2013-06-14T11:48:50-05:00 2012-07-31 861065772 Deloitte Tax LLP 350 South Grand Ave Los Angeles CA 900713462 990 2011-08-01 956052058 National Academy of Recording Arts & Sciences Inc NATI 3103923777 3030 Olympic Blvd Santa Monica CA 904045073 NEIL PORTNOW 3103923777 2013-06-07 1 Diana J McCutchen P00545657 2136880800 2011 2016-02-24 21:20:13Z The Recording Academy Neil Portnow 3030 Olympic Blvd Santa Monica CA 904045073 81706178 0 X www.grammy.com; www.grammy.org; www.grammy365.com X 1987 DE Our mission is to advance the arts and sciences of recording and to foster creative leadership for artistic, cultural, educational, and technical progress in the recording field. A primary activity of The Recording Academy is the recognition of outstanding creative and technical achievements in the recording arts of those deemed to be most worthy by their colleagues through the annual presentation of the GRAMMY Awards. 41 41 149 500 71801 0 1431235 1596221 56620044 64201303 679213 853264 562080 1244498 59292572 67895286 3979208 4583928 0 0 12531346 13740094 0 0 0 40790179 40564880 57300733 58888902 1991839 9006384 87037868 96703749 20979896 21892096 66057972 74811653 X Our mission is to advance the arts and sciences of recording and to foster creative leadership for artistic, cultural, educational, and technical progress in the recording field. A primary activity of The Recording Academy is the recognition of outstanding creative and technical achievements in the recording arts of those deemed to be most worthy by their colleagues through the annual presentation of the GRAMMY Awards. 0 0 The Recording Academy produces the GRAMMY awards, the only peer- presented award to honor artistic achievement, technical proficiency and excellence in the recording industry, without regard to album sales or chart position. 0 0 0 1 0 0 0 0 1 1 0 0 1 1 1 0 1 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 1 0 0 0 0 0 1 1 1 0 1 486 0 1 149 1 1 1 0 0 0 1 1 0 X 41 41 1 0 0 0 1 1 1 1 1 0 1 1 1 1 1 1 1 1 1 0 0 CA IL NY X Wayne Zahner 3103923777 3030 Olympic Blvd Santa Monica CA 904045073 George J Flanigen IV 1.00 X 0 0 0 Christine Albert 1.00 X 0 0 0 Glenn Lorbecki 1.00 X 0 0 0 James Jimmy Jam Harris 1.00 X 0 0 0 Glenn Schick 1.00 X 0 0 0 Anne Harris 1.00 X 0 0 0 Tammy Hurt 1.00 X 0 0 0 John Johnny K Karkazis 1.00 X 0 0 0 Peter Strand 1.00 X 0 0 0 Carlos Alvarez 1.00 X 0 0 0 Eric Schilling 1.00 X 0 0 0 Michael Bearden 1.00 X 0 0 0 John Burk 1.00 X 0 0 0 Sheila Sheila E Escovedo 1.00 X 0 0 0 Mike Knobloch 1.00 X 0 0 0 Scott Bomar 1.00 X 0 0 0 Darrell Brown 1.00 X 0 0 0 Pete Fisher 1.00 X 0 0 0 Terry Hemmings 1.00 X 0 0 0 Scott Jacoby 1.00 X 0 0 0 Ruby Marchand 1.00 X 0 0 0 John Poppo 1.00 X 0 0 0 Karen Sherry 1.00 X 0 0 0 Sue Ennis 1.00 X 0 0 0 Phil Nicolo 1.00 X 0 0 0 Larry Batiste 1.00 X 0 0 0 Stephen Hart 1.00 X 0 0 0 Katherine Kitty Margolis Montuori 1.00 X 0 0 0 James McKinney 1.00 X 0 0 0 Peter Asher 1.00 X 0 0 0 Sebastian Krys 1.00 X 0 0 0 Harvey Mason Jr 1.00 X 0 0 0 Ken Shepherd 1.00 X 0 0 0 Daniel Hill 1.00 X 0 0 0 Jennifer Blakeman 1.00 X 0 0 0 Nicki Richards 1.00 X 0 0 0 Bill Gibson 1.00 X 0 0 0 David Ivory 1.00 X 0 0 0 Malcolm Harper 1.00 X 0 0 0 Paul Paul Wall Slayton 1.00 X 0 0 0 Kurosh Nasseri 1.00 X 0 0 0 Bruce Burch 8111-42512 1.00 X 0 0 0 Mike Clink 8111-53112 1.00 X 0 0 0 Lamont Dozier 8111-53112 1.00 X 0 0 0 Gail Mitchell 8111-53112 1.00 X 0 0 0 Jody Stephens 8111-53112 1.00 X 0 0 0 Fletcher Foster 8111-53112 1.00 X 0 0 0 Beth Ravin 8111-53112 1.00 X 0 0 0 Steve Sterling 8111-53112 1.00 X 0 0 0 Nancy Rumbel 8111-53112 1.00 X 0 0 0 Terry Jones 8111-53112 1.00 X 0 0 0 Monique Headley 8111-11512 1.00 X 0 0 0 Daniel Workman 8111-53112 1.00 X 0 0 0 William Billy Zero Gallagher 1.00 X 0 0 0 Neil Portnow 40.00 X 1487832 0 17157 Wayne Zahner 40.00 X 250467 0 20214 Nancy Shapiro 40.00 X 311021 0 22728 Evan Greene 40.00 X 292818 0 29649 Branden Chapman 40.00 X 239900 0 22316 William Freimuth 40.00 X 197555 0 23587 Gaetano Frizzi 40.00 X 190400 0 15519 Barbara Dehgan 40.00 X 164841 0 12866 Rick Engdahl 40.00 X 195072 0 14406 Peter Anton 40.00 X 218491 0 30827 Daryl Friedman 40.00 X 255170 0 21261 3803567 0 230530 28 0 1 0 John Cossette Productions Inc 2040 Stoner Ave Los Angeles CA 900256109 Grammy Awards Production 8380844 Greenberg Traurig LLP 3290 Northside Parkway Atlanta GA 303272268 Legal Fees 4417302 AEG Ehrlich Ventures LLC 11835 West Olympic Blvd Los Angeles CA 90064 Grammy Awards Production 2236705 Along Came Mary Events Inc 5265 West Pico Blvd Los Angeles CA 900194043 Event Production 982723 Proskauer Rose LLP 1585 Broadway New York NY 100368299 Legal Fees 867473 34 1596221 1596221 Telecast Related Incom 900099 47920340 47920340 Sponsorship Income 711130 7569718 7569718 Grammy Ticket Sales 711130 6624423 6624423 NARAS Related events 711130 1835829 1835829 Publications Income 541800 250993 179192 71801 64201303 771561 771561 1126615 1126615 34200 59967 -25767 -25767 -25767 13831345 1283 13749466 1459 81879 -176 81703 81703 Film clip 900099 90025 90025 Annuity Income 900099 9591 9591 44034 44034 143650 67895286 8683478 71801 57543786 4583928 3874076 7509314 242765 1314766 799173 3680958 282066 120000 148060 3193268 2413211 1541843 1265114 4322448 1664365 820068 1213518 355051 Event Production 12946484 Event Expenses 6046850 Entertainment 386636 Miscellaneous 164940 58888902 3000 3000 26938748 37664765 2096213 2142046 673154 591067 11290318 5333645 7142077 5956673 14391089 26893851 12292 13336 35781295 23439011 87037868 96703749 5449530 3751803 14988097 17856890 542269 283403 20979896 21892096 X 66057972 74811653 66057972 74811653 87037868 96703749 X 9006384 -252704 X 0 1 1 X 0 0 0 0 1596221 339042 339042 399055 -60013 14391088 12084226 418537 26893851 12530625 1860463 14391088 59878167 2000000 5781348 55000000 128890 12530625 64744138 -4457333 408638 59878167 1.00000 1 0 6925847 2198533 4727314 2841439 2188559 652880 1523032 946553 576479 5956673 Other Retirement Liability - 457(B) 98679 Due from Naras Foundation, Inc. 614986 Royalty Receivable due from Latin Academy of Recording Arts & Sciences, Inc. 82492 Due from Naras Properties, Inc. 22484254 Due from Latin Academy of Recording Arts & Sciences, Inc. 150481 Library books/ Materials 8119 23439011 Other Retirement Liability - 457(B) 98679 Due to Grammy Museum Foundation 1444 Due to Musicares Foundation 183280 283403 Description of Intended Use of Endowment Funds: Part V, Line 4: The intended use for the endowment fund is to purchase assets to promote growth of the organization or to be held to provide operational support in case of a catastrophic event. Description of Uncertain Tax Positions Under FIN 48: Part X: The Recording Academy accounts for income taxes in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 740, Income Taxes. FASB ASC 740 prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the company has taken, or expects to take, on a tax return. During the years ended July 31, 2012 and 2011, The Recording Academy did not record any liability for unrecognized tax benefits. 1 GRAMMY Museum Foundation Inc 800 West Olympic Blvd A245 Los Angeles CA 900150000 261447714 501(c)(3) 193480 211500 FMV Printed advertising spots & Grammy tickets General support NARAS Foundation Inc 3030 Olympic Blvd Santa Monica CA 904040000 953199223 501(c)(3) 1479301 176967 FMV GRAMMY & other event tickets, barter assets, and rent Contributions, general and program service support MusiCares Foundation Inc 3030 Olympic Blvd Santa Monica CA 904040000 954470909 501(c)(3) 2196836 174467 FMV GRAMMY & other event tickets, barter assets, and rent Contributions, general and program service support City of Hope 1055 Wilshire Blvd Los Angeles CA 900170000 953435919 501(c)(3) 13800 FMV General support Songwriters Hall of Fame 330 W 58th St 411 New York NY 100191820 237051690 501(c)(3) 10800 FMV General support T J Martell Foundation 729 7th ave 16th fl New York NY 100197416 510180178 501(c)(3) 10230 600 FMV Event tickets General support The New York Botanical Garden 2900 Southern Blvd Bronx NY 104585126 131693134 501(c)(3) 10000 FMV General support People Assisting the Homeless (PATH) 340 N Madison Ave Los Angeles CA 90004 953950196 501(c)(3) 22906 FMV General support The David Foster Foundation PO Box 1760 Santa Monica CA 904061760 810581479 501(c)(3) 10000 FMV Event tickets General support The Broad Stage 1900 Pico Blvd Santa Monica CA 90405 412221712 501(c)(3) 10000 FMV General support 10 Procedure for Monitoring Grants in the U.S.: Part I, Line 2: Schedule I, Part I, Line 2: Chapters of the The Recording Academy make donations to various charitable organizations in their respective communities. The Chapters, either through their local charitable giving committee or local executive committee, put forth a proposal for the local Chapter Board to approve donations of their special project funds to be used for this purpose. These funds are the accumulation of funds based on events held at the local level. These Chapter-approved disbursements are then sent to the national Finance Sub-Committee for final approval. A presentation is made disclosing information about the beneficiary, its tax-exempt status, the nature of the use of the funds and other pertinent information. The national headquarters of The Recording Academy sponsors various charities, in the communities its serves, through purchases of tables at events and/or advertisements in program books and from time-to-time minimal cash donations. The Recording Academy provides assistance to its affiliated entities: MusiCares Foundation, Inc., NARAS Foundation, Inc. and GRAMY Museum Foundation, Inc. X 1 1 X X X X X 0 1 0 Neil Portnow 881924 0 0 0 605908 0 5500 0 11657 0 1504989 0 336247 0 Wayne Zahner 245483 0 1750 0 3234 0 0 0 20214 0 270681 0 0 0 Nancy Shapiro 248950 0 57365 0 4706 0 5500 0 17228 0 333749 0 0 0 Evan Greene 248001 0 40077 0 4740 0 4125 0 25524 0 322467 0 0 0 Branden Chapman 234988 0 1750 0 3162 0 4125 0 18191 0 262216 0 0 0 William Freimuth 190919 0 1750 0 4886 0 5500 0 18087 0 221142 0 0 0 Gaetano Frizzi 183909 0 1750 0 4741 0 4125 0 11394 0 205919 0 0 0 Barbara Dehgan 158399 0 1750 0 4692 0 4125 0 8741 0 177707 0 0 0 Rick Engdahl 189963 0 1750 0 3359 0 5500 0 8906 0 209478 0 0 0 Peter Anton 211788 0 1750 0 4953 0 5500 0 25327 0 249318 0 0 0 Daryl Friedman 248560 0 1750 0 4860 0 4125 0 17136 0 276431 0 0 0 Part I, Line 1a The Recording Academy has a written policy regarding the circumstances in which first class travel may be used. The organization makes it a practice to routinely use business or coach airline travel. Additionally, The Recording Academy receives, as part of its sponsorship income, barter tickets for first class, business and coach airline travel. The Recording Academy also has a practice to utilize barter tickets first for first class, business or coach airline travel except when travel time exceeds a certain length or if barter travel is inconvenient or not available. The President/CEO and elected officers are permitted to fly first class, although they are encouraged to fly business class if available prior to booking in first class. Further, these individuals are also encouraged to use coach class travel for very short trips. Other members of senior management are only allowed to fly business or first class if they use barter. Non-barter flights are required to be booked in coach, unless international, which the first choice is business class and the second choice is first class. Part I, Line 4b Part I, Line 4b: Neil Portnow participated in a Supplemental Employee Retirement Benefit Plan ("SERP"). The SERP qualified as a supplemental nonqualified retirement plan under IRC Section 457(f). Mr. Portnow vested in the SERP on December 31, 2011 and was paid out $536,947. This amount is included in Part II, Column (B)(iii). This amount is also included in Part II, Column (F), less associated expenses and amounts attributable to calendar year 2011, as it had been reported in Part II, Column (C) in previous years while still subject to a substantial risk of forfeiture. Schedule J, Part II, Column (B)(i) for Mr. Portnow also includes an amount reported to Mr. Portnow on a Form 1099 for a return of amounts contributed to a 457(b) plan in previous years. The total amount refunded was $22,629, which includes investment income earned on the principal. This refund represents the portion of Mr. Portnow's contribution to the plan in excess of the amount allowed in each impacted year. The principal portion of this refund is also included in Part II, Column (F), as it had been reported in Part II, Column (C) in previous years. Rickey Minor - Minor Production Inc Former Trustee 115000 Producer of Pre-GRAMMY Gala 0 Terry Lickona - Lickonavision Inc Former Trustee 90000 Co-producer of GRAMMY Awards Telecast 0 Form 990, Part VI, Section A, line 1 The Executive Committee is comprised of the Chair of the Board of Trustees, Vice Chair of the Board of Trustees, Secretary/Treasurer of the Board of Trustees, Chair Emeritus of the Board of Trustees and four (4) sitting Trustees selected by the Chair of the Board of Trustees in consultation with the President/Chief Executive Officer and ratified by the Board of Trustees. They are granted unilateral rights to conduct business on behalf of the Board of Trustees. Any such action shall be communicated to the entire Board as promptly as the Executive Committee deems reasonably practicable. Such actions shall not include: (a)Altering major legal documents such as, but not limited to, the Certificate of Incorporation, Bylaws, or Governance Manual; (b)Authorizing mergers (other than a merger of any wholly-owned subsidiary with The Recording Academy), acquisitions, joint ventures, consolidations or dissolutions; or approving the sale, lease, exchange or encumbrance of any material asset of The Recording Academy that is not in the ordinary course of business of The Recording Academy; (c)Forming or dissolving standing and Trustee-only committees of the Board, or amending the charter of any committee; (d)Taking any actions that have been expressly, by charter or resolutions, delegated to any other Trustee-only committee; and (e)Amending or repealing any resolution of the Board. Form 990, Part VI, Section A, line 2 Business relationship: Scott Jacoby and James McKinney Steve Sterling and Lamont Dozier Steve Sterling and Harvey Mason Scott Bomar and Jody Stephens John Burk and Sheila Escovedo John Burk and Michael Bearden John Burk and Lamont Dozier John Burk and Eric Shilling Glenn Lorbecki, James Harris, Neil Portnow, Wayne Zahner, and Branden Chapman Form 990, Part VI, Section A, line 6 There are three categories of members of The Recording Academy: (a) Voting Members; (b) Associate members; and (c) Student Members. Each Membership Class has its own rights and established criteria for participation as set forth by the organization's Bylaws. Form 990, Part VI, Section A, line 7a The Voting Members from each Chapter shall constitute a separate Membership Class (the "Chapter Voting Member Membership Class") at the time and, as such, shall elect the Voting Member Governors from such Chapter by a Plurality Vote of qualified returned ballots equal to not less than ten percent of the total number of Members of such Membership Class. The Voting Members and Associate Members from each Chapter at the time shall constitute a separate Membership Class (the "Chapter Voting Member and Associate Member Membership Class") and, as such, shall elect the Associate Member Governors from such Chapter by a Plurality Vote of qualified return ballots equal to not less than ten percent of the total number of Members of such Membership Class. Voting Member Governors and Associate Member Governors from each Chapter. The Members from each Chapter who at the time are Voting Member Governors and Associate Member Governors shall constitute a separate Membership Class (the "Chapter Governor Membership Class"). The Chapter Governor Membership Class shall elect (a) the Trustees from such Chapter by a Plurality Vote of a Majority of the Membership Class eligible to vote and (b) the Chapter Officers of such Chapter by a Plurality Vote of a Majority of the Membership Class eligible to vote, and shall have the power to remove such persons from office. Trustees. The Members who at the time are Trustees shall constitute a separate Membership Class (the "Trustee Membership Class"). During the period a person is in office as a Trustee Officer, such person will also be a Trustee. The Trustee Membership Class shall (a) elect the Trustee Officers by a Majority Vote of a Simple Quorum; (b) have the power, by a Supermajority Vote of a Supermajority Quorum, (i) to remove any Trustee from office (ii) to remove any Trustee Officer from office and (iii) to remove any Governor from office; (c) have the power to ratify the committee nominations; and (d) have the power to approve, adopt, vote on, consent with respect to, or ratify such matters or actions that the Chair or the Executive Committee decides to submit to the Trustee Membership Class for such action. Voting Member Governors and Associate Member Governors from all Chapters. The Members from all Chapters who at the time are Voting Member Governors and Associate Member Governors shall constitute a separate Membership Class (the "Governor Membership Class"). The Governor Membership Class shall have the right to vote on any Major Matter, and approval will require a Supermajority Vote of a Supermajority Quorum. Form 990, Part VI, Section A, line 7b See classes of membership as described in Schedule O, Form 990, Part VI, Section A, line 7a. Form 990, Part VI, Section B, line 11 Form 990 is prepared by Deloitte Tax, LLP, working in conjunction with the organization's finance department. The draft of the Form 990 is reviewed by the organization's management. The initial draft of the Form 990 is then provided to The Recording Academy's Audit/Finance Committee for their review. Any comments resulting from their review are incorporated into the final filing of the Form 990. The Audit/Finance Committee has been authorized by the Board of Trustees to review the tax filings and approve them to be filed. Form 990, Part VI, Section B, line 12c The Corporate Secretary distributes the Statement of Conflict of Interest Policy at each Trustees Meeting. The statements are collected by the Corporate Secretary and then a summary report is given to the Chair of the Board of Trustees and the President/Chief Executive Officer. Accordingly, the Chair of the Board of Trustees as well as the President/Chief Executive Officer are responsible for both monitoring and enforcing the conflict of interest policy based on the statements that are provided. Form 990, Part VI, Section B, line 15a The President/CEO compensation was determined by the Executive Committee of the Board of Trustees, functioning as a Compensation Committee for this purpose. The decision was then ratified by the Board of Trustees. The Committee relied upon the advice and expertise of legal counsel, an independent outside compensation consultant and comparability data in determining the compensation. The meeting in which those deliberations were conducted was contemporaneously documented. 15b)Compensation for other employees of National Academy of Recording Arts & Sciences, Inc. is set by the President/Chief Executive Officer, Chief Financial Officer and Vice President of Human Resources. Compensation is determined by the review of the compensation of other employees at similar levels. Information from outside organizations is gathered by the Vice President of Human Resources and by a general knowledge of what is expected for the position by these three individuals. As it relates to annual increases, the Vice President of Human Resources and the Chief Financial Officer have discussed benchmarking with the Chief Financial Officer of a similar organization and other persons in their Human Resources management. Agreement is obtained between these three individuals (CEO, CFO, VP of HR) as to the value of services provided. Form 990, Part VI, Section C, line 19 The organization does not make its governing documents, conflict of interest policy, and financial statements available to the public. Changes in Net Assets or Fund Balances: Form 990, Part XI, line 5: Net unrealized losses on investments: -252,704. Form 990, Part XII, Line 2a & 2b: The organization's financial statements were audited as part of the combined financial statements that included NARAS Properties, Inc., a related tax-exempt organization. FORM 990, PART VIII AND IX: During the tax year, NARAS received donated services in the form of printed advertisements. Revenue from these donated services is included in Sponsorship Income on Form 990, Part VIII, Line 2b. Expenses incurred associated with the donated services are included on Form 990, Part IX, Line 12. In addition, the fair market value of the portion of the donated services that were contributed to other organizations is included in Form 990, Part IX, Line 1 and Schedule R if the organization was also a related organization. NARAS Properties Inc 3030 Olympic Blvd Santa Monica CA 904045073 954516666 Hold title to Real Property CA 501(c)(2) N/A National Academy of Recording Arts & Sciences Inc 1 The GRAMMY Museum Foundation Inc 800 W Olympic Blvd Suite A245 Los Angeles CA 900150000 261447714 Explores and celebrates all Forms of music CA 501(c)(3) Line 11, aI National Academy of Recording Arts & Sciences Inc 1 0 1 0 1 0 1 0 0 0 1 0 0 0 1 0 0 0 1 NARAS Properties Inc D 200000 Cash NARAS Properties Inc J 2334240 Leased Lantana Bldg Based NARAS Properties Inc N 52772 Bldg maintenance & Accounting NARAS Properties Inc R 12433857 Repayment of loan The GRAMMY Museum Foundation Inc B 404980 Contribution of Ads & Cash The GRAMMY Museum Foundation Inc F 161300 GRAMMY Tickets at Face Value Schedule R, Part V, Column (d) NARAS Properties, Inc., a related Section 501(c)(2) tax-exempt organization controlled by The Recording Academy, owns the corporate headquarters in Santa Monica, California used by The Recording Academy and its affiliated tax-exempt organizations. The Recording Academy paid rent for its use of the corporate headquarters. The value of the rent was determined based on comparables of similar properties. NARAS Properties, Inc. also owns an office building in Nashville, Tennessee used by the Nashville Chapter of The Recording Academy and The Recording Academy's affiliated tax-exempt organizatons. The Recording Academy paid rent for its use of the property. The value of the rent was determined based on comparables of similar properties. Value of donated advertising is based on rate card from the publication. Value of building maintenance & accounting, based on allocation of actual expenses.