The Hideout Audited Financial Statements 12/31/23 and 2022

ASSOCIATION OF PROPERTY OWNERS OF THE HIDEOUT, INC. AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION DECEMBER 31, 2023 AND 2022

ASSOCIATION OF PROPERTY OWNERS OF THE HIDEOUT, INC. TABLE OF CONTENTS PAGE: Independent Auditor’s Report.................................................................................................................... 1-2 Balance Sheets .............................................................................................................................................. 3 Statements of Revenue and Expenses ........................................................................................................... 4 Statements of Changes in Members' Equity ................................................................................................. 5 Statements of Cash Flows ............................................................................................................................. 6 Notes to Financial Statements .................................................................................................................. 7-13 Supplementary Information ................................................................................................................... 14-16 Supplementary Information on Future Major Repairs and Replacements (Unaudited) ........................... 17

INDEPENDENT AUDITOR’S REPORT To the Board of Directors and Members Association of Property Owners of the Hideout, Inc. Opinion We have audited the accompanying financial statements of the Association of Property Owners of the Hideout, Inc., which comprise the balance sheets as of December 31, 2023 and 2022, and the related statements of revenues, expenses, and changes in members’ equity and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Association of Property Owners of the Hideout, Inc. as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion We conducted our audits in accordance with auditing standards generally accepted in the United States of America.

Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Association of Property Owners of the Hideout, Inc. and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Association of Property Owners of the Hideout, Inc.’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

1

In performing an audit in accordance with generally accepted auditing standards, we: •

Exercise professional judgment and maintain professional skepticism throughout the audit.

•

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

•

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Association of Property Owners of the Hideout, Inc.’s internal control. Accordingly, no such opinion is expressed.

•

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

•

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Association of Property Owners of the Hideout, Inc.’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

Report on Supplementary Information Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The actual vs. budget by department and calculation of surplus(deficit) from budgeted operations on pages 14 through 16 are presented for purposes of additional analysis are not a required part of the financial statements. Such information is the responsibility of the Association’s management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

Disclaimer of Opinion on Required Supplementary Information Accounting principles generally accepted in the United States of America require that information on the future major repairs and replacements on page 17 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Financial Accounting Standards Board, which considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Kingston, Pennsylvania February 1, 2024

2

ASSOCIATION OF PROPERTY OWNERS OF THE HIDEOUT, INC. BALANCE SHEETS DECEMBER 31, 2023 AND 2022 ASSETS

2023

2022

877,626 729,341

$ 1,123,345 1,052,666

281,768 100,477 382,245

244,701 357 245,058

Short Term Investments – Reserves Investments – Real estate Inventories (Note 3) Other Current Assets (Note 4) Total Current Assets

898,509 302,568 197,207 72,829 3,460,325

999,781 299,320 137,511 112,121 3,969,802

Long Term Investments – Reserves

3,381,614

3,365,655

1 283,687 10,121,897 301,088 8,763,008 7,881,320 27,351,001 (16,963,948) 10,387,053 $ 17,228,992

1 283,265 9,242,163 199,177 7,751,604 8,232,361 25,708,571 (15,935,861) 9,772,710 $ 17,108,167

$

$

Current Assets: Cash and Cash Equivalents: (Note 1) Operating Reserves

$

Accounts Receivable: Assessments, Net of Allowance for Doubtful Accts (Note 1) Other Accounts Receivable (Note 2) Total Accounts Receivable

Property and Equipment: Developer's Initial Contribution Land Land Improvements Construction in Progress Buildings and Improvements Vehicles and Equipment Less: Accumulated Depreciation Net Property and Equipment Total Assets LIABILITIES AND MEMBERS' EQUITY Current Liabilities: Accounts Payable Accrued Expenses and Payroll Withholdings (Note 5) Deferred member assessments Deferred Income (Note 6) Accrued Vacation Total Current Liabilities Total Liabilities Members' Equity: Board Designated for Capital Replacements, Additions and Other Reserves Undesignated Capital Total Members' Equity Total Liabilities and Members’ Equity

See notes to financial statements

3

375,876 233,589 168,745 89,569 30,488 898,267

208,054 256,007 151,761 96,124 28,329 740,275

898,267

740,275

5,009,464 11,321,261

5,418,102 10,949,790

16,330,725

16,367,892

$ 17,228,992

$ 17,108,167

ASSOCIATION OF PROPERTY OWNERS OF THE HIDEOUT, INC. STATEMENTS OF REVENUES AND EXPENSES YEARS ENDED DECEMBER 31, 2023 AND 2022 2023

2022

$ 6,099,199 32,946 160,970 6,293,115

$ 5,798,364 9,249 139,291 5,946,904

1,150,267 293,225 111,651 71,707 527,601 2,154,451

1,180,716 159,015 91,620 100,154 512,361 2,043,866

Excess of Non-Amenity Revenue Over Non-Amenity Expenses

$ 4,138,664

$ 3,903,038

Amenity Revenues and Expenses Amenity Revenue Amenity Expenses Excess of Amenity Expenses Over Amenity Revenues

3,203,783 (8,954,598) (5,750,815)

2,996,147 (8,457,324) (5,461,177)

Excess of Non-Amenity and Amenity Expenses over Non-Amenity and Amenity Revenues

(1,612,151)

(1,558,139)

Net Revenues (Expenses) Representing Capital Reserves: Capital Reserve New Capital

1,348,105 226,879

883,385 134,175

1,574,984

1,017,560

Non-Amenity Revenues and Expenses Non-Amenity Revenue Operating Assessments Investment Income Administrative revenues and late charges Total Non-Amenity Revenue Non-Amenity Expenses Salaries, Payroll Taxes, and Employee Benefits Provision for Bad Debts Insurance Professional Fees Administrative expenses Total Non-Amenity Expenses

Total Net Revenues (Expenses) Representing Capital Reserves Excess of All Revenues over All Expenses

$

See notes to financial statements

4

(37,167)

$

(540,579)

ASSOCIATION OF PROPERTY OWNERS OF THE HIDEOUT, INC. STATEMENTS OF CHANGES IN MEMBERS' EQUITY YEARS ENDED DECEMBER 31, 2023 AND 2022 Board Designated Funds for Capital Replacements, Additions, and Other Reserves

Description

Undesignated

Balance - December 31, 2021

$ 11,612,033

$ 5,296,438

$ 16,908,471

(1,558,139)

-

(1,558,139)

-

1,017,560

1,017,560

895,896

(895,896)

-

$ 10,949,790

$ 5,418,102

$ 16,367,892

(1,612,151)

-

(1,612,151)

-

1,574,984

1,574,984

1,983,622

(1,983,622)

-

$ 11,321,261

$ 5,009,464

$ 16,330,725

Excess of Expenses over Revenues before Capital Reserve Revenues Capital Reserve Revenues Net Transfers to Undesignated Equity for Capital Project Expenditures Balance - December 31, 2022 Excess of Expenses over Revenues before Capital Reserve Revenues Capital Reserve Revenues Net Transfers to Undesignated Equity for Capital Project Expenditures Balance - December 31, 2023

See notes to financial statements 5

Total

ASSOCIATION OF PROPERTY OWNERS OF THE HIDEOUT, INC. STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2023 AND 2022 2023

2022

$ (1,612,151)

$ (1,558,139)

1,208,841 364,450

1,149,730 218,306

(Increase) Decrease in Current Assets: Annual Assessments Receivable Other Receivables Other Current Assets and Inventory

(381,405) (100,120) (20,404)

(156,781) 84,898 (40,491)

Increase (Decrease) in Current Liabilities: Accounts Payable Accrued Vacation Accrued Expenses and Payroll Withholdings Deferred Income Net Cash (used) by Operating Activities

167,822 2,159 (22,409) 10,429 (382,788)

(248,764) (10,593) 68,795 46,288 (446,751)

Cash Flows from Investing Activities: Increase in Investments – Real Estate Net (Increase) Decrease in Held-to-Maturity Securities Gain/(Loss) on retirement of assets Capital Expenditures Net Cash (used) by Investing Activities

(3,248) 85,313 1,766 (1,845,071) (1,761,240)

(3,634) (1,813,391) 7,854 (891,588) (2,700,759)

Cash Flows from Capital and Related Financing Activities: Assessment Revenue Representing Replacement and New Capital Reserves Net cash provided by financing activities

1,574,984 1,574,984

1,017,560 1,017,560

Net (Decrease) in Cash

(569,044)

(2,129,950)

Cash and Cash Equivalents, beginning of the year

2,176,011

4,305,961

Cash and Cash Equivalents, end of the year

$ 1,606,967

$ 2,176,011

Supplemental Information: Interest paid Income taxes paid

$

None 20,146

None None

Cash flows from Operating Activities: Excess of Amenity and Non-Amenity Expenses over Amenity and Non-Amenity Revenues Adjustments to Reconcile Excess of Expenses Over Revenues to Net Cash Provided (Consumed) by Operating Activities: Add back: Operating Expenses Not Decreasing Cash: Depreciation Provision for Bad Debts

See notes to financial statements 6

ASSOCIATION OF PROPERTY OWNERS OF THE HIDEOUT, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: ORGANIZATION The Association of Property Owners of the Hideout, Inc. was incorporated in February, 1970 as a non-profit corporation in the state of Pennsylvania. The Association is responsible for the operation and maintenance of the common property within the development. There are 3,908 billable properties within the development, of which 3,641 had paid their annual assessment in full for 2023. The development is located in Lake Ariel, Pennsylvania.

BASIS OF ACCOUNTING The accompanying financial statements are prepared on the accrual basis of accounting in conformity with generally accepted accounting principles.

CASH AND CASH EQUIVALENTS For cash flow purposes, the balance of cash and cash equivalents represents financial instruments with a maturity of three months or less as of December 31, and consisted of the following: 2023 18,280 859,346

$

2022 18,083 1,105,262

Petty cash and register banks Operating cash Reserved funds (Capital Reserve and New Capital Funds)

$

729,341

1,052,666

Total Cash & Cash Equivalents

$ 1,606,967

$ 2,176,011

INVESTMENTS The Association holds investments primarily in debt securities with which it intends to hold to maturity. Investments are considered short-term if they mature within twelve months. These investments are stated at amortized cost and consist of the following: 2023

Short Term: Bonds/Certificates of Deposit Equities Total Short Term

2022

Amortized Cost $

898,509 -

Fair Value $

904,695 -

Amortized Cost $

Fair Value

999,781 -

$ 1,000,353 -

898,509

904,695

999,781

1,000,353

Long Term: Bonds/Certificates of Deposit Equities

1,316,859 2,064,755

1,316,769 2,357,902

1,321,339 2,044,316

1,312,006 2,059,016

Total Long Term

3,381,614

3,674,671

3,365,655

3,371,022

$ 4,280,123

$ 4,579,366

$ 4,365,436

$ 4,371,375

Total

7

ASSOCIATION OF PROPERTY OWNERS OF THE HIDEOUT, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued): INVESTMENTS - continued 2023

Market Value

Amortized Cost

2022

Totals:

Amortized Cost

Bonds/Certificates of Deposit Equities

$ 2,215,368 2,064,755

$ 2,221,464 2,357,902

$ 2,321,120 2,044,316

$ 2,312,359 2,059,016

Total All Investments

$ 4,280,123

$ 4,579,366

$ 4,365,436

$ 4,371,375

The Association uses the specific identification method to value investments. considered to be held to maturity.

Market Value

All securities are

Under ASC 820-10, Fair Value Measurement, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Association uses various valuation approaches. ASC 820-10 establishes a fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Association.

Unobservable inputs reflect the Association’s assumption about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The fair value hierarchy is categorized into three levels based on the inputs as follows: Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 securities. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.

Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The following table presents information about the Association’s assets measured at fair value at December 31: 2023 2022 Level 1 Level 2 Level 3 Total

$ 4,579,366 $ 4,579,366

$ 4,371,375 $ 4,371,375

8

ASSOCIATION OF PROPERTY OWNERS OF THE HIDEOUT, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued): MEMBERS' ASSESSMENTS, ACCOUNTS RECEIVABLE and PROVISION for DOUBTFUL ACCOUNTS Association members are subject to annual assessments to provide funds for the Association's operating expenses, future capital acquisitions, and major repairs and replacements. Assessments receivable at the balance sheet date represent fees due from property owners and are stated at their estimated net realizable value as determined by management. Under the terms of the agreement between the Association and the individual member (the Protective Covenants), the Board of Directors can designate a portion of member assessments as capital addition assessments. Members' equity designated for capital replacements, additions and other reserves amounted to $5,009,464 at December 31, 2023 and $5,418,102 at December 31, 2022.

Assessment revenue is recognized when assessments are due. Any amounts received in advance of the due date are deferred until due. The Financial Accounting Standards Board issued Accounting Standards Code 606 requiring the deferral of the recognition of income until the services are rendered. The Association had determined ASC 606 does not apply to the Association as no customer relationship exists as it is defined by the Code. The Association does not defer the recognition of any portion of revenue as a contract liability.

Member’s Equity designated for Capital Replacements and Additions Capital Reserves New Capital

2023

2022

$ 4,596,477 412,987

$ 4,920,229 497,873

$ 5,009,464

$ 5,418,102

A provision for doubtful accounts is recorded based upon an estimated percentage resulting from an account by account analysis, and by reference to payment history, aging reports and past experience.

Assessments receivable consisted of the following at December 31: Member Assessments Fines, Citations, Collection Fees Finance Charges

2023

2022

$ 2,297,553 54,704 382,925

$ 2,528,796 69,913 349,564

2,735,182

2,948,273

(2,453,414)

(2,703,572)

Allowance for Bad Debt Net Accounts Receivable

$

9

281,768

$

244,701

ASSOCIATION OF PROPERTY OWNERS OF THE HIDEOUT, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued): ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

CONCENTRATIONS OF CREDIT RISK The Association maintains its cash accounts in one Pennsylvania financial institution. The Federal Deposit Insurance Corporation insures accounts up to $250,000 through December 31, 2023 at each institution. Funds on deposit in the Association’s sweep account are fully collateralized on a daily basis with United States Government Agency securities held in the institution’s investment portfolio. At December 31, 2023 and 2022, the Association had $-0- and $297,752 respectively in uninsured cash in bank accounts.

Deposits, in the amounts of $499,970 and $210,069 held in sweep accounts as of December 31, 2023 and 2022, respectfully, are fully collateralized on a daily basis with United States Government, US Government Agency and US Government Sponsored Enterprise Securities held in the bank’s investment portfolio. In the event of a bank failure, purchased securities in sweep transactions immediately become due and payable to the sweep account customers.

Substantially all of the Association’s revenue is derived from property owners in the Hideout. The Association has filed judgments on the property owners who fail to pay dues and assessments.

INCOME TAXES The Association can elect annually to file its federal income tax return as a regular corporation or to be treated under a special provision of the Internal Revenue Code as a homeowners' association. Under the provisions of the homeowners' election, members' assessments and capital additions revenue are excluded from taxable income. The Association had an income tax liability of $32,885 at December 31, 2023 and $13,502 at December 31, 2022.

PROPERTY AND EQUIPMENT The Association capitalizes all property and equipment to which it has title. Assets conveyed to the Association by the developer consist of 450 acres of common area including lakes and ponds, 40 miles of paved roads, saleable lots, pools, beaches, campgrounds, a golf course and other recreational buildings and facilities. These assets have been capitalized at $1. These buildings and recreational facilities have insurable value of approximately $12.8 million as updated in 2011 by the Association’s insurance appraiser. Other property and equipment acquired by the Association are recorded at cost.

DEPRECIATION Capitalized common property is depreciated over its estimated useful life using the straight-line method of depreciation as follows: Road paving 5-10 years Building and improvements 20 years Vehicles and equipment 1-10 years

10

ASSOCIATION OF PROPERTY OWNERS OF THE HIDEOUT, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued): CASH FLOWS For purposes of the statements of cash flows, the Association considers investments purchased with a maturity of less than three months to be cash equivalents.

COMPENSATED ABSENCES (ACCRUED VACATION) and SICK PAY Effective January 1, 2021, paid time off is accrued as earned according to the years of any employee’s service.

A maximum of 40 hours of unused paid time off may be carried over into the following calendar year. Any accrued, but unused paid time off will be forfeited at the end of the calendar year. Sick pay cannot be carried over from one year to the next. At the end of the calendar year, any unused sick pay will be paid to the employee at their current compensation rate.

Reclassification of prior year financial statement amounts: To facilitate comparison between current and prior year financial statements, certain items in the prior year financial statements have been reclassified to reflect their presentation in the current year financial statements.

NOTE 2 - OTHER ACCOUNTS RECEIVABLE: As of December 31, other accounts receivable consisted of the following: 2023 Community relations receivable $ 14,707 Miscellaneous 439 Medical expense reimbursements 85,331 Total Other Accounts Receivable $ 100,477

$ $

2022 6 351 357

NOTE 3 - INVENTORIES: Inventories consist of road maintenance materials, food and beverages, golf pro shop and recreation merchandise and are stated at the lower of cost or market.

Inventory at December 31, consisted of the following: Clubhouse Maintenance Pro Shop Recreation Art Center Gate Transmitters Lodge Snackbars Total Inventory

11

2023 $ 37,973 52,111 12,837 45,421 6,049 3,897 33,303 5,616 $ 197,207

2022 $ 24,641 17,384 11,904 25,421 6,141 5,823 39,081 7,116 $ 137,511

ASSOCIATION OF PROPERTY OWNERS OF THE HIDEOUT, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 NOTE 4 - OTHER CURRENT ASSETS: Other Current Assets as of December 31 consisted of the following: 2023 Prepaid Insurance $ 72,829 Prepaid Expenses Total Other Assets $ 72,829

2022 77,396 34,725 $ 112,121

$

NOTE 5 - ACCRUED EXPENSES AND PAYROLL WITHHOLDINGS: Accrued Expenses and Payroll Withholdings as of December 31 consisted of the following: 2023 2022 Accrued Payroll $ 176,836 $ 182,174 Accrued Payroll Taxes and Withholdings 32,929 46,316 Accrued Sales and Use Taxes 4,039 3,886 Accrued Federal Income Tax 19,285 6,546 Accrued Insurance Payable 17,085 Banquet deposits 500 Total Accrued Expenses & Withholdings $ 233,589 $ 256,007 NOTE 6 - DEFERRED INCOME: Deferred income represents income collected or credited in advance of the fiscal year to which it relates.

Deferred income at December 31 consisted of the following: 2023 $ 18,511 51,000 20,058 $ 89,569

Gift Certificates Deposits A.P.C. Cards, Filing and Renter Fees Total Deferred Income

2022 $ 17,132 63,000 15,992 $ 96,124

NOTE 7 – LINE OF CREDIT: The Association has a $250,000 line of credit available. The line is subject to variable interest rates subject to change from time to time, currently at 8.25% per annum. The line must be cleared for a period of thirty consecutive days during the calendar year. At December 31, 2023 and 2022, there were no outstanding draws. The line is approved through June 30, 2024.

12

ASSOCIATION OF PROPERTY OWNERS OF THE HIDEOUT, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 NOTE 8 – PENSION PLAN: The Association maintains a 401k retirement plan. Employees worked a minimum of a year to participate. Employee funds withheld are matched up to 50% of the first 6% of eligible employee’s earnings, which, for the years ended December 31, 2023 and 2022, amounted to $32,862 and $38,172, respectively. There is no future pension liability. Participants are fully vested.

NOTE 9 - FUTURE MAJOR REPAIRS AND REPLACEMENTS: The Association is funding major repairs and replacements by designating a portion of member assessments as capital addition assessments. The Association's board of directors conducted a study to estimate the remaining useful lives and the replacement costs of the common property components.

Actual expenditures, however, may vary from the estimated amounts and the variations may be material.

Therefore, the adequacy of amounts designated for future repairs and replacements cannot presently be determined. If additional funds are needed, however, the Association has the right to increase regular assessments or levy special assessments, or it may delay major repairs and replacements until funds are available.

NOTE 10 – COMMITMENTS AND CONTINGENCIES: The Roamingwood Sewer and Water Association, acting as agent for South Wayne County Water and Sewer Authority which provides sewer and water services to the residents of The Hideout, is currently in the construction stage of a major infrastructure improvement program. These improvements will lead to increased water and sewer rates for its customers. In conjunction, in November of 2012, the Association entered into a reimbursement agreement with Roamingwood, whereby the Association agreed to reimburse Roamingwood $200,000 per year for ten years for Phase I and $200,000 per year for ten years for Phase II for road repaving which was necessary as a result of the improvement program. All Phases have been completed and the Association owes one more payment. Payments will be finalized in 2024.

NOTE 11 – SUBSEQUENT EVENTS: Management has evaluated subsequent events through February 1, 2024, the date the financial statements were available to be issued.

13

ASSOCIATION OF PROPERTY OWNERS OF THE HIDEOUT, INC. SUPPLEMENTARY INFORMATION ACTUAL vs. BUDGET BY DEPARTMENT (INCLUDES ALL FUNDS) YEARS ENDED DECEMBER 31, 2023 AND 2022 __________________ 2023 ______________ Actual Budget Variance

Non Amenity Revenues: Dues, Net of provision for bad debts Late Charges Investment income Transfer fees Miscellaneous Gain on sale of equipment

$ 7,216,273 103,481 202,034 465,130 1,766

$ 7,190,500 28,000 53,000 500,000 12,000 -

Total Non-Amenity Revenues

7,988,684

Departmental Income: Security Laurel Park Ski Hill Marina Pools/Beach Recreation-fitness & mini-golf Golf course & golf maint.

Arts & crafts Maintenance Lake & environmental Administration & admin. fees Community relations Clubhouse & tabmaster Snack bars Woodworkers Lodge & Tiki bar Total Departmental Revenues Other Revenues: Grant revenues Total Other Revenues Total Revenues

$

Actual

2022 ______________ Budget Variance

25,773 75,481 149,034 (34,870) (12,000) 1,766

$ 7,054,326 79,631 89,081 508,258 8,504 -

$ 6,916,000 25,000 65,250 370,000 2,000 -

7,783,500

205,184

7,739,800

7,378,250

361,550

142,140 19,485 167,825 179,895 88,662 159,028 234,181 28,099 1,419 49,320 722,512 247,352 762,082 170,944 3,750 317,006

118,983 22,921 80,575 156,700 110,250 160,375 205,500 24,100 2,500 49,000 640,000 190,900 780,553 113,703 4,250 268,500

23,157 (3,436) 87,250 23,195 (21,588) (1,347) 28,681 3,999 (1,081) 320 82,512 56,452 (18,471) 57,241 (500) 48,506

101,046 20,583 148,996 178,440 106,176 157,324 203,074 31,095 191 48,640 737,794 227,482 808,911 139,306 3,240 189,170

118,611 25,500 96,619 151,765 106,250 171,500 200,800 19,560 9,825 44,000 450,010 182,250 634,146 87,500 4,750 241,900

(17,565) (4,917) 52,377 26,675 (74) (14,176) 2,274 11,535 (9,634) 4,640 287,784 45,232 174,765 51,806 (1,510) (52,730)

3,293,700

2,928,810

364,890

3,101,468

2,544,986

556,482

-

-

-

105,623

-

105,623

11,282,384

10,712,310

570,074

105,623 10,946,891

9,923,236

105,623 1,023,655

14

$

138,326 54,631 23,831 138,258 6,504 -

ASSOCIATION OF PROPERTY OWNERS OF THE HIDEOUT, INC. SUPPLEMENTARY INFORMATION ACTUAL vs. BUDGET BY DEPARTMENT (INCLUDES ALL FUNDS)-continued YEARS ENDED DECEMBER 31, 2023 AND 2022

Expenditures: Security Laurel Park Ski Hill Marina Pools/Beach Recreation & fitness Golf course & golf maint.

Arts & crafts Maintenance Lakes & environmental Administration & admin fees Community relations Clubhouse & tabmaster Snack bars Woodworkers Lodge & Tiki bar

___________________ 2023 ______________ Actual Budget Variance

________________ 2022 __________________ Actual Budget Variance

1,700,057 12,535 479,337 43,129 232,490 503,973 488,325 98,692 1,822,291 433,126 1,805,075 175,273 1,283,409 190,345 10,655 306,000

1,539,305 14,291 287,602 35,914 195,643 450,651 413,364 86,221 2,068,251 467,153 1,788,744 192,783 1,031,816 149,965 10,910 340,685

(160,752) 1,756 (191,735) (7,215) (36,847) (53,322) (74,961) (12,471) 245,960 34,027 (16,331) 17,510 (251,593) (40,380) 255 34,685

1,576,327 17,691 366,458 70,166 217,357 502,966 433,534 104,119 2,019,593 285,525 1,820,660 173,908 1,175,813 164,864 10,955 235,341

1,496,894 14,840 278,932 57,485 187,302 466,572 406,730 76,478 1,745,967 422,192 1,555,823 178,369 941,485 132,171 11,114 322,678

(79,433) (2,851) (87,526) (12,681) (30,055) (36,394) (26,804) (27,641) (273,626) 136,667 (264,837) 4,461 (234,328) (32,693) 159 87,337

Total Departmental Expenditures

9,584,712

9,073,298

(511,414)

9,175,277

8,295,032

(880,245)

Other Expenditures: Contingency & other 24,577 Investment expense 17,080 Stormwater projects 96,649 Realized loss on sale of investments Roads 354,807 Loss on disposal of fixed assets Provision for income taxes 32,885

44,000 10,450 100,000 175,000 2,000

19,423 (6,630) 3,351 (179,807) (30,885)

54,998 39,895 115,018 474,502 456,714 7,834 13,502

70,000 100,000 500,000 17,001

15,002 (39,895) (15,018) (474,502) 43,286 (7,834) 3,499

525,998

331,450

(194,548)

1,162,463

687,001

(475,462)

Total Expenditures

10,110,710

9,404,748

(705,962)

10,337,740

8,982,033

(1,355,707)

Net Income Before Depreciation

1,171,674

1,307,562

(135,888)

609,151

941,203

(332,052)

Depreciation Expense

1,208,841

1,140,000

(68,841)

1,149,730

1,080,000

(69,730)

(540,579)

$ (138,797)

Total Other Expenditures

Net Income

$

(37,167)

$

167,562

$

(204,729)

15

$

$

(401,782)

ASSOCIATION OF PROPERTY OWNERS OF THE HIDEOUT, INC. SUPPLEMENTARY INFORMATION CALCULATION OF SURPLUS (DEFICIT) FROM BUDGETED OPERATIONS YEAR ENDED DECEMBER 31, 2023 Actual

Revenues: Deficit carryforward Dues (collected) Late charges (collected) Delinquent dues collected Administration fees Amenity and other income Interest Other

$

Expenses: Amenity expense Net of insect spray reserve/expense Contingency expense Income taxes

Surplus (deficit)

$

151,994 5,770,985 67,731 178,266 35,750 3,294,307 32,946 (220)

Budget $

151,994 5,785,250 28,000 100,000 10,000 3,013,810 18,000 2,000

Variance $

(14,265) 39,731 78,266 25,750 280,497 14,946 (2,220)

9,531,759

9,109,054

422,705

9,584,748 24,834 568

8,983,054 85,000 40,000 1,000

(601,694) 85,000 15,166 432

9,610,150

9,109,054

(501,096)

(78,391)

$

-

$

(78,391)

This calculation of the surplus can be reconciled to the surplus in accordance with generally accepted accounting principles per the audit report as follows: Audited excess of revenues over expenses Add: Surplus carry forward Depreciation Bad debt expense, net Delinquent dues collected Less: Dues collected vs. billed Late & other charges collected vs. billed Net revenues representing reserve funds

$

(27,243) 151,994 1,207,075 364,450 178,266

(307,490) (70,459) (1,574,984) $ (78,391) Contingency Fund

To Future Budgets

The by-law contingency fund is funded as follows: 2017 2018 deficit applied 2020 deficit applied 2022 deficit applied 2023 deficit applied

$

200,000 (141,908) (130,660) $ (72,568)

2021 Carried over to 2023 budget 2022 Carried over to 2024 budget 2023 Carried over to 2025 budget To future budgets

$ $

16

151,994 (128,954) (78,391) (55,351)

$ (128,954) to 2024 (78,391) to 2025 $ (207,345)

ASSOCIATION OF PROPERTY OWNERS OF THE HIDEOUT, INC. SUPPLEMENTARY INFORMATION ON FUTURE MAJOR REPAIRS AND REPLACEMENTS (UNAUDITED) DECEMBER 31, 2023 A formal Reserve Study was conducted by an independent firm in 2023. The Asset Costs are listed at actual cost when available for equipment and building components. When needed estimates for other building components are calculated using current architectural square footage guides. The Reserve study estimates the Accumulated Reserve Requirement for asset replacement cost of the components of common property by applying the following assumptions applied to the Asset Cost, Date placed in service and Useful life. Assumptions for current schedule: Inflation 4% and Interest Rate on Deposits 1.5%.

The Accumulated Reserve Requirement represents the Fully Funded amounts as indicated in the Reserve Study including an amount for contingency of 1%.

The estimated accumulated reserve requirement at December 31, 2023 was $6,046,689 (based upon the latest available update). The Association currently has designated $5,009,464 in equity as available for Capital Replacements.

The following information is based on the study and presents significant information about the components of common property.

Current Accumulated Replacement Reserve Component Cost Requirement Water Management/Dams Golf Course & Maintenance Equip

$ 3,179,896

$

354,766

1,090,319

551,836

879,241

375,452

1,696,859

770,714

Public Safety Equipment

534,516

173,506

Food and Beverage Equipment – Lodge

523,771

180,934

Food and Beverage Equipment – Clubhouse

144,393

73,359

Ski Hill Lifts and Equipment

820,950

271,913

1,306,220

528,335

Administration/Information Tech.

169,968

73,614

Art Center

18,091

13,740

5,239,357

2,496,658

264,472

255,474

$ 15,868,053

$ 6,120,301

Facility Management Equip Recreation Facilities and Equip

Vehicles/Fleet

Building Components Road Improvements/Signs

17