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The Florida Bar and Subsidiaries
Financial Statements and Supplemental Information
June 30, 2008 and 2007

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Independent Auditors' Report Management's Discussion and Analysis Financial Statements
Consolidated Statements of Net Assets

The Florida Bar and Subsidiaries


Table of Contents June 30, 2008 and 2007

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8 9 10- 11 12 - 27

Consolidated Statements of Revenues, Expenses, and Changes in Net Assets Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements

Supplementary Information
Consolidating Statement of Net Assets as of June 30,2008. Consolidating Statement of Revenues, Expense and Changes in Net Assets for the year ended June 30, 2008. Consolidating Statement of Cash Flows for the year ended June 30, 2008. General Fund Schedule of Budgeted and Actual Revenues and Expenses for the year ended June 30, 2008. General Fund Reconciliation of Revenues and Expenses on a Budgetary Basis to Totals Per the Consolidating Schedule of Statement of Revenues, Expenses and Changes in Net Assets for the year ended June 30, 2008. Clients' Security Fund Schedule of Budgeted and Actual Revenues and Expenses for the year ended June 30, 2008. Certification Fund Schedule of Budgeted and Actual Revenues and Expenses for the year ended June 30, 2008. Sections Fund Schedule of Budget and Actual Revenues and Expenses for the year ended June 30, 2008. 28 - 29

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Other Reports
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

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CARR RIGGS & INGRAM

Carr, Riggs & Ingram, LLC 1713 Mahan Drive Tallahassee, Florida 32308 (850) 878-8777 (850) 878-2344 (fax) www.cricpa.com

Independent Auditors' Report

Board of Governors The Florida Bar Tallahassee, Florida We have audited the accompanying consolidated financial statements of the business type activities of The Florida Bar and Subsidiaries (The Florida Bar) as of and for the years ended June 30, 2008 and 2007, which comprise The Florida Bar's basic financial statements as listed in the table of contents. These 'financial statements are the responsibility of The Florida Bar's management. Our responsibility is to express an opinion on these fin.ancial statements based on our audits. We conducted our audits 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 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 audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the bl:Jsiness-type activities of The Florida Bar and Subsidiaries as of June 30, 2008 and 2007, and the changes in financial position and cash flows thereof for the years then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated October 24, 2008, on our consideration of The Florida Bar and Subsidiaries' internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. 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 considered in assessing the results of our audit.

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Board of Governors The Florida Bar Page 2

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The management's discussion and analysis on pages 3 through 7 is not a required part of the basic financial statements but is supplementary information required by accounting principles We have applied certain limited generally accepted in the United States of America. 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. Our audits were performed for the purpose of forming an opinion on the consolidated financial statements that collectively comprise The Florida Bar and Subsidiaries' basic financial statements. The supplementary information as listed in the table of contents, is presented for the purposes of additional analysis and is not a required part of the basic consolidated financial statements of The Florida Bar. Such information has been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic consolidated financial statements taken as a whole.

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Tallahassee, 0 Ida October 24, 2008

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The Florida Bar and Subsidiaries


Management's Discussion and Analysis

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The Florida Bar is the statewide professional and regulatory organization for lawyers with more than 84,800 members. Headquartered in Tallahassee, The Florida Bar is a unified state bar by rule of the Supreme Court of Florida. Membership in The Florida Bar is a necessary component of Supreme Court of Florida regulation of all lawyers licensed to practice law in Florida (Article IV, Section 15, Florida Constitution). The foundation for the organization is built on a philosophy of equity and ethics. Through its programs and services, the Bar supports this philosophy with four pillars that function as the mission of The Florida Bar: providing pubHc service, protecting rights, promoting professionalism and pursuing justice. Overview of the Financial Statements This annual report consists of three parts - management's discussion and analysis, the basic consolidated financial statements, and an optional section that presents supplementary information. The supplementary information includes consolidating statements and comparisons of actual results to budgeted results. The basic consolidated financial statements present the consolidated financial position, results of operations, and cash flows of the Florida Bar and its subsidiaries. The Florida Bar performs two overall activities as the statewide regulators of the practice of law and the professional association of lawyers. Its activities are accounted for as a proprietary type enterprise fund because it charges fees to provide its services similar to a business enterprise. The Statement of Net Assets includes all of The Florida Bar's assets and liabilities. The net assets are the difference between The Florida Bar's assets and liabilities. The Statement of Revenues, Expenses, and Changes in Net Assets include all of The Florida Bar's revenues and expenses regardless of when the cash is received or paid. The change in net assets is one way to measure The Florida Bar's financial health or position. A Statement of Cash Flows provides additional information regarding the change in The Florida Bar's cash position. Summary of Operations At June 30, 2008 and 2007, The Florida Bar had $61,717,266 and $58,556,200, respectively in total assets. Of this amount $53,967,114 and $51,221,438 was held in cash and investments and $6,850,102 and $6,339,329 was invested in capital assets at June 30, 2008 and 2007, respectively. The primary liability at June 30, 2008 and 2007 was deferred revenue of $10,541,326 and $9,362,874, respectively, resulting from advance collection of member fees and prepayments for Continuing Legal Education registrations. Our net assets were $44,282,555 and $42,327,971 at June 30, 2008 and 2007, respectively. These amounts are in line with the prior year's balances given the current changes in net assets. The original operating budgets for the General Fund (excluding the wholly-owned subsidiary and controlled entities) for the years ended June 30, 2008 and 2007 approved by the Florida Supreme Court, planned on an increase in net assets of $598,305 and $724,991, r.espectively. After Board of Governor amendments, the planned increase (decrease) became $245,311 and $(951,934), respectively. General Fund actual operations resulted in a change in net assets of $1,321,352 and $2,963,163, respectively. This improved performance resulted primarily from the implementation of the Florida Registered Paralegal program and efficiencies in operations of the various departments of The Florida Bar. Included in the supplemental information is an actual to budget comparison for each department.

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See the Independent Auditors' Report. -3

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The Florida Bar and Subsidiaries


Management's Discussion and Analysis

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For the year ended June 30, 2008 and 2007, The Florida Bar's budget funded most departments at a continuation level. The Lawyer Regulation Department's consumer assistance program was fully functional and the Florida Registered Paralegal program became effective March 2008.

CONDENSED CONSOLIDATED FINANCIAL INFORMATION CONDENSED CONSOLIDATED STATEMENTS OF NET ASSETS


June 30, Assets Current assets Capital assets, net Total assets

2008

2007

Change 2,650,293 510,773 3,161,066

$ 54,867,164 $ 52,216,871 $ 6,850,102 6,339,329 $ 61,717,266 $ 58,556,200 $ $ 13,594,124 3,840,587 17,434,711


5,184,217 34,412 39,063,926 44,282,555

Liabilities Current liabilities Other liabilities Total liabilities Net assets Invested in capital assets, net of related debt Restricted for scholarships Unrestricted Total net assets Total liabilities and net assets

$ 12,157,092 $
4,071,137 16,228,229

1,437,032 (230,550) 1,206,482

4,474,503 32,551 37,820,917 42,327,971

709,714 1,861 1,243,009 1,954,584 3,161,066

$ 61,717,266

$ 58,556,200 $

See the Independent Auditors' Report. -4

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The Florida Bar and Subsidiaries


Management's Discussion and Analysis

CONDENSED CONSOLIDATED STATEMENTS OF NET ASSETS

June 30, Assets Current assets Capital assets, net Total assets
Liabilities Current liabilities Other liabilities Total liabilities Net assets Invested in capital assets, net of related debt Restricted for scholarships Unrestricted Total net assets Total liabilities and net assets

2007

2006

Change

$ 52,216,871
6,339,329

$ 47,002,121
5,904,229

$ $

$ 58,556,200 $ 12,157,092
4,071,137 16,228,229

$ 52,906,350

5,214,750 435,100 5,649,850

$ 12,556,535 $
4,037,979 16,594,514

(399,443) 33,158 (366,285)

4,474,503 32,551 37,820,917 42,327,971 $ 58,556,200

3,854,686 25,248 32,431,902 36,311,836

619,817 7,303 5,389,015 6,016,135

$ 52,906,350

5,649,850

For more detailed information, see the accompanying Consolidated Statements of Net Assets. CONDENSED CONSOLIDATED STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS

June 3D, Operating revenues Operating expenses Net operating revenues


Non-operating revenues Non-operating expenses Net non-operating revenues Increase in net assets Net assets, beginning Net assets, ending

2008 2007 Change $ 40,560,544 $ 39,732,682 $ 827,862 (39,782,261 ) (37,915,576) (1,866,685) 778,283 (1,038,823) 1,817,106 1,320,375 (144,074) 1,176,301 1,954,584 42,327,971 $ 44,282,555
4,361,648 (162,619) 4,199,029 6,016,135 36,311,836 (3,041,273) 18,545 (3,022,728) (4,061,551) 6,016,135

$ 42,327,971

1,954,584

See the Independent Auditors' Report.

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The Florida Bar and Subsidiaries


Management's Discussion and Analysis

CONDENSED CONSOLIDATED STATEMENTS OF REVENUES, EXPENSES


AND CHANGES IN NET ASSETS

June 30, Operating revenues Operating expenses Net operating revenues

2007

$ 39,732,682
(37,915,576) 1,817,106 4,361,648 (162,619) 4,199,029 6,016,135 36,311,836

$ 36,834,025

Change $ 2,898,657 (33,968,523) (3,947,053) 2,865,502 (1 ,048,396) 2,505,173 (171,246) 2,333,927 5,199,429 31,112,407 1,856,475 8,627 1,865,102 816,706 5,199,429
$

2006

Non-operating revenues Non-operating expenses Net non-operating revenues Increase in net assets
Net assets, beginning
Net assets, ending

$ 42,327,971

$ 36,311,836

6,016,135

For more detailed information, see the accompanying Consolidated Statements of Revenues,
Expenses, and Changes in Net Assets.
CAPITAL ASSETS
The Florida Bar had invested the following in Capital Assets:
June 30, Land Building and improvements Landscaping and parking Equipment and furnishings Construction in progress Total, prior to depreciation

2008 $ 1,306,690 8,983,412 120,318 4,629,153 19,526 15,059,099 (8,208,997)


$ 6,850,102

2007 $ 1,103,060 8,292,805 120,318 4,632,356 136,170 14,284,709 (7,945,380)

Change 203,630 $ 690,607 (3,203) (116,644) 774,390 (263,617)

Accumulated depreciation Net capital assets

$ 6,339,329

510,773

See the Independent Auditors' Report.

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The Florida Bar and Subsidiaries


Management's Discussion and Analysis

CAPITAL ASSETS

June 30, Land Building and improvements Landscaping and parking Equipment and furnishings Construction in progress Total, prior to depreciation

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2007 $ 1,103,060 8,292,805 120,318 4,632,356 136,170 14,284,709 (7,945,380) $ 6,339,329

2006 $ 1,103,060 7,902,973 120,318 4,456,519 13,582,870 (7,678,641) $ 5,904,229

Change
$

389,832 175,837 136,170 701,839 (266,739)


$

Accumulated depreciation Net capital assets

435,100

Presently, The Florida Bar has no plans to significantly alter its investment in capital assets.

DEBT
At June 30, 2008 and 2007, The Florida Bar had $1,665,886 and $1,864,825, respectively outstanding in a mortgage loan. The mortgage loan is scheduled to balloon on October 15, 2009. Management is evaluating its options for when the mortgage loan balloons. Management will decide to either pay the loan or refinance the balloon. Investments have been purchased to cover the required balloon payment if that is the selected course of action. Future Financial Plan The Florida Bar was created by the Supreme Court of Florida to assist it in regulating the practice of law in Florida. It is primarily funded through lawyer payments of their required annual fee, sale of continuing education programs to lawyers and other revenue from its business partners and affiliates. There is no plan to materially change these revenue streams for the next two years. Accordingly, there are no present plans to materially increase the scope or nature of the services provided to the citizens of Florida and the lawyers authorized to serve them.

See the Independent Auditors' Report. - 7

Financial Statements

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The Florida Bar and Subsidiaries


Consolidated Statements of Net Assets
June 3D,

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2008

2007

Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable, net Prepaid expenses and other assets Total current assets Capital assets, net Land Buildings and improvements Landscaping and parking Equipment and furnishings Construction in progress Accumulated depreciation Total capital assets, net Total assets

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14,058,533 39,908,581 261,303 638,747 54,867,164 1,306,690 8,983,412 120,318 4,629,153 19,526 (8,208,997) 6,850,102

$ 10,667,868 40,553,570 577,459 417,974 52,216,871

1,103,060 8,292,805 120,318 4,632,356 136,170 (7,945,380) 6,339,329


$ 58,556,200

61,717,266

Liabilities and Net Assets


Current liabilities Current portion of long-term debt Accounts payable Claims payable Accrued expenses Deferred revenues Security deposits Total current liabilities Non-current liabilities Long-term debt, less current portion Compensated absences payable Total non-current liabilities Total liabilities Net assets Invested in capital assets, net of related debt Restricted for scholarships Unrestricted Total net assets Total liabilities and net assets

214,251 1,405,120 364,820 1,020,011 10,541,326 48,596 13,594,124 1,451,635 2,388,952 3,840,587 17,434,711 5,184,217 34,412 39,063,926 44,282,555

198,939 1,586,408 53,595 907,385 9,362,874 47,891 12,157,092

1,665,886 2,405,251 4,071,137 16,228,229

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4,474,503 32,551 37,820,917 42,327,971

61,717,266

$ 58,556,200

See accompanying notes to the consolidated financial statements. -8

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The Florida Bar and Subsidiaries


Consolidated Statements of Revenues, Expenses and Changes in Net Assets
Years ended June 3D,

2008
$ 21,577,689

2007

Operating revenues Annual fees Other fees Sales of products and services Advertising Young lawyers Grants and other Total operating revenues Operating expenses Regulation of the practice of law Cost of products and services provided to members Unauthorized practice of law Public service programs Communications with members and the public Administration Legislation Young lawyers Depreciation and amortization Other programs and costs Total operating expenses Operating income Non-operating revenues (expenses)
Investment earnings Interest expense Loss on disposal of capital assets Total non-operating revenues (expenses) Change in net assets Total net assets, beginning of year Total net assets, end of year

6,056,320 9,263,422 2,348,386 561,070 753,657 40,560,544 15,732,831 11,658,187 1,349,500 2,185,966 4,002,905 2,508,482 400,437 626,082 764,039 553,832 39,782,261 778,283 1,320,375 (137,262) (6,812) 1,176,301 1,954,584 42,327,971
$ 44,282,555

$ 20,896,608 6,003,005 8,891,878 2,315,354 575,425 1,050,412 39,732,682

14,704,622 10,289,835 1,344,015 1,738,927 3,989,239 3,515,762 401,101 550,596 699,110 682,369 37,915,576 1,817,106

4,361,648
(148,325)
(14,294)
4,199,029
6,016,135 36,311,836

$ 42,327,971

See accompanying notes to the consolidated financial statements.

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The Florida Bar and Subsidiaries


Consolidated Statements of Cash Flows
Years ended June 30,

2008

2007

Cash flows from operating activities:


Receipts from members, customers and other sources Payments to employees, suppliers and other vendors Net cash provided by operating activities

42,586,177 $ 39,800,129 (37,493,257) (39,543,051) 2,306,872 3,043,126

Cash flows from non-capital and related financing activities:


Reduction of debt Interest paid Net cash (used in) non-capital and related financing activities

(198,939) (137,262) (336,201)

(184,718) (148,325) (333,043)

Cash flows from capital and related financing activities:


Acquisition of capital assets Net cash (used in) capital and related financing activities

(1,281,624) (1,281,624)

(1,148,504) (1 ,148,504)

Cash flows from investing activities:


Net change in repurchase agreement Redemption of investments Purchase of investments, net of decrease in fair value Investment income Net cash (used in) provided by investing activities

(625,165) 19,997,054 (18,726,900) 1,320,375 1,965,364 3,390,665 10,667,868

(1 ,499,475) 32,951,300 (39,888,684) 4,361,648 (4,075,211) (3,249,886) 13,917,754

(Decrease) increase in cash and cash equivalents: Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year

14,058,533

$ 10,667,868

See accompanying notes to the consolidated financial statements. - 10

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The Florida Bar and Subsidiaries


Consolidated Statements of Cash Flows (Continued)
Years ended June 30,
Reconciliation of operating income to net cash provided by operating activities:
Operating income Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation and amortization (Increase) decrease in: Accounts receivable, net Prepaid expenses and other assets Increase (decrease) in: Accounts payable Claims payable Accrued expenses Deferred revenues Security deposits Compensated absenses payable Net cash provided by operating activities Non-cash investing, capital, and financing acitivities Change in the fair value of investments Loss on disposal of assets Supplemental information Cash paid for interest

2008

2007

778,283

$ 1,817,106

764,039 316,156 (220,773)

699,110 (172,135) 144,358

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(181,288) 172,459 311,225 (425,263) 112,626 133,848 (296,813) 1,178,452 705 2,105 (16,299) 232,097 $ 3,043,126 $ 2,306,872

$ (1,969,343) $ 1,195,808 $ 6,812 $ 14,294

137,262

148,325

See accompanying notes to the consolidated financial statements.

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The Florida Bar and Subsidiaries


Notes to Consolidated Financial Statements

NOTE 1 - NATURE OF BUSINESS The Florida Bar and Subsidiaries (The Florida Bar) is the statewide professional organization of lawyers. It serves as an advocate and intermediary for attorneys, the court and the public. The Florida Bar was established as a unified state bar by rule of the Supreme Court of Florida. The Florida Bar regulates lawyers in Florida, investigates the unauthorized practice of law, offers continuing legal education, publishes law journals and offers other member services.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reporting Entity
The Florida Bar is a unified state bar organized as an arm of the Supreme Court of the State of Florida. It is considered a governmental entity because it was established by, and has the potential to be dissolved by, the Supreme Court of Florida. Therefore, The Florida Bar adopted the provisions of Statement No. 34 (UStatement No. 34") of the Governmental Accounting Standards Board ItBasic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments," as amended by Statement No. 37. In evaluating The Florida Bar as a reporting entity, management has considered all potential component units for which The Florida Bar may be financially accountable and if found to be financially accountable, be required to be included in The Florida Bar's financial statements. The Florida Bar is financially accountable if it appoints a voting majority of an organization's governing board and (1) it is able to impose its will on an organization or (2) there is a potential for an organization to provide specific financial benefit to or impose specific financial burden on The Florida Bar. Additionally, the primary government is required to consider other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete.
Management's analysis has disclosed no component units that should be included in The Florida Bar's financial statements.

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Basis of Presentation
The Florida Bar is accounted for as a proprietary type enterprise fund. Enterprise funds are used
to account for activities that are financed and operated in a manner similar to private business
enterprises: (1) where the costs of providing goods and services to the general public on a
continuing basis are to be financed through user charges; or (2) where the periodic determination
of net income is considered appropriate. Proprietary funds distinguish operating revenues and
expenses from non-operating items. Operating revenues and expenses generally result from
providing goods and services in connection with a proprietary fund's ongoing operations.
Operating expenses for The Florida Bar include the costs of personnel, contractual services,
supplies, utilities, repairs and maintenance, and depreciation on capital assets. All revenues and
expenses not meeting this definition are reported as non-operating revenues and expenses.

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Basis of Accounting
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The Florida Bar and Subsidiaries


Notes to Consolidated Financial Statements
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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Basis of accounting refers to when revenues and expenses are recognized in the accounts and reported in the financial statements. The financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Under this method, revenues are recognized when they are earned and expenses are recognized when they are incurred. The measurement focus of proprietary fund types is on a flow of economic resources method, which emphasizes the determination of net income, financial position, and cash 'flow. All fund assets and liabilities, current and non-current, are accounted for in the Consolidated Statements of Net Assets.

Cash and Cash Equivalents


All demand deposit accounts, daily repurchase agreements and short-term highly liquid investments with original maturities of three months or less are reported as cash equivalents.

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Investments
Investments are reported at fair value, which are based on quoted market prices. The determination of realized gains and losses is independent of the determination of the net change in the fair value of investments. Realized gains and losses on investments held in a previous fiscal year and sold in the current period were used to compute the change in fair value for the previous year and the current year.

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Capital Assets
Capital assets are stated at cost less accumulated depreciation. The cost of capital assets is depreciated over the estimated useful lives of the related assets, ranging from 5 to 40 years, using the straight-line method. When capital assets are retired or otherwise disposed of, the costs and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Consolidated Statements of Revenues, Expenses and Changes in Net Assets, in the period of disposal.

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Claims Payable
The Florida Bar created the Clients' Security Fund (the Fund) to compensate people who have suffered financial losses due to misappropriation of funds by errant Florida Bar members. The Fund is financed by $20 of the annual fees from each Florida Bar member who is in good-standing (including inactive members). Claims payable represent amounts payable from the Fund.

Deferred Revenues
Deferred revenues consist primarily of membership fees collected in advance, prepaid advertising and prepaid legal education courses.

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Allocation of Expenses

The Florida Bar and Subsidiaries


Notes to Consolidated Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The costs of providing the various programs, services, and other activities have been summarized on a functional basis in the Consolidated Statement of Revenues, Expenses and Changes in Net Assets. Accordingly, certain costs have been allocated among the programs and supporting services benefited.

Principles of Consolidation
The accompanying consolidated financial statements include the accounts of The Florida Bar and its wholly-owned subsidiary, The Florida Bar Building Corporation, and its other controlled entities, Florida Lawyers Association for the Maintenance of Excellence, Inc., and The Florida Attorneys Charitable Trust. All significant intercompany transactions and accounts have been eliminated in consolidation.

Income Taxes
The Florida Bar is an administrative agency of the Supreme Court and is not subject to federal or state income tax. The Florida Bar Building Corporation, Florida Lawyers Association for the Maintenance of Excellence, Inc., and The Florida Attorneys Charitable Trust have been granted exemption from federal and state income taxes except on unrelated business income under Sections 501 (c)(25), 501 (c)(6), and 501 (c)(3), respectively, of the Internal Revenue Code. Accordingly, no liability for income taxes is reflected in these financial statements.

Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Concentration
The Florida Bar receives the majority of its revenue from lawyers licensed to practice in the State of Florida.

Net Assets
Net assets are categorized as invested in capital assets, restricted for scholarships, and undesignated. Invested in capital assets is intended to reflect the portion of net assets that are associated with non-liquid, capital assets. Restricted for scholarships consists of monies restricted for the annual G. Kirk Haas fund scholarships. Undesignated assets consist of all other assets not included in the previous categories.

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The Florida Bar and Subsidiaries


Notes to Consolidated Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Derivative Financial Instruments

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The Florida Bar follows the provisions of Governmental Accounting Standards Board (GASB) Technical Bulletin No. 2003-1, Disclosure Requirements for Derivatives Not Reported at Fair Value on the Statement of Net Assets, an amendment to GASB Technical Bulletin 94-1. GASB Technical Bulletin No. 2003-1 provides an updated definition of derivatives and requires certain disclosures regarding the government's objective for entering into derivative transactions and the derivative's terms, fair value, and risk exposures.
Recent Accounting Pronouncements

The Florida Bar prospectively adopted Governmental Accounting Standards Board (GASB) No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions (OPEB), during the year ended June 30, 2007. This statement establishes standards for the measurement, recognition, and display of OPEB expenses and related liabilities, note disclosures and, if applicable, required supplementary information, in the financial reports of governmental employers. OPEB costs are accrued when the related services are received by The Florida Bar.
NOTE 3 - CASH AND CASH EQUIVALENTS

Cash and cash equivalents are subject to custodial credit risk. Custodial credit risk is the risk that in the event of a bank or other counterparty failure, The Florida Bar's cash and cash equivalents may not be returned. The Florida Bar's policy with respect to custodial credit risk is that The Florida Bar will only maintain demand deposit accounts with financial institutions in which management believes that the risk is limited because the financial institutions are large with strong financial positions. Cash and cash equivalents are held at two financial institutions. Operating cash is held at a financial institution insured by the Federal Deposit Insurance Corporation up to $100,000 each for the parent and subsidiary accounts. Operating cash balances were $2,460,726 and $2,561,243 at June 30, 2008 and 2007, respectively. Additional cash and money market funds are held at a financial institution insured by the Securities Investor Protection Corporation up to $100,000. Additional cash and money market funds were $11,597,807 and $8,106,625 at June 3D, 2008 and 2007, respectively.

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I I I I I I I I I I I I I I I I I I I

The Florida Bar and Subsidiaries


Notes to Consolidated Financial Statements

NOTE 4 - INVESTMENTS

Investment Objectives and Policies


Investments will be made for the sole interest and exclusive purpose of providing investment returns for The Florida Bar. The Florida Bar's investment objectives and policies are achieved through a short-term account portfolio and a long-term account portfolio. The ultimate responsibility for the proper supervision of The Florida Bar's investment portfolio rests with the Board of Governors and the Investment Committee. The purpose of the short-term portfolio is to provide for The Florida Bar's short-term working capital needs. The short-term portfolio possesses a short-term time horizon (one to three years) and within this horizon, the primary objectives of the short-term portfolio are to preserve capital for short-term cash flow needs, provide liquidity, and to achieve attractive short-term yields consistent with the preservation of capital. The purpose of the long-term investment portfolio is to provide for The Florida Bar's operating needs and to fund The Florida Bar's programs both today and into the future. The long-term portfolio possesses an intermediate to long-term horizon (five to seven years) and within this horizon, the primary objectives of the long-term portfolio are to provide long-term growth of capital and income. The asset allocation guidelines with regard to acceptable asset classes, the overall target asset mix, and the representative indices of each asset class are as follows:

Short-Term
Asset Classes Minimum Target Mix Maximum Representative Index

Short-Term Fixed Income Cash and Equivalents

35.0% 35.00/0

50.0% 50.0%

65.0% 65.0%

Lehman Brothers 1-3 year Govt Bond Index Citigroup U.S. 90-Day Treasury Bills

Long-Term
Asset Classes Minimum Target Mix Maximum Representative Index

Large Cap Equity Mid Cap Equity Small Cap Equity International Emerging Market Equity Real Assets REITs TIPS Fixed income Cash and Equivalents

14.0% 3.0% 3.0% 9.8% 0.01c> 0.0% 0.0% 0.01c> 28.00% 2.01c>

20.0% 6.0% 6.01c> 14.00/0 2.00/0 2.01c> 3.0% 3.01c> 40.00% 4.0%

26.0% 9.01c> 9.0% 18.2% 5.00/0 5.00/0 6.00/0 6.01c> 52.00% 10.00/0

Standard & Poor's 500 Index Russell Mid Cap Index Russell 2000 Index MSCI EAFE Index MSCI Emerging Markets Free Index Dow Jones AIG Commodity Index NAREIT Equity Index Lehman Brothers US TIPS Index Lehman Brothers Intermediate Gov't/Credit Bond Index Citigroup U.S. gO-Day Treasury Bills

- 16

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The Florida Bar and Subsidiaries


Notes to Consolidated Financial Statements

NOTE 4 -INVESTMENTS (CONTINUED) Investments At June 30, The Florida Bar's investment balances were as follows:
;2')07
June 30,
Repurchase agreement Mutual funds - debt securities (ST) * US Treasuries Federal Agencies Corporate Bonds & Other Fixed Income Municipal Bonds US Treasury Bonds Mutual funds - equity securities Stocks Total investments

Fair Value

Maturity
Daily 2 year average ** 9 year average** 14 year average** 12 year average** 10 year average** 1 year average ** N/A N/A

Rating

2,799,128 7,108,547 1,664,959 2,791,097 5,427,237 1,493,209 1,459,725 3,609,073 13,555,606 39,908,581

N/A
8a to Aaa Aaa Aaa Baa3 to Aaa Baa1 to Aaa Aaa

N/A N/A

Fair Value $ 2,173,963 7,081,588 4,854,913 2,279,114 3,656,258 913,232 1,354,845 3,212,727 15,026,930 $ 40,553,570

* The Florida Bar invests in short-term mutual funds, which consist of debt securities (i.e. fixed income securities). The Florida Bar's short-term mutual funds are not invested directly in fixed income debt securities. The Florida Bar is able to sell their interest in these mutual funds at will (subject to potential redemption fees). ** Represents the weighted average maturity of debt securities held by The Florida Bar.

Credit Risk

Investments in fixed income debt securities through mutual funds must adhere to the policy of meeting an average quality rating of A or higher for the long-term portfolio and AA or higher for the short-term portfolio by either Standards & Poor's, Moody's or Fitch Investors Service at the time of purchase. Investments in corporate holdings must be rated investment grade or better by either Standards & Poor's, Moody's or Fitch Investors Service at the time of purchase.
Concentration of Credit Risk

Investments in equity securities are subject to a maximum 5% commitment at cost and 1GOA> weighting at market of the account's total market value for any individual security or single issuer. Investment in fixed income securities are subject to no more than 5 0ft> of the account's market value invested in a single issue (at cost) or in direct obligations of a single issuer (at market) with the exception of the U.S. Government and its agencies so long as any such government or agency issue shall be backed with the full faith and credit of the U.S. Government. In addition, no more than 15% of the fixed income securities may be invested in mortgage backed or asset backed securities of a single issuer, with the exception of those issued by the U.S. Government, its agencies, or its sponsored agencies.

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The Florida Bar and Subsidiaries


Notes to Consolidated Financial Statements

NOTE 4 - INVESTMENTS (CONTINUED)


Interest Rate Risk

Interest rate risk arises from investments in debt instruments and is defined as the risk that changes in interest rates will adversely affect the fair value of an investment. The Florida Bar's investment in U.S. Treasuries, federal agencies, corporate bonds, municipal bonds and U.S. Treasury bonds are directly subject to the interest rate risk of debt instruments. The Florida Bar is not directly subject to the interest rate risk for its short-term debt instruments, as investments in these debt securities are entered into through mutual funds and The Florida Bar is able to sell their interest in these mutual funds at will (subject to potential redemption fees). Additionally, The Florida Bar has elected to participate in mutual funds with target durations of one to two years (low duration funds). However, investments in mutual funds are with the understanding that the investment policies stated in the mutual fund's prospectus supersedes the guidelines established by The Florida Bar.
Custodial Credit Risk

Custodial credit risk is the risk that in the event of the failure of the custodial entity, The Florida Bar's deposits may not be returned to it. The Florida Bar's policy regarding custodial credit risk is that deposits subject to overnight repurchase agreements shall only be invested in securities backed by the United States government. Additionally, The Florida Bar will only hold investment securities that are insured or registered and held by The Florida Bar, or its designated agent, in the name of The Florida Bar. The repurchase agreement is exposed to uninsured and uncollateralized custodial credit risk with Bank of America. Investments held through Morgan Stanley have Securities Investor Protection Corporation coverage up to $500,000 per customer for cash and securities and excess protection provided by the Customer Asset Protection Company for up to the net equity value of cash and securities in Morgan Stanley's account. Investments in PIMCO mutual funds are held by a third party trust company.
Foreign Currency Risk

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Investments in international equity securities are limited to SEC-Registered, U.S. exchange listed, U.S. dollar-denominated securities in foreign domiciled issuers. Investments in international debt securities are limited to SEC-registered, U.S. dollar-denominated, U.S. government backed securities issued by foreign governments. The Florida Bar invests in international securities through American Depository Receipts (ADRs). ADRs represent investments in shares of foreign companies traded on the U.S. financial markets and are denominated in U.S. dollars and, thus, are not exposed to foreign currency risk. Investments in foreign currency-denominated government bonds, any type of foreign corporate bond, or any other type of foreign currency are not allowed. Securities of foreign companies traded on foreign stock exchanges may be purchased only with the written pern1ission of The Florida Bar's Investment Committee. Additionally, the investment policy approves the use of mutual funds, which may include foreign securities, with the understanding that the investment policies stated in the mutual fund's prospectus supersede the guidelines set forth in The Florida Bar's investment policy.

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I I

The Florida Bar and Subsidiaries


Notes to Consolidated Financial Statements

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NOTE 4 -INVESTMENTS (CONTINUED)

Derivative Instruments

The Florida Bar's investment policy states that investments in options, derivatives and financial
futures are prohibited in separately managed accounts. Additionally, the investment policy approves the use of mutual funds, which may include derivative instruments, with the understanding that the investment policies stated in the mutual fund's prospectus supersede the guidelines set forth in The Florida Bar's investment policy.

NOTE 5 - ACCOUNTS RECEIVABLE, NET

The following is a summary of accounts receivable, net:

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June 30, Accounts receivable Allowance for doubtful accounts Accounts receivable, net

$ $

2008 286,203 $ (24,900) 261,303 $

2007 602,359 (24,900) 577,459

NOTE 6 - CAPITAL ASSETS, NET

July 1,2007 Capital assets not being depreciated: Land Construction in Progress Total capital assets not depreciated Capital assets being depreciated: Buildings and improvements Landscaping and parking Equipment and furnishings Total capital assets being depreciated Less accumulated depreciation for: Buildings and improvements Landscaping and parking Equipment and furnishings Total accumulated depreciation Total capital assets being depreciated, net Total capital assets, net

Additions
203,630 344,009 547,639 $

Deletions

June 30, 2008

$ 1,103,060 $
136,170 1,239,230

- $ 1,306,690
(460,653) (460,653)

19,526 1,326,216 8,983,412 120,318 4,629,153 13,732,883 (4,826,326) (120,318) (3,262,353) (8,208,997) 5,523,886

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I

8,292,805 120,318 4,632,356 13,045,479

690,607 504,032 1,194,639 (507,235) (507,235)

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(4,533,372) (120,318) (3,291 ,690) (7,945,380) 5,100,099 $ 6,339,329 $

(292,954) (471,085) (764,039) 430,600 978,239 $ 500,422 500,422 (6,813)

(467,466) $ 6,850,102

Depreciation expense for the years ended June 30, 2008 and 2007 was $764,039 and $699,110, respectively.

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The Florida Bar and Subsidiaries


Notes to Consolidated Financial Statements

NOTE 7 - LONG-TERM LIABILITIES

Long-Term Debt
The following is a summary of long-term debt: June 30, 2008 2007

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Renewal mortgage note payable to Bank of America in the amount of $2,986,384 due on October 15, 2009. Monthly payments of principal began on November 15, 1999 at $9,383 with annual increases of $723 per month each November 15th based on a 15 year amortization with a balloon payment of $1,396,760 at maturity. Interest is payable monthly based on a contract rate equal to the London Interbank Offering Rate (LIBOR) (2.47 % at June 30, 2008) plus 47 basis points. However, the interest rate was swapped in a hedge transaction. See Note 8 below. The mortgage is collateralized by real estate owned by The Florida Bar Building Corporation and guaranteed by The Florida Bar. $ 1,665,886 $ 1,864,825 Current portion (214,251) (198,939) Long-term debt, less current portion $1,451,635 $ 1,665,886

The following are maturities of long-term debt: Years ended June 30, 2009 2010 Total Amount 214,252 1,451,634 $ 1,665,886
$

Compensated Absences Payable


Compensated absences payable consisted of the following: June 30, Accrued vacation Accrued sick leave Total compensated absences 2008 2007
$ 1,451,600

$ 1,488,365
900,587
$ 2,388,952

953,651

$ 2,405,251

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The Florida Bar and Subsidiaries


Notes to Consolidated Financial Statements

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Changes in Long-Term Liabilities

NOTE 7 - LONG-TERM LIABILITIES (CONTINUED)

Changes in long-term liabilities are summarized as follows: Balance July 1,2007 Additions $ 1,864,825 $ 2,405,251 1,623,141 $ 4,270,076 $ 1,623,141 Balance Reductions June 30, 2008 $ 198,939 $ 1,665,886 1,639,440 2,388,952 $ 1,838,379 $ 4,054,838

Long-term debt Compensated absences Total long-term liabilities

NOTE 8 - DERIVATIVE DISCLOSURE -INTEREST RATE SWAP Objective of the interest rate swap. In October 1999, The Florida Bar refinanced an 8.5% fixed rate mortgage to a variable rate mortgage based on the LIBOR rate plus .47~. To manage its interest rate exposure under the variable rate renewal mortgage note payable to Bank of America, The Florida Bar entered into a hedge transaction ,on October 13, 1999 to swap its floating rate for a fixed rate through a 120 month interest rate swap provided by Bank of America.

Terms. The swap was for the notional amount of $2,986,384 which was equal to the principal amount of the underlying variable rate debt. The notional amount declines each year as the principal amount of the associated debt declines. At June 30, 2008 and 2007, the notional amount was $1,665,886 and $1,864,825, respectively. The swap was entered into at the same time that the debt was refinanced (October 1999). Under the swap, The Florida Bar pays the Bank of America a contracted interest rate of 30-day LIBOR plus .47% and receives a payment from Bank of America based on the coupon rate of the swap which is 6.970/0. The net effect of the two contractual rates is an effective fixed rate of 7.440/0. The swap matures on October 15, 2009.

Fair value. Due to the difference between the two rates, the swap had a negative fair value of $80,650 and $63,775 as of June 30, 2008 and 2007, respectively. The fair value was estimated by the Bank of America as identified in the Schedule to the International Swap Dealers Association Master Agreement (ISDA) using the mid-market level method. This method is in accordance with market conventions, which take into consideration estimates about relevant present and future market conditions, as well as size and liquidity of the position and related actual or potential hedging transactions.
Basis risk. The swap exposes The Florida Bar to basis risk should the LIBOR rates decrease significantly. If a change occurs that results in a significant decrease in LIBOR rates, the expected cost savings may not be realized. Termination risk. The Florida Bar or the Bank of America may terminate the swap if the other party fails to perform under terms of the agreement. If at the time of termination the swap has a negative fair value, The Florida Bar would be liable to the Bank of America for a payment equal to the swap's fair value.

- 21

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The Florida Bar and Subsidiaries


Notes to Consolidated Financial Statements

NOTE 8 - DERIVATIVE DISCLOSURE -INTEREST RATE SWAP (CONTINUED)

Swap payments and associated debt. Using rates as of June 30, 2008, debt service requirements of the renewal mortgage note payable and the swap payments, assuming current interest rates remain the same for their term, were as follows. As rates vary, the variable-rate interest payments and swap payments will vary.

Year ending June 30 2009 2010 Total Interest rate swap, net 63,248 14,441 77,689 Net debt
service

Principal

Interest

Total

$ $

214,255 1,451,631

46,141 10,535 56,676

$ $

260,396 $ 1,462,166 1,722,562 $

$ $

323,644 1,476,607 1,800,251

1,665,886 $

NOTE 9 - REVENUE AND EXPENSE CLASSIFICATION The significant revenue and expense accounts presented in the consolidated financial statements are described as follows:

Other Fees from Members


Includes revenues from mernbers other than annual dues such as advertising approval fees,
certification fees and section dues.

Sales of Products and Services

Includes revenues from sources such as Continuing Legal Education (CLE) registrations, sales of publications and meeting revenues.

Grants and Other


Includes grants received from The Florida Bar Foundation, cost recoveries from discipline cases, rents received in The Bar Center Building Fund and other sources of revenue.

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Regulation of the Practice of Law


Includes expenses incurred for Lawyer Regulation, Lawyer Advertising, Ethics, Continuing Legal Education Rules (CLER), Membership Records and Certification.

Cost of Products and Services Provided to Members


Includes expenses such as the cost of CLE courses and publications, Legal Office Management Advisory Services (LOMAS), voluntary member assistance programs, meetings, committee activity and section activity.

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The Florida Bar and Subsidiaries


Notes to Consolidated Financial Statements

NOTE 9 - REVENUE AND EXPENSE CLASSIFICATION (CONTINUED)

Communication with Members and the Public

Includes the expenses of the Public Information Department and The Florida Bar Journal and News.
Administration

Includes board and officer expenses, the cost of the Executive Director's office, General Counsel, Research, Planning and Evaluation, and liability and property insurance.

NOTE 10 - RETIREMENT PLANS

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The Florida Bar sponsors a defined contribution pension plan, The Florida Bar Employees' Pension Plan (the Plan), which is available to all salaried personnel having completed six months of service. The Plan is administered by The Florida Bar Retirement Committee. The Plan may be amended at any time by The Florida Bar. Employer contributions are discretionary and are currently made for all eligible employees based on a formula which was 13% and 11 % of covered compensation for the years ended June 30, 2008 and 2007, respectively, and 4.3% on covered compensation exceeding 80% of the Social Security wage base for the years ended June 30, 2008 and 2007. The employer contributions are allocated to separate participant accounts and invested by the Trustee in the funds selected by the employee from those offered by the Plan Administrator. Participant accounts vest based on the following schedule:
< 3 years 3 - 4 years 4 - 5 years 5 - 6 years > 6 years

0%

400/0

60%
80%
1000/0

Forfeited contributions are held in a separate account and are used to reduce future employer contributions. The plan has been amended to comply with all applicable Federal tax laws. The pension contribution made equaled the contribution required during the years ended June 30, 2008 and 2007 for the Plan years ended December 31, 2007 and 2006 and was $1,842,543 and $1,434,567, respectively. The Florida Bar also has a deferred compensation plan. The plan is for the benefit of all eligible employees who elect to participate.

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The Florida Bar and Subsidiaries


Notes to Consolidated Financial Statements

NOTE 11 - RETIREE POSTEMPLOYMENT HEALTH BENEFITS

Plan Description. The Florida Bar Retiree Health Plan (TFBRHP) is a single-employer defined benefit healthcare plan administered by The Florida Bar. TFBRHP provides health insurance benefits to eligible employees at early retirement, disability or full retirement. The Florida Bar has the authority to establish and amend benefit provisions to TFHRHP. TFHRHP issues a stand-alone financial report that includes the financial statements and required disclosures. This report may be obtained by writing to The Florida Bar, 651 East Jefferson Street, Tallahassee, Florida 32399-2300. Funding Policy. The contribution requirements of plan members and The Florida Bar are established and may be amended by The Florida Bar. The required contribution is based on an actuarially determined percentage of total active payroll. For fiscal years ended June 30, 2008 and 2007, The Florida Bar contributed $64,766 and $1,281,688, respectively, to the plan. Plan members, who are ages 62 through 65 or disabled, are required to contribute $25 per month for retiree-only coverage and $100 per month for all other member coverage. Annual OPEB Cost and Net OPEB Obligation. The Florida Bar's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASS Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. Based on the January 1, 2008, actuarial valuation, the ARC is 0.37% of active payroll payable for the fiscal years 2008 through 2010. The following table shows the components of The Florida Bar's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in The Florida Bar's net OPES obligation to TFBRHP:
Annual required contribution Interest on net OPES obligation Adjustments to annual reguired contribution Annual OPES cost (expense) Net OPES obligation - July 1, 2007 Annual OPES cost (expense) for 2008 Contributions made during 2008 Net OPES obligation - June 30, 2008

60,826 (2,093) 58,733

$ $

58,733 (64,766) (6,033)

The excess contribution is recorded in prepaid expenses and other assets on the consolidated statements of net assets. The Florida Bar's annual OPES cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2008 and the preceding year were as follows:
Fiscal Year Ended
6/30/2007 6/30/2008

Annual OPES Cost 64,766 $


58,733

Percentage of Annual OPES Cost Contribtued


100 % 110.27%

Net OPES Obligation


$
(6,033)

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The Florida Bar and Subsidiariesll


Notes to Consolidated Financial Statements

NOTE 11 - RETIREE POSTEMPLOYMENT HEALTH BENEFITS (CONTINUED)

Funded Status and Funding Progress. As of January 1, 2008, the actuarial valuation date, the plan was 100 % funded. The actuarial accrued liability for benefits was calculated to be $1,216,209 and the actuarial value of the assets was $1 ,288,476, resulting in a funding excess of $72,267. The covered payroll (annual payroll of active employees covered by the plan) was $14,296,752, and the ratio of the UML to the covered payroll was (0.51%).
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject' to continual revision as actual results are compared with past expectations and new estimates are made about the future.

Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.
In the January 1, 2008 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 7.50A> investment rate of return, which is the rate of the expected long-term investment returns on plan assets and an annual healthcare cost trend rate of 12% initially, reduced by decrements to an ultimate rate of 5% in the year 2015 and beyond. Both rates included a 3% inflation assumption. As of the January 1, 2008 actuarial valuation, TFBRHP did have plan assets in trust solely to provide benefits to retirees and their beneficiaries. The UML is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at January 1, 2008 was 30 years. REQUIRED SUPPLEMENTARY INFORMATION

Schedule of Funding Progress


Actuarial Accrued Liability (AAL)Projected Unit Credit (b)

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Actuarial Valuation Date 1/1/06 1/1/08

Actuarial Value of Assets (a)


$

Unfunded AAL (UAAL) (b - a)


$
1,203,784 (72,267)

Funded Ratio

(alb)

Covered Payroll (c)

UAAL as a Percentage of Covered Payroll (b - a) I c)


9.300/0 -0.51 0 /0

1,288,476

1,203,784 1,216,209

0.000/0 $ 12,946,872 105.940/0 14,296,752

NOTE 12 - LEASES

The Florida Bar is the lessee of office space under operating leases expiring in various years through the year 2017, with escalation clauses.

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The Florida Bar and Subsidiaries


Notes to Consolidated Financial Statements

NOTE 12 - LEASES (CONTINUED) The Florida Bar leases office space from its wholly-owned subsidiary, The Florida Bar Building Corporation. The intercompany rental income and rental expense have been eliminated in consolidation.
Future minimum rental payments are as follows:

Years ending June 30, 2009 2010 2011 2012 2013 Thereafter Total minimum future rental payments

Amount $ 676,454 559,887 205,583 203,798 850,858 901,432 $ 3,398,012

Total rental expense for the fiscal year ended June 30, 2008 and 2007 was $863,980 and $860,045, respectively. The Florida Bar is also the lessor of certain office space in a building owned by The Florida Bar. The space is rented to unrelated entities under operating leases expiring in various years through the year 2013. Rental income for the fiscal years ended June 30, 2008 and 2007 were $293,928 and $507,083, respectively. Future minimum rental receipts are as follows:
Years ending June 30, 2009 2010 2011 2012 2013 Thereafter Total minimum future rental payments

Amount $ 272,767 272,974 279,790 286,784 293,818 73,894 $ 1,480,027

NOTE 13 - CONTINGENCIES The Florida Bar is involved in several actions as defendant and/or co-defendant. The majority of the actions are expected to be settled with little or no financial impact to The Florida Bar. An accurate assessment of any significant liability is not determinable although management of The Florida Bar believes that the possibility of any significant liability arising from current litigation is extremely remote.

- 26

The Florida Bar and Subsidiaries


Notes to Consolidated Financial Statements

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NOTE 14 - COMMITMENTS

The Florida Bar has contracted with various hotels to reserve facilities, rooms, and food and beverage services for meetings and seminars to be held through 2015. If The Florida Bar should choose to cancel the contract(s), liquidating damages will be due to the hotel. Generally, liquidating damages are tiered depending on the time between cancellation and scheduled arrival date and are based on a percentage of anticipated revenues. The following is a schedule of estimated liquidating damages that The Florida Bar would incur should they cancel the contract(s) as of June 30, 2008: Estimated liquidating damages $ 674,810 168,121 125,497 15,700 592,893 362,105 $ 1,939,126

Event Annual Meeting Mid-Year Meeting Board of Governors Meeting General Meeting Section Meeting Continuing Legal Education Seminars Total commitment

NOTE 15 - DESIGNATED FUND BALANCES

The Florida Bar has designated certain net assets to be used for specific program purposes. As of June 30, 2008 and 2007, the designated net assets were $14,614,367 and $14,691,134, respectively.

NOTE 16 - RISK MANAGEMENT PROGRAMS

The Florida Bar is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. Workers' compensation, property, and general liability coverage are provided through commercial insurance carriers. Management continuously reviews the limits of coverage and believes that current coverage is adequate. There were no significant reductions in insurance coverage from the previous year.

NOTE 17 - RISKS AND UNCERTAINTIES

The Florida Bar investment securities are exposed to various risks, such as interest rate, market conditions, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that ~hanges in the value of investment securities will occur in the near term and that such changes could materially affect investment balances.

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Supplementary Information

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------------------
The Florida Bar and Subsidiaries
Consolidating Statement of Net Assets
June 30, 2008

General Fund

Bar Center Fund

Clients' Security Fund

Certification Fund

Sections Fund

Eliminating Entries

Total All Funds

Assets
Current assets Cash and cash equivalents Short-term investments Accounts receivable, net Due from other funds Prepaid expenses and other assets Total current assets Restricted assets Investment in The Florida Bar Building Corporation Total restricted assets Capital assets, net Land Buildings and improvements Landscaping and parking Equipment and furnishings Construction in progress Accumulated depreciation Total capital assets, net Total assets

$ 13,226,114
39,908,581 236,741

832,419

5,198,940

5,233,829

776,017

4,182,743

24,562 (15,391,529) (25,117) (15,392,084)

$ 14,058,533
39,908,581 261,303 638,747 54,867,164

663,864 54,035,300

6,031,359

5,233,829

776,017

4,182,743

1,611,647 1,611,647

(1,611,647) (1,611,647)

$ 55,646,947

1,306,690 8,983,412 120,318 4,629,153 19,526 (8,208,997) 6,850,102

$ 5,233,829 $

776,017

$ 4,182,743

$ (17,003,731)

1,306,690 8,983,412 120,318 4,629,153 19,526 (8,208,997) 6,850,102

$ 12,881,461

$ 61,717,266

See Independent Auditors' Report. - 28

------------------The Florida Bar and Subsidiaries


Consolidating Statement of Net Assets (Continued)
June 30,2008

General Fund

Bar Center Fund

Clients' Security Fund

Certification Fund

Sections Fund

Eliminating Entries

Total All Funds

Liabilities and Net Assets


Current liabilities Current portion of long-term debt Accounts payable Claims payable Accrued expenses Due to other funds Deferred revenues Security deposits Total current liabilities Non-current liabilities Long-term debt, less current portion Compensated absences payable Total non-current liablities Total liabilities Net assets Invested in capital assets, net of related debt Restricted for scholarships Unrestricted Designated Undesignated Contributed capital Total net assets Total liabilities and net assets

2,775,025

214,251 55,480

364,820

(1,425,385)

1,020,011 13,941,582 10,541,326

73,713 343,444

364,820

(13,941,582)

214,251 1,405,120 364,820 1,020,011 10,541,326 48,596 13,594,124

(25,117) (15,392,084)

28,277,944

2,388,952 2,388,952 30,666,896

1,451,635

1,451,635 1,795,079

364,820

(15,392,084)

1,451,635 2,388,952 3,840,587 17,434,711

34,412
496,080 24,449,559

5,184,217

4,290,518

4,869,009

776,017

4,182,743

(1,611,647) (1,611,647)

5,184,217 34,412 14,614,367 24,449,559 44,282,555

1,611,647 11,086,382

24,980,051

4,869,009

776,017

4,182,743

$ 55,646,947

$ 12,881,461

$ 5,233,829

776,017

$ 4,182,743

$ (17,003,731)

$ 61,717,266

See Independent Auditors' Report.

- 29

------------------The Florida Bar and Subsidiaries


Consolidating Statement of Revenues, Expenses and Changes in Net Assets
Year ended June 30,2008

General Fund

Bar Center Fund

Clients' Security Fund

Certification Fund

Sections Fund

Eliminating Entries

Total All Funds

Operating revenues
Annual fees Other fees from members Sales of products and services Advertising Young lawyers Grants and other Total operating revenues

$ 21,577,689
3,684,107 6,832,092 2,348,386 561,070 385,564 35,388,908

795,745 795,745

1,175,327 5,823

1,196,886 2,425,507

$ 21,577,689
6,056,320 9,263,422 2,348,386 561,070 753,657 40,560,544

103,373 103,373

(531,025) (531,025)

1,181,150

3,622,393

Operating expenses
Regulation of the practice of law Cost of products and services provided to members Unauthorized practice of law Public service programs Communication with members and the public Administration Legislation Young lawyers Depreciation and amortization Other programs and costs Total operating expenses 14,743,172 8,240,948 1,369,266 680,533 4,062,138 2,547,171 406,356 635,337

1,212,265

3,528,489

1,515,357

764,039 483,185 1,247,224 (451,479)

125,030 32,809,951 2,578,957

1,515,357 (1,411,984)

1,212,265 (31,115)

3,528,489 93,904

(222,606) (111,250) (19,766) (9,924) (59,233) (38,689) (5,919) (9,255)

(54,383) (531,025)

15,732,831 11,658,187 1,349,500 2,185,966 4,002,905 2,508,482 400,437 626,082 764,039 553,832 39,782,261 778,283

Operating income (loss) Non-operating revenues (expenses)


Investment earnings Interest expense Loss on disposal of capital assets Total non-operating revenues

922,159

922,159 3,501,116 23,677,380 (2,198,445)

134,013 (137,262) (6,812) (10,061) (461,540) 10,935,901 612,021

127,077

17,679

119,447

127,077 (1,284,907) 4,567,492 1,586,424

17,679 (13,436) 789,453

119,447 213,351 3,969,392

(1,611,647)

1,320,375 (137,262) (6,812) 1,176,301 1,954,584 42,327,971

Change in net assets Net assets, beginning of year Transfers (to) from other funds Net assets, end of year

$ 24,980,051

$ 11,086,382

$ 4,869,009

776,017

$ 4,182,743

$ (1,611,647)

$ 44,282,555

See Independent Auditors' Report.


- 30

------------------The Florida Bar and Subsidiaries


Consolidating Statement of Cash Flows
Year ended June 30,2008 Cash flows from operating activities: Receipts from members, customers and other sources Payments to employees, suppliers and other vendors Net cash provided by (used in) operating activities Cash flows from non-capital and related financing activities: Reduction of debt Interest paid Net cash (used in) non-capital and related financing activities Cash flows from capital and related financing activities: Acquisition of capital assets Net cash (used in) capital and related financing activities Cash flows from investing activities: Net change in repurchase agreement Redemption of investments Purchase of investments, net of change in fair value Investment income Net cash (used in) provided by investing activities (Decrease) increase in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year General Fund Bar Center Fund Clients' Security Fund Certification Fund Sections Fund Eliminating Entries Total All Funds

$ 36,876,195
(34,750,941 ) 2,125,254

795,745 386,330 1,182,075

103,373 (230,450) (127,077)

$ 1,181,150
(1,198,829) (17,679)

$ 3,622,393
(3,741,840) (119,447)

7,321 (7,321 )

$ 42,586,177
(39,543,051 ) 3,043,126

(198,939) (137,262) (336,201)

(198,939) (137,262) (336,201)

(1,281,624) (1,281,624)

(1,281,624) (1,281,624)

(625,165) 19,997,054 (18,726,900) 922,159 1,567,148 3,692,402 9,533,712

134,013 134,013 (301,737) 1,134,156

127,077 127,077 -

17,679 17,679

119,447 119,447 -

(625,165) 19,997,054 (18,726,900) 1,320,375 1,965,364 3,390,665 10,667,868

$ 13,226,114

832,419

$ 14,058,533

See Independent Auditors' Report.


- 31

------------------The Florida Bar and Subsidiaries


Consolidating Statement of Cash Flows (Continued)
Year ended June 30,2008

General Fund

Bar Center Fund

Clients' Security Fund

Certification Fund

Sections Fund

Eliminating Entries

Total All Funds

Reconciliation of operating income to net cash provided by (used in) operating activities:
Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities Depreciation and amortization Transfers (to) from other funds (Increase) decrease in: Accounts receivable, net Due from other funds Prepaid expense and other assets Increase (decrease) in: Accounts payable Claims payable Accrued expenses Deferred revenues Security deposits Due to other funds Compensated absences payable Net cash provided by (used in) operating activities

$ 2,578,957

(451,479)

$ (1,411,984)

(31,115)

93,904

778,283

(2,198,445) 308,835

764,039 612,021

1,586,424

13,436

(213,351 )

764,039

216,315

(612,742)

(220,773) (162,109)

7,321 596,342

316,156 (220,773) (181,288) 311,225 112,626 1,178,452 705 (16,299)

40,474 -

311,225

(59,653)

112,626 1,178,452

$
(119,447)

544,010 (16,299) $ 2,125,254

705

$ 1,182,075 $

(127,077)

(544,010) -

$
(17,679)

$ 3,043,126

Non-cash investing, capital and financing activities:


Change in the fair value of investments Loss on disposal of assets

$ (1,969,343) $ -

$ $

6,812

$ $

$ $

$ $

$ $

$ (1,969,343) 6,812 $

Supplemental information:

Cash paid for interest

137,262

137,262

See Independent Auditors' Report.

- 32

I I I I I I I I I I I I I I I I I I I

The Florida Bar and Subsidiaries


General Fund Schedule of Budgeted and Actual Revenues and Expenses
Variance Favorable (Unfavorable)

Year ended June 30, 2008


Revenues - budgetary basis Annual fees
Investments
Authorized house counsel
Board and officer expense
Lawyer regulation
Florida registered paralegal program Professional enhancement program Division director - ethics, UPL and professionalism Unlicensed practice of law
Ethics
Lawyer advertising
Professionalism
Multijurisdictional practice
Meetings and conventions
Addressing services Continuing legal education program Continuing legal education rule Course approval center
Public service programs
Foreign legal consultants
Law office management advisory services Member benefits program Legal publications Section administration
Young lawyers division
Committtee expenses
Public information
Journal
News
Directory
Building and grounds
Other revenue
G. Kirk Haas Fund (restricted revenue) Total revenues - budgetary basis

Actual

Budgeted

$ 21,577,689
910,475 270,840 49,189 755,981 302,400 127,625 76 12,867 13 486,924 29,106 492,700 556,896 178,561 3,559,496 662,682 113,819 624,567 9,175 131,551 607,483 913,807 760,119 561,070 8,000 103,028 595,521 1,565,434 187,431 60,485 23,560 4,360 36,242,930

$ 21,924,333
1,287,500 239,450 712,250 4,751 95,000 2,445 50 411,570 39,594 500,000 490,000 210,000 4,303,347 564,403 122,020 733,875 11,075 172,923 588,615 1,020,000 777,454 634,808 5,000 190,149 466,261 1,517,340 223,363 53,000 12,500 3,000 37,316,076

(346,644) (377,025) 31,390 49,189 43,731 297,649 32,625 76 10,422 (37) 75,354 (10,488) (7,300) 66,896 (31,439) (743,851) 98,279 (8,201 ) (109,308) (1,900) (41,372) 18,868 (106,193) (17,335) (73,738) 3,000 (87,121) 129,260 48,094 (35,932) 7,485 11,060 1,360 (1,073,146)

See Independent Auditors' Report.

- 33

I
I I I I I I I I
Year ended June 30, 2008
Expenses - budgetary basis General administration Staff and office expense Travel Internal service and administration Member service project Post employment health Other operating expenses Total general administration Board and officer Staff and office expense Travel Internal service and administration Other operating expenses Total board and officer Legislation Staff and office expense Contract services Travel Internal service and administration Other operating expenses Total legislation Authorized house counsel Staff and office expense Internal service and administration Other operating expenses Total authorized house counsel General counsel Staff and office expense Contract services Travel Internal service and administration Other operating expenses Total general counsel Division director - legal Staff and office expense Travel Internal service and administration Other operating expenses Total division director - legal

The Florida Bar and Subsidiaries General Fund Schedule of Budgeted and Actual Revenues and Expenses (Continued)
Variance Favorable (Unfavorable)

Actual

Budgeted

705,045 56,652 14,183

1,152,544 61,916 22,027

447,499 5,264 7,844

14,507 790,387

18,603 1,255,090

4,096 464,703

273,819 35,844 9,381 379,063 698,107

275,447 28,550 11,578 359,809 675,384

1,628 (7,294) 2,197 (19,254) (22,723)

I
I I I I I I I I I

100,043 249,454 4,970 50,542 1,347 406,356

122,353 260,958 7,075 61,222 5,620 457,228

22,310 11,504 2,105 10,680 4,273 50,872

10,461 3,853 1,440 15,754

9,853 3,911 1,030 14,794

(608) 58 (410) (960)

193,393 613,044 3,608 34,471 247 844,763

176,901 780,557 5,487 43,548 1,340 1,007,833

(16,492) 167,513 1,879 9,077 1,093 163,070

(24,310) 23,784 525 (1 )

(22,845) 22,299 494 52

1,465 (1,485) (31) 52 1

See Independent Auditors' Report.

- 34

I I I I I I
I I I I I I
I I I I I

The Florida Bar and Subsidiaries


General Fund Schedule of Budgeted and Actual Revenues and Expenses (Continued)
Variance Favorable (U nfavorable)

Year ended June 30, 2008


Expenses - budgetary basis Attorney Consumer Assistance Program Staff and office expense Travel Internal service and administration Other operating expenses Total lawyer regulation Lawyer regulation Staff and office expense Travel Internal service and administration Other operating expenses Total lawyer regulation Professional enhancement program Staff and office expense Travel Internal service and administration Other operating expenses Total professional enhancement program Division director - ethics, UPL and professionalism
Staff and office expense Travel Less cost dist. Internal service and administration
Other operating expenses Total division director - ethics, UPL and professionalism Unlicensed practice of law Staff and office expense Travel Internal service and administration Other operating expenses Total unlicensed practice of law Lawyer assistance program/substance abuse Staff and office expense Internal service and administration Other operating expenses Total lawyer assistance program/substance abuse

Actual

Budgeted

1,059,636 557 118,074 29,979 1,208,246

1,005,261 5,188 115,987 9,410 1,135,846

(54,375) 4,631 (2,087)


(20,569)
(72,400)

8,976,452 144,993 1,287,138 438,893 10,847,476

9,215,075 155,295 1,341,938 442,396 11,154,704

238,623 10,302 54,800 3,503 307,228

28,514 9,973 4,486 2,918 45,891

33,383 14,750 5,754 2,465 56,352

4,869 4,777 1,268 (453) 10,461

42,021 7,489 (49,513) 3

42,758 7,377 (50,156) 21

737
(112)
(643)
18

1,131,542 36,301 171,677 33,940 1,373,460

1,254,341 41,764 216,794 44,783 1,557,682

122,799 5,463 45,117 10,843 184,222

1,737 49,028 442,000 492,765

5,300 50,871 442,000 498,171

3,563 1,843 5,406

I
I

See Independent Auditors' Report.

- 35

I I I I
I
I I I I I I I I I I I
I
I I

The Florida Bar and Subsidiaries


General Fund Schedule of Budgeted and Actual Revenues and Expenses (Continued)
Variance Favorable (Unfavorable)

Year ended June 30, 2008


Expenses - budgetary basis
Ethics
Staff and office expense Travel Internal service and administration Other operating expenses Total ethics Lawyer advertising Staff and office expense Travel Internal service and administration Other operating expenses Total lawyer advertising Ethics/advertising staff pool Staff and office expense Total ethics/advertsising pool Professionalism Staff and office expense Contract services Travel Internal service and administration Other operating expenses Total professionalism Multijurisdictional practice Staff and office expense Internal service and administration Other operating expenses Total multijurisdictional practice Florida Registered Paralegal Staff and office expense Travel Internal service and administration Other operating expenses Total professionalism

Actual

Budgeted

647,379 5,201 71,501 5,225 729,306

636,145 4,533 73,704 5,534 719,916

(11,234)
(668)
2,203 309 (9,390)

641,268 4,769 70,997 9,079 726,113

672,600 7,418 78,586 10,487 769,091

31,332 2,649 7,589 1,408 42,978

(1 ) (1 )

1 1

417,792 20,714 56,577 20,400 515,483

440,580 22,218 60,974 41,383 565,155

22,788 1,504 4,397 20,983 49,672

18,707 3,484 11 22,202

18,625 5,576 1,025 25,226

(82) 2,092 1,014 3,024

51,175 2,013 58,570 3,888 115,646

54,846 3,293 24,215 5,591 87,945

3,671 1,280 (34,355) 1,703 (27,701)

See Independent Auditors' Report.

- 36

I I I I I I I I I I
I I

The Florida Bar and Subsidiaries


General Fund Schedule of Budgeted and Actual Revenues and Expenses (Continued)
Variance Favorable (U nfavorable)

Year ended June 30, 2008 Expenses - budgetary basis Shipping and receiving Staff and office expense Internal service and administration Other operating expenses Less cost distribution Total shipping and receiving Building and grounds Staff and office expense Travel Internal service and adn1inistration Other operating expenses Less cost distribution Total building and grounds Meetings and conventions
Staff and office expense Contract services Travel Internal service and administration Other operating expenses Less cost distribution Total meetings and conventions Information systems Staff and office expense Contract services Travel Internal service and administration Other operating expenses Less cost distribution Total information systems Human resource management Staff and office expense Travel Internal service and administration Other operating expenses Less cost distribution Total human resource management Division director - programs
Staff and office expense Travel Internal service and administration Other operating expenses Total division director - programs

Actual

Budgeted

132,089 (13,569) 89 (118,609)

159,489 (5,000) 29 (163,303) (8,785)

27,400 8,569 (60) (44,694) (8,785)

1,396,100 3,009 169 1 (1,356,925) 42,354

1,459,388 2,000 1,001 2 (1,380,098) 82,293

63,288 (1,009) 832 1 (23,173) 39,939

355,073 2,336 26,605 147,811 369,887 (23,378) 878,334

334,792 630 28,023 148,650 410,518 (26,699) 895,914

(20,281)
(1,706)
1,418
839
40,631
(3,321) 17,580

I
I I
I

3,134,221 95,094 4,532 (73,273) 32,205 (3,192,777) 2

3,556,801 224,000 24,493 10 42,791 (3,848,095)

422,580 128,906 19,961 73,283 10,586 (655,318) (2)

246,540 38,419 33,163 (318,122)

256,329 2,224 48,218 29,543 (336,314)

9,789 2,224 9,799


(3,620)
(18,192)

(5,272) 4,677 462 137 4

(5,719) 5,541 121 57

(447)
864
(341)
(80)
(4)

See Independent Auditors' Report.

- 37

I I I I I I I I I I I I
I I
I
I I I I

The Florida Bar and Subsidiaries


General Fund Schedule of Budgeted and Actual Revenues and Expenses (Continued)
Variance Favorable (Unfavorable)

Year ended June 30, 2008 Expenses - budgetary basis Continuing legal education programs Staff and office expense Travel Internal service and administration Other operating expenses Total continuing legal education programs Continuing legal education rule Staff and office expense Travel Internal service and administration Other operating expenses Total continuing legal education rule Course approval center Staff and office expense Internal service and administration Other operating expenses Total course approval center Legal education and specialization pool
Staff and office expense Internal service and administration Other operating expenses Total legal education and specialization pool Professional development pool
Staff and office expense Travel
Internal service and administration Other operating expenses Total professional development pool Public service programs
Staff and office expense Travel Internal service and administration Other operating expenses Total public service programs Foreign legal consultants Staff and office expense Internal service and administration Other operating expenses Total foreign legal consultants

Actual

Budgeted

864,889 68,473 877,424 1,661,520 3,472,306

909,632 60,388 977,222 1,624,660 3,571,902

44,743 (8,085) 99,798 (36,860) 99,596

277,781 374 36,257 30,952 345,364

305,387 928 39,295 32,719 378,329

27,606 554 3,038 1,767 32,965

99,644 11,120 3,051 113,815

111,124 13,002 3,205 127,331

11,480 1,882 154 13,516

(139,484) 138,729 754 (1 )

(200,136) 200,000 136

(60,652)
61,271
(618)
1

(1,233) 73 1,168 8

(724) 19 705

509
(54)
(463)
(8)

334,688 3,035 75,925 267,591 681,239

456,866 2,879 114,364 294,771 868,880

122,178
(156)
38,439
27,180
187,641

3,097 338 10 3,445

10,150 1,174 174 11,498

7,053 836 164 8,053

See Independent Auditors' Report.

- 38

I I I I I I
I I I I I I I

The Florida Bar and Subsidiaries


General Fund Schedule of Budgeted and Actual Revenues and Expenses (Continued)
Variance Favorable (Unfavorable)

Year ended June 30, 2008


Expenses - budgetary basis Print shop Staff and office expense Internal service and adn1inistration Other operating expenses Less cost distribution Total print shop Law office management advisory services Staff and office expense Travel Internal service and administration Other operating expenses Total law office management advisory services Member benefits program Staff and office expense Internal service and administration Other operating expenses Total member benefits program Legal publications Staff and office expense Travel Internal service and administration Other operating expenses Total legal publications Section administration Staff and office expense Travel Internal service and administration Other operating expenses Total section administration Young lawyers division Staff and office expense Travel Internal service and administration Other operating expenses Total young lawyers division

Actual

Budgeted

393,341

466,005 116,721 (582,726)

2
84,324 (477,659)

72,664 (2) 32,397 (105,067)

(8)

348,837 53,942 49,121 7,838 459,738 5,338 9,366 (688) (4,070) 9,946

343,499 44,576 49,809 11,908 449,792

70,610 26,096 170,360 267,066

62,179 28,958 192,449 283,586

(8,431) 2,862 22,089 16,520

1,058,926 18,691 126,094 45,436 1,249,147

1,104,862 19,357 138,042 54,033 1,316,294

45,936 666 11,948 8,597 67,147

564,734 8,429 455,949 25 1,029,137

537,962 8,460 433,445 6,332 986,199

(26,772) 31 (22,504) 6,307 (42,938)

I
I I I I

52,993 9,397 64,855 508,092 635,337

36,197 6,808 67,101 507,750 617,856

(16,796) (2,589) 2,246 (342) (17,481)

See Independent Auditors' Report.

- 39

I I I I I I I I I I I
I I I I I I I I

The Florida Bar and Subsidiaries


General Fund Schedule of Budgeted and Actual Revenues and Expenses (Continued)
Variance Favorable (Unfavorable)

Year ended June 30, 2008


Expenses - budgetary basis Committee Staff and office expense Travel Internal service and administration Other operating expenses Total committee Public information Staff and office expense Contract services Travel Internal service and administration Other operating expenses Total public information Office systems Staff and office expense Internal service and administration Other operating expenses Less cost distribution Total office systems "Journal" - "News" staff pool
Staff and office expense
Travel Internal service and administration Other operating expenses Total "Journal" - "News" staff pool "Journal" Staff and office expense Travel Internal service and administration Other operating expenses Less cost distribution Total "Journal" "News" Staff and office expense Travel Internal service and administration Other operating expenses Less cost distribution Total "News"

Actual

Budgeted

133,213 10,920 41,806 37,411 223,350

146,295 22,556 45,077 33,259 247,187

13,082 11,636 3,271 (4,152) 23,837

676,653 4,567 52,562 373,694 122,993 1,230,469

735,468 6,505 79,107 368,981 222,050 1,412,111

58,815 1,938 26,545 (4,713) 99,057 181,642

443,992 2,239 75 (446,307) (1 )

466,857 5,000 142 (471,999)

22,865 2,761 67 (25,692)

(32,558) 2,418 26,127 4,019

(95,254) 3,697 80,000 11,557

(62,696) 1,279 53,873 7,538 (6)

257,892 81,718 503,948 (7,600) 835,958

280,524 2,235 92,716 540,468 (8,000) 907,943

22,632 2,235 10,998 36,520 (400) 71,985

495,507 10,834 161,824 1,156,764 (169,465) 1,655,464

547,689 12,297 174,419 1,164,051 (190,820) 1,707,636

52,182 1,463 12,595 7,287 (21,355) 52,172

See Independent Auditors' Report.

- 40

I I I I I I I I I I I I I I I I I I I

The Florida Bar and Subsidiaries


General Fund Schedule of Budgeted and Actual Revenues and Expenses (Continued) Variance Favorable (Unfavorable)

Year ended June 30, 2008

Actual

Budgeted

Expenses - budgetary basis


Directory Staff and office expense Internal service and administration Other operating expenses Less cost distribution Total Directory Finance and records Staff and office expense Contract services Travel Internal service and administration Other operating expenses Less cost distribution Total finance and records 47,513 33,654 264,606 (1,395) 344,378 73,820 43,166 309,561 (3,825) 422,722 26,307 9,512 44,955 (2,430) 78,344

1,638,066 46,248 8,220 549,282 269,267 (1,645,350) 865,733

1,682,813 56,000 8,516 689,279 316,921 (1,726,784) 1,026,745

44,747 9,752 296 139,997 47,654 (81,434) 161,012

Research, planning and evaluation Staff and office expense Contract services Travel Internal service and administration Other operating expenses Total research, planning and evaluation Division directors - administration Staff and office expense Travel Internal service and administration Other operating expenses Less cost distribution Total division directors - administration G. Kirk Haas Fund (restricted fund) Total expenses Excess of revenues over expenses - budgetary basis

154,204 8,720 3,476 1,783 9,519 177,702

158,409 8,915 6,313 2,271 10,141 186,049

4,205 195 2,837 488 622 8,347

121,971 55 233 358 (122,617)

148,818 671 253 372 (150,114)

26,847 616 20 14 (27,497)

2,500 33,334,869

2,500 35,484,345 2,149,476

2,908,061

1,831,731

1,076,330

See Independent Auditors' Report. - 41 -

The Florida Bar and Subsidiaries


General Fund Reconciliation of Revenues and Expenses on a Budgetary Basis to Totals Per the Consolidating Schedule of Statement of Revenues, Expenses and Changes in Net Assets
Excess of Revenues Over(U nder) Expenses

I
I
I
I
I
I
I I I I I I
I I I I I
Year ended June 30, 2008 Totals on budgetary basis

Operating Revenues

Expenses

$ 36,242,930

$ 33,334,869

2,908,061

Add: Subsidiary operations Florida Lawyers Association for the Maintenance of Excellence, Inc. The Florida Attorneys Charitable Trust Less: Adjustments for financial statement presentation purposes Net change in the fair value of investments Budgeted items treated as interfund transfers for basic financial statement purposes Depreciation Total operating revenues, expenses and income per Consolidating Schedule of Statement of Revenues, Expenses and Changes in Net Assets

11,684 56,453

85,157 1,946

(73,473) 54,507

(922, 159)

(922, 159)

(612,021)

612,021

$ 35,388,908

$ 32,809,951

2,578,957

See Independent Auditors' Report.

- 42

I I I I I I
I
I
I I I I I I I I I I I

The Florida Bar and Subsidiaries


Clients' Security Fund Schedule of Budgeted and Actual Revenues and Expenses
Variance Favorable (U nfavorable)

Year ended June 30, 2008 Operating revenues Annual contribution * Recoveries Total operating revenues Operating expenses Staff and office expense Contract services Travel Internal service and administration Claims paid Other operating expenses Total operating expenses Operating income (loss) Non-operating revenues Investment earnings Total non-operating revenues Change in net assets

Actual

Budget

1,586,424 103,373 1,689,797

1,586,420 15,300 1,601,720

4 88,073 88,077

152,887 42,228 7,137 74,658 1,235,423 3,024 1,515,357 174,440

134,485 42,229 8,395 63,185 1,586,420 2,752 1,837,466 (235,746)

(18,402) 1 1,258 (11,473) 350,997 (272) 322,109 410,186

127,077 127,077

200,000 200,000

(72,923) (72,923) 337,263

301,517

(35,746) $

* The annual contribution from the general fund is treated as a budgeted revenue item on this statement. However, it is treated as an interfund transfer in the basic financial statements section of this report. The difference between the budget basis statement and the basic financial statement is reconciled as follows:

Change in net assets - budgetary basis Less: annual contribution treated as an interfund transfer on the basic financial statements Change in net assets per Consolidating Schedule of Statement of Revenues, Expenses and Changes in Net Assets

301,517

(1,586,424)

(1,284,907)

See Independent Auditors' Report.

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Year ended June 30, 2008

The Florida Bar and Subsidiaries Certification Fund Schedule of Budgeted and Actual Revenues and Expenses
Variance Favorable (Unfavorable)

Actual

Budget

Operating revenues
Member Fees
Sales
Total operating revenues Operating expenses
Staff and office expense
Contract services Travel Internal service and administration Other operating expenses
Total operating expenses
Operating income (loss) Non-operating revenues
Investment earnings
Total non-operating revenues
Change in net assets per Consolidating Schedule of Statement of Revenues, Expenses and Changes in Net Assets

$ 1,175,327
5,823 1,181,150

963,278 6,831 970,109

212,049 (1,008) 211,041

810,996 25,683 55,078 138,787 181,721 1,212,265 (31,115)

857,995 19,800 57,799 360,937 192,713 1,489,244 (519,135)

46,999 (5,883) 2,721 222,150 10,992 276,979 488,020 (2,321 ) (2,321 )

17,679 17,679

20,000 20,000

(13,436) $

(499,135) $

485,699

See Independent Auditors' Report.

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The Florida Bar and Subsidiaries


Sections Fund Schedule of Budgeted and Actual Revenues and Expenses
Variance Favorable (Unfavorable)

Year ended June 30, 2008


Revenues - budgetary basis Real property, probate and trust law Trial lawyers Business law General practice Family law City, county, and local government Workers' compensation Tax law Criminal law Administrative law Environmental and land use law Practice management and technology Labor and employment law International law Entertainment, arts and sports law Health law Public interest law Government lawyers Elder law Out-of-state practice Appellate practice and advocacy Equal opportunity law Council of sections Total revenues - budgetary basis

Actual

Budgeted

1,263,141 259,296 278,211 108,986 668,663 24,579 74,729 246,649 100,598 27,080 99,705 78,466 117,944 61,870 48,242 8,217 33,563 102,566 19,491 109,023 4,717 6,104 3,741,840

946,445 279,745 264,843 71,292 401,531 65,361 91,517 345,863 32,198 54,966 83,954 88,852 93,577 49,631 44,639 5,406 22,774 111,655 22,264 (31,607) 10,663 6,605 3,062,174

316,696 (20,449) 13,368 37,694 267,132 (40,782) (16,788) (99,214) 68,400 (27,886) 15,751 (10,386) 24,367 12,239 3,603 2,811 10,789 (9,089) (2,773) 140,630 (5,946) (501 ) 679,666

See Independent Auditors' Report. - 45

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The Florida Bar and Subsidiaries


Sections Fund Schedule of Budgeted and Actual Revenues and Expenses (Continued)
Variance Favorable (Unfavorable)

Year ended June 30, 2008 Operating expenses - budgetary basis Real property, probate and trust law Trial lawyers Business law
General practice
Family law
City, county, and local government Workers' compensation Tax law Criminal law Administrative law Environmental and land use law Practice management and technology Labor and employment law International law Entertainment, arts and sports law Health law Public interest law Government lawyers Elder law Out-of-state practice Appellate practice and advocacy Equal opportunity law Council of sections Total expenses - budgetary basis

Actual

Budgeted

1,211,692 163,781 329,436 77,595 532,633 77,097 90,210 254,672 81,465 17,310 112,133 60,392 174,383 41,775 30,631 6,393 21,878 123,752 25,930 91,050 5,469 (1,188) 3,528,489

973,671 207,438 288,551 107,165 291,050 107,043 121,268 391,271 156,130 76,868 135,024 100,494 124,930 47,555 58,285 10,184 24,489 119,851 33,803 118,445 11,663 8,189 3,513,367

(238,021 ) 43,657 (40,885) 29,570 (241,583) 29,946 31,058 136,599 74,665 59,558 22,891 40,102 (49,453) 5,780 27,654 3,791 2,611 (3,901 ) 7,873 27,395 6,194 9,377 (15,122)

Change in net assets per the Consolidating Schedule of Statement of Revenues, Expenses and Changes in Net Assets

213,351

(451,193) $

664,544

See Independent Auditors' Report.

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Other Reports

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CRI

CARR RIGGS & INGRAM

Carr, Riggs & Ingram, LLC 1713 Mahan Drive Tallahassee, Florida 32308 (850) 878-8777 (850) 878-2344 (fax) www.cricpa.com

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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

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Board of Governors
The Florida Bar
Tallahassee, Florida

We have audited the basic financial statements of The Florida Bar and Subsidiaries as of and for the year ended June 30, 2008, and have issued our report thereon dated October 24, 2008. 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 Florida Bar and Subsidiaries' internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of The Florida Bar and Subsidiaries' internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of The Florida Bar and Subsidiaries' 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 Florida Bar and Subsidiaries' 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 Florida Bar and Subsidiaries' financial statement that is more than inconsequential will not be prevented or detected by The Florida Bar and Subsidiaries' internal control.

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 Florida Bar and Subsidiaries' internal control.

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Board of Governors
The Florida Bar

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 Florida Bar and Subsidiaries' 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 that are required to be reported under Government Auditing Standards. We have noted other matters that we have reported to the management of The Florida Bar in a separate letter dated October 24, 2008. This report is intended solely for the information and use of the Board of Governors and management and is not intended to be and should not be used by anyone other than these specified parties.

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LaJ\J\..
Tallahassee, lorida October 24, 2008
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