2012-03-15T12:27:30-05:00 2011-06-30 MCGLADREY & PULLEN LLP 100 INTERNATIONAL DRIVE SUITE 1400 BALTIMORE MD 21202 990 2010-07-01 520548411 UNITED STATES NAVAL ACADEMY ALUMNI ASSOC UNIT 4102954000 247 KING GEORGE STREET ANNAPOLIS MD 214025068 HENRY J SANFORD 4102954000 2012-03-05 1 JULIA FLANNERY CPA 4102469300 2010 2016-02-24 21:20:13Z BYRON MARCHANT 247 KING GEORGE STREET ANNAPOLIS MD 214025068 9934239 0 X WWW.USNA.COM X 1947 MD TO SERVE AND SUPPORT THE UNITED STATES, THE NAVAL SERVICE, THE NAVAL ACADEMY, AND ITS ALUMNI. 28 27 97 50 334664 34646 5678317 2913428 1453190 1581992 1487949 1831796 790704 815388 9410160 7142604 1455179 2447286 0 0 2609992 2944265 0 0 15518 2585328 2735856 6650499 8127407 2759661 -984803 63567455 70002395 21308127 21624717 42259328 48377678 X TO SERVE AND SUPPORT THE UNITED STATES, THE NAVAL SERVICE, THE NAVAL ACADEMY AND ITS ALUMNI:BY FURTHERING THE HIGHEST STANDARDS AT THE NAVAL ACADEMY;BY SEEKING OUT, INFORMING, ENCOURAGING, AND ASSISTING OUTSTANDING, QUALIFIED YOUNG MEN AND WOMEN TO PURSUE CAREERS AS OFFICERS IN THE NAVY AND MARINE CORPS THROUGH THE NAVAL ACADEMY; ANDBY INITIATING AND SPONSORING ACTIVITIES WHICH WILL PERPETUATE THE HISTORY, TRADITIONS, MEMORIES AND GROWTH OF THE NAVAL ACADEMY AND BIND ALUMNI TOGETHER IN SUPPORT OF THE HIGHEST IDEALS OF COMMAND, CITIZENSHIP AND GOVERNMENT. THE MISSION STATEMENT OF THE RELATED ENTITY, THE U.S. NAVAL ACADEMY FOUNDATION:TO SUPPORT, PROMOTE AND ADVANCE THE MISSION OF THE NAVAL ACADEMY BY WORKING IN CONJUNCTION WITH ACADEMY LEADERSHIP TO IDENTIFY STRATEGIC INSTITUTIONAL PRIORITIES AND BY RAISING, MANAGING AND DISBURSING PRIVATE GIFT FUNDS THAT PROVIDE A MARGIN OF EXCELLENCE IN SUPPORT OF THE NATION'S PREMIER LEADERSHIP INSTITUTION. 0 0 1999748 766780 MEMBERSHIP SUPPORT - COSTS TO PROVIDE SERVICES TO MEMBERS OF THE ALUMNI ASSOCIATION, CLASS AND CHAPTER SUPPORT, AND SPECIAL ALUMNI EVENTS. 1065500 210981 PUBLICATIONS: SHIPMATE, ALUMNI REGISTER AND BUSINESS RESOURCE DIRECTORY - THROUGH THESE PUBLICATIONS, THE ASSOCIATION REACHES OUT TO MEMBERS TO PERPETUATE THE HISTORY, TRADITIONS, MEMORIES AND GROWTH OF THE U.S. NAVAL ACADEMY. 2447286 2447286 SUPPORT - THE ASSOCIATION MAKES CONTRIBUTIONS TO THE U.S. NAVAL ACADEMY AND THE THE U.S. NAVAL ACADEMY FOUNDATION INC., A RELATED PARTY. 505735 14583 PARTNERSHIP MARKETING - EXPENSES RELATED TO AFFINITY PROGRAMS AND MERCHANDISE SALES 437982 ALUMNI COMMUNICATIONS - SUPPORT FOR ALL ELECTRONIC AND WEBSITE-BASED COMMUNICATIONS. 598157 625272 CAREER TRANSITIONS - EXPENSES RELATED TO THE SERVICE ACADEMICS CAREER CONFERENCE. 1541874 639855 7054408 1 1 0 0 0 0 0 0 1 1 1 0 0 1 1 0 1 0 0 1 0 1 0 0 0 0 1 0 1 0 0 0 0 0 0 0 0 1 0 0 0 0 1 0 0 0 0 1 43 0 1 97 1 1 1 1 CJ 0 0 0 0 0 0 0 0 X 28 27 0 0 0 0 1 1 0 1 1 0 1 1 1 1 1 1 1 1 1 1 0 MD X X X HENRY J SANFORD CFO & TREASURER 4102954051 247 KING GEORGE STREET ANNAPOLIS MD 21401 X STEVE ABBOT 2.00 X X 0 0 0 JACK W KLIMP 2.00 X X 0 0 0 WILLIAM O RENTZ 2.00 X 0 0 0 STEPHEN M ANDRES 2.00 X 0 0 0 MICHAEL J COLLINS 2.00 X 0 0 0 LEO V WILLIAMS III 2.00 X 0 0 0 HERBERT D FRERICHS 2.00 X 0 0 0 ROBERT D JONES 2.00 X 0 0 0 VICTOR DELANO 2.00 X 0 0 0 FRANCIS R DONOVAN 2.00 X 0 0 0 JEROME F SMITH JR 2.00 X 0 0 0 PERRY J MARTINI JR 2.00 X 0 0 0 INGAR A GREV 2.00 X 0 0 0 JOSPEH L MORENO 2.00 X 0 0 0 JOSHUA W WELLE 2.00 X 0 0 0 ALEX PLECHASH 2.00 X 0 0 0 STEPHEN E FREDRICK 2.00 X 0 0 0 RS KERR SMITH 2.00 X 0 0 0 PIERCE J JOHNSON 2.00 X 0 0 0 DAVID G PADDOCK 2.00 X 0 0 0 RICHARD R PACE 2.00 X 0 0 0 R TIM MYERS 2.00 X 0 0 0 RICHARD M FOLGA 2.00 X 0 0 0 WALTER S DRAPER IV 2.00 X 0 0 0 WILLIAM L RUCH III 2.00 X 0 0 0 CHRISTOPHER S COOKE 2.00 X 0 0 0 ERIK C WOODS 2.00 X 0 0 0 BYRON F MARCHANT 24.00 X X 130278 195417 12062 HENRY J SANFORD 27.00 X 91609 111967 4077 TERRANCE P MURRAY 50.00 X 185363 0 397 GERALDINE S FARMER 27.00 X 54038 66046 460 LAWRENCE HEYWORTH III 50.00 X 107079 0 1805 LISA STROBEL 50.00 X 104908 0 5650 673275 373430 24451 4 0 1 0 BO BROOKS 2780 LIGHTHOUSE POINT BALTIMORE MD 21224 CATERING 238450 MOVEABLE MIXTURES 1388 STONECREEK ROAD ANNAPOLIS MD 21403 CATERING 140506 BAYSIDE BULL BBQ INC 3014 WHITE BEECH DR HARWOOD MD 20776 CATERING 110627 HAUTE CATERING PO BOX 77896 WASHINGTON DC 20013 CATERING 109109 BLACKBAUD PO BOX 930256 ATLANTA GA 31193 SOFTWARE/CONSULTING 109003 5 1944688 968740 45175 2913428 CAREER TRANSITION SERV 541900 625272 625272 LIFE MEMBER AMORTIZATI 900099 294703 294703 MEMBERSHIP DUES 900099 269904 269904 PUBLICATIONS & ADVERTI 541800 210981 210981 HOMECOMING & CONFERENC 900099 181132 181132 1581992 1834601 41321 1793280 573058 573058 124344 124344 124344 124344 2759879 2762684 -2805 -2805 -2805 43534 28951 14583 14583 TRAVEL COMMISSIONS 485000 82362 82362 MISCELLANEOUS 900099 21041 21041 103403 7142604 1406635 334664 2487877 2400789 2400789 46497 46497 504529 425116 79413 1978437 1665107 313330 125890 105977 19913 153977 129617 24360 181432 152734 28698 73697 62040 11657 53761 53761 138051 138051 592808 499039 93769 912245 767949 144296 183784 154714 29070 118290 99579 18711 145352 122361 22991 185013 155748 29265 98789 83163 15626 LICENSES & DUES 138883 116915 21968 TRAINING 47676 40135 7541 MISCELLANEOUS 16908 14234 2674 BAD DEBT EXPENSE 15518 15518 AWARDS & GIFTS 15081 12694 2387 8127407 7054408 1057481 15518 4602726 4046595 1949797 1239109 139435 80048 5503 5946 270166 182743 5392562 2041466 3450877 3351096 39692563 43856105 11718909 15249493 1737479 1991260 63567455 70002395 1100610 1315555 500000 19707517 20309162 21308127 21624717 X 4711117 7566329 15627790 18883055 21920421 21928294 42259328 48377678 63567455 70002395 X -984803 7103153 X X 0 1 1 X 0 X 3933073 4534472 4536025 5678317 2913428 21595315 1309069 1401903 1322188 1272659 1414545 6720364 5242142 5936375 5858213 6950976 4327973 28315679 0 0 0 28315679 1894820 2520262 1673869 2062463 2490682 10642096 17188 18362 29449 64999 1894820 2537450 1692231 2062463 2520131 10707095 121317 73775 13902 36618 21041 266653 7258279 8547600 7564346 9050057 6869145 39289427 0.72070 0.70900 0.27250 0.28320 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 58295306 109914 608871 59014091 56224991 1622529 447786 58295306 68411141 -12649818 463668 56224991 1.00000 0 1 1 108880 108880 3857087 1143550 2713537 1426595 897916 528679 3351096 OTHER - PARTNERSHIP INTERESTS & ETC. 15249493 F 15249493 DEPOSITS ON LIFE MEMBERSHIPS 596418 CLASS SAVINGS ACCOUNTS 2591093 DEFERRED INCOME AND DEPOSITS 971869 SPLIT INTEREST AGREEMENTS 1232798 ACCR. KEY EMPLOYEES RETIREMENT 728153 UNAMORTIZED LIFE MEMBERSHIPS 14188831 20309162 7142604 8127407 -984803 6852162 250991 7103153 6118350 42455778 6852162 28480 28768372 35649014 6806764 138051 197789 335840 7142604 23084630 28480 15264583 15293063 7791567 138051 197789 335840 8127407 DESCRIPTION OF INTENDED USE OF ENDOWMENT FUNDS: PART V, LINE 4: THE ENDOWMENT CONSISTS OF APPROXIMATELY 72 INDIVIDUAL FUNDS ESTABLISHED FOR A VARIETY OF PURPOSES. THESE ENDOWMENT FUNDS ARE DONOR-RESTRICTED. THE ASSOCIATION DOES NOT HAVE ANY BOARD-DESIGNATED ENDOWMENT FUNDS. AS REQUIRED BY GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, NET ASSETS ASSOCIATED WITH ENDOWMENT FUNDS ARE CLASSIFIED AND REPORTED BASED ON THE EXISTENCE OR ABSENCE OF DONOR-IMPOSED RESTRICTIONS. DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X: THE ASSOCIATIONS HAVE ADOPTED THE ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES, WHICH ADDRESSES THE DETERMINATION OF WHETHER TAX BENEFITS CLAIMED OR EXPECTED TO BE CLAIMED ON A TAX RETURN SHOULD BE RECORDED IN THE FINANCIAL STATEMENTS. UNDER THIS POLICY, THE ASSOCIATIONS MAY RECOGNIZE THE TAX BENEFIT FROM AN UNCERTAIN TAX POSITION ONLY IF IT IS MORE-LIKELY-THAN-NOT THAT THE TAX POSITION WOULD BE SUSTAINED ON EXAMINATION BY TAXING AUTHORITIES, BASED ON THE TECHNICAL MERITS OF THE POSITION. MANAGEMENT HAS EVALUATED THE ASSOCIATIONS' TAX POSITIONS AND HAS CONCLUDED THAT THE ASSOCIATIONS HAVE TAKEN NO UNCERTAIN TAX POSITIONS THAT REQUIRE ADJUSTMENT TO THE CONSOLIDATED FINANCIAL STATEMENTS TO COMPLY WITH PROVISIONS OF THIS GUIDANCE. AS OF JUNE 30, 2011 AND 2010, THERE ARE NO MATERIAL UNRECOGNIZED/DERECOGNIZED TAX BENEFITS OR TAX PENALTIES OR INTEREST. WITH FEW EXCEPTIONS, THE ASSOCIATIONS ARE NO LONGER SUBJECT TO U.S. FEDERAL, STATE OR LOCAL TAX EXAMINATIONS BY TAX AUTHORITIES FOR YEARS ENDING BEFORE JUNE 30, 2008. PART XI, LINE 8 - OTHER ADJUSTMENTS: CHANGE IN SPLIT INTEREST AGREEMENTS 250,991. PART XII, LINE 2D - OTHER ADJUSTMENTS: COST OF GOODS SOLD NETTED WITH REVENUE 28,951. CHANGE IN SPLIT INTEREST TRUST AGREEMENTS 250,991. REVENUE OF AFFILIATE INCLUDED ON CONSOLIDATED FINANCIAL STATEMENTS 28,488,430. PART XII, LINE 4B - OTHER ADJUSTMENTS: GRANT FROM THE NAVAL ACADEMY FOUNDATION, INC. 197,789. PART XIII, LINE 2D - OTHER ADJUSTMENTS: COST OF GOODS SOLD NETTED WITH REVENUE 28,951. EXPENSES OF AFFILIATE INCLUDED ON CONSOLIDATED FINANCIAL STATEMENTS 15,235,632. PART XIII, LINE 4B - OTHER ADJUSTMENTS: GRANT FROM THE NAVAL ACADEMY FOUNDATION, INC. 197,789. 1 EUROPE 0 0 PROGRAM SERVICES SCHOLARSHIPS 46497 CENTRAL AMERICA AND THE CARIBBEAN INVESTMENTS 6564949 0 0 0 0 0 0 6611446 0 6611446 SCHOLARSHIP EUROPE 2 46497 CHECK 0 0 0 0 0 0 PROCEDURE FOR MONITORING GRANTS OUTSIDE THE U.S.: SCHEDULE F, PART I, LINE 2: THE U.S. NAVAL ACADEMY DETERMINES WHO RECEIVES THE SCHOLARSHIP FUNDS. THE U.S. NAVAL ACADEMY ALUMNI ASSOCIATION VERIFIES THAT THE SCHOLAR AND THEIR CHOICE OF HIGHER LEARNING ARE APPROPRIATE BASED ON THE U.S. NAVAL ACADEMY'S SCHOLAR SELECTION PROCESS. THE FUNDS ARE THEN TRANSFERRED DIRECTLY TO THE INSTITUTION OF HIGHER LEARNING. 1 US NAVAL ACADEMY 121 BLAKE ROAD ANNAPOLIS MD 21402 311575142 2400789 GENERAL SUPPORT 1 0 PROCEDURE FOR MONITORING GRANTS IN THE U.S.: PART I, LINE 2: SCHEDULE I, PART I, LINE 2: THE U.S. NAVAL ACADEMY ALUMNI ASSOCIATION KEEPS DETAILED RECORDS OF GRANTS TO THE U.S. NAVAL ACADEMY. ALL GRANTS ARE REVIEWED BY MANAGEMENT PRIOR TO PAYMENT. THE UNRESTRICTED PORTION OF THE GRANT TO THE U.S. NAVAL ACADEMY IS BUDGETED FOR AND APPROVED BY THE BOARD OF TRUSTEES. ALL OTHER GRANTS TO THE U.S. NAVAL ACADEMY ARE BASED ON DONOR DIRECTION OF THEIR RESTRICTED GIFTS. X X X X X X 1 1 0 0 0 0 0 0 0 BYRON F MARCHANT 128000 192000 0 0 2278 3417 0 0 5017 7525 135295 202942 6600 9900 HENRY J SANFORD 69750 85250 0 0 21859 26717 0 0 2051 2507 93660 114474 7425 9075 TERRANCE P MURRAY 86635 0 0 0 98728 0 0 0 717 0 186080 0 0 0 PART I, LINES 4A-B TERRANCE P. MURRAY RECEIVED SEVERANCE DURING THE YEAR. $61,448 WAS RECEIVED DURING 2010 AND INCLUDED AS OTHER REPORTABLE COMPENSATION ON PART II. THE REMAINING AMOUNT WAS PAID IN 2011. THE TERMS AND CONDITIONS OF THIS AGREEMENT ARE CONFIDENTIAL AND ARE AVAILABLE TO THE IRS UPON REQUEST. BYRON MARCHANT AND HENRY SANFORD PARTICIPATE IN A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN (457F AND 457B). $16,500 VESTED IN 2010 FOR BYRON MARCHANT AND HENRY SANFORD AND THOSE AMOUNTS ARE INCLUDED IN THEIR W-2 COMPENSATION. SUPPLEMENTAL INFORMATION PART III BYRON MARCHANT AND HENRY SANFORD'S W-2 INCOME INCLUDES DEFERRED COMPENSATION THAT VESTED IN 2010 AND MUST BE REPORTED AS INCOME IN THE YEAR IT VESTS. PART I, LINE 3: THE WRITTEN EMPLOYMENT CONTRACT IS AN INTERNAL CONTRACT ONLY. X 13 45175 FAIR MARKET VALUE 0 1 0 FORM 990, PART VI, SECTION A, LINE 6 REGULAR MEMBERS ARE GRADUATES OF THE UNITED STATES NAVAL ACADEMY (THE "ACADEMY") AND FORMER MIDSHIPMEN WHO DID NOT GRADUATE FROM THE ACADEMY, AFTER THE LAST ACADEMY CLASS OF WHICH THEY WERE A MEMBER HAS GRADUATED AND WHO, IN EACH CASE, HAVE APPLIED FOR MEMBERSHIP AND HAVE BEEN ADMITTED. REGULAR MEMBERS HAVE THE RIGHT TO VOTE, TO HOLD OFFICE, TO SERVE AS TRUSTEES AND SHALL PAY DUES. EACH REGULAR MEMBER IS ENTITLED TO ONE (1) VOTE IN ALL ELECTIONS CONDUCTED PER SECTION 4.6(A) OF THE BYLAWS, AND ALL QUESTIONS PRESENTED TO THE MEMBERSHIP FOR ACTION. IN ORDER TO MAINTAIN A STRONG AND VIBRANT ORGANIZATION, THE ASSOCIATION MAY FROM TIME TO TIME ESTABLISH ADDITIONAL CLASSES OF MEMBERSHIP WITH CRITERIA FOR SUCH CLASSES OF MEMBERSHIP AND APPROVAL OF INDIVIDUAL MEMBERS TO BE DETERMINED BY THE BOARD. FORM 990, PART VI, SECTION A, LINE 7A SEE EXPLANATION FOR FORM 990, PART VI, SECTION A, LINE 6. FORM 990, PART VI, SECTION B, LINE 11 THE FORM 990 WAS REVIEWED BY MANAGEMENT AND MEMBERS OF THE JOINT FINANCE AND AUDIT COMMITTEE OF U.S. NAVAL ACADEMY ALUMNI ASSOCIATION AND U.S. NAVAL ACADEMY FOUNDATION WITH OUR TAX PREPARERS AND SENT TO MEMBERS OF THE BOARD OF TRUSTEES AND TO THE IRS. FORM 990, PART VI, SECTION B, LINE 12C THE CONFLICT OF INTEREST POLICY IS SENT TO EACH BOARD/TRUSTEE MEMBER AT THE BEGINNING OF THE CALENDAR YEAR WITH A SELF ADDRESSED ENVELOPE FOR RESPONDING. THE POLICY DETAILS POTENTIAL CONFLICTS OF INTEREST AND THE NEED TO DISCLOSE SUCH CONFLICTS. THE POLICY ALSO DEFINES THE BOARD/TRUSTEE'S MEMBER FIDUCIARY OBLIGATION TO THE ORGANIZATION. ALL CONFLICTS OF INTEREST STATEMENTS ARE RETURNED TO THE BOARD SECRETARY'S OFFICE AND KEPT ON FILE. THE COMPLETED SIGNED CONFLICTS OF INTEREST STATEMENTS ARE REVIEWED BY THE ORGANIZATION'S AUDIT FIRM DURING THE ANNUAL AUDIT FOR COMPLETENESS AND TO ENSURE THAT ALL BOARD/TRUSTEE MEMBERS ARE INCLUDED. FORM 990, PART VI, SECTION B, LINE 15 THE PROCESS FOR DETERMINING COMPENSATION OF THE CEO, OTHER OFFICERS AND KEY EMPLOYEES OF THE ORGANIZATION "INCLUDES A REVIEW AND APPROVAL BY INDEPENDENT PERSONS, COMPARABILITY DATA, AND CONTEMPORANEOUS SUBSTANTIATION OF THE DELIBERATION AND DECISION." SPECIFICALLY, THE ORGANIZATION TAKES ALL OF THE STEPS NECESSARY TO ENSURE THAT THE COMPENSATION PACKAGES OF THESE INDIVIDUALS ARE NOT ONLY REASONABLE AND COMPETITIVE, BUT ARE DESIGNED AND DETERMINED IN THE PRECISE MANNER SPECIFIED IN THE INTERNAL REVENUE SERVICE'S "INTERMEDIATE SANCTIONS" REGULATIONS. THE PROCESS FOR DETERMINING THE COMPENSATION PACKAGES OF THESE INDIVIDUALS IS AS FOLLOWS: 1. A BOARD COMPENSATION COMMITTEE IS CONSTITUTED THAT IS COMPOSED ENTIRELY OF TRUSTEES MEETING A STRICT "NO CONFLICTS" INDEPENDENCE TEST SET FORTH IN THE IRS REGULATIONS. 2. THE COMMITTEE ACQUIRES APPROPRIATE, INDEPENDENT MARKET COMPARABILITY DATA FROM ITS PROFESSIONAL COMPENSATION CONSULTANT. 3. THE COMMITTEE REVIEWS THIS COMPARABILITY DATA IN DETAIL, POSING APPROPRIATE QUESTIONS TO ITS PROFESSIONAL COMPENSATION CONSULTANT. 4. THE COMMITTEE REVIEWS THE QUALIFICATIONS, EXPERIENCE AND PERFORMANCE OF EACH OF THE INDIVIDUALS AGAINST THE COMPARABILITY DATA ACQUIRED FROM THE PROFESSIONAL COMPENSATION CONSULTANT. 5. THE COMMITTEE DESIGNS A PROPOSED COMPENSATION PACKAGE FOR EACH OF THE INDIVIDUALS AND SEEKS A WRITTEN OPINION FROM THE PROFESSIONAL COMPENSATION CONSULTANT THAT THE PROPOSED COMPENSATION PACKAGE IS REASONABLE. (THE COMMITTEE MAKES ANY ADJUSTMENTS TO THE PROPOSAL REQUIRED IN ORDER FOR THE PROFESSIONAL COMPENSATION CONSULTANT TO CONCLUDE THAT THE PACKAGE IS REASONABLE.) 6. THE COMMITTEE MEMORIALIZES ALL OF ITS DELIBERATIONS IN DETAILED COMMITTEE MINUTES THAT ARE REVIEWED, CORRECTED IF NECESSARY, AND APPROVED AT ITS NEXT FOLLOWING MEETING. 7. THE COMMITTEE ACQUIRES AN OPINION OF COUNSEL CONCLUDING THAT THE PROCESS FOLLOWED BY THE COMMITTEE MEETS THE REQUIREMENTS OF THE IRS REGULATIONS. 8. THE COMMITTEE REGULARLY REVIEWS ITS PROCESS TO ENSURE THAT IT CONTINUES TO MEET ALL OF THE REQUIREMENTS OF APPLICABLE LAW. FORM 990, PART VI, SECTION C, LINE 19 THE ORGANIZATION MAKES ALL NECESSARY AND REQUIRED GOVERNING DOCUMENTS, CONFLICTS OF INTEREST POLICIES, FINANCIAL STATEMENTS, FORM 990S AND ANNUAL REPORT AVAILABLE ON ITS WEBSITE: WWW.USNA.COM. FORM 990, PART VII, LINE 1A, COLUMN B SEVERAL OFFICERS OF THE UNITED STATES NAVAL ACADEMY ALUMNI ASSOCIATION ARE DUALLY EMPLOYED BY A RELATED ORGANIZATION, THE U.S. NAVAL ACADEMY FOUNDATION. HOURS DEVOTED TO THE FOUNDATION ARE LISTED BELOW FOR THE OFFICERS INVOLVED IN BOTH ORGANIZATIONS: OFFICER HOURS DEVOTED TO FOUNDATION BYRON F. MARCHANT 36 HENRY J. SANFORD 33 GERALDINE S. FARMER 33 CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 5: NET UNREALIZED GAINS ON INVESTMENTS: 6,852,162. CHANGE IN SPLIT INTEREST AGREEMENTS 250,991. TOTAL TO FORM 990, PART XI, LINE 5: 7,103,153. 990, PART XI, QUESTION 2B - AUDITED FINANCIAL STATEMENTS FOR GAAP PURPOSES, THE ORGANIZATION PRESENTS ITS ACTIVITY IN A CONSOLIDATED FORMAT WITH ITS RELATED ENTITY , THE U.S. NAVAL ACADEMY FOUNDATION. THESE CONSOLIDATED FINANCIAL STATEMENTS ARE AUDITED BY INDEPENDENT AUDITORS. THE GAAP FINANCIAL STATEMENTS INCLUDE SUPPLEMENTARY INFORMATION THAT PRESENTS THE FINANCIAL POSITION AND THE CHANGES IN NET ASSETS OF THE ASSOCIATION. FORM 990, PART I, LINE 5 AND FORM 990, PART V, LINE 2A THE U.S. NAVAL ACADEMY ALUMNI ASSOCIATION IS THE PAYMASTER FOR BOTH THE ASSOCIATION AND THE U.S. NAVAL ACADEMY FOUNDATION (A RELATED ORGANIZATION). DUE TO THE ASSOCIATION'S ROLE AS PAYMASTER FOR BOTH ORGANIZATIONS, THE ASSOCIATION REPORTS BOTH ASSOCIATION AND FOUNDATION EMPLOYEES FOR W-3 PURPOSES AND THE FOUNDATION DOES NOT REPORT EMPLOYEES FOR W-3 PURPOSES. THE ASSOCIATION FILES ALL RELATED EMPLOYMENT TAX FORMS. ALL PAYROLL EXPENSES RELATED TO THE FOUNDATION ARE RECORDED AS A RECEIVABLE TO THE ASSOCIATION AND A PAYABLE FROM THE FOUNDATION. FORM 990, PART VII, SECTION A AND PART VII, SECTION B ALL INFORMATION REPORTED ON THIS 2010 FORM 990 IS REPORTED ON A FISCAL YEAR BEGINNING JULY 1, 2010 AND ENDING JUNE 30, 2011, WITH THE EXCEPTION OF INFORMATION THAT IS REPORTED FOR COMPENSATION ON SCHEDULE J AND PART VII OF THE RETURN. COMPENSATION LISTED ON THESE SCHEDULES IS BASED ON CALENDAR YEAR REPORTED COMPENSATION (PER THE 990 INSTRUCTIONS) FOR THE CALENDAR YEAR JAN 1, 2010 AND ENDING DECEMBER 31, 2010. US NAVAL ACADEMY FOUNDATION INC 247 KING GEORGE STREET ANNAPOLIS MD 21402 237003516 SUPPORT OF U.S. NAVAL ACADEMY MD 501(C)(3) 7 N/A 0 0 0 1 1 1 0 0 1 0 0 1 1 1 1 1 1 1 1