2016-05-10T17:45:21-05:00 2015-06-30 910189318 MOSS ADAMS LLP 4747 EXECUTIVE DRIVE SUITE 1300 SAN DIEGO CA 92121 990 2014-07-01 237421224 CITY UNIVERSITY OF SEATTLE CITY 2062394911 521 WALL STREET NO 100 SEATTLE WA 98121 RICHARD CARTER PRESIDENT 2062394911 2016-05-05 1 PATRICIA J MAYER P00188643 8586271400 2014 2016-08-17 19:52:53Z RICHARD CARTER 521 WALL STREET NO 100 SEATTLE WA 98121 39898494 0 X WWW.CITYU.EDU X 1973 WA CITY UNIVERSITY OF SEATTLE IS A PRIVATE, NOT-FOR-PROFIT INSTITUTION OF HIGHER EDUCATION. 19 18 698 40 0 0 4531309 6012540 30254954 29038287 13767 20041 1021607 4827626 35821637 39898494 430254 425476 0 0 19731463 21496744 0 0 0 15555441 15887199 35717158 37809419 104479 2089075 16533457 19261971 13074264 13065928 3459193 6196043 X FOUNDED IN 1973, CITY UNIVERSITY OF SEATTLE'S MISSION IS TO CHANGE LIVES FOR GOOD BY OFFERING HIGH QUALITY AND RELEVANT LIFELONG EDUCATION TO ANYONE WITH THE DESIRE TO LEARN. CITY UNIVERSITY'S VISION IS TO PROVIDE UNDERSERVED INDIVIDUALS AND COMMUNITIES AROUND THE WORLD ACCESS TO HIGH QUALITY, LIFELONG EDUCATION THROUGH A NETWORK OF LOCAL AND INTERNATIONAL PARTNERSHIPS. TO FULFILL ITS MISSION AND WORK TOWARD ACHIEVING ITS VISION, CITY UNIVERSITY OF SEATTLE DETERMINES TO BE FLEXIBLE: DESIGN AND DELIVER PROGRAMS AND SERVICES TO BE CONVENIENT TO STUDENTS; ACCESSIBLE: PROVIDE EDUCATIONAL OPPORTUNITIES TO ANYONE, ANYWHERE; INNOVATIVE: CONTINUALLY CREATE NEW EDUCATIONAL OPPORTUNITIES; RELEVANT: WHAT IS TAUGHT TODAY CAN BE APPLIED TOMORROW; AND GLOBAL: ACT LOCALLY AND THINK GLOBALLY.CITY UNIVERSITY OF SEATTLE IS ACCREDITED BY THE NORTHWEST COMMISSION ON COLLEGES AND UNIVERSITIES (NWCCU), A REGIONAL BODY APPROVED BY THE U.S. DEPARTMENT OF EDUCATION. 0 0 25632922 29038287 CITY UNIVERSITY OF SEATTLE IS A PRIVATE, NOT-FOR-PROFIT UNIVERSITY WITH APPROXIMATELY 6,361 ENROLLMENTS AND AWARDED 1,244 DEGREES DURING THE YEAR ENDED JUNE 30, 2015. ALL GRANTS UNDER FINANCIAL AID GO TO STUDENTS TO FINANCE THEIR EDUCATION. THE UNIVERSITY IS COMPRISED OF THE SCHOOL OF MANAGEMENT, THE GORDON ALBRIGHT SCHOOL OF EDUCATION, THE DIVISION OF ARTS AND SCIENCES, THE SCHOOL OF APPLIED LEADERSHIP, AND THE DIVISION OF WASHINGTON ACADEMY OF LANGUAGES. HEADQUARTERED IN THE PACIFIC NORTHWEST, CITY UNIVERSITY OF SEATTLE OFFERS PROFESSIONAL CERTIFICATION, ASSOCIATES, BACHELORS, MASTER'S, AND DOCTORAL PROGRAMS. CLASSES ARE HELD AT LOCATIONS THROUGHOUT WASHINGTON, CANADA, SLOVAKIA, MEXICO, GREECE, SWITZERLAND, ROMANIA, THE CZECH REPUBLIC, VIETNAM, AND CHINA. 425476 425476 CITY UNIVERSITY OF SEATTLE BELIEVES THAT FUNDING SHOULD NOT BE A BARRIER TO EDUCATION. THE UNIVERSITY HAS MULTIPLE SCHOLARSHIP PROGRAMS AVAILABLE FOR STUDENTS WHO ARE LOW-INCOME MINORITIES, UNDERREPRESENTED, EXPERIENCING ECONOMIC HARDSHIP, OR DEPENDENT ON MERIT-BASED SCHOLARSHIPS. CITYU HAS AWARDED MORE THAN $3.5 MILLION IN SCHOLARSHIPS TO DATE. CITY UNIVERSITY OF SEATTLE CONTINUES THE LAID-OFF WORKER AND TRANSFER SCHOLARSHIP PROGRAM TO ASSIST STUDENTS THAT WERE IMPACTED BY RECENT POOR ECONOMIC CONDITIONS. CITY UNIVERSITY OF SEATTLE ALSO ADDED INTERNATIONAL STUDENT SCHOLARSHIPS FOR STUDENTS WITH ECONOMIC NEED, NEW STUDENTS AND TRANSFER STUDENTS. 26058398 1 1 0 0 0 0 0 1 0 0 1 0 1 1 1 1 0 1 1 1 1 0 1 0 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 0 1 66 0 1 698 1 0 1 CA LO 0 0 0 0 0 0 0 0 X 19 18 0 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 1 1 WA X BRUCE BRYANT SVP BUSINESS & ADMINISTRATION 2062394826 521 WALL STREET NO 100 SEATTLE WA 98121 CARLOS RODRIGUEZ TRUSTEE 3.00 X 0 0 0 DR DONALD KRIPKE TRUSTEE 3.00 X 0 0 0 DR E LEE RICE TRUSTEE 3.00 X 0 0 0 DR MICHAEL CUNNINGHAM CHANCELLOR, TRUSTEE 10.00 X X 60545 0 0 GERALD CZARNECKI TRUSTEE 3.00 X 0 0 0 HERBERT MEITSTRICH CHAIR, BOARD OF TRUSTEES 10.00 X X 0 0 0 HIEP QUACH TRUSTEE 3.00 X 0 0 0 JACQUELINE TOWNSEND KONSTANTUROS TRUSTEE 3.00 X X 0 0 0 JAY STONE TRUSTEE 3.00 X 0 0 0 JEAN LEONARD TRUSTEE 3.00 X 0 0 0 JEANNE CONNELLY TRUSTEE 3.00 X 0 0 0 MICHAEL R MCGILL TRUSTEE 3.00 X 0 0 0 REBECCA HENDERSON TRUSTEE 3.00 X 0 0 0 RICHARD CHISHOLM SECRETARY/TRUSTEE 5.00 X 0 0 0 ROBERT FREELEN TRUSTEE 3.00 X 0 0 0 RUTHANN HEINRICH VICE CHAIR, TRUSTEE 5.00 X 0 0 0 STACY ALLISON TRUSTEE 3.00 X 0 0 0 THOMAS TOPUZES TRUSTEE 3.00 X X 0 0 0 WH KNIGHT JR TRUSTEE 3.00 X 0 0 0 BRUCE BRYANT CFO, VP FINANCE AND ADMINI 50.00 1.00 X 201421 0 17216 RICHARD E CARTER PRESIDENT 50.00 X 414454 0 52638 STEVEN OLSWANG PROVOST 50.00 1.00 X 240351 0 8501 KURT KIRSTEIN DEAN, SCHOOL OF MANAGEMENT 50.00 X 152547 0 15317 MARIANNE FINGADO VP, ENROLLMENT SERVICES 50.00 X 190694 0 35589 CRAIG SCHEIBER DEAN, SCHOOL OF EDUCATION/ 50.00 X 118075 0 17063 KEVIN BROWN DIRECTOR, INFORMATION TECH 50.00 X 137156 0 20801 MELISSA MECHAM VP , STUDENT SERVICES/REGI 50.00 X 142798 0 15194 RC ARDEN HENLEY VP, UNIVERSITY ADVANCEMENT 50.00 X 114925 0 7851 TIM SPRAKE DIRECTOR, HUMAN RESOURCES 50.00 X 112677 0 29590 DR JERRY LEE CHANCELLOR EMERITUS, TRUST 0.30 X 172820 0 0 2058463 0 219760 15 1 1 0 DNA SEATTLE 1301 5TH AVENUE SUITE 2600 SEATTLE WA 98101 ADVERTISING SERVICES 1163651 SABEY INTERGATE EXCHANGE LLC 12201 TUKWILA INTERNATIONAL BLVD 4 SEATTLE WA 98168 WIRELESS SERVICES 588423 SIERRA-CEDAR INC PO BOX 402521 ATLANTA GA 30384 SOFTWARE HOSTING AND CONSULTING 560078 GOOGLE INC PO BOX 39000 SAN FRANCISCO CA 94139 ADVERTISING SERVICES 398884 POINT IT 151 WESTERN AVE STE 350 SEATTLE WA 98119 ADVERTISING SERVICES 363225 18 5476384 536156 6012540 EDUCATIONAL SERVICES 611310 29038287 29038287 29038287 20041 20041 195549 195549 31201 0 31201 31201 31201 AFFILIATION REIMBURSEM 900099 4522145 4522145 OFFICE SUPPLY CONTRACT 900099 16241 16241 BOOKSTORE COMMISSION 900099 9564 9564 52926 52926 4600876 39898494 29038287 0 4847667 365052 365052 60424 60424 457157 349446 107711 16731675 13441514 3290161 331003 330440 563 2626875 1521917 1104958 1350034 989705 360329 54951 6269 48682 241275 47 241228 1189563 772204 417359 2382324 64288 2318036 1292975 829158 463817 1404947 27818 1377129 4649576 3825133 824443 583542 394502 189040 52868 42234 10634 42822 42822 1919000 1367939 551061 15513 15513 INSTRUCTIONAL MATERIALS 698417 674521 23896 STUDY/TOUR SEMINAR PROG 345530 345530 CREDIT CARD FEES 322685 322685 BAD DEBT EXPENSE 159234 159234 531977 168338 363639 37809419 26058398 11751021 0 674582 5344707 429430 315894 824322 881399 29414857 20847529 9660031 8567328 1111000 1111000 54081 27449 3780011 3014194 16533457 19261971 2371824 3158067 1627492 2076126 1929425 738485 7145523 7093250 13074264 13065928 X 3459193 5768589 427454 3459193 6196043 16533457 19261971 X 2089075 647775 X 0 1 X 1 1 1 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 236000 236000 X 0 12040077 5554982 6485095 17374780 15292547 2082233 8567328 SLOVAKIA INVESTMENTS 1111000 C 1111000 INTERCOMPANY RECEIVABLES 2163517 DEPOSITS 850677 3014194 DEFERRED RENT 7093250 7093250 X PART III, LINE 4: SMALL ART COLLECTION DONATED BY FORMER UNIVERSITY STUDENT AND INSTRUCTOR FOR PUBLIC DISPLAY SO ALL STUDENTS CAN ENJOY THE ART. PART X, LINE 2: THE UNIVERSITY HAS RECEIVED A LETTER OF DETERMINATION FROM THE U.S. INTERNAL REVENUE SERVICE GRANTING AN EXEMPTION FROM FEDERAL INCOME TAX UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE (THE IRC), EXCEPT TO THE EXTENT OF UNRELATED BUSINESS TAXABLE INCOME AS DEFINED UNDER IRC SECTIONS 511 THROUGH 514. THE UNIVERSITY DID NOT INCUR UNRELATED BUSINESS INCOME TAX DURING THE YEARS ENDED JUNE 30, 2015 AND 2014, AND ACCORDINGLY, THE CONSOLIDATED FINANCIAL STATEMENTS DO NOT INCLUDE A PROVISION FOR FEDERAL INCOME TAXES. MANAGEMENT BELIEVES THAT THE UNIVERSITY ALSO IS EXEMPT FROM STATE INCOME TAXES IN ALL STATES IN WHICH IT OPERATES THAT HAVE A CORPORATE INCOME TAX, EXCEPT TO THE EXTENT OF UNRELATED BUSINESS TAXABLE INCOME. ADDITIONALLY, THE UNIVERSITY'S WHOLLY OWNED AFFILIATES, CITY UNIVERSITY OF SEATTLE, SEATTLE, USA, SPOL. S.R.O., USA, THE COLLEGE OF MANAGEMENT IN TRENCIN, AND CU PROPERTIES, A.S., ARE EXEMPT FROM U.S. FEDERAL INCOME TAX AS THE ACTIVITIES ARE RELATED TO THE EXEMPT PURPOSE OF THE UNIVERSITY AND/OR THE ACTIVITIES ARE CONDUCTED OUTSIDE OF THE U.S. AND SUBJECT TO TAXES OF THAT FOREIGN JURISDICTION. THE UNIVERSITY HAS NOT IDENTIFIED ANY UNCERTAIN TAX POSITIONS THAT REQUIRE DISCLOSURE FOR OPEN TAX YEARS AFTER JUNE 30, 2012. 1 1 1 1 1 1 1 0 0 0 1 0 0 0 0 0 0 1 SCHEDULE E, PART I, LINE 3 ADVERTISING PLACED IN MEDIA AND ON NU EXTERNAL FACING WEBSITE GENERALLY CONTAIN THE FOLLOWING STATEMENT: ADMISSION IS OPEN TO QUALIFIED APPLICANTS WITHOUT REGARD TO RACE, RELIGION, SEX, AGE, PHYSICAL DISABILITY, OR ETHNIC ORIGIN. SCHEDULE E, PART I, LINE 5 GORDON ALBRIGHT SCHOOL OF EDUCATION DIVERSITY SCHOLARSHIPS PROMOTE ETHNIC DIVERSITY IN OUR STUDENT BODY AS AN IMPORTANT PART OF THE OVERALL LEARNING EXPERIENCE AT CITY UNIVERSITY OF SEATTLE. WE ALSO WORK HARD TO EDUCATE AND FACILITATE THE PLACEMENT OF DIVERSE TEACHERS IN CLASSROOMS TO SERVE OUR COMMUNITIES. 1 EAST ASIA AND THE PACIFIC - AUSTRALIA, BRUNEI, BURMA, CAMBODIA, 70 0 PROGRAM SERVICES STUDENT RECRUITING, PROGRAM MANAGEMENT AND INSTRUCTION 192860 EUROPE (INCLUDING ICELAND & GREENLAND) - ALBANIA, ANDORRA, AUSTRIA, BELGIUM 2 0 PROGRAM SERVICES RECRUITING/TRADE FAIRS, STUDENT MOBILITY SERVICES, INSTRUCTION 98448 NORTH AMERICA - CANADA AND MEXICO, BUT BUT NOT THE UNITED STATES 173 4 PROGRAM SERVICES BRANCH LOCATIONS IN CANADA, INSTRUCTION AND PROGRAM MANAGEMENT 27484 NORTH AMERICA - CANADA AND MEXICO, BUT BUT NOT THE UNITED STATES 0 0 GRANTMAKING SCHOLARSHIPS 60424 SOUTH ASIA - AFGHANISTAN, BANGLADESH, BHUTAN, INDIA, MALDIVES, NEPAL, 3 0 PROGRAM SERVICES STUDENT RECRUITING 28341 EUROPE (INCLUDING ICELAND & GREENLAND) 0 0 INVESTMENT 1111000 248 4 0 0 248 4 1518557 0 1518557 GRANTS TO INDIVIDUALS NORTH AMERICA - CANADA AND MEXICO, BUT BUT NOT THE UNITED STATES 29 60424 SCHOLARSHIP N/A FMV 0 0 1 0 0 0 PART I, LINE 2: SCHOLARSHIP FUNDS ARE AWARDED TO PROVIDE ASSISTANCE TO STUDENTS AT THE CITY UNIVERSITY OF SEATTLE LOCATIONS IN CANADA AND CHINA. PART I, LINE 3: THE ACCRUAL METHOD WAS USED TO ACCOUNT FOR PROGRAM SERVICES AND COST FOR INVESTMENTS. 1 SCHOLARSHIPS, TUITION WAIVERS 190 0 365052 FMV TUITION IS REDUCED BY THE AMOUNT OF INDIVIDUAL SCHOLARSHIPS AWARDED TO STUDENTS. PART I, LINE 2: CITY UNIVERSITY OF SEATTLE PROVIDES SCHOLARSHIP GRANTS TO STUDENTS IN THE FORM OF TUITION REDUCTION. MONITORING IS DONE INTERNALLY TO ENSURE THE ACCOUNTS ARE CREDITED PROPERLY. X 0 0 X X 0 1 0 0 0 0 0 1 0 BRUCE BRYANT CFO, VP FINANCE AND ADMINI 198206 0 0 0 3215 0 5877 0 11339 0 218637 0 0 0 RICHARD E CARTER PRESIDENT 389454 0 25000 0 0 0 18455 0 34183 0 467092 0 0 0 STEVEN OLSWANG PROVOST 233234 0 0 0 7117 0 6793 0 1708 0 248852 0 0 0 KURT KIRSTEIN DEAN, SCHOOL OF MANAGEMENT 150869 0 0 0 1678 0 1981 0 13336 0 167864 0 0 0 MARIANNE FINGADO VP, ENROLLMENT SERVICES 190694 0 0 0 0 0 13542 0 22047 0 226283 0 0 0 KEVIN BROWN DIRECTOR, INFORMATION TECH 133891 0 0 0 3265 0 3935 0 16866 0 157957 0 0 0 MELISSA MECHAM VP , STUDENT SERVICES/REGI 141507 0 0 0 1291 0 4092 0 11102 0 157992 0 0 0 DR JERRY LEE CHANCELLOR EMERITUS, TRUST 15938 0 0 0 156882 0 0 0 0 0 172820 0 0 0 PART I, LINE 1A FIRST CLASS TRAVEL IS MADE AVAILABLE TO BOARD MEMBERS IF THE FLIGHT IS OVER 3 HOURS. THIS IS NOT INCLUDED AS TAXABLE INCOME TO SUCH BOARD MEMBERS IF UTILIZED. PART I, LINE 4B DR. JERRY LEE PARTICIPATED IN A 457(B) SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN DURING FISCAL YEAR ENDING JUNE 30, 2015. INCLUDED AS TAXABLE COMPENSATION WAS $156,882 FOR DR. JERRY LEE FOR THE YEAR ENDING 6/30/15. FORM 990, PART VI, SECTION B, LINE 11 FORM 990 IS PREPARED BY STAFF, REVIEWED BY THE CFO AND OUTSIDE TAX FIRM. THE 990 IS REVIEWED BY THE BOARD OF TRUSTEES AUDIT COMMITTEE AND IF APPROVED THE COMMITTEE NOTIFIES THE FULL BOARD. FORM 990, PART VI, SECTION B, LINE 12C ANNUALLY, BOARD OF GOVERNORS AND OFFICERS ARE REQUIRED TO COMPLETE A NEW OR UPDATED CONFLICT OF INTEREST STATEMENT, WHICH REINFORCES THE NEED TO DISCLOSE ANY CONFLICTS THAT MAY EXIST. IF A CONFLICT OF INTEREST ARISES, THE CONFLICTED BOARD OF GOVERNOR MEMBER EXCUSES HIMSELF OR HERSELF. ADDITIONALLY, ANY NEW BOARD OF GOVERNOR MEMBERS ARE BRIEFED ON THE CONFLICT POLICY DURING BOARD ORIENTATION. COPIES OF THE SIGNED CONFLICT OF INTEREST STATEMENTS ARE MAINTAINED BY THE CORPORATE SECRETARY. FORM 990, PART VI, SECTION B, LINE 15 COMPENSATION REVIEWS ARE COORDINATED BY THE HUMAN RESOURCES DEPARTMENT AND GENERALLY INVOLVE THE USE OF OUTSIDE AGENCIES FOR SALARY COMPARISONS. ONCE MARKET VALUE COMPENSATION IS DETERMINED, THAT WILL BE USED TO SET THE RANGE OF COMPENSATION. THEREAFTER, ANNUAL ADJUSTMENTS ARE MADE BASED UPON CPI MOVEMENTS, MARKET INDICATORS AND THE OVERALL FINANCIAL CONDITION OF THE INSTITUTION. THE NATIONAL UNIVERSITY SYSTEM CHANCELLOR AND CITY UNIVERSITY BOARD SET THE ANNUAL COMPENSATION FOR THE PRESIDENT. THE PROCESS IS DOCUMENTED AND WAS LAST COMPLETED JUNE 20, 2015. FORM 990, PART VI, SECTION C, LINE 19 COPIES OF THE ANNUAL TAX RETURN AND AUDITED FINANCIAL STATEMENTS ARE MADE AVAILABLE UPON REQUEST AS NOTED IN THE ANNUAL COURSE CATALOG WHICH IS AVAILABLE ELECTRONICALLY ON THE UNIVERSITY WEBSITE OR IN HARD COPY. GOVERNING DOCUMENTS AND THE CONFLICT OF INTEREST POLICY ARE ALSO AVAILABLE TO THE PUBLIC UPON REQUEST. FORM 990, PART XI, LINE 9: FOREIGN CURRENCY TRANSLATION 647,775. FORM 990, PART VII, COMPENSATION: COMPENSATION: RELATED PARTY ALL COMPENSATION FOR CERTAIN OFFICERS, DIRECTORS, TRUSTEES, KEY EMPLOYEES, AND HIGHEST COMPENSATED EMPLOYEES IS ALLOCATED BY SMG TO NUS AFFILIATES PURSUANT TO THE AFFILIATION AGREEMENT. FOR A COMPLETE LISTING OF RELATED PARTY ALLOCATION OF COMPENSATION AND BENEFITS PLEASE REFER TO SMG FORM 990, SCHEDULE O DISCLOSURE. VYSOKA SKOLA MANAZMENTU PANONSKA CESTA 17 BRATISLAVA LO 851 04 SLOVAKIAN INSTITUTION OF HIGHER EDUCATION LO LINE 2 CITY UNIVERSITY OF SEATTLE BELLEVUE USA SPOL SRO 0 SYSTEM MANAGEMENT GROUP 11355 NORTH TORREY PINES ROAD LA JOLLA CA 92037 201269904 PROVIDE ADMINISTRATIVE SERVICES TO AFFILIATED INSTITUTIONS CA 501(C)(3) LINE 11A, I N/A 1 NATIONAL UNIVERSITY VIRTUAL HIGH SCHOOL 11355 NORTH TORREY PINES ROAD LA JOLLA CA 92037 562438569 EDUCATIONAL INSTITUTION CA 501(C)(3) LINE 9 N/A 1 WESTMED COLLEGE 11355 NORTH TORREY PINES ROAD LA JOLLA CA 92037 900171867 EDUCATIONAL INSTITUTION CA 501(C)(3) LINE 9 N/A 1 JOHN F KENNEDY UNIVERSITY 100 ELLINWOOD WAY PLEASANT HILL CA 945234817 941610694 EDUCATIONAL INSTITUTION CA 501(C)(3) LINE 2 N/A 1 SPECTRUM PACIFIC LEARNING INC 11355 NORTH TORREY PINES ROAD LA JOLLA CA 92037 453996682 INACTIVE CA 501(C)(3) LINE 9 N/A 1 NATIONAL UNIVERSITY 11355 NORTH TORREY PINES ROAD LA JOLLA CA 92037 237172306 EDUCATIONAL INSTITUTION CA 501(C)(3) LINE 2 N/A 1 NATIONAL UNIVERSITY INTERNATIONAL INC 11355 NORTH TORREY PINES ROAD LA JOLLA CA 92037 453997908 INACTIVE CA 501(C)(3) LINE 2 N/A 1 CITY UNIVERSITY OF SEATTLE BELLEVLUE USA SPOL SRO PANONSKA CESTA 17 BRATISLAVA LO 851 04 HIGHER EDUCATION LO CITY UNIVERSITY OF SEATTLE TUITION -54930 1461474 0 1 1.00000 CU PROPERTIES AS PANONSKA CESTA 17 BRATISLAVA LO 851 04 PROPERTY MANAGEMENT LO N/A C -192339 2572445 1.00000 1 0 0 1 0 1 0 0 0 0 0 0 0 1 1 1 0 0 0 0 NATIONAL UNIVERSITY SYSTEM C 5476384 CASH NATIONAL UNIVERSITY SYSTEM M 646887 CASH NATIONAL UNIVERSITY SYSTEM E 47050 CASH SCHEDULE R STATEMENT: IN FEBRUARY 2013, THE UNIVERSITY ENTERED INTO A CONTRACT OF AFFILIATION (THE CONTRACT) WITH THE NATIONAL UNIVERSITY SYSTEM (NUS), WHICH IS AN ALLIANCE OF OPERATIONALLY INDEPENDENT AND SEPARATELY ACCREDITED NONPROFIT EDUCATIONAL INSTITUTIONS, A PUBLIC CHARTER SCHOOL, AND TWO NONPROFIT SERVICE PROVIDERS. THE AFFILIATION AGREEMENT PROVIDES FOR CERTAIN FINANCIAL BENEFITS TO THE UNIVERSITY FOR CURRENT AND FUTURE CAPITAL PROJECT FUNDING AND EXPENSE REIMBURSEMENTS TO PROVIDE ADDITIONAL WORKING CAPITAL TO FUND EXPECTED FUTURE REQUIREMENTS AND NEEDS OF THE UNIVERSITY. ADDITIONALLY, THE CONTRACT INCLUDES A GUARANTEE BY NUS OF ALL OUTSTANDING OBLIGATIONS OF THE UNIVERSITY UNDER THE AFFILIATION. THE UNIVERSITY BOARD OF GOVERNORS ELECTED IN ITS STEAD THE PERSONS WHO ARE ALSO BOARD MEMBERS OF THE OTHER NUS AFFILIATES. THE UNIVERSITY RETAINS ITS NAME, IDENTITY, AND STANDING AS AN INDEPENDENT FULLY ACCREDITED NONPROFIT UNIVERSITY, AS WELL AS ITS COMMITMENT TO ITS CORE MISSION, VISION AND VALUES. THE UNIVERSITY'S AFFILIATION WITH NUS WILL SIGNIFICANTLY STRENGTHEN THE UNIVERSITY'S RESOURCES AND PROVIDE FOR THE LONG-TERM FUTURE OF THE UNIVERSITY. SCHEDULE R, RELATED ORGANIZATIONS: THE NUS IS AN ALLIANCE OF EDUCATIONAL INSTITUTIONS, SERVING DIVERSE LEARNERS FROM HIGH SCHOOL TO DOCTORAL PROGRAMS. THE NUS INCLUDES 6 INDEPENDENT NON-PROFIT ORGANIZATIONS EXEMPT UNDER IRC SECTION 501(C)(3): NATIONAL UNIVERSITY, NATIONAL UNIVERSITY VIRTUAL HIGH SCHOOL, WESTMED COLLEGE, JOHN F. KENNEDY UNIVERSITY, CITY UNVIVERSITY OF SEATTLE, AND SYSTEM MANAGEMENT GROUP (SMG). SMG IS A SUPPORTING ORGANIZATION EXEMPT UNDER IRC SECTION 509(A)(3) WHICH PROVIDES SUPPORT AND SERVICES TO ITS TAX-EXEMPT AFFILIATES IN THE NUS. SPECTRUM PACIFIC LEARNING COMPANY LLC AND NATIONAL UNIVERSITY INTERNATIONAL LLC ARE WHOLLY-OWNED BY NATIONAL UNIVERSITY, AND ARE TREATED AS DISREGARDED ENTITIES FOR TAX PURPOSES. THE BOARD OF TRUSTEES OF EACH NUS AFFILIATE GOVERNS EACH AFFILIATE INDEPENDENTLY. THE BOARD OF TRUSTEES HAS NO AUTHORITY TO REMOVE, REPLACE OR APPOINT A MAJORITY OF THE GOVERNING BODY OF THOSE OTHER AFFILIATES. THE BOARD OF TRUSTEES OF EACH AFFILIATE, ACTING IN ITS INDEPENDENT CAPACITY, PERIODICALLY APPOINTS ITS OWN NEW TRUSTEES. THE BOARD OF TRUSTEES HAS A MAJORITY OVERLAPPING COMPOSITION BETWEEN EACH AFFILIATE OF NUS. IN ADDITION, THE NUS AUDIT FIRM PREPARES A SET OF "COMBINED NOT "CONSOLIDATED" AUDITED FINANCIAL STATEMENTS THAT INCLUDE THE EIGHT INDEPENDENT NON-PROFIT ORGANIZATIONS EXEMPT UNDER IRC SECTION 501(C)(3): NATIONAL UNIVERSITY, NATIONAL UNIVERSITY VIRTUAL HIGH SCHOOL, WESTMED COLLEGE, JOHN F. KENNEDY UNIVERSITY, CITY UNIVERSITY OF SEATTLE, AND SYSTEM MANAGEMENT GROUP.