2013-08-09T12:45:11-05:00 2012-09-30 861065772 DELOITTE TAX LLP 655 WEST BROADWAY SUITE 700 SAN DIEGO CA 921018590 990 2011-10-01 330435954 THE SCRIPPS RESEARCH INSTITUTE SCRI 8587841000 10550 NORTH TORREY PINES ROAD LA JOLLA CA 92037 DONNA WESTON 8587841000 2013-08-09 1 DIANA J MCCUTCHEN P00545657 6192326500 2011 2016-02-24 21:20:13Z MICHAEL MARLETTA PHD 10550 NORTH TORREY PINES ROAD LA JOLLA CA 92037 464291457 0 X WWW.SCRIPPS.EDU X 1924 CA TSRI CONDUCTS BIOMEDICAL AND BIOCHEMICAL RESEARCH AND POSTGRADUATE TRAINING PROGRAMS. 28 25 2937 44 873073 0 390761176 375025082 5509730 5315745 22030623 15493331 5641340 22410634 423942869 418244792 9252225 6690799 0 0 192593572 202806421 212371 135151 2262758 199793302 200198805 401851470 409831176 22091399 8413616 865626306 913484033 172754699 185939234 692871607 727544799 X THE SCRIPPS RESEARCH INSTITUTE ("TSRI") PERFORMS HIGH IMPACT BASIC BIOMEDICAL RESEARCH, IMPROVES THE HUMAN CONDITION BY FOSTERING TRANSLATION OF ITS DISCOVERIES INTO USEFUL PRODUCTS AND ENGAGES IN THE HIGHEST QUALITY GRADUATE SCIENTIFIC EDUCATION AND POST GRADUATE SCIENTIFIC TRAINING. TSRI IS KNOWN FOR ITS ENTREPRENEURIAL ENVIRONMENT AND ITS EMPHASIS IN RESEARCH RELATING TO SYNTHETIC CHEMISTRY, THE RELATIONSHIP BETWEEN MOLECULAR STRUCTURE AND ACTIVITY AND CHEMICAL BIOLOGY. 0 0 368433452 5315745 RESEARCH IS CONDUCTED IN LA JOLLA, CALIFORNIA AND JUPITER, FLORIDA WITH GRANTS, CONTRACTS AND FELLOWSHIPS THAT ARE RECEIVED FROM PUBLIC AND PRIVATE INSTITUTIONS AND INDIVIDUALS. THESE AWARDS FUND BIOMEDICAL RESEARCH AND THE DEVELOPMENT OF ANSWERS TO FUNDAMENTAL AND IMPORTANT QUESTIONS. WE BELIEVE THAT THE PURSUIT OF BASIC KNOWLEDGE IN CHEMISTRY AND BIOLOGY WILL INEVITABLY LEAD TO BENEFICIAL RESULTS APPLICABLE TO THE HUMAN CONDITION AND TREATMENT OF DISEASE. 22415748 6690799 TSRI RECOGNIZES THAT A ROBUST EDUCATION PROGRAM IS KEY TO THE SUCCESS OF ITS LABORATORY-BASED INVESTIGATIONS, AND OFFERS BOTH GRADUATE AND POST-GRADUATE EDUCATION PROGRAMS. POST-DOCTORAL EDUCATION PROGRAMS INCLUDE FELLOWSHIPS FOR FOCUSED AND SUPERVISED TRAINING ON PROBLEMS THAT WILL BECOME CENTRAL TO SUBSEQUENT INVESTIGATIONS AS THESE YOUNG SCIENTISTS BEGIN THEIR SCIENTIFIC CAREERS. TSRI'S GRADUATE PROGRAM SEEKS TO CREATE AN INDIVIDUALIZED CURRICULUM FOR STUDENTS STUDYING AT THE INTERFACE OF BIOLOGY AND CHEMISTRY - AREAS OF SCIENTIFIC INQUIRY FOR WHICH THE SCRIPPS RESEARCH INSTITUTE HAS EARNED ITS REPUTATION FOR EXCELLENCE. COURSES CAN BE CHOSEN FOR EITHER FOCUSED OR INTERDISCIPLINARY STUDIES. OPPORTUNITIES TO CRAFT A RESEARCH PROJECT AND AREA OF STUDY THAT ENCOMPASSES SEVERAL LABORATORIES OUTSIDE OF THE STUDENT'S MENTOR ARE NOT ONLY AVAILABLE BUT ENCOURAGED. ACCOMMODATIONS ARE MADE TO SUIT THE STUDENT'S SENSIBILITIES AND OBSTACLES ARE ROUTINELY OVERCOME TO KEEP THE BEST INTERESTS OF THE STUDENTS AT THE FOREFRONT OF THE PROGRAM. 390849200 1 1 0 1 0 0 0 0 0 1 1 1 0 0 1 0 1 0 0 0 1 1 0 1 1 0 0 0 1 1 1 0 0 0 0 0 0 0 1 0 1 1 0 0 0 0 0 0 0 0 0 1 251 0 1 2937 1 1 1 0 0 0 0 0 0 0 0 0 0 X 28 25 1 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 CA CT FL MD NJ NY PA X DONNA WESTON 8587848300 3301 NORTH TORREY PINES COURT LA JOLLA CA 92037 X WARREN BEATTY 1.00 X 0 0 0 J GARY BURKHEAD 1.00 X 0 0 0 GARY N COBURN 1.00 X 0 0 0 GEORGE H CONRADES 1.00 X 0 0 0 J MICHAEL COOK 1.00 X 0 0 0 THOMAS E DEWEY JR 1.00 X 0 0 0 ALEXANDER W DREYFOOS 1.00 X 0 0 0 A BRENT EASTMAN MD 1.00 X 0 0 0 RICHARD J ELKUS JR 1.00 X 0 0 0 MARJORIE FINK 1.00 X 0 0 0 PHILLIP FROST MD 1.00 X 0 0 0 RICHARD GEPHARDT 1.00 X 0 0 0 LOUIS L GONDA 1.00 X 0 0 0 STEVEN GREEN 1.00 X 0 0 0 PAUL L HERRLING PHD 1.00 X 0 0 0 LAWRENCE C HOROWITZ MD 1.00 X 0 0 0 THOMAS H INSLEY 1.00 X 0 0 0 AMIN KHOURY 1.00 X 0 0 0 CLAUDIA S LUTTRELL 1.00 X 0 0 0 JAMES R MELLOR 1.00 X 0 0 0 JOHN J MOORES 1.00 X 0 0 0 MARK PEARSON 1.00 X 0 0 0 LYNN SCHENK 1.00 X 0 0 0 RALPH J SHAPIRO 1.00 X 0 0 0 MARK S SKAGGS 1.00 X 0 0 0 ANDREW J VITERBI PHD 1.00 X 0 0 0 GERALD COHN 1.00 X 0 0 0 RICHARD LERNER 40.00 X X 1310860 0 59700 MICHAEL MARLETTA 40.00 X X 438226 0 7808 DONNA WESTON 40.00 X 368916 0 58802 THOMAS NORTHRUP 40.00 X 256252 0 51118 DOUGLAS BINGHAM 40.00 X 575372 0 61727 KAYE WYNNE 40.00 X 290426 0 61014 HARRY ORF 40.00 X 242837 0 58685 GERALD EDLEMAN 40.00 X 428756 0 63943 GERALD JOYCE 40.00 X 418490 0 63915 JULIUS REBEK JR 40.00 X 416470 0 69806 WILLIAM ROUSH 40.00 X 413648 0 61560 PETER WRIGHT 40.00 X 411096 0 59044 5571349 0 677122 286 0 1 0 OLSON & CEPURITIS LTD 20 NORTH WACKER DRIVE 36TH FLOOR CHICAGO IL 60606 LAWYER 950720 FITCH CONTRACTING 9011 LOS COCHES RD LAKESIDE CA 92040 ROOFING CONTRACTORS 926388 QUINE INTELLECTUAL 2033 CLEMENT AVENUE ALEMEDA CA 94501 LAWYER 563362 SCHWEGMAN LUNDBERG WOESSNER PA 1600 TCF TOWER 121 S 8TH STREET MINNEAPOLIS MN 55402 LAWYER 470956 DELOITTE & TOUCHE LLP 655 W BROADWAY SUITE 700 SAN DIEGO CA 921018590 AUDIT & TAX 448331 17 256774 274364442 100403866 272887 375025082 PATENT OFFICE 900099 5315745 5315745 5315745 11508314 11508314 19513354 19513354 602415 412569 189846 189846 189846 43110758 6293629 42738046 2681324 372712 3612305 3985017 3985017 214726 256774 214726 0 SHARED SERVICES 900099 1335493 1335493 K-1 INCOME 531390 873073 873073 LIBRARY SERVICES 900099 493012 493012 5856 5856 2707434 418244792 5315745 873073 37030892 6090000 6090000 600799 600799 3770136 1236586 2533550 141881196 136160463 4585204 1135529 8641599 8052219 515443 73937 39662782 39086875 481588 94319 8850708 8264015 501738 84955 4050 1080 2970 135151 135151 53345635 47255636 5662086 427913 61019038 60608685 328999 81354 25290205 23980476 1214917 94812 3777590 3625781 99629 52180 2392025 2392025 36282671 36125634 137042 19995 3153981 2695301 455078 3602 UTILITIES 13169689 13070843 47971 50875 EQUIPMENT DISPOSALS 1041173 1041173 0 0 PUBLICATIONS 526151 394516 124088 7547 LICENSES AND TAXES 136568 107064 28915 589 60029 60029 409831176 390849200 16719218 2262758 16260150 12041699 67838988 57489248 756216 400669 3943730 3584016 627369 316943 3084184 2931207 712012638 339942351 368610449 372070287 280701080 315911245 118705361 143516688 5098779 5222031 865626306 913484033 35502014 44296795 51514855 45006769 40745000 38780000 8150000 8150000 36842830 49705670 172754699 185939234 X 449190729 452992659 203583381 233315315 40097497 41236825 692871607 727544799 865626306 913484033 X 8413616 26259576 X 0 1 1 X 1 1 X SCRIPPS HEALTH LA JOLLA CA RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 4050 4050 0 EXPLANATION OF LOBBYING ACTIVITIES: PART II-B, LINE 1: TSRI PAYS ANNUAL DUES TO THE ASSOCIATION OF INDEPENDENT RESEARCH INSTITUTES, CALIFORNIA HEALTHCARE INSTITUTE (CHI), THE CALIFORNIA ASSOCIATION OF CERTIFIED PUBLIC ACCOUNTANTS AND THE FLORIDA RESEARCH CONSORTIUM, A PORTION OF WHICH IS USED FROM LOBBYING ACTIVITIES. 0 0 60599628 370091 3094947 650139 63414527 61045904 681736 484627 1612639 60599628 57023972 2763384 2641687 1383139 61045904 50896638 6124230 53243 50139 57023972 0.34970 0.65030 0 0 42645590 42645590 400241901 137279871 262962030 18553717 16053956 2499761 246472671 184654160 61818511 4098759 1954364 2144395 372070287 INVESTMENT IN LIMITED PARTNERSHIPS 143516688 F 143516688 PAYABLE TO UNITRUST/GIFT ANNUITY BENEFICIARIES 1760132 PENSION LIABILITY 45696438 BOND PREMIUM 2249100 49705670 418244792 409831176 8413616 27595073 -1335497 26259576 34673192 446010033 27595073 170168 27765241 418244792 0 418244792 411336836 1505660 1505660 409831176 0 409831176 DESCRIPTION OF INTENDED USE OF ENDOWMENT FUNDS: PART V, LINE 4: INVESTMENT RETURN FROM THE ENDOWMENTS SUPPORTS SCIENTIFIC PROJECTS CONSISTENT WITH THE MISSION AND PRINCIPLES OF THE SCRIPPS RESEARCH INSTITUTE. DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X: TSRI ADOPTED FIN 48 DURING THE YEAR ENDED 9/30/08. NO LIABILITY FOR UNCERTAIN TAX POSITIONS HAS BEEN RECORDED ON THE FINANCIAL STATEMENTS FOR THE CURRENT YEAR. PART XI, LINE 8 - OTHER ADJUSTMENTS: SHARED SERVICES -1,335,493. OTHER/ROUNDING -4. TOTAL TO SCHEDULE D, PART XI, LINE 8: -1,335,497. PART XII, LINE 2D - OTHER ADJUSTMENTS: RENT EXPENSES NETTED AGAINST RENT REVENUE 412,569. LOSS ON DISPOSAL OF EQUIPMENT 1,093,092. OUTSIDE SHARED SERVICE GROSS REVENUE -1,335,493. PART XIII, LINE 2D - OTHER ADJUSTMENTS: RENT EXPENSES NETTED AGAINST RENT REVENUE 412,569. LOSS ON DISPOSAL OF EQUIPMENT 1,093,092. ROUNDING ADJUSTMENT -1. 1 EUROPE (INCLUDING ICELAND & GREENLAND) 0 0 PROGRAM SERVICES LAB FOR TSRI SCIENTIST & STUDENT RESEARCH 600799 CENTRAL AMERICA & THE CARIBBEAN 0 0 INVESTMENTS 47572835 SEE PART IV 0 0 0 0 0 0 48173634 0 48173634 X EUROPE (INCLUDING ICELAND & GREENLAND) LABORATORY FOR TSRI SCIENTIST & STUDENT RESEARCH 600799 ELECTRONIC FUND/WIRE 0 N/A N/A 1 0 1 0 1 0 0 0 PROCEDURE FOR MONITORING GRANTS OUTSIDE THE U.S.: SCHEDULE F, PART I, LINE 2: TSRI MONITORS THE AMOUNTS PROVIDED TO THE FOREIGN ORGANIZATION BY ADHERENCE TO A GRANT CONTRACT FOR THE LAB PROVIDED FOR USE OF THE TSRI RESEARCHER AND MONITORS DETAILED BILLING STATEMENTS FOR STUDENT RESEARCH EXPENDITURES. TSRI HAS MANY SCIENTISTS THAT TRAVEL AROUND THE WORLD. GLOBAL TRAVEL IS REQUIRED BY THE SCIENTISTS TO ATTEND VARIOUS MEETINGS AND SPEAK ON THEIR AREAS OF SPECIALTY. IT IS NOT FEASIBLE TO GATHER THE DETAILED INFORMATION REGARDING EXPENDITURES FOR PART I. THERE ARE NO OFFICES OUTSIDE OF THE US OR EMPLOYEES WHO RESIDE OUTSIDE OF THE U.S. SCHEDULE F, PART IV TSRI HAD A LESS THAN 10% OWNERSHIP IN A FOREIGN CORPORATION DURING THE TAX YEAR AND THEREFORE WAS NOT REQUIRED TO FILE FORM 5471. X X X X X X 1 SANKY COMMUNICATIONS INC 599 ELEVENTH AVENUE NEW YORK NY 10036 E-PHILANTHROPY 0 84638 77291 7347 SANKY COMMUNICATIONS INC 599 ELEVENTH AVENUE NEW YORK NY 10036 DIRECT MAIL DONOR ACQUISITION 0 15269 57860 -42591 99907 135151 -35244 CA FL CT IL MI MA NJ NY PA DC 50TH ANNIV. GALA 186500 25448 161052 45946 38566 76540 PGA WOMENS CANCER AWARENESS DAYS 160000 107282 52718 1360 18529 32829 1 125000 124044 956 0 0 0 0 0 956 471500 256774 214726 1360 45946 18529 38566 110325 214726 0 EXPLANATION OF FUNDRAISING PAYMENTS SCHEDULE G, PART I, LINE 2B, COLUMN (V) THE SANKY DIRECT MAIL DONOR ACQUISITION PROGRAM IS AN OVERALL BUDGET, WHICH INCLUDES THE SANKY AGENCY FEE AND THE UPFRONT COSTS OF ALL PROJECT FEES WITH THIRD-PARTY VENDORS. ALL DIRECT EXPENSES SUCH AS LIST RENTALS, POSTAGE, ETC. ARE SUBSEQUENTLY PAID DIRECTLY TO THE VENDOR FOR EXPENSE REIMBURSEMENTS. THE SANKY E-PHILANTHROPY PROGRAM IS A FLAT RATE, WHICH INCLUDES THE SANKY AGENCY FEE AND ALL PROJECT FEES. THIS INCLUDES ALL DIRECT THIRD-PARTY VENDOR FEES SUCH AS THE MERCHANT ACCOUNT FOR PROCESSING ONLINE CONTRIBUTIONS. 1 SCHOLARSHIP/STIPENDS-KELLOGG GRADUATE SCHOOL, $29,000 PER STUDENT 210 6090000 PROCEDURE FOR MONITORING GRANTS IN THE U.S.: PART I, LINE 2: SCHEDULE I, PART I, LINE 2: GRADUATE STUDENT STIPENDS ARE PROCESSED VIA PERSONNEL ACTION FORMS WHICH ARE APPROVED BY THE GRADUATE OFFICE AND HUMAN RESOURCES PRIOR TO BEING SENT TO THE PAYROLL OFFICE. ONCE APPROVED, GRADUATE STUDENTS ARE SET UP IN TSRI'S PAYROLL SYSTEM AND ARE DISPERSED ON THE 1ST AND 15TH OF EACH MONTH. MONITORING IS DONE VIA THE INTERACTION BETWEEN THE STUDENT AND FACULTY ADVISOR. AS LONG AS THE STUDENT IS PROGRESSING, S/HE WOULD CONTINUE TO BE PAID. X X 1 1 X X X X X 0 1 0 0 0 0 0 0 0 RICHARD LERNER 979633 0 0 0 331227 0 49000 0 10700 0 1370560 0 0 0 MICHAEL MARLETTA 392947 0 0 0 45279 0 0 0 7808 0 446034 0 0 0 DONNA WESTON 352754 0 0 0 16162 0 49000 0 9802 0 427718 0 0 0 THOMAS NORTHRUP 247951 0 0 0 8301 0 38050 0 13068 0 307370 0 0 0 DOUGLAS BINGHAM 559074 0 0 0 16298 0 49000 0 12727 0 637099 0 0 0 KAYE WYNNE 259519 0 0 0 30907 0 49000 0 12014 0 351440 0 0 0 HARRY ORF 228833 0 0 0 14004 0 46650 0 12035 0 301522 0 0 0 GERALD EDLEMAN 418275 0 0 0 10481 0 49000 0 14943 0 492699 0 0 0 GERALD JOYCE 413350 0 0 0 5140 0 49000 0 14915 0 482405 0 0 0 JULIUS REBEK JR 407326 0 0 0 9144 0 49000 0 20806 0 486276 0 0 0 WILLIAM ROUSH 408503 0 0 0 5145 0 49000 0 12560 0 475208 0 0 0 PETER WRIGHT 404038 0 0 0 7058 0 49000 0 10044 0 470140 0 0 0 PART I, LINE 1A THE SCRIPPS RESEARCH INSTITUTE TRAVEL POLICIES PERMIT BUSINESS CLASS TRAVEL ON FLIGHTS OF MORE THAN THREE HOURS. FIRST CLASS TRAVEL IS PERMITTED ON SMALLER AIRCRAFT IF BUSINESS CLASS TRAVEL IS NOT OFFERED ON THESE LONG-HAUL FLIGHTS. FINALLY, TSRI HAS TWO CAMPUSES; ONE IS LA JOLLA, CA, AND ONE IN JUPITER, FLORIDA. THE OUTGOING PRESIDENT AND CEO MAINTAINED A HOUSE IN BOTH LOCATIONS. A HOUSING ALLOWANCE IS PROVIDED FOR ONE OF THOSE LOCATIONS. IN ADDITION, THE INCOMING PRESIDENT ALSO RECEIVES A HOUSING ALLOWANCE. PART I, LINE 4B RICHARD LERNER, M.D. PARTICIPATED IN A DEFERRED COMPENSATION PLAN. NO PAYMENTS WERE MADE DURING THE YEAR. TOTAL TSRI LIABILITY AT 9/30/2012 WAS $6,075,000. DOUGLAS BINGHAM PARTICIPATED IN A SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. NO PAYMENTS WERE MADE DURING THE YEAR. LIABILITY AT 9/30/2012 WAS $1,275,000. MICHAEL MARLETTA PARTICIPATED IN A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN. NO PAYMENTS WERE MADE DURING THE YEAR. LIABILITY AT 9/30/2012 WAS $219,000. CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK 630304653 13033WRC9 2005-02-23 39547350 SEE PART VI 0 0 0 39547350 22905721 641629 16000000 2005 1 0 1 1 0 0 0 1 1 0.00000 0.00000 1 0 0 0 0 0 1 1. TO ACQUIRE THE IMMUNOLOGY BUILDING AND TO REFINANCE THE 1994 ARNOLD AND MURIEL BECKMAN CHEMISTRY BUILDING CONSTRUCTION BOND 2. TO PAY FOR A PORTION OF THE ISSUANCE COST OF BOTH ISSUES 3. TO PAY FOR CAPITALIZED INTEREST ON THE BONDS DURING THE CONSTRUCTION PERIOD SEE PART V 0 FORM 990, SCHEDULE L, PART IV A. PAUL HERRLING, TRUSTEEB. EMPLOYEE OF NOVARTIS AND A DIRECTOR OF NOVARTIS AFFILIATE, THE NOVARTIS INSTITUTE FOR FUNCTIONAL GENOMICS (GNF)C. $4,817,269 IN PAYMENTS FROM NOVARTIS OR GNFD. LICENSES & FACULTY RECRUITEMENT AGREEMENTS AND EQUIPMENT USAGEE. NOA. LYNN SCHENK, TRUSTEEB. DIRECTOR ON THE BOARD OF SEMPRA ENERGYC. $8,908,669D. UTILITY PAYMENTS MADE TO SDG&E, A SUBSIDIARY OF SEMPRA ENERGYE. NO FORM 990, SCHEDULE L, ADDITIONAL INFORMATION PHILLIP FROST, M.D. IS A TRUSTEE OF TSRI AND IS A SIGNIFICANT SHAREHOLDER IN OPKO HEALTH, INC. ("OPKO"). OPKO IS A HEALTH CARE COMPANY FOCUSED ON THE DEVELOPMENT OF PHARMACEUTICALS, HAS A USE LICENSE WITH TSRI, AND MAY BE INVOLVED IN BUSINESS TRANSACTIONS WITH TSRI IN THE FUTURE.RICHARD A. LERNER, M.D. TERM AS PRESIDENT AND CEO OF TSRI EXPIRED ON DECEMBER 31, 2011. DR. LERNER SERVES AS CHAIRMAN ON ONE OF THE SCIENTIFIC ADVISORY BOARD OF PFIZER, INC BUT HE IS UNCOMPENSATED FOR HIS SERVICES TO PFIZER. TSRI AND PFIZER, INC. WERE PARTIES TO A COLLABORATIVE RESEARCH AGREEMENT THAT EXPIRED ON DECEMBER 31, 2012. IN ADDITION, DR. LERNER SERVES ON THE BOARD OF DIRECTORS AND IS THE CHAIR OF THE COMPENSATION COMMITTEE OF OPKO. OPKO'S RELATIONSHIP WITH TSRI IS EXPLAINED ABOVE. X 12 272887 COST/SELLING PRICE 0 0 1 1 THIRD PARTY USE: PART I, LINE 32B: SHARES OF STOCK GIFTED TO TSRI ARE TRANSFERRED INTO OUR BROKERAGE ACCOUNT AT SALOMON SMITH BARNEY AND THEY IN TURN SELL THE SHARES AND WIRE THE STOCK PROCEEDS TO TSRI. NON REPORTING OF REVENUE: PART I, LINE 33: ADDITIONALLY, STOCK GIFTS FOR A TOTAL OF $287,382 WERE GIVEN TO BE APPLIED AGAINST PLEDGES. THEY WERE APPLIED AGAINST A PLEDGE RECEIVABLE RATHER THAN REVENUE. FORM 990, PART VI, SECTION A, LINE 2 TSRI BOARD OF TRUSTEE MEMBERS CLAUDIA S. LUTTRELL AND MARK S. SKAGGS HAVE A FAMILY RELATIONSHIP. DR. RICHARD LERNER AND DR. PHILLIP FROST HAVE A BUSINESS RELATIONSHIP. DR. RICHARD LERNER AND GERALD COHN HAVE A BUSINESS RELATIONSHIP. DR. LAWRENCE HOROWITZ, MARK PEARSON, RALPH SHAPIRO, RICHARD ELKUS AND LOUIS GONDA HAVE A BUSINESS RELATIONSHIP WITH EACH OTHER. FORM 990, PART VI, SECTION B, LINE 11 ON JUNE 26, 2013, THE AUDIT COMMITTEE REVIEWED A DRAFT OF THE FORM 990 (INCLUDING ALL SUPPLEMENTAL SCHEDULES.) THIS REVIEW INCLUDED A PRESENTATION OF THE STATEMENTS BY THE CHIEF FINANCIAL OFFICER WITH PARTICULAR EMPHASIS ON DISCLOSURES ABOUT GOVERNANCE AND ABOUT TRANSACTIONS INVOLVING INTERESTED PERSONS. THE 990 WILL BE PROVIDED TO THE FULL BOARD OF TRUSTEES PRIOR TO FILING. FORM 990, PART VI, SECTION B, LINE 12C TSRI'S CONFLICT OF INTEREST POLICY COVERS ALL SCIENTIFIC EMPLOYEES, KEY EMPLOYEES, OFFICERS AND TRUSTEES. IT IS ADMINISTERED BY THE PROFESSIONAL AFFAIRS COMMITTEE OF THE BOARD OF TRUSTEES. THE CONFLICT OF INTEREST POLICY COMPLIES WITH THE REQUIREMENTS OF OTHER OVERSIGHT BODIES SUCH AS THE NIH. ALL TRANSACTIONS INVOLVING POTENTIAL OR ACTUAL CONFLICTED PERSONS ARE BROUGHT BEFORE THE PROFESSIONAL AFFAIRS COMMITTEE WHICH, AFTER EXAMINATION OF ALL RELEVANT INFORMATION, MAY DO ONE OF THE FOLLOWING: 1.APPROVE THE TRANSACTION SUBJECT TO A CONFLICT MITIGATION PLAN 2.DISAPPROVE THE TRANSACTION 3.REQUEST ADDITIONAL INFORMATION FURTHER, THERE IS AN ANONYMOUS "HOT LINE" WHERE ALL EMPLOYEES ARE INVITED TO DISCLOSE INFORMATION OF A BROAD NATURE, INCLUDING POTENTIAL OR PERCEIVED CONFLICTS OF INTEREST. ONCE APPROVED BY THE PROFESSIONAL AFFAIRS COMMITTEE, TRANSACTIONS INVOLVING OFFICERS ARE BROUGHT TO THE BOARD OF TRUSTEES FOR FINAL REVIEW AND APPROVAL. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF TRUSTEES ANNUALLY APPROVES THE COMPENSATION FOR THE PRESIDENT; AND, IF CHANGES OCCURS, AS NEEDED FOR OTHER EXECUTIVES. THE BOARD'S COMPENSATION COMMITTEE (CC) SELECTS AND ENGAGES AN OUTSIDE COMPENSATION CONSULTANT. THIS WOULD BE DONE LESS THAN BI-ANNUALLY ONLY IF THERE HAVE BEEN MATERIAL CHANGES IN THE INSTITUTE OR THE PRESIDENT'S RESPONSIBILITIES. THE CONSULTANT MEETS WITH THE VP OF HR TO ENSURE IT HAS COMPLETE AND ACCURATE INFORMATION REGARDING THE INSTITUTE AND SCOPE OF EXECUTIVE RESPONSIBILITY. THE CONSULTANT DETERMINES PEER INSTITUTIONS FOR INCLUSION IN A COMPENSATION SURVEY. THE CONSULTANT CONDUCTS A COMPENSATION REVIEW USING SPECIALIZED AND PUBLISHED SURVEYS, AND SUBMITS A WRITTEN OPINION TO THE CC IN ACCORDANCE WITH THE PROVISIONS OF SECTION 53.4958-6(C)(2) AND SATISFIES THE PROFESSIONAL ADVICE REQUIREMENTS OF SECTION 53.4958-1(D)(III) OF THE INCOME TAX REGULATIONS. AFTER THE CONSULTANT PRESENTS THE SURVEY TO THE CC, THE CC REVIEWS THE EXECUTIVE PERFORMANCE AS COMMUNICATED FROM THE EXECUTIVE COMMITTEE OF THE BOARD OF TRUSTEES. THE CC REVIEWS EXECUTIVE TRAVEL, BUSINESS EXPENSES, AND OUTSIDE PROFESSIONAL ACTIVITIES DISCLOSURE. THE CC THEN MAKES AN INDEPENDENT RECOMMENDATION TO THE BOARD OF TRUSTEES ON EXECUTIVE COMPENSATION, WHICH MUST BE APPROVED BY THE BOARD OF TRUSTEES. AFFECTED TRUSTEES ABSTAIN FROM PARTICIPATION IN THIS PROCESS. FORM 990, PART VI, SECTION C, LINE 19 GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICIES ARE NOT AVAILABLE TO THE PUBLIC AT THIS TIME. THE FINANCIAL STATEMENTS ARE AVAILABLE ON THE TSRI WEB-SITE AND ARE FILED WITH THE STATE OF FLORIDA BY THE SCRIPPS FLORIDA FUNDING CORPORATION. THE STATEMENTS ARE PROVIDED TO BOND HOLDERS THROUGH TSRI'S DISSEMINATION AGENT. THE ANNUAL INFORMATION RETURN IS PROVIDED UPON REQUEST. FORM 990, PART VII, SECTION B: TSRI PATENTS MANY OF ITS DISCOVERIES. FOR MOST OF THOSE DISCOVERIES, THE COST OF THESE PATENTS IS RECOVERED FROM THIRD PARTIES PURSUANT TO THE TERMS OF THE UNDERLYING LICENSE. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 5: NET UNREALIZED GAINS ON INVESTMENTS: 27,595,073. SHARED SERVICES -1,335,493. OTHER/ROUNDING -4. TOTAL TO FORM 990, PART XI, LINE 5: 26,259,576.