Audit report, George L. Smith, II, Georgia World Congress Center Authority, a component unit of the state of Georgia, year ended June 30, 2009

STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton
State Auditor
AUDIT REPORT GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER AUTHORITY A COMPONENT UNIT OF THE STATE OF GEORGIA YEAR ENDED JUNE 30, 2009

GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER AUTHORITY
-TABLE OF CONTENTS-
SECTION I FINANCIAL
INDEPENDENT AUDITOR'S REPORT ON BASIC FINANCIAL STATEMENTS ACCOMPANIED BY REQUIRED SUPPLEMENTARY INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
EXHIBITS
BASIC FINANCIAL STATEMENTS A STATEMENT OF NET ASSETS
PROPRIETARY FUNDS-ENTERPRISE FUNDS B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN
FUND NET ASSETS PROPRIETARY FUNDS-ENTERPRISE FUNDS
C STATEMENT OF CASH FLOWS PROPRIETARY FUNDS-ENTERPRISE FUNDS
D NOTES TO THE FINANCIAL STATEMENTS
SECTION II
INTERNAL CONTROL AND COMPLIANCE REPORT
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Page
1 5
12 14 16 18
37

SECTION I FINANCIAL

DEPARTMENT OF AUDITS AND ACCOUNTS

270 Washington St. S.W. Suite 1-156

w. RUSSELL HINTON

Atlanta, Georgia 30334

STATE AUDITOR (404) 656-2174

September 30, 2009

Honorable Sonny Perdue, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the George L. Smith, II Georgia World Congress Center Authority
and Honorable Daniel A. Graveline, Executive Director

INDEPENDENT AUDITOR'S REPORT ON BASIC FINANCIAL STATEMENTS ACCOMPANIED BY REQUIRED SUPPLEMENTARY INFORMATION

Ladies and Gentlemen:

We have audited the accompanying financial statements of the George L. Smith, II Georgia World Congress Center Authority, a component unit of the State of Georgia, as of and for the year ended June 30, 2009, as listed in the table of contents. These financial statements are the responsibility of the Authority's management. Our responsibility is to express opinions on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the proprietary major funds of the George L. Smith, II Georgia World Congress Center Authority, as of June 30, 2009, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.

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In accordance with Government Auditing Standards, we have also issued a report dated September 30, 2009, on our consideration ofthe George L. Smith, II Georgia World Congress Center Authority's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grants. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
The management's discussion and analysis information on pages 5 through 9 are not a required part of the
basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it.
Respectfully submitted,
~~lQ~~
Russell W. Hinton, CPA, CGFM State Auditor RWH:wlt
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MANAGEMENT'S DISCUSSION AND ANALYSIS
The following is a discussion and analysis of the George L. Smith, II Georgia World Congress Center Authority's financial performance, providing an overview of the activities for the fiscal year ended June 30, 2009 and comparing them to fiscal year ended June 30, 2008. The Georgia World Congress Center Authority manages the activities of the Georgia World Congress Center, the Georgia Dome and Centennial Olympic Park. Please read it in conjunction with the Authority's financial statements, which follow this section.
mGHLIGHTS
Net Assets: As of the close of fiscal year 2009, the Authority's combined ending net assets totaled $67.8 million. Of this total, $22.9 million is invested in capital assets, $27.7 million is restricted by Georgia Dome Bond Covenants and $17.2 million is unrestricted. The net assets of$67.8 million is down from fiscal year 2008's $73.2 million.
Long-term Debt: The Authority's total long-term debt obligations consist of $130.5 million in revenue bonds for the Georgia Dome.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the Georgia World Congress Center Authority's basic financial statements. The Authority's basic financial statements are reported as a special purpose governmental entity (component unit of the State of Georgia) engaged in business-type activities and are comprised of financial statements for proprietary (enterprise) funds. A fund is a group of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Georgia World Congress Center Authority uses fund accounting to reflect results of operations and to ensure and demonstrate compliance with financialrelated legal requirements.
Proprietary Funds: The Georgia World Congress Center Authority uses Enterprise Funds, a type of Proprietary Fund, to account for activities of the Georgia World Congress Center Fund, the Georgia Dome Fund and the Centennial Olympic Park Fund, all of which are considered to be major funds. Enterprise funds utilize accrual accounting; the same method used by private sector businesses and report activities that provide supplies and services to the general public. The basic proprietary funds financial statements are the Statement of Net Assets, the Statement of Revenues, Expenses and Changes in Fund Net Assets and the Statement of Cash Flows. These statements can be found on pages 12-17 ofthis report.
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Notes to the financial statements: The notes to financial statements provide additional information that is essential to a full understanding of the data provided in the fund financial statements. The notes to financial statements can be found on pages 18-33 of this report.

FINANCIAL ANALYSIS

Georgia World Congress Center Authority Net Assets

FY2009

FY2G08

Other Assets Capital Assets (Net of Depreciation)

$ 100,822,418 161,568,401

$ 101,781,792 166,543,348

Total Assets

$ 262,390.819

$ 268,325.140

Other Liabilities Long-Term Liabilities:
Current Non-Current

$ 42,805,633
12,071,959 139,692,019

$ 35,040,998
11,816,909 148,246,536

Total Liabilities

$ 194,569.611

Net Assets: Invested in capital assets, net of debt Restricted Unrestricted

$ 22,948,401 27,684,497 17,188,310

$ 195,104.443
$ 20,258,348 34,631,310 18,331,039

Total Net Assets

$ ~Z-821,208

$ 73,220,697

The Authority's investment in capital assets (e.g. land, buildings, equipment, etc) is $22.9 million or 34% of the Authority's total net assets. Georgia Dome revenue bond covenants, $27.6 million, make up another 41% of the total net assets. The Authority has a remaining $17.2 million in unrestricted assets.

The Georgia World Congress Center Authority's net assets decreased by $5.4 million in FY2009.

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The following is a summary of Revenues, Expenses and Changes in Net Assets for FY 2009 compared to FY 2008.

Revenues: Operating Revenue
Non-operating Revenue: Net Hotel/Motel Tax Investment income Other non-operating revenue
Total Revenues

FY2009 $ 71,696,977
23,352,589 1,006,268 9,618,525
$ 105,674,359

Expenses: Personal Services Other Operating Expense Depreciation Expense Debt service expense Other Non-Operating Expense

$ 27,704,750 54,841,533 10,760,073 7,848,919 9,918,573

Total Expenses

$ 111,073,848

Increase(Decrease) in Net Assets $ -5,399,489

Net Assets, Beginning of Year

73,220,697

Adjustments: Transfer In Transfer Out

1,619,936 -1,619,936

Total Net Assets, End of Year

$ 61.821.208

FY2008 $ 92,693,186
24,111,679 3,021,588 4,497,885
$ 124,324,338
$ 29,858,622 77,830,133 10,755,424 8,308,819 930,289
$ 127,683,287
$ -3,358,949 76,579,646
1,629,602 -1,629,602
$ 1312201621

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CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets: The Georgia World Congress Center Authority's investment in capital assets as of June 30, 2009 amounts to $311.8 million, which with accumulated depreciation of $150.3 million leaves a net book value of $161.5 million. This investment in capital assets includes land, buildings, improvements and equipment. Actual depreciation charges for the year totaled $10.8 million. It should be noted that land for the Georgia Dome and land and buildings for the convention center are owned by the Department of Economic Development and are therefore reflected on the State of Georgia's financial statements. Additional information on the Authority's capital assets can be found in note 6 on page 26 of this report.
Debt Administration: The Georgia World Congress Center Authority issued Revenue Bonds in the amount of $200 million in 1990 for the construction of the Georgia Dome. These bonds are the only long-term debt held by the Authority. These bonds were refunded in 2000 in order to obtain a more favorable interest rate. A principal payment of$ 7.67 million was made on July 1, 2008. Additional information on the Authority's long-term debt can be found in note 7 on page 27 of this report.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
The 200-acre campus of the Georgia World Congress Center Authority serves as an economic catalyst for the community, generating economic benefits to the citizens of the state, as well as enhancing the overall quality of life for every Georgian.
An estimated 5 million visitors attended over 500 events at the Georgia World Congress Center, the Georgia Dome and Centennial Olympic Park during Fiscal Year 2009. According to a University of Georgia study conducted by the Selig Center for Economic Growth, those visitors spent over $1.4 billion new dollars, which generated an estimated economic impact of more than $2.2 billion. Trade shows, conventions, sporting events and concerts also helped generate an estimated $180 million in tax revenues for the state and local governments. Additionally, the GWCCA contributes to the region's economy by creatingjobs.
Fiscal Year 2009 was an excellent year by many measures and proved to be both a challenging and rewarding year for the Georgia World Congress Center Authority. We hosted many exciting events on campus including the SEC Football Championship, ACC Men's Basketball tournament, Chick-fil-a College Kickoff and Chick-fil-a Bowl, 10 Falcon games, International Soccer Match, American Idol Auditions, many trade shows, corporate events, high school and college graduations and concerts in the park. During this time we were also busy rebuilding all facilities from the tornado that hit Atlanta on March 14, 2008. The campus of the Georgia World Congress Center Authority sustained
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diligence and detail of our team, the estimated actual replacement cost came in under $65 million.
Fiscal Year 2009 was challenging to the Georgia World Congress Center as everyone in the Nation was faced with the struggles of a recession and decreased revenues. The Georgia World Congress Center Authority's operating revenues were $5.4 million below projection. A large part of this decrease came from long term licenses for Dome suite and club seat revenue and Georgia Dome advertising revenue which were $2.2 million below projection. Additionally non-operating revenues (Hotel/Motel Tax and Interest earnings)
were nearly $3 million below forecast. In response to the reduction in Authority revenue
the staff held onto expenses as tight as possible. We re-activated our Customer Service Workgroup (CSW) teams to focus on increasing revenue and decreasing cost. We froze 40+ positions at the Georgia World Congress Center saving $2.9 million in personal services. We had a focus on turning off escalators and lights that produced a savings in our electrical budget of $260k and through other cost cutting/saving strategies we saved an additional $3+ million on other operating expenses. Overall, considering the economic climate, the Georgia World Congress Center Authority's financial performance was excellent.
Additionally, the Georgia World Congress Center Authority completed several major projects amounting to $23+ million and the Falcons contributed in excess of $5 million toward renovations of the Georgia Dome. The major projects include replacing all the escalators and air hander units in the original 1976 building of the convention center (building A) for $5 million, replacing furniture in the public concourses at a cost of $1 million, roof and other repairs not covered by insurance at the convention center for $3.4 million, replace the large video boards at the Georgia Dome for $5.2 million and other projects across the campus including replacing kitchen equipment, building A handrails, upgrade building A restrooms and upgrade the Red parking deck stairs and elevators. Needless to say, it was a very intensive and busy year for construction and repairs on the Georgia World Congress Center Campus. Without these projects, the Georgia World Congress Center Authority would have performed financially better than projection, despite the recession and decrease in revenues.
The 200-acre campus of the Georgia World Congress Center Authority is committed to servicing the State of Georgia as the leading economic generator and is committed to the tradeshow manager, convention attendee, football fan and the downtown community to provide the best atmosphere, customer service and environment for everyone, everyday.
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BASIC FINANCIAL STATEMENTS -11 -

GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER AUTHORITY
STATEMENT OF NET ASSETS PROPRIETARY FUNDS-ENTERPRISE FUNDS
JUNE 30, 2009

EXHIBIT"A"

GWCC
FUND

MAJOR FUNDS
GEORGIA DOME FUND

CENTENNIAL OLYMPIC
PARK FUND

TOTAL

CIA'lenl Assets Cash and Cash Equivalents Accolllls Receivable Prepaid Items kwentories

$

21,337,907.23 $

23,602,898.82 $

5,136,307.07

9,466,146.03

32,013.49

15,144.34

199,748.90

Total Current Assets

26,705,976.69 $

33,084,189.19 $

Nonc:ment Assets Resbicted Cash and Cash EqLivalents Customer Deposits
lrM!slments Rewnue Bond Cownant ACCOl.llls
Accounts Receivable Customer Deposits

$

6,741,691.94

31,541,491.14

106,062.00

Total Resbicted Assets

$ _ _38~,38~9,~24_5_.08_

Capital Assets Land BLilding Less: Acamulaled Depreciation lmprowments Olher than BLildings Less: Acamulaled Depreciation EqLipment Less: Accurnuated Depreciation

$

800,000.00

$

$

209,402,736.05

-124,090,524.33

5,161,388.69 -4,291,507 .34

20,501,067.63 -11 ,271,303.98

Capital Assets (Net of ACClnUlted Depreciation) $ _ _ _1'-",66=9,""88"'1""'.3~5 $

94.541.975.37 $

Total Nonanent Assets

$ _ _ _1'-",669=,88"'-'-'1-"'.35~$

132,931,220.45 $

Total Assets

$

28,375.858.04 $

166.015.409.64 $

2,448,427.09 $ 147,510.67 47,069.77
2,643,007.53 $

47,389,233.14 14,749,963.77
94,227.60 199,748.90
62,433,173.41

$

6,741,691.94

31,541,491.14

106,062.00

$ _ _3_8~,38~9,~24_5_.0_8

36,482,885.56 $
35,797,674.53 -9,546,046.56 3,682,028.33 -1,059,997.58
65,356,544.28 $
65,356,54428 $

37,282,885.56 209,402,736.05 -124,090,524.33
35,797,674.53 -9,546,046.56 29,344,484.65 -16,622.808.90
161,568,401.00
199,957,646.08

67.999.551.81 $

262.390,819.49

The notes to the financial statements are an integral part of this statement.
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GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER AUTHORITY
STATEMENT OF NET ASSETS PROPRIETARY FUNDS-ENTERPRISE FUNDS
JUNE 30, 2009

EXHIBIT"A"

GWCC FUND

MAJOR FUNDS
GEORGIA DOME FUND

CENTENNIAL OLYMPIC
PARK FUND

TOTAL

LIABILITIES AND NET ASSETS

Current Liabilities AccolJ'lls Payable Accrued PayrolVPayroll Withholdings Compensated Absences Deferred Revenue Other Liabilities
Total Cl.l'Tent Liabilities
Current Liabilities Payable from Restricted Assets Accrued 11terest Payable Revenue Bonds Payable
Total Cl.flllnt Liabilities Payable from Restricted Assets
Noncll'Tent Liabilities Compensated Absences Customer Deposits Payable Revenue Bonds Payable Other Liabilities
Total Noncurrent Liabilities
Total Liabilities

$

3,192,019.30 $

3,657,952.44 $

118,228.20

47,042.95

208,670.59

61,070.22

4,013,494.44

30,665,607.52

274 769.03

65,854.18

$

7,807,181.56 $--"-'-'-3'4-,'4-9"7-,'527.31 $

$

3,921,959.38

8,150,000.00

12,071,959.38

$

1,281,833.59 $

375,145.64 $

6,778,865.00

130,470,000.00

557,864.38

133.703.93

$ _ _ _1=8~3~9~69~7=.9~7$1_3~7~7..5C7..7C1..4.~.5=7'- $

$

9,646,879.53 $ - -1~ 84,3~ 27,201.26 $

437,754.47 $ 7,630.60 11,778.02 32,800.00 10,961.63
500,924.72 $

7,287,726.21 172,901.75 281,518.83
34,711,901.96 351,584.84
42,805,633.59

$

3,921,959.38

8,150,000.00

$

12,071,959.38

72,350.68 $
22,255.43 94 606.11 $ 595 530.83 $

1,729,329.91 6,778,865.00 130,470,000.00
713 823.74
139,692,018.65
194,569,611.62

Net Assets Invested in Capital Assets, Net of Related Debt Restricted for: Revenue Bond Covenants Maintenance of Art Unrestricted (Deficit)
Total Net Assets
Total Liabilities and Net Assets

$

1,669,881.35 $

-44,078,024.63 $

65,356,544.28 $

22,948,401.00

17,059,097.16

27,619,531.76 -1,853,298.75

64,965.46 1,982,511.24

27,619,531.76 64,965.46
17,188,309.65

$

18,728,978.51 $ _ _-..1.:8.:;3,i1""1-7'"9'-"1'-.'6-=2~ $

67,404,020.98 $

67,821,207 .87

$

28,375,858.04 $ ____1_6_6p_1_5_,409.64 $

67,999,551.81 $ 262,390,819.49

The notes to the financial statements are an integral part of this statement.
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GEORGE L. SMITH, II

EXHIBIT "B"

GEORGIA WORLD CONGRESS CENTER AUTHORITY

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS

PROPRIETARY FUNDS-ENTERPRISE FUNDS

YEAR ENDED JUNE 30, 2009

OPERATING REVENUES
Space Rental Rental - Suite Rental - Equipment Utility Services Parking Catering Advertising Seats/Suites License Fee Telecommunications Contribution from Falcons Cancellation Fee Holiday in Lights Revenue Sponsorship Miscellaneous

G\NCC FUND

MAJOR FUNDS
GEORG~ DOME FUND

CENTENN~L OLYMPIC
PARK FUND

TOTAL

$ 12,570,161.53 $ 219,272.00
6,670,424.10 2,904,734.47 4,901,671.64
485,553.38 549,848.06
1,077,138.05

5,599,528.00 $ 1,383,547.00
42,048.77 73,542.02 591,077.20 4,696,327.04 3,959,077.20 18,766,955.20 43,715.60 5,467,023.75 357,316.94
342,798.24

257,350.00 $ 6,202.96 52,333.00
458,202.78
91,976.75 107,900.00
21,251.20

18,427,039.53 1,383,547.00 267,523.73 6,796,299.12 3,495,811.67
10,056,201.46 3,959,077.20 18,766,955.20 529,268.98 5,467,023.75 907,165.00 91,976.75 107,900.00 1 441,187.49

Tolal Operating Revenues

$ 29,378,803.23 $ 41,322,956.96 $ 995,216.69 $ 71,696,976.88

OPERATING EXPENSES
Personal Services Regular Operating Expenses Equipment/Computer Per Diem and Fees Other Special Projects/Capital OuHay Contractual - Game Tickets Contractual- Falcons Contractual - Commissions

$ 18,853,658.46 $ 10,464,594.91 1,867,508.32 1,995,911.68 334,997.89 3,151,406.45

7,561,762.88 $ 7,346,491.18
662,749.25 2,664,397.69
183,781.49 10,454,668.59 6,169,890.00 4,000,000.00 4,264,429.12

1,289,328.40 $ 654,398.64 9,895.26 414,431.36 13,034.23 188,946.96

27,704,749.74 18,465,484.73
2,540,152.83 5,074,740.73
531,813.61 13,795,022.00 6,169,890.00 4,000,000.00 4,264,429.12

Tolal Operating Expenses

$ 36,668,077.71 $ 43,308,170.20 $ 2,570,034.85 $ 82,546,282.76

Operating Profit (Loss) Before Depreciation $ -7,289,274.48 $

-1,985,213.24 $ -1,574,818.16 $ -10,849,305.88

Depreciation

266,719.97

8,958,811.04

1,534,541.98

10,760,072.99

Operating Profit (Loss)

$ -7,555,994.45 $ -10,944,024.28 $ -3,109,360.14 $ -21,609,378.87

The notes to the financial statements are an integral part of this statement.
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GEORGE L. SMITH, II

EXHIBIT"B"

GEORGIA WORLD CONGRESS CENTER AUTHORITY

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS

PROPRIETARY FUNDS-ENTERPRISE FUNDS

YEAR ENDED JUNE 30, 2009

GWCC FUND

MAJOR FUNDS
GEORGIA DOME FUND

CENTENNIAL OLYMPIC
PARK FUND

TOTAL

NONOPERA"ffiG REVENUES {EXPENSES)
Hotel and Motel Tax Investment Income Vendor's Compensation on Sales Tax Collections Debt Service murance Recovery Gain (Loss) on Capital Asset Disposals Bond Money Revenue - Georgia Slate Financing
and Investment Commission Bond Money Expense - Georgia Slate Financing
and Investment Commission Construction Project Revenue - Georgia Department
o f Transportation Construction Project Expense - Georgia Department
of Transportation
Total Nonoperating Revenues (Expenses)
Net Income (Loss) Before Transfers
TRANSFERS
Transfer In Transfers Out
Total Transfers
Changes in Net Assets
TOTALNETASSETS-JULY1

$ 4,244,847.13 $ 354,288.34 5,913.72
-324, 160.69 77,192.48
8,943,355.70
-8,943,355. 70
26,099.04
-26,099.04 $ 4,358,080.98 $
$ -3, 197,913.47 $

19,107,741.86 624,917.54 $ 3,068.42
-7,848,918.76 -81,693.79 33,256.16

$ 27,061.99
31.94
-14,624.43 968.00
528,639.04
-528,639.04

11,838,371.43 $

13,437.50 $

894 347.15 $ -3,095,922.64 $

$ -1,619,936.06 $ -1,619,936.06 $ -4,817,849.53 $
23,546,828.04

$ 1,619,936.06 $

$ 1,619,936.06 $

894,347.15 $ -1,475,986.58 $

-19,206,138.77

68,880,007.56

23,352,588.99 1,006,267.87 9,014.08 -7,848,918.76 -420,478.91 111,416.64 9,471,994.74 -9,471,994.74
26,099.04
-26,099.04 16,209,889.91 -5,399,488.96
1,619,936.06 -1,619,936.06
0.00 -5,399,488.96
73,220,696.83

TOTAL NET ASSETS - JUNE 30

$ 18,728,978.51 $ -181311?91.62 $ 6714041020.98 $

6718211207.87

The notes to the financial statements are an integral part of this statement.
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GEORGE L. SMITH. II GEORGIA WORLD CONGRESS CENTER AUTHORITY
STATEMENT OF CASH FLOWS PROPRIETARY FUNDS-ENTERPRISE FUNDS
YEAR ENDED JUNE 30, 2009

EXHIBIT "C"

G~C FUND

MAJOR FUNDS

CENTENNIAL

GEORGIA

OLYMPIC

DOME FUND

PARK FUND

TOTAL

CASH FLOWS FROM OPRATNG ACTIVITES

Cash Receiwd from Customers
Customer Seat and Suite Deposits - Georgia Dome
Customer Seat and Suite License Fees - Georgia Dome
Cash Paid to Vendors Cash Paid to Emplo)'HS Amal Pa)fl1811t (Contractual- Falcons)

$ 30,130,973.13 $ 39,302,098.37 $

-731,720.00

18,592,775.78

-29,478,563.88 -47,881,996.18

-10,277,986.37

-4,701,386.37

-4,000.000.00

1,645,123.06 $
-2,042,952.82 -830,607.57

71,078,194.58 -731,720.00
18,592,775.78 -79,183,512.88 -15,609,980.31
-4,000,000.00

Net Cash Provided By (Used h) Operating Activities

$ -9,625.577.12 $

799,771.60 $ -1,028.437.33 $ -9,854~42.85

CASH FLOWS FROM NON~APITAL FNANCNG ACTIVITES

Hotel and Motel Tax Receiwd Hotel and Motel Tax Dislribt.ted Operating Transfer- Centennial O~pic Park Operations Lost Re\'elUI Recovery VendOl's Compensation on Sales Tax Collections

$ 13,093,781.81 -9,173,887.00 -1,619,936.06 2,065,434.31 $ 5,913.72

$ 520,523.21
3,088.42

$
1,619,936.06 93,181.57 31.94

13,093,781.81 -9,173,887.00
0.00 2,679,139.09
9 014.06

Net Cash Prollided By (Used h) Noncapital Financing Activities

$ 4,371,306.78 $

523,591.63 $ 1,713,149.57 $ 6,608,047.98

CASH FLOWS FROM CAPITAL AND RELATED FINANCNG ACTIVITES

hlerest/Fees Paid on Refu'lding Rewnue Bonds Principal Payment on Refunding Re9Rl8 Bonds
Hotel and Motel Tax Receiwd - Dedicated to Georgia Dome
Damage Caused by Tornado hsinnce Recovery Acquisition and ConslrUclion of Capital Assets

$
$ -34,249,760.87 31,916,668.95 24,040.87

-8,078,868.76 -7,665,000.00 17,571,483.90
-895,971.17 $ 1,746,704.50 -5,358~44.69

$
-147,676.57 453,972.77
968.00

-8,078,868.76 -7,665,000.00 17,571,483.90 -35,093,408.61 34,117,346.22 -5,333,235.62

Net Cash Prollided By (Used h) Capital and Related Financing Activities

$ -2,309,051.05 $ -2,479,898.22 $

307,264.20 $ -4,481 ,683.07

CAH FLOWS FROM NVESThlG ACTIVITES

Plldlase of rniestment Securities Proceeds from Sale and Maturity of nvestments ~st on nwsbnents

$ -55,200,000.00 $ -244,074,451.55

62,200,000.00 251,251,214.10

354,288.34

624,917.54 $

$ -299,274,451.55

313,451,214.10

27,061.99

1,006,267.87

Net Cash Provided By (Used h) nvesting Activities

$ 7,354,288.34 $ 7,801,680.09 $

27,061.99 $ 15,183,030.42

Net hcrease (Decrease) in Cash and Cash Equivalents

$

-209,033.05 $ 6,645,147.10 $ 1,019,038.43 $ 7,455,152.48

CASH AND CASH EQUIVALENTS - JULY 1

21,546,940.28

23,699,443.66

1,429,368.88

46,675,772.60

CASH AND CASH EQUIVALENTS-JUNE 30

$ 2\337,907.23 $ 30,344,590.76 $ 2,448,427.09 $ 54,130,925.08

The notes to the financial statements are an integral part of this statement.
-16 -

GEORGE L. SMITH. II GEORGIA WORLD CONGRESS CENTER AUTHORITY
STATEMENT OF CASH FLOWS PROPRIETARY FUNDS-ENTERPRISE FUNDS
YEAR ENDED JUNE 30. 2009

EXHIBIT"C"

GWCC
FUND

MAJOR FUNDS

CENTENNIAL

GEORGIA

OLYMPC

DOME FUND

PARK FUND

TOTAL

REQ~[!.IA]OO OF OP!;RATNG PROFIT {!.0Sl TQ NET QAH PRQ'iDED BY (!,!D N} OPERAJm ACTIV[l;S
Operatit"G Profit (Loss)
Adjustmerts to Reconcile Operatit"G Profit (Loss) to Net Cash Prollided By (Used In) Operatil"G Actillities: Depreciation Comact with LEIIIY Reslalrarts for Eql.ipmenl F>l.l'Chases
c ~ in Assets and Liabilities:
(Increase) Decrease in Accounts Receilable (lnclllase) Decrease in Prepaid 1ems Decrease in tMntories lncn!ase (Decreese) in Liabilities (Other
than Customer Deposits) (Decrease) in Customer Deposits Payable
Increase (Decrease) in Deferred Rewnues
Total Adjuslments

$ -7,555,994.45 $ -10,944,024.28 $ -3,109,360.14 $ -21,609,378.87

$

266,719.97 $ 8,958,811.04 $ 1,534,541.98 $ 10,760,072.99

-322,480.58

-17,993.00

-340,473.58

-1,684,942.95 15,821.49 95,493.21

-4,238,417.81 -7,533.74

575,004.47 -39,731.16

-5,348,356.29 -31,443.41 95,493.21

-813,479.13 373,286.32

-425,152.87 -731,720.00 8,205,802.26

59,807.52 -48,700.00

-1,178,824.48 -731,720.00 8,530,387.58

$ -2,069.582.67 $ 11,743,795.88 $ 2,080,922.81 $ 11,755,136.02

Net Cash Prollided By (Used In) Operatit"G Adillities

$ -9,6251577.12 $

s 190i711.so

-1,0281437.33 $ -9,8541242.85

The notes to the financial statements are an integral part of this statement.
-17 -

GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. REPORTING ENTITY The George L. Smith, II Georgia World Congress Center Authority (Authority) is an instrumentality of the State of Georgia and a public corporation created for the purposes of operating and maintaining a comprehensive international trade and convention center consisting of a complex of facilities suitable for multipurpose use. The management of the business and affairs of the Authority is vested in a Board of Governors. The Official Code of Georgia Annotated (OCGA) Section 10-9-6 provides that the Board of Governors consist of fifteen (15) members appointed by the Governor. The Authority is considered a component unit of the State of Georgia for financial reporting purposes because of the significance of its legal, operational and financial relationships with the State of Georgia. These reporting entity relationships are defined in Section 2100 of the Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting Standards.
B. BASIS OF PRESENTATION The Authority reports its financial position and the results of its operations under accounting principles generally accepted in the United States of America for a special purpose government (component unit of the State of Georgia) engaged in business-type activities utilizing the following funds:
Maior Funds , PROPRIETARY FUND TYPES
Enterprise Funds These funds account for those activities for which the intent of management is to recover, primarily through user charges, the cost of providing goods or services to the general public, or where sound financial management dictates that periodic determinations of results of operations are appropriate.
GWCC Fund - Used to report activity associated with operations of the Georgia World Congress Center and certain administrative responsibilities related to the Georgia Dome and Centennial Olympic Park.
Georgia Dome Fund - Used to report activity associated with operations of the Georgia Dome.
Centennial Olympic Park Fund - Used to report activity associated with operations of the Centennial Olympic Park.
lnterfund Eliminations In accordance with the License Agreement (See Note 12), the GWCC Fund of the Authority collects an administrative overhead fee from the Georgia Dome Fund. The effect of this interfund activity has been eliminated from the GWCC Fund's operating revenues and expenses.

- 18-

GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009

EXHIBIT "D"

C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Proprietary fund types are reported using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of cash flows.
The Authority has elected to follow generally accepted accounting principles prescribed by the Governmental Accounting Standards Board (GASS) as well as Statements and Interpretations of the Financial Accounting Standards Board, Accounting Principles Board Opinions and Accounting Research Bulletins of the Committee on Accounting Procedure issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASS pronouncements.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Authority's enterprise funds are charges to customers for space rent, utility services, catering and parking services. Operating expenses include personal services, regular operating expenses, equipment, contractual expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
D. ASSETS, LIABILITIES AND NET ASSETS CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include currency on hand, demand deposits with banks and other financial institutions, and the State investment pool that has the general characteristics of demand deposit accounts in that the Authority may deposit additional cash at any time and also may withdraw cash at any time without prior notice or penalty. Cash and Cash Equivalents also include short-term, highly liquid investments with maturities of three months or less from the date of acquisition. Funds of the Georgia Dome Fund on deposit with the Trustee for the purpose of continual investment are reflected as investments regardless of the term of the instruments. The aforementioned definitions were applied in the preparation of the Statement of Cash Flows.
The State investment pool (Georgia Fund 1) is an external investment pool that is not registered with the Securities and Exchange Commission (SEC) but does operate in a manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. The State of Georgia's Office of Treasury and Fiscal Services (OTFS) manages Georgia Fund 1 in accordance with policies and procedures established by State law and the State Depository Board, the oversight Board for OTFS. This investment is valued at the pool's share price, $1.00 per share.
The Authority does not have any risk exposure related to investments in derivatives or similar investments in Georgia Fund 1 as the investment policy of OTFS does not provide for investments in derivatives or similar investments through the Georgia Fund 1.

- 19-

GEORGE L. SMITH, 11 GEORGIA WORLD CONGRESS CENTER AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009

EXHIBIT "D"

INVESTMENTS Investments are defined as those financial instruments with terms in excess of three months from the date of purchase. Also reported as investments are funds of the Georgia Dome Fund on deposit with the Trustee of the Series 2000 Refunding Revenue Bonds for the purpose of continual investment and certain other securities held for the production of revenue. Investments are stated at cost or amortized cost. Accounting principles generally accepted in the United States of America require that investments be reported at fair value, however, the variance in cost/amortized cost and fair value is deemed immaterial to the financial statements.
The Authority may invest regular funds in U.S. Government securities, certificates of deposit and repurchase agreements. In addition, the Series 2000 Refunding Revenue Bond covenants restrict the Authority to the following forms of investments for the Georgia Dome Fund:
(1) Obligations issued by the United States government.
(2) Obligations of any corporation of the United States government fully guaranteed by the United States government.
(3) Obligations of the Federal Home Loan Bank.
(4) Repurchase Agreements.
ACCOUNTS RECEIVABLE Accounts receivable arising from operations are reported at gross value. Based on management's evaluation that amounts uncollectible are not material, no provision has been made for such amounts.
PREPAID ITEMS Payments made to vendors for services that will benefit periods beyond June 30, 2009, are recorded as prepaid items.
INVENTORIES Supply inventories are valued at cost, using the first-in/first-out (FIFO) method. These expendable supplies are recorded as inventories at the time of purchase and are recorded as expense based on consumption.
RESTRICTED ASSETS Certain refunding revenue bond resources recorded in the Dome Fund are reflected as restricted assets on the Statement of Net Assets because their use is limited by applicable bond covenants.
In addition, restricted assets include customer deposits paid to the Authority based on contracts for the rental of seats and suites within the Georgia Dome. Certain customer deposits are subject to refund upon expiration of the contracts.
- 20-

GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009

EXHIBIT"D"

CAPITAL ASSETS Capital assets, which include property, plant and equipment, are recorded in the Statement of Net Assets at historical cost. Donated capital assets are recorded at fair market value on the date donated and disposals are deleted at recorded cost. All land is capitalized regardless of cost. Buildings and Building Improvements are capitalized when the cost of individual items or projects exceeds $100,000. Equipment is capitalized when the cost of individual items exceeds $5,000. The costs of normal maintenance and repairs that do not add to the value of assets or materially extend asset lives are not capitalized.

Capital assets of the Authority are depreciated using the straight-line method over the following estimated useful lives:

Assets

Buildings Improvements Other than Buildings Equipment

30 30 3-10

Under a contractual agreement with the State of Georgia Department of Economic Development, the Authority operates the Georgia World Congress Center. The Georgia World Congress Center consists of exhibition facilities for conventions, trade shows and meetings catering to national, international and corporate groups. The Georgia World Congress Center was financed with the proceeds from State of Georgia General Obligation Bonds and is owned by the State of Georgia.

LONG-TERM OBLIGATIONS Long-term debt is recognized as a liability of proprietary fund types if those liabilities are expected to be financed from proprietary fund operations.

NET ASSETS The difference between fund assets and liabilities is "Net Assets". Net assets are reported in three categories:

Net Assets Invested in Capital Assets, Net of Related Debt consist of capital assets, net of accumulated depreciation and reduced by outstanding balances for bonds, notes and other debt that are attributed to the acquisition, construction, or improvement of those assets.

- 21 -

GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009

EXHIBIT "D"

Restricted Net Assets result when constraints placed on net assets use are either externally imposed by creditors, granters, contributors, and the like, or imposed by law through constitutional provisions or enabling legislation. The Authority reports the following restricted net assets:
Revenue Bond Covenants - represents the balance of assets restricted by the revenue bond covenants not obligated for payment of current liabilities.
Maintenance of Art - represents restriction placed by contract with AHEPA Centennial Foundation, Inc. for the maintenance and repair of works of art placed in Centennial Olympic Park.
Unrestricted Net Assets consist of net assets that do not meet the definition of the two preceding categories. Unrestricted net assets often are designated, indicating they are not available for general operations. Such designations have internally imposed constraints on resources, but can be removed or modified.
E. REVENUES AND EXPENSES
SHARED REVENUES Pursuant to the Hotel and Motel Tax Act as enacted and amended by the General Assembly of Georgia, the City of Atlanta, the City of Sandy Springs, the City of Johns Creek, the City of Chattahoochee Hills, the City of Milton, and Fulton County, Georgia, have agreed to levy and collect an excise tax in the amount of seven percent on rooms, lodgings and accommodations within the special district defined in the Hotel and Motel Tax Act. Pursuant to the Stadium Funding Agreement between the Authority and the City of Atlanta and Fulton County, Georgia, 48.9% of such collections are to be paid to the Authority, with 39.3% dedicated to the purposes of the Domed Stadium Project and the remaining 9.6% to be used at the Authority's discretion. Pursuant to the Stadium Funding Agreement between the Authority and the City of Sandy Springs, the City of Johns Creek, the City of Milton, and the City of Chattahoochee Hills, 39.3% of such collections are to be paid to the Authority dedicated to the purposes of the Domed Stadium Project. The flow of future shared revenues dedicated to the purposes of the Domed Stadium Project may not be terminated prior to the liquidation of all Series 2000 Refunding Revenue Bonds.
COMPENSATED ABSENCES Compensated absences represent obligations of the Authority relating to employee's rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulated annual leave. Annual leave is recorded as an expense as earned. Cost of annual leave of terminated employees is covered by operations of the related fund.

GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009

EXHIBIT "D"

KEY EMPLOYEE INCENTIVE COMPENSATION Key employee incentive compensation represents the obligation of the Authority to pay certain administrative employees bonuses based on annual personal performance evaluations and an evaluation of the overall performance of the Authority made by the Board. The annual bonuses are expensed in the fund from which the employee's salary is paid in the year earned and paid over a three year period. If an employee terminates prior to the complete payout of the bonus, the balance is forfeited at termination.
F. TRANSFERS Transfers are made up of interfund transfers which are used to move a portion of revenues from the GWCC Fund to the Centennial Olympic Park Fund for operations of Centennial Olympic Park.
NOTE 2: BUDGETS
An internal operations budget for management purposes is prepared by the Authority. The budget is not subject to review or approval by the General Assembly of the State of Georgia and therefore, is a nonappropriated budget.
NOTE 3: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
COMPLIANCE WITH REVENUE BOND COVENANTS The Authority is subject to certain covenants with regard to the issuance of the Series 2000 Refunding Revenue Bonds (Domed Stadium Project).
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds of the State of Georgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral any one or more of the following securities as enumerated in the OCGA Section 50-17-59:
(1) Bonds, bills, certificates of indebtedness, notes, or other direct obligations of the United States or of the State of Georgia.
(2) Bonds, bills, certificates of indebtedness, notes, or other obligations of the counties or municipalities of the State of Georgia.
(3) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose.
(4) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia.

GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009

EXHIBIT D 11 11

(5) Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, or debt obligations issued by or securities guaranteed by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Corporation, or the Federal National Mortgage Association.
(6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.
OCGA Section 45-8-11 provides that the Authority may waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
NOTE 4: DEPOSITS AND INVESTMENTS
A. Deposits The custodial credit risk for deposits is the risk that in the event of a bank failure, the Authority's deposits may not be recovered. At June 30, 2009, the balance of the Authority's deposits were fully collateralized by a combination of depository insurance and securities held by the financial institution's agent in the Authority's name.

Cash and Cash Equivalents

Per Statement of Net Assets

$ 54,130,925.08

Reclassification from Investments for Risk Assessment Disclosure Bank of New York Cash

99,088.98

Reclassification to Investments for Risk Assessment Disclosure State investment pool

-590,652.66

Investments $ 31,541,491.14
-99,088.98
590,652.66

Per notes to the financial statements

$

53,639,361.40 $ 32,033,054.82

GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009

EXHIBIT "D"

8. Investments

The Authority's investments as of June 30, 2009 are presented below. All investments are

presented by investment type by maturity.

Fair

Investment

Maturities

Value

U.S. Agency Obligations U.S. Treasury Bill U.S. Treasury Bill

1 Day 23 Days 338 Days

$ 12,071,000.00 13,394,062.35 5,980,028.57

Georgia Fund 1 Investment Pool

WAM

590,652.66

$ 32,035,743.58
Interest Rate Risk Interest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. The Authority's policy is to not invest in instruments over 12 months.
Credit Quality Risk Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The credit quality risk of the Authority is managed by restricting investments to those authorized in Note 1.
The U. S. Agency Obligations and the Georgia Fund 1 were rated AAA by Standard and Poor's.
Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of the Authority's investment in a single issuer. At June 30, 2009, more than 5% of the Authority's total investments were in securities of U.S. Agency Obligations not explicitly guaranteed by the U.S. government. These investments represented approximately 37.7 percent of total investments.

GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009

EXHIBIT"D"

NOTE 5: TRANSFERS

Transfers during the year ended June 30, 2009, consist of the following:

Transfers In lnterfund

$ 1,619,936.06

Transfers Out lnterfund

-1,619,936.06

Total Transfers

$

0.00

NOTE 6: CAPITAL ASSETS Capital asset activity for the year ended June 30, 2009, was as follows:

Balance July 1, 2008

Additions

capital Assets Not Being Depreciated:

Land

$

Total capital Assets Not Being Depreciated $

37,282,885.56 37,282,885.56

capital Assets Being Depreciated:

Buildings

$ 209,402,736.05

lrrprovements Other Than Buildings

35,797,674.53

Equipment

24,014,668.01 $ 5,791,498.60 $

Total capital Assets Being Depreciated

$ 269,215,078.59 $

5,791,498.60 $

Less AccumJlated Depreciation For: Buildings h'provements Other Than Buildings Equipment
Total AccumJlated Depreciation

$ -116,334,868.72 $ -7,755,655.61

-8,352,790.74

-1, 193,255.82

-15,266,956. 74

-1,810,904.46 $

$ -139,954,616.20 $ -10,759,815.89 $

Total capital Assets Being Depreciated, Net $ 129,260,462.39 $ -4,968,317.29 $

Total capital Assets, Net

$ 166,543,347.95 $ -4,968,317.29 $

Deletions

Balance June 30, 2009

$

37,282,885.56

$

37,282,885.56

$
-461,681.96 -461,681.96 $

209,402,736.05 35,797,674.53 29,344,484.65
274,544,895.23

$
455,052.30 455,052.30 $

-124,090,524.33 -9,546,046.56
-16,622,808.90 -150,259,379.79

-6,629.66 $ 124,285,515.44

-6,629.66 $ 161,568,401.00

GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2009

EXHIBIT 11D"

NOTE 7: LONG-TERM DEBT

Long-term obligations at June 30, 2009, and changes for the fiscal year then ended are as follows:

July 1, 2008

Increases

Decreases

June 30, 2009

Amounts Due Within One Year

Refunding Revenue Bonds $ Compensated Absences Key Employee Incentive
Compensation

146,285,000.00 1,656,222.00 $
1,032,238.78

$ -7,665,000.00 $ 138,620,000.00 $ 8, 150,000.00

543,076.42

-188,449.68

2,010,848.74

281,518.83

411,444.80

-378,275.00

1,065,408.58

351,584.84

$

148,973,460.78 $ 954,521.22 $ -8,231,724.68 $ 141,696,257.32 $ 8,783,103.67

REVENUE BONDS PAYABLE
The Authority has issued Refunding Revenue Bonds (Domed Stadium Project), Series 2000, which
are backed by a Hotel and Motel Tax imposed by the City of Atlanta, the City of Sandy Springs, the City of Johns Creek, the City of Chattahoochee Hills, the City of Milton, and Fulton County, Georgia, as well as future operating revenues derived from the operation of the Georgia Dome. Refunding
revenue bonds outstanding at June 30, 2009, are as follows:

Purpose

Amount

Domed Stadium Project

5.50% - 6.00% $ 138,620,000.00

Revenue bond debt service requirements to maturity are as follows:

Fiscal Year
Ended June 30

Principal

Interest

2010 2011 2012 2013 2014 2015-2019 2020-2021

$ 8, 150,000.00 $ 3,677,459.38 $

8,660,000.00

7,095,118.76

9,210,000.00

6,559,018.76

9,795,000.00

6,007,234.38

10,375,000.00

5,436,062.50

62,115,000.00 17,332,650.00

30,315,000.00

1,691,387.50

Total
11,827,459.38 15,755,118.76 15,769,018.76 15,802,234.38 15,811,062.50 79,447,650.00 32,006,387.50

$ 138,620,000.00 $ 47,798,931.28 $ 186,418,931.28

Interest due on July 1, 2009, in the amount of $3,921,959.38 was recorded as a liability of the Georgia Dome Fund at June 30, 2009.

GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009

EXHIBIT "D"

COMPENSATED ABSENCES Compensated absences are liquidated by the fund they are reported in and do not have scheduled future debt service requirements beyond one year.
FINANCIAL GUARANTY INSURANCE POLICY The Authority maintains a Financial Guaranty Insurance Policy issued by the MBIA Insurance Corporation and dated April 4, 2000. The Financial Guaranty Insurance Policy is available to ensure timely payments of interest and bond principal should funds not be readily available from the Authority. The terms of this policy extend through the expiration of the Series 2000 Refunding Revenue Bond Issue. In the event that principal and interest payments become necessary by the Insurer, the Authority is liable to the Insurer for reimbursement of such payments plus interest thereon. As of June 30, 2009, no monies have been paid by the Insurer on this policy.
NOTE 8: RISK MANAGEMENT
Public Entity Risk Pool The Department of Community Health administers for the State of Georgia a program of health benefits for the employees of units of government of the State of Georgia, units of county government and local education agencies located within the State of Georgia. This plan is funded by participants covered in the plan, by employers' contributions paid by the various units of government participating in the plan, and appropriations made by the General Assembly of Georgia. The Department of Community Health has contracted with various outside parties to process claims in accordance with the State Employees' Health Benefit Plan as established by the Department. Details on the liability for unpaid claims are disclosed in the State ofGeorgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2009.
Other Risk Management The Authority is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omission; and injuries to employees. The State of Georgia utilizes selfinsurance programs established by individual agreement, statute or administrative action, to provide property insurance covering fire and extended coverage and automobile insurance and to pay losses that might occur from such causes; liability insurance for employees against personal liability for damages arising out of performance of their duties; survivors benefits for eligible members of the Employees' Retirement System; consolidating processing of unemployment compensation claims against State agencies and the payment of sums due to the Department of Labor; and workers' compensation insurance coverage for employees of the State and for the receipt of benefits as prescribed by the workers' compensation statutes of the State of Georgia. These self-insurance funds are accounted for as internal service funds of the State of Georgia where assets are set aside for claim settlements. The majority of the risk management programs are funded by assessments charged to participating organizations. A limited amount of commercial insurance is purchased by the self-insurance funds applicable to property, employee and automobile liability, fidelity and certain other risks to limit the exposure to catastrophic losses. Otherwise, the risk management programs service all claims against the State for injuries and property damage. Financial information relative to the self-insurance funds will be presented in the State of Georgia Comprehensive Annual Financial Report for the year ended June 30, 2009.
- 28-

GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009

EXHIBIT"D"

NOTE 9: RETIREMENT PLANS
The Georgia World Congress Center Authority participates in various retirement plans administered by the State of Georgia under the Employees' Retirement System of Georgia (ERS System). This system issues separate publicly available financial reports that include the applicable financial statements and required supplementary information. The reports may be obtained from the respective system offices. The significant retirement plans that the Georgia World Congress Center Authority participates in are described below. More detailed information can be found in the plan agreements and related legislation. Each plan, including benefit and contribution provisions, was established and can be amended by State law.
Employees' Retirement System of Georgia
The ERS System is comprised of individual retirement systems and plans covering substantially all employees of the State of Georgia except for teachers and other employees covered by the Teachers Retirement System of Georgia. The Employees' Retirement System of Georgia (ERS), is a cost-sharing multiple-employer defined benefit pension plan that was established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees and has the powers and privileges of a corporation. ERS acts pursuant to statutory direction and guidelines, which may be amended prospectively for new hires but for existing members and beneficiaries may be amended in some aspects only subject to potential application of certain constitutional restraints against impairment of contract.
On November 20, 1997, the Board created the Supplemental Retirement Benefit Plan (SRBP-ERS) of ERS. SRBP-ERS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of ERS. The purpose of the SRBP-ERS is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC Section 415. Beginning January 1, 1998, all members and retired former members in ERS are eligible to participate in the SRBP-ERS whenever their benefits under ERS exceed the limitation on benefits imposed by IRC Section 415.
The benefit structure of ERS is established by the Board of Trustees under statutory guidelines. Unless the employee elects otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1, 1982, is an "old plan" member subject to the plan provisions in effect prior to July 1, 1982. Members hired on or after July 1, 1982 but prior to January 1, 2009 are "new plan" members subject to the modified plan provisions. Effective January 1, 2009, newly hired State employees, as well as rehired State employees who did not maintain eligibility for the "old" or "new" plan, are members of the Georgia State Employees' Pension and Savings Plan (GSEPS). ERS members hired prior to January 1, 2009 also have the option to change their membership to the GSEPS plan.
Under the old plan, new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early

GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009

EXHIBIT"D"

retirement after 25 years of creditable service for members under age 60.
Retirement benefits paid to members are based upon a formula adopted by the Board of Trustees for such purpose. The formula considers the monthly average of the member's highest 24 consecutive calendar months of salary, the number of years of creditable service, and the member's age at retirement. Post-retirement cost-of-living adjustments may be made to members' benefits provided the members were hired prior to July 1, 2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.
Member contribution rates are set by law. Member contributions under the old plan are 4% of annual compensation up to $4,200 plus 6% of annual compensation in excess of $4,200. Under the old plan, the Georgia World Congress Center Authority pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these Georgia World Congress Center Authority contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The Georgia World Congress Center Authority is required to contribute at a specified percentage of active member payroll established by the Board of Trustees determined annually in accordance with actuarial valuation and minimum funding standards as provided by law. These Georgia World Congress Center Authority contributions are not at any time refundable to the member or his/her beneficiary.
Employer contribution rates required for fiscal year 2009 were:
Old Plan 5.66% New Plan 10.41 % GSEPS 6.54%
The following table summarizes the Georgia World Congress Center Authority contributions for the years ending June 30, 2009, 2008, and 2007 (dollars in thousands):

ERS

Required

Percent

Contribution

Contributed

2009 $ 2008 $ 2007 $

1,714 1,686 1,627

100% 100% 100%

GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009

EXHIBIT"D"

Georgia Defined Contribution Plan
Certain employees of the Authority participate in the Georgia Defined Contribution Plan (GDCP), which is a single-employer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement allowances for public employees who are not members of a public retirement or pension system. GDCP is administered by the ERS Board of Trustees.
A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board. If a member has less than $3,500 credit to his/her account, the Board has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions of GDCP are established and may be amended by State statute.
Member contributions are 7.5% of gross salary. There are no employer contributions. Contribution rates are established and may be amended by State statute. Earnings are credited to each member's account in a manner established by the Board. Upon termination of employment, the amount of the member's account is refundable upon request by the member. Total contributions by employees during the fiscal year ended June 30, 2009, were $150,013.88, which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
NOTE 10: OTHER POSTEMPLOYMENT BENEFITS
The Georgia World Congress Center Authority participates in two State of Georgia postemployment benefit plans, the Georgia Retiree Health Benefit Fund (administered by the Department of Community Health) and the State Employees' Assurance Department- OPEB (administered by the ERS System). Separate financial reports that include the applicable financial statements and required supplementary information for these plans are publicly available and may be obtained from the respective system offices.
Georgia Retiree Health Benefit Fund
The Georgia Retiree Health Benefit Fund (GRHBF) is a cost-sharing multiple-employer defined benefit postemployment healthcare plan that covers retired employees of the State including all departments, agencies and local school systems. GRHBF provides health insurance benefits to eligible retirees and their qualified beneficiaries through the health insurance plan for State employees. The Official Code of Georgia Annotated (OCGA) assigns the authority to establish and amend the benefit provisions of the employees' health insurance plan (including benefits for retirees) to the Board of Community Health (Board).
The contribution requirements of the plan members and participating employers are established by the Board in accordance with the current Appropriations Act and may be amended by the Board. Contributions of plan members or beneficiaries vary based on plan election, dependent coverage, and Medicare eligibility and election. On average, plan members pay approximately 25 percent of

GEORGE L. SMITH. II GEORGIA WORLD CONGRESS CENTER AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 2009

EXHIBIT "D"

the cost of the health insurance coverage.

Participating employers are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rate is established to fund both the active and retired employee health insurance plans based on projected "pay-as-you-go" financing requirements. The combined rates for the active and retiree plans for the fiscal year ended June 30, 2009 were as follows:

July 2008 - January 2009 22.165% of covered payroll for August - February Coverage

February 2009

1.926% of covered payroll for March Coverage

March 2009 - June 2009 0.000% of covered payroll for April - July Coverage

No additional contribution was required by the Board for fiscal year 2009 nor contributed to GRBHF to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the State plan for other postemployment benefits and are subject to appropriation.

The following table summarizes the Georgia World Congress Center Authority contributions to the health insurance plans for the years ending June 30, 2009, 2008 and 2007 (dollars in thousands):

Required

Percent

Contribution Contributed

2009 2008 2007

$ 2,559 $ 4,296 $ 3,073

100% 100% 100%

State Employees' Assurance Department- OPES State Employees' Assurance Department - OPES (SEAD-OPEB) is a cost-sharing multipleemployer defined benefit postemployment plan that was created in fiscal year 2007 by the Georgia General Assembly to provide term life insurance to retired and vested inactive members of Employees', Judicial (JRS), and Legislative (LRS) Retirement Systems, amended to exclude members of JRS and LRS hired on or after July 1, 2009. Pursuant to Title 47of the OCGA, the authority to establish and amend the benefit provisions of the plan is assigned to the Boards of Trustees of the Employees' and Judicial Retirement Systems.
Contributions by plan members are established by the Boards of Trustees, up to the maximum allowed by statute (not to exceed 0.5% of earnable compensation). The Boards of Trustees of the Employees' and Judicial Retirement Systems establish employer contribution rates, such rates which, when added to members' contributions, shall not exceed 1% of earnable compensation. For the fiscal year ended June 30, 2009, contributions of ERS "old plan" members were 0.45% of earnable compensation, 0.22% of which was paid by the employer. Contributions of ERS "new plan" members and of members of the Judicial and Legislative Retirement Systems were 0.23% of earnable compensation. There were no employer annual required contributions (ARC) for the fiscal years ended June 30, 2009, 2008 and 2007.

GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009

EXHIBIT "D"

NOTE 11: LEAVE POLICIES
Employees earn ten hours of sick leave each month with a maximum accumulation of ninety days. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment.
Employees earn annual leave ranging from ten to fourteen hours each month depending upon the employees' length of continuous State service with a maximum accumulation of forty-five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1E - Compensated Absences. Certain employees who retire with one hundred and twenty days or more of forfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia.
The Authority has adopted a policy where employees may request that a portion of their unused accrued annual leave balance be paid in lump sum. There are eligibility requirements and minimum balances that must be maintained in addition to a maximum of 40 hours per year that can be converted through this process.
NOTE 12: OTHER FINANCIAL NOTES
LICENSE AGREEMENT On July 1, 1990, the Authority entered into a License Agreement (Falcons Agreement) with Atlanta Falcons Football Club, LLC, the holder of the National Football League Franchise for and owner of the Atlanta Falcons (Falcons). The expiration of the Falcons Agreement is the latter of June 30, of the license year (State fiscal year) of the maturity of the refunding revenue bonds or June 30 of the twentieth license year. As part of the Falcons Agreement, certain financial obligations between the Authority and the Falcons were established. These obligations pertain to the license fee payable by the Falcons to the Authority and the annual payments due from the Authority to the Falcons as described below.
LICENSE FEE The license fee is payable by the Falcons to the Authority and amounts to ten percent (10%) of the net ticket proceeds, as defined in the Falcons Agreement, for each game day or exhibition performed by the Falcons in the Georgia Dome and cannot be less than $50,000.00 for each Falcons game at the Georgia Dome.
ANNUAL FIXED PAYMENT The Authority has agreed to pay the Falcons the amount of $4,000,000.00 each year beginning on April 1, 1993, and continuing each April 1 thereafter for the term of the Falcons Agreement.
NOTE 13: CONTINGENCIES
Litigation, claims and assessments filed against the Authority, if any, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2009.

SECTION II INTERNAL CONTROL AND COMPLIANCE REPORT
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DEPARTMENT :oF AUDITS AND ACCOUNTS
270 WashingtonSt. S.W. Suite 1-156 Atlanta, Georgia 30334
RussELL W. IIINToN
STATE AUDITOR (404) 656-2174
September 30, 2009
Honorable Sonny Perdue, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the George L. Smith, II Georgia World Congress Center Authority
and Honorable Daniel A. Graveline, Executive Director
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAUDITING STANDARDS
We have audited the financial statements of the George L. Smith, II Georgia World Congress Center Authority, a component unit of the State of Georgia, as of and for the year ended June 30, 2009, and have issued our report thereon dated September 30, 2009. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the George L. Smith, II Georgia World Congress Center Authority's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the George L. Smith, II Georgia World Congress Center Authority's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the George L. Smith, II Georgia World Congress Center Authority's internal control over financial reporting.
A control deficiency 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 misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity's financial statements that is more than inconsequential will not be prevented. or detected by .the entity's internal control.
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A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the entity's internal control.
Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the George L. Smith, II Georgia World Congress Center Authority's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Governmental Auditing Standards.
This report is intended solely for the information and use of management, members of the George L. Smith, II Georgia World Congress Center Authority Board, and management of the State of Georgia, and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:wlt

~A.Q9.W.~
Russell W. Hinton, CPA, CGFM State Auditor

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