asset Morgan Stanley MMA #32298 (Investment Account) Total Current Asset Total Other Current Assets Total Current Assets TOTAL ASSETS LIABILITIES & EQUITY Liabilities Current Liabilities Other Current Liabilities Due to Oar Total Other Current Liabilities Total Current Liabilities Total Liabilities Equity Retained Earnings (Retained Earnings) Net Income Total Equity TOTAL LIABILITIES & EQUITY 25, , , , , , , , , , , , , , , Page 1

43 1:28 PM Oregon Realtors Plaza LLC Profit & Loss Accrual Basis January through December 2014 Jan - Dec 14 Ordinary Income/Expense Income Rental Rental-Offset- Incentive Amorti Total Income Expense Bank Service Charges Insurance Interest Expense Mortgage Total Interest Expense Landscaping Lease Holder - Build Out Postage and Delivery Professional Fees Rent Repairs Building Maintenance Building Repairs Total Repairs Security Services Supplies Office Supplies - Other Total Supplies Taxes Personal Property Taxes Property Total Taxes Telephone Utilities Fire Sprinkler System Garbage Gas and Electric Water Utilities - Other Total Utilities Total Expense Net Ordinary Income Other Income/Expense Other Income Interest Income Total Other Income Other Expense Depreciation Expense Other Expenses Total Other Expense Net Other Income Net Income 140, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , Page 1

44 1:28 PM 03/08/15 Accrual Basis Oregon Realtors Plaza LLC Balance Sheet As of December 31, 2014 Dec31, 14 ASSETS Current Assets Checking/Savings U.S. Bank - Plaza 26, Total Checking/Savings 26, Accounts Receivable Accounts Receivable 7, Total Accounts Receivable 7, Total Current Assets Fixed Assets Building -211 O Mission Street Accumlative Depreciation Building -211 O Mission Street - Other Total Building Mission Street Building Improvements Bldg Imp. Accumlative Depr. Building Improvements - Other Total Building Improvements Furniture & Fixtures Accumulated Depr. Furniture/Fix Furniture & Fixtures - Other Total Furniture & Fixtures Land Total Fixed Assets Other Assets Prepaid Expenses Total Other Assets TOTAL ASSETS LIABILITIES & EQUITY Liabilities Current Liabilities Accounts Payable Accounts Payable Total Accounts Payable Other Current Liabilities Due to Oregon Assn of Realtors Note to Plaza for 2013 Loan Due to Oregon Assn of Realtors Other Total Due to Oregon Assn of Realtors Security Deposits Tenants Deposits Total Other Current Liabilities Total Current Liabilities Long Term Liabilities Mortgage Payable Total Long Term Liabilities Total Liabilities Equity Opening Bal Equity Retained Earnings Net Income -882, ,746, , ,863, , , , , , , ,73 4,591, , , ,660, , , , , ,055, , , ,065, ,067, ,009, ,009, ,077, ,751, ,058, , Page 1

45 1:28 PM Oregon Realtors Plaza LLC Balance Sheet 03/08/15 Accrual Basis As of December 31, 2014 Dec31,14 Total Equity 582, TOTAL LIABILITIES & EQUITY 4,660, Page 2

46 1 :25 PM Oregon Association of Realtors Home Foundation 03/08/15 Profit & Loss January through December 2014 Accrual Basis Jan - Dec 14 Ordinary Income/Expense Income 4000 OAR Charitable Contribution 401 O Donations 4014 Dessert Auction 4015 Taste of Rogue Valley 4021 Taste of Portland 4022 Taste Portland-Booth Sponsor 4023 A Taste of Portland- Ticket Sal 4025 Raffle Tickets - Taste of POX 4026 Auction Items-Taste of Portland 4035 Golf Tournament 4036 Green Fees - Golf Tournament 4037 Golf Ball Drop - Tournament 4039 Hole-In-One Sponsor 4040 Hole Sponsor - Golf Fund Raiser Total Income Expense 5015 Taste-Professional Fees 502 Inter-Office Transfer of Funds 505 Catering Charitable Contributions Filing Fee Bank Service Charge Crdt Crd Fees 510 Taste of Portland Expense 5101 Taste-Bank Fees 5102 Taste-Event Supplies 5103 Taste-Facility Rental 5104 Taste-Printing 5106 Taste-Rental 5107 Taste-Travel 520 Golf Tournament Expenses 5201 Golf-Awards and Gifts 5202 Golf-Bank Fees 5203 Golf-Event Supplies 5204 Golf-Facility Rental 5205 Golf-Printing Admin Expense- Non Event Specif Reconciliation Discrepancies Total Expense Net Ordinary Income Other Income/Expense Other Income 4020 Interest Earned Total Other Income Other Expense 5150 Auction Items - Cost of Goods Total Other Expense Net Other Income Net Income 19,50 5, ,50 17, ,50 8, , ,03 19, , , ,00 155, , , , , ,15 1, , , , , , Page 1

47 1:25 PM Oregon Association of Realtors Home Foundation Balance Sheet Accrual Basis As of December 31, 2014 Dec31,14 ASSETS Current Assets Checking/Savings 101 U.S. Bank Total Checking/Savings Accounts Receivable 1200 Accounts Receivable 1202 Inter-Company AIR Total Accounts Receivable Other Current Assets Prepaid Expenses/Deposits Total Other Current Assets Total Current Assets TOTAL ASSETS LIABILITIES & EQUITY Equity 310 Temp. Restricted Assets 3900 Retained Earnings Net Income Total Equity TOTAL LIABILITIES & EQUITY 63, , ,25 9,75 26,00 2,62 2,62 91, , ,00 95, , , , Page 1

48 1:22 PM 03/08/15 Accrual Basis Oregon Association of REALTORS Profit & Loss January through December 2014 Ordinary Income/Expense Income Local Boards Strategic Planning Contract Services 401 Dues/Realtor 403 Dues/Affiliate Reinstatements Fees 405 Dues/Institute Affiliate 401 Dues/Realtor - Other Total 401 Dues/Realtor MULTI BOARD DUES- INCOMING KCAR Dues- Admin IN Malheur Dues- Admin IN Mulit Board ORPAC- IN Multi Board NAR Dues In SBOR Dues - Admin IN Total MULTI BOARD DUES- INCOMING 410 Registration Fees- Income Subscription Fees-Income Webinars Booth Sponsor - Convention 418 CRB-Support 429 Sponsorships 431 Mailing Lists, CD, Misc 4325 COMMISION INCOME 433 Miscellaneous Income Jan - Dec 14 1, ,00 4,00 2,467, ,50 4, ,478, , , , , , , ,16 4, , , , Total Income 2,727, Gross Profit Expense 5000 Suspense 5001 Region 12 Expenses Inter-Office Transfer of Funds MULTl BOARD DUES- OUTGOING KCAR DUES- ADMIN- OUT MALHAEUR DUES ADMIN- OUT MULTl BOARD-ORPAC Dues -OUT MULTIBOARD NAR DUES- OUT SBOR DUES - Amin- OUT MULTI BOARD DUES- OUTGOING - Other Total MULTl BOARD DUES- OUTGOING Advertising Expense 502 Award/Gifts 503 Insurance 504 OFFICE RENT Property Tax Landscaping/Plants 504 OFFICE RENT - Other Total 504 OFFICE RENT Storage Rent 505 Catering 506 Communications 507 Computer Services 5071 Fall Convention Web Maintenance Contributions-HomeFoun-Ermrkd** 5083 Charitable Contributions Credit Card Fees/ Bank Fees 5103 Convention/Trade Show Expense 5104 Due from Plaza Home Foundation Expenses 2,727, ,32 88, , , , , , , , , , ,50 2, , , Page 1

49 1:22 PM 03/08/1 5 Accrual Basis Oregon Association of REALTORS Profit &Loss January through December Dues/Commitments- Expenses Education 515 Equipment Rental Equip Repairs 520 Instructor/Speaker Fees Issues Mobilization Exp-Erm REBAC/Student Fee Leased Equip-Copiers 525 Meeting Room Rental Membership Survey Miscellaneous 531 Strategic Planning Expenses 532 Postage/Delivery Professional/Contract Services 5326 Legal Action Expense-Earmarkd 533 Printing Registration Fees- Expenses Production/Entertainment REPLACEMENT FUNDS 534 Employee Benefits 535 Health, Dental, Vision Workmens Comp Insurance 5352 CHANGE IN ACCRUED VACATION Flexible Spending Acct - Health 5354 Flex Spending Acct - Dep Care Income Protection K Contribution 656 Payroll Expenses 534 Employee Benefits - Other Total 534 Employee Benefits Health Reimbursement Account 5358 Safe Harbor Expense 538 Staff Allocations - DO NOT USE Payroll Staff Allocations Health/Vision Staff Allocations Dental Staff Allocations Life Ins Staff Allocations Total 538 Staff Allocations - DO NOT USE 540 Staff Ex penses Travel Expenses Meals Lodging Travel Expenses - Other Total Travel Expenses 541 Staff Professional Development 542 Staff/Member Relations 5430 Training 543 Subscriptions & Reference Expen OFFICE EXPENSE &SUPPLIES MEETING MATERIALS & EXPENSES President Discretionary Fund 558 Design/Development Video Production Jan - Dec 14 2, , , ,50 1,90 42, , , , , , , , , , , ,00 15, , , , , , , , ,25 25, ,005, , , , , , , , , , , , , , , Total Expense 2,095, Net Ordinary Income Other Income/Expense Other Income OR Plaza, LLC 412 Interest Income US Bank Int Income Interest Income- NWFCU 631, , Page 2

50 1 :22 PM 03/08/15 Accrual Basis Oregon Association of REAL TORS Profit & Loss January through December 2014 Jan - Dec Int-Invest Operations 3, Interest Income UMA Interest Income - Other Total 412 Interest Income Dividend Income Div-Inc _Invest -Legal Div-Inc LL Invest Operations Dividends-UMA Dividend Income - Other Total Dividend Income Gain(Loss)Disposal ofassets Royalty Capital Gains 413 Unrealized Gain/Loss Investment Unrealized GIL Operating 413 Unrealized Gain/Loss Investment - Other Total 413 Unrealized Gain/Loss Investment REALIZED GAIN ON SALE OF INVEST OREF Investment OREF-Subsidiary Income Total OREF Investment , , , , , , , , , , Total Other Income Other Expense 5086 INVESTMENT FEES 510 Depreciation Expense Total Other Expense Net Other Income Net Income -23, , , , , , Page 3

51 1 :22 PM Oregon Association of REAL TORS Balance Sheet As of December 31, 2014 Accrual Basis ASSETS Current Assets Checking/Savings 102 US BANK US Bank New NAR FCU Investment Acct Morgan Stanley MMF (x379)1 of Unrecorded Rceipts (PayPal CC) Petty Cash Dec 31, , , , , Total Checking/Savings 1, 175, Accounts Receivable 120 Accounts receivable 1201 Accrued AIR-Strategic Planning 1203 Inter-Company A/R 32, ,40 4, Total Accounts Receivable 45, Other Current Assets Short Term Investment Morgan Stanley-ST CD(x379)1 of Morgan Stanley MutFund (xx626) Morg Stanly Leg Act Fund (x378) 995, , , Total Short Term Investment 1,487, A/R- US Bank Fraud 141 Prepaid Insurance 142 Deposits & Prepaid Expenses 23, , , Total Other Current Assets 1,528, Total Current Assets 2,749, Fixed Assets 130 Property, Plant, & Equipment 133 Office, Furniture & Equipment Software Office Equipment 133 Office, Furniture & Equipment - Other 106, , , Total 133 Office, Furniture & Equipment 301, Accum Depreciation -283, Total 130 Pro perty, Plant, & Equipment 17, Total Fixed Assets 17, Other Assets Long Term Investment 180 Investment in OREF 75, Total Long Term Investment 75, Investment in OR Plaza LLC* Due from Plaza LLC* Note For Plaza Loan* 181 Investment in OR Plaza LLC* - Other 722, , , Total 181 Investment in OR Plaza LLC* 1,638, Total Other Assets 1, 713, TOT AL ASSETS 4,480, LIABILITIES & EQUITY Liabilities Current Liabilities Accounts Payable 201 Accounts payable 10, Total Accounts Payable 10, Page 1

52 1 :22 PM 03/08/15 Accrual Basis Oregon Association of REAL TORS Balance Sheet As of December 31, 2014 Other Current Liabilities 203 Accrued Vacations Deferred-Realtor Dues Income Deferred-Affiliate Dues Income Safe Harbor Liability REGION 12- CURRENT LIAS 2108 DUE TO NAR Dec 31, 14 69, , , , , , Total Other Current Liabilities 1,025, Total Current Liabilities Long Term Liabilities 305 Contingency Fund- Restricted 306 Replacement Fund 307 Risk Reduction Fund 308 Issues Mob Fund- Restricted 310 Legal Action Fund- Restricted 311 Building Reserve 1,035, ,00 58, , , , , Total Long Term Liabilities 1,057, Total Liabilities Equity 320 Equity in Plaza Property 325 Operating Reserve 3300 Temp Restricted Net Assets 390 Retained Earnings Net Income 2,093, ,887, ,342, ,00-1,460, , Total Equity 2,387, TOTAL LIABILITIES & EQUITY 4,480, Page 2

53 Oregon Association of REALTORS 2110 Mission Street SE Salem OR, 97302