2011-04-15T18:13:05-05:00 2010-06-30 SINGERLEWAK LLP 10960 WILSHIRE BLVD SUITE 700 LOS ANGELES CA 900243783 990 2009-07-01 952264067 MUSEUM ASSOCIATES MUSE 3238576142 5905 WILSHIRE BLVD LOS ANGELES CA 90036 ANN ROWLAND 3238576142 2011-03-09 1 Lior Temkin 3104773924 2011-03-09 2009 2016-02-24 21:20:13Z LOS ANGELES COUNTY MUSEUM OF ART (LA ANN ROWLAND 5905 WILSHIRE BLVD LOS ANGELES CA 90036 79923181 0 X WWW.LACMA.ORG X 1938 CA SEE SCHEDULE OTo serve the public through the collection, conservation, exhibition and interpretation of significant works of art from a broad range of cultures and historical periods, and through translation of these collections into meaningful educational, aesthetic, intellectual and cultural experiences for the widest array of audiences.The Los Angeles County Museum of Art (the "Museum") is the premier encyclopedic art museum in the Western United States. The Museum's collection of more than 100,000 artworks from around the world spans the history of art, from ancient to contemporary times, including especially strong collections of Asian, Latin American, European, and American art. Through its varied collections, the Museum is both a resource to and a reflection of the many cultural communities and heritages in Southern California and throughout the world. (SEE FORM 990, PART III, LINE 1 FOR ADDITIONAL DESCRIPTION) 48 47 378 601 537270 -13087 42676923 40952868 25300815 32774453 -46957846 3325723 1734669 1768219 22754561 78821263 0 0 25301166 23496498 0 3600609 72371769 57880532 97672935 81377030 -74918374 -2555767 717422100 741509602 434250240 451336207 283171860 290173395 SEE SCHEDULE O PART 990, PART I, LINE 1 FOR DESCRIPTION(CONTINUATION FROM FORM 990, PART I, LINE 1)This fiscal year, the museum mounted 31 Exhibitions and permanent collection installations, acquired 2,658 new works of art, provided programs for 66,212 school children, and made continued progress on enhancing the physical campus, including completion of construction of the new 45,000 square foot Resnick Pavilion, surrounding Kelly and Robert Day Gardens, and B. Gerald Cantor Sculpture Garden. Total attendance at the museum was 904,921. 0 0 24887662 441843 EXHIBITION, CURATORIAL, CONSERVATION & ART PROGRAMSLACMA organized 11 special exhibitions and 20 installations in fiscal 2009-2010, featuring artworks from its own collection and from lenders around the world. Public programs, films, and concerts are developed in coordination with special exhibitions. Many works from the museum's permanent collection of over 100,000 objects are treated by conservators, while the museum's research library and scholarly publications provide reference support to museum staff and outside scholars. All of these activities serve to meet the goals of conservation, exhibition and interpretation of the art into meaningful aesthetic, intellectual, and cultural experiences. 16077425 9026630 ART ACQUISITIONSWorks of art in all media, from every historical period, and from every corner of the globe are purchased to enhance the museum's permanent collection. Such additions contribute to the museum's goal of collecting significant works of art from a broad range of cultures and eras. 14112187 0 FACILITY ENHANCEMENTDuring the fiscal year 2009-2010, expenses included renovation of existing museum facilities in connection with the Lynda and Stewart Resnick Exhibition Pavilion - a major addition to the museum campus. These projects will permit expanded and improved service to the museum's public by increasing the amount of art on view and unifying the museum campus. Since these projects are largely capitalized as they are built, expenses are largely depreciation of construction costs and amortization of financing costs. 14621872 24189523 It is a museum goal to continuously expand and serve audiences of all ages, ethnicities and socio-economic backgrounds both on-site and off-site by creating welcoming and user-friendly environments and programs. This is accomplished through a variety of means, including the museum magazine, museum website, special events, promotional campaigns, and on-site staff providing service to the public. Another museum goal is to extend the museum experience in the fullest possible way to the widest possible audience, both present and future. To achieve this goal, the museum offers many educational outreach programs, such as programs in local schools and on-site for children and teens as well as classes and other programs and interpretive materials for college students and adults. 14621872 24189523 69699146 1 1 0 1 0 0 1 0 1 1 1 0 0 0 0 0 0 0 1 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 0 1 417 0 1 378 1 1 1 0 0 0 0 1 1 0 0 0 48 47 1 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 CA X X X ANN ROWLAND Chief Financial Officer 3238576142 5906 WILSHIRE BLVD LOS ANGELES CA 90036 Andrew Gordon 0.50 X X 0 0 0 Terry Semel 0.50 X X 0 0 0 William H Ahmanson 0.50 X X 0 0 0 Robert Kotick 0.50 X X 0 0 0 Lynda Resnick 0.50 X X 0 0 0 Wallis Annenberg 0.50 X 0 0 0 Willow Bay 0.50 X 0 0 0 William J Bell Jr 0.50 X 0 0 0 Rebecka Belldegrun 0.50 X 0 0 0 Nicolas Berggruen 0.50 X 0 0 0 David C Bohnett 0.50 X 0 0 0 Suzanne Deal Booth 0.50 X 0 0 0 Brigitte Bren 0.50 X 0 0 0 Gabriel Brener 0.50 X 0 0 0 Eva Chow 0.50 X 0 0 0 Ann Colgin 0.50 X 0 0 0 Kelly Day 0.50 X 0 0 0 Joshua S Friedman 0.50 X 0 0 0 Camilla Chandler Frost 0.50 X 0 0 0 Tom Gores 0.50 X 0 0 0 Brian Grazer 0.50 X 0 0 0 Ghada Irani 0.50 X 0 0 0 Victoria Jackson 0.50 X 0 0 0 Suzanne Kayne 0.50 X 0 0 0 Mrs Harry Lenart YVONNE 0.50 X 0 0 0 Robert Looker 0.50 X 0 0 0 Michael Lynton 0.50 X 0 0 0 Robert F Maguire III 0.50 X 0 0 0 Jamie McCourt 0.50 X 0 0 0 Richard Merkin MD 0.50 X 0 0 0 Wendy Stark Morrissey 0.50 X 0 0 0 Jane Nathanson 0.50 X 0 0 0 Peter Norton 0.50 X 0 0 0 Geoffrey Palmer 0.50 X 0 0 0 Anthony N Pritzker 0.50 X 0 0 0 Janet Dreisen Reppaport 0.50 X 0 0 0 Tony Ressler 0.50 X 0 0 0 Edward P Roski Jr 0.50 X 0 0 0 Steven F Roth 0.50 X 0 0 0 Carole Bayer Sager 0.50 X 0 0 0 Florence Sloan 0.50 X 0 0 0 Eric Smidt 0.50 X 0 0 0 Michael G Smooke 0.50 X 0 0 0 Barbra Streisand 0.50 X 0 0 0 Sandra W Terner 0.50 X 0 0 0 Steve Tisch 0.50 X 0 0 0 Casey Wasserman 0.50 X 0 0 0 Dasha Zhukova 0.50 X 0 0 0 Michael Govan 40.00 X 756466 158178 274607 Melody Kanschat 40.00 X 375150 0 180367 Fred Goldstein 40.00 X 265673 0 35935 Ann Rowland 40.00 X 50378 135804 74469 Theresa Morello 40.00 X 204041 0 30642 Nancy Thomas 40.00 X 87952 113376 59861 Mark Mitchell 40.00 X 174119 0 19235 Peter Bodell 40.00 X 167593 0 34102 John Bowsher 40.00 X 160273 0 20323 Melissa Bomes 40.00 X 157068 0 11764 Alvaro Vasquez 40.00 X 150852 0 22211 Mark Gilberg 40.00 X 144812 0 30583 2694377 407358 794099 22 0 1 0 MATT CONSTRUCTION 9814 NORWALK BLVD STE 100 SANTA FE SPRINGS CA 90670 CONSTRUCTION 35191522 Allied Barton Security services EIGHT TOWER BRIDGE 161 WASHINGTON Conshohocken PA 19428 security AND PROTECTIVE SERVICES 4069577 Gensler 2500 BROADWAY SUITE 300 SANTA MONICA CA 90404 ARCHITECTUAL SERVICES 1152704 SPF Architects 8609 Washington Boulevard Culver City CA 90232 ARCHITECTUAL SERVICES 1147600 Swinerton Builders 260 TOWNSEND STREET SAN FRANCISCO CA 94107 building contractor 929537 52 8562980 925767 579598 30884523 1146215 40952868 COUNTY OPERATING CONTR 900099 18887000 18887000 COLLECTION ITEMS SOLD 900099 9026630 9026630 ADMISSIONS 900099 2790659 2790659 COUNCILS 900099 458047 458047 EXHIBITION REVENUE 900099 441843 441843 1170274 1170274 32774453 2712481 -7086 2719567 447576 447576 48353 48353 165666 165666 165666 165666 315464 925767 315464 0 1669997 786454 883543 883543 ART RENTAL & SALES GAL 532000 544356 544356 FACILITY USE FEE 900099 155667 155667 COMMISSIONED PRINTS 900099 37500 37500 98800 98800 836323 78821263 33657996 537270 3673129 2230715 952375 655023 623317 16630135 11922580 3162085 1545470 1644788 1164467 359027 121294 1708504 1146470 409429 152605 1282356 886120 275026 121210 47611 16555 31056 106522 106522 643669 643669 8153041 7311415 809753 31873 470794 467871 2923 6827848 5790508 517200 520140 1100553 791256 234302 74995 56034 55643 391 2748072 2352388 373252 22432 893359 768122 99126 26111 8301989 8301989 4951759 4881858 69901 2015672 2001949 8596 5127 ART ACQUISITION 16077425 16077425 0 0 REMOTE ART OBJECTS 1672485 1672485 0 0 CONSTRUCTION COSTS 1070436 717300 35330 317806 HOSPITALITY 928341 928341 0 0 EQUIPMENT PURCHASE 364571 345036 17747 1788 1450351 1146993 266917 36441 81377030 69699146 8077275 3600609 32071859 28602532 117431448 113835320 2566253 1832699 1092807 1205376 124147 1356680 334888720 20719799 280273771 314168921 163888753 199544622 119973062 80963452 717422100 741509602 15952260 11683001 1069126 1724306 383000000 383000000 1199589 7500000 33029265 47428900 434250240 451336207 X 111889544 116281027 150362675 151913103 20919641 21979265 283171860 290173395 717422100 741509602 X 0 1 1 X 0 X 41815379 94522304 135804657 42565858 40952868 355661066 41815379 94522304 135804657 42565858 40952868 355661066 46412777 309248289 5482800 5952094 9925791 4696222 3381162 29438069 50694 155078 54642 34054 -13087 281381 1339350 928064 686379 339786 291967 3585546 388966062 114205044 0.79510 0.76950 X Schedule A, Part II, Line 10, Explanation of Other Income: CAFETERIA COMMISSIONED PRINTS DWP ENERGY REBATE FACILITY USE FEE INSURANCE CLAIM REV. OTHER REVENUE PATRON PARKING RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 6911 6911 81377030 81383941 1000000 250000 0 0 1000000 1000000 1000000 3000000 4500000 30303 936875 6911 974089 250000 250000 250000 750000 1125000 Part IV, Supplemental Information: Schedule C, Part II-A, line 1b The Museum's General Counsel and the Museum's President provided comments on legislation pending in Federal and State legislative bodies that would directly affect the museum. X X X X X Public Education 0 99571155 17948 14057814 6868978 106777939 148060293 37200 -41522387 7003951 99571155 0.46700 0.20600 0.32700 0 0 36143953 36143953 298744767 20719799 278024968 314168921 REVENUE BOND TRUST ACCOUNTS 64692387 capitalized REVENUE BOND ISSUANCE COSTS 16271065 80963452 INTEREST RATE SWAPS 44836523 SPLIT-INTEREST AGREEMENT LIABILITIES 1117553 UNDERFUNDED PENSION LIABILITIES 672456 CAPITAL LEASE OBLIGATION 802368 47428900 78821263 81377030 -2555767 23166786 -13609484 9557302 7001535 82622928 23166786 -14253153 8913633 73709295 5111968 5111968 78821263 68389159 -12987871 -12987871 81377030 0 81377030 Part III, Line 1a: In conformity with the practice followed by many museums, art objects purchased by or donated to the Museum are not capitalized in the statement of financial position. The Museum's art collection is made up of art objects that are held for exhibition and various other program activities. Each of the items is catalogued, preserved and cared for, and activities verifying their existence and assessing their condition are performed continuously. Purchased collection items are recorded as decreases in unrestricted net assets in the year in which the items are acquired, or in temporarily restricted net assets if the net assets used to purchase the items are restricted by donors; contributed collection items are excluded from the financial statements. Part III, Line 4: The Los Angeles County Museum of Art (the "Museum") is the premier encyclopedic art museum in the Western United States. The Museum's collection of more than 100,000 artworks from around the world spans the history of art, from ancient to contemporary times, including especially strong collections of Asian, Latin American, European, and American art. Through its varied collections, the Museum is both a resource to and a reflection of the many cultural communities and heritages in Southern California and throughout the world. Part V, Line 4: Description of Intended Use of Endowment Funds: The earnings of the Museum's endowment funds support education and art programs, and the mission of the Museum. Part X: Description of Uncertain Tax Positions Under FIN 48: In accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic No. 740, "Uncertainty in Income Taxes" ("ASC 740") (formerly FASB Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109"), the Museum recognizes the impact of tax positions in the financial statements if that position is more likely than not to be sustained on audit, based on the technical merits of the position. To date, the Museum has not recorded any uncertain tax positions. The Museum recognizes potential accrued interest and penalties related to uncertain tax positions in income tax expense. During the years ended June 30, 2010 and 2009, respectively, the Museum performed an evaluation of uncertain tax positions and did not note any matters that would require recognition in the financial statements or which may have an effect on its tax-exempt status. Part XI, Line 8 - Other Adjustments: UNREALIZED GAINS/LOSSES - ON INTEREST RATE SWAP: -13609484. Part XII, Line 2d - Other Adjustments: UNREALIZED GAINS/LOSSES - ON INTEREST RATE SWAP: -13609484. INVESTMENT MANAGEMENT FEES: -643669. Part XII, Line 4b - Other Adjustments: COGS: -786454. COLLECTION ITEMS SOLD: 9026630. DOUBTFUL PLEDGES: -3128208. Part XIII, Line 2d - Other Adjustments: COGS: 786454. ART ACCESSIONS: -16047435. DEFERRED ACTUARIAL LOSS: -211429. INVESTMENT MANAGEMENT FEES: -643669. DOUBTFUL PLEDGES: 3128208. Part XII, Line 4b & Part XIII, Line 2d: The doubtful pledges amount referenced in Part XII and in Part XIII pertains to a pledge that the Museum wrote off that, thus far, remains unpaid from Eli Broad, a non-voting Life Trustee and a major gift donor to the Museum, in the amount of $5,496,589. This amount is related to a 2004 pledge agreement in which BCAM building costs over $50 million were to be approved and paid by the donor. Although the donor disputes the amount in question, management believes the costs were approved and that the amount remains due and owing. Until the resolution of this issue, the Museum believes the most appropriate and conservative accounting treatment is to write down the full amount of the unpaid pledge. The pledge was written off, in part, against the income statement and in part against a reserve for doubtful pledges. RESNIK PAVILION 1107800 840669 267131 267131 Art Museum Council 57843 38154 19689 19689 6 75600 46944 28656 28656 1241243 925767 315476 315476 315476 0 X 1 1 X X X X X X 0 0 0 0 0 0 0 0 1 1 Michael Govan 587466 151878 0 0 169000 6300 220156 0 0 54451 976622 212629 0 0 Melody Kanschat 375000 0 0 0 150 0 176028 0 4339 0 555517 0 298440 0 Fred Goldstein 265673 0 0 0 0 0 31596 0 4339 0 301608 0 0 0 Ann Rowland 50378 135804 0 0 0 0 7925 0 0 66544 58303 202348 0 0 Theresa Morello 204041 0 0 0 0 0 20673 0 9969 0 234683 0 0 0 Nancy Thomas 87952 113376 0 0 0 0 14657 0 0 45204 102609 158580 0 0 Mark Mitchell 173869 0 0 0 250 0 14831 0 4404 0 193354 0 0 0 Peter Bodell 167593 0 0 0 0 0 24023 0 10079 0 201695 0 0 0 John Bowsher 160273 0 0 0 0 0 15919 0 4404 0 180596 0 0 0 Melissa Bomes 157068 0 0 0 0 0 11764 0 0 0 168832 0 0 0 Alvaro Vasquez 150852 0 0 0 0 0 12242 0 9969 0 173063 0 0 0 Mark Gilberg 144812 0 0 0 0 0 20789 0 9794 0 175395 0 0 0 Part I, Line 8 The employment agreement between the organization and the ceo and Director that was in effect during the fiscal year ended June 30, 2010 was negotiated at arms-length by the search committee of the Board of Trustees, and reviewed and approved by the Executive Committee, the Audit Committee and the full Board, prior TO the time that the Director was retained by LACMA. Effective July 1, 2010, the organization entered into a new employment agreement with the Director for a term ending June 30, 2016. Such new employment agreement was negotiated by the Co-Chairmen of the Board of Trustees and reviewed and approved by the Executive Committee, the Audit Committee and the full Board of Trustees, following the rebuttable presumption procedure described in the regulations. CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY 680164610 130795YO3 2008-09-10 100000000 CONSTRUCTION 0 0 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY 680164610 130795YE1 2008-09-10 100000000 CONSTRUCTION 0 0 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY 680164610 130795YF8 2008-09-10 95000000 CONSTRUCTION 0 0 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY 680164610 130795YG6 2008-09-10 60000000 CONSTRUCTION 0 0 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY 680164610 130795YH4 2008-09-10 28000000 CONSTRUCTION 0 0 100000000 16710183 851861 2010 0 0 0 1 100000000 16710183 851861 2010 0 0 0 1 95000000 15874674 809268 2010 0 0 0 1 60000000 10026110 511116 2010 0 0 0 1 28000000 4678851 238521 2010 0 0 0 1 0 0 1 0 1 0.00000 0.00000 0.00000 1 0 0 1 0 1 0.00000 0.00000 0.00000 1 0 0 1 0 1 0.00000 0.00000 0.00000 1 0 0 1 0 1 0.00000 0.00000 0.00000 1 0 0 1 0 1 0.00000 0.00000 0.00000 1 0 1 0 0 0 0 0 1 0 0 0 0 0 1 0 0 0 0 0 1 0 0 0 0 0 1 0 0 0 0 JOSHUA S FRIEDMAN TRUSTEE MR. FRIEDMAN IS A TRUSTEE OF MUSEUM ASSOCIATES. 523004 INV. MGMT FEESMR. FRIEDMAN IS ALSO A FOUNDER, CO-CHAIR AND CO-CHIEF EXECUTIVE OFFICER FOR CANYON CAPITAL ADVISORS LLC (CCA, LLC), AN INVESTMENT FIRM WHICH IS PAID for management services for investing funds of the organization, which are based in part, on revenues from the performance of these investments. Museum associates invested with CCA, LLC in 2005, four years prior to Mr. Friedman joining the board. Museum associates has not invested any additional funds in CCA, LLC since the date of the initial investment. 1 X 95 0 SEE PART II X 1 0 X 16 1146215 FMV of average stock val 17 0 1 1 Third Party Use: Part I, Line 32b: The Museum uses brokers to sell securities and uses auction houses and art dealers to sell works on consignment. Non Reporting of Revenue: Part I, Line 33: In conformity with the practice followed by many museums, art objects purchased by or donated to the Museum are not capitalized in the statement of financial position. The Museum's art collection is made up of art objects that are held for exhibition and various other program activities. Each of the items is catalogued, preserved and cared for, and activities verifying their existence and assessing their condition are performed continuously. Purchased collection items are recorded as decreases in unrestricted net assets in the year in which the items are acquired, or in temporarily restricted net assets if the net assets used to purchase the items are restricted by donors; contributed collection items are excluded from the financial statements. Form 990, Part VI, Section A, line 2 On May 26, 2006, Robert Kotick, a LACMA Trustee, loaned Michael Govan, LACMA's CEO and Director, approximately $180,000. The loan was repaid on August 18, 2010. Form 990, Part VI, Section B, line 11 The form 990 is reviewed by outside tax accountants and reviewed and approved by the audit committee of the board of trustees. Once approved by the audit committee, the Audit Committee reports to the full Board of Trustees on its review and approval and the return is made available to the rest of the board before it is electronically filed. Form 990, Part VI, Section B, line 12c THE CHAIRMAN OF THE AUDIT COMMITTEE SENDS AN ANNUAL CONFLICT OF INTEREST DISCLOSURE FORM TO EACH TRUSTEE, AND, WITH THE OFFICE OF GENERAL COUNSEL, MONITORS RESPONSES AND FOLLOWS UP WITH TRUSTEES TO ACHIEVE AS HIGH A RESPONSE RATE AS POSSIBLE. THE OFFICE OF GENERAL COUNSEL REVIEWS THESE FORMS AND REPORTS SIGNIFICANT CONFLICTS TO THE AUDIT COMMITTEE, WHICH REVIEWS ANY SPECIFIC TRANSACTIONS THAT MIGHT INVOLVE A CONFLICT OF INTEREST WITH A TRUSTEE. THE DIRECTOR OF THE MUSEUM SENDS KEY EMPLOYEES AN ANNUAL CONFLICT OF INTEREST FORM, WHICH KEY EMPLOYEES ARE REQUIRED TO COMPLETE AND RETURN TO THE GENERAL COUNSEL, WHO REVIEWS SUCH FORMS FOR POSSIBLE CONFLICTS AND MONITORS COMPLIANCE WITH THE MUSEUM'S ETHICS POLICY INCLUDING THE CONFLICT OF INTEREST POLICIES CONTAINED IN THE ETHICS POLICY. Form 990, Part VI, Section B, line 15 The compensation of the CEO and Director of LACMA is determined by the Executive Committee of the Board of Trustees, within the parameters established by the employment agreement entered into by LACMA and the CEO and Director in April 2006. The Director and CEO determines the compensation of the President and COO of LACMA, also subject to the three year employment agreement between LACMA and the President, effective January 1, 2008. The Director and the President annually determine the compensation of each of the other Officers and Key Employees. In each case, the compensation is based on (1) the employee's contract, in the case of the CEO and the President; (2) the employee's performance during the prior year; (3) the context of LACMA's overall operating budget; and (4) comparability data for persons holding similar positions in similar organizations. Such comparability data is generally prepared by senior management, including the Chief Financial Officer, the President and the Director of Human Resources and includes a review of publicly filed Forms 990 of other institutions. Once compensation of the CEO and the President is approved by the Executive Committee, based on the information and comparability data described above, the Executive's Committee recommendation is presented to the Audit Committee of the Board of Trustees, which reviews the Executive Committee's recommendation, as well as the proposed compensation for all other Officers and Key Employees, the underlying data, including the performance reviews and comparability analyses, to determine whether, in the Audit Committee's judgment, such proposed compensation is appropriate, fair and reasonable to LACMA. The final recommendation of the Executive Committee and Audit Committee is reported to the full Board of Trustees at its next regularly scheduled meeting and submitted to the full Board for approval. All members of the Executive Committee and the Audit Committee are independent Trustees of LACMA. Note that LACMA does not have a separate "Compensation Committee". Form 990, Part VI, Section C, line 19 All governing documents, conflict of interest policy, informational returns and financial statements are available to the public UPON REQUEST and ON the museum's website. Schedule K Supplental Information Revenue Bonds On May 26, 2004, pursuant to an indenture (the "Indenture") by and between the California Statewide Communities Development Authority (the "Issuer") and BNY Western Trust Company, as trustee (the "Trustee"), $118,575,000 of tax-exempt Auction Rate Securities ("2004A&B Bonds") were issued in two series: Series 2004A was issued for $50,000,000 and Series 2004B was issued for $68,575,000. The 2004A&B Bonds were issued in $25,000 denominations with a variable interest rate that is reset every seven days. The Issuer lent the proceeds of the 2004A&B Bonds to the Museum pursuant to a Loan Agreement (the "Loan Agreement") by and between the Issuer and the Museum. Such proceeds received by the Museum were used to finance (i) the construction of new capital improvements on LACMA's campus, (ii) capitalized interest on the 2004A&B Bonds, and (iii) costs of issuance of the 2004A&B Bonds. On October 30, 2004, pursuant to an indenture (the "Indenture") by and between the California Statewide Communities Development Authority (the "Issuer") and US Bank, as trustee (the "Trustee"), $57,625,000 of tax-exempt Variable Rate Demand Obligations ("2004C Bonds") were issued. The 2004C Bonds were issued in $100,000 denominations with a variable interest rate that is reset every week. The Issuer lent the proceeds of the Series 2004C Bonds to the Museum pursuant to a Loan Agreement (the "Loan Agreement") by and between the Issuer and the Museum. Such proceeds received by the Museum were used to finance (i) the design, construction, installation, furnishings and equipping of a new subterranean parking garage on LACMA's campus, (ii) capitalized interest on the 2004C Bonds, and (iii) costs of issuance of the 2004C Bonds. On November 9, 2007, pursuant to an Indenture (the "Indenture") by and between the California Statewide Communities Development Authority (the "Issuer") and US Bank as trustee (the "Trustee"), $200,000,000 of tax-exempt Auction Rate Securities ("2007A,B,C&D Bonds") were issued in four series (Series 2007A, Series 2007B, Series 2007C and Series 2007D) and each for $50,000,000. The 2007A,B,C&D Bonds were issued in $25,000 denominations with variable interest rates which reset every seven days. The Issuer lent the proceeds of the 2007A,B,C&D Bonds to the Museum pursuant to a Loan Agreement (the "Loan Agreement") by and between the Issuer and the Museum. Such proceeds received by the Museum will be used to finance (i) the design, construction, installation, furnishings and equipping of a new exhibition pavilion, (ii) renovation and improvements to LACMA West, (iii) increase capacity to LACMA's central heating and cooling plant, (iv) capitalized interest on the 2007A,B,C&D Bonds, and (v) costs of issuance of the 2007A,B,C&D Bonds. The 2004A&B Bonds, 2004C Bonds, and 2007A,B,C&D Bonds were limited to obligations of the Issuer payable solely from and secured by revenues pledged under the Indenture, consisting primarily of loan payments made by the Museum, the Loan Agreement and certain other funds as provided in the Indenture. Payment of principal and interest on the 2004A&B Bonds, 2004C Bonds, and 2007A,B,C&D Bonds when due were insured by the municipal bond insurance policy issued by Financial Guaranty Insurance Company (the "Bond Insurer"). The loan payments were general obligations of the Museum. No specific property was pledged under the Loan Agreement and the payment obligations of the Museum were without recourse to the Museum's art collection. On September 10, 2008, pursuant to an Indenture (the "Indenture") by and between the California Statewide Communities Development Authority (the "Issuer") and US Bank, as trustee (the "Trustee"), the Museum refinanced the 2004 Bonds (Series A, B and C) and 2007 Bonds (Series A, B, C and D) with $383,000,000 of tax-exempt Variable Rate Demand Obligations ("2008 Bonds"). The 2008 Bonds were issued in $100,000 denominations with a variable interest rate that is reset, depending on the series, either weekly or daily. The 2008 Bonds were issued in five series: Series 2008A was issued for $100,000,000, Series 2008B was issued for $100,000,000, Series 2008C was issued for $95,000,000, Series 2008D was issued for $60,000,000 and Series 2008E was issued for $28,000,000. The 2008 bonds are supported by a letter of credit from a consortium of banks fronted by Wells Fargo. The letter of credit has a three-year term which is set to expire in September 2011, but which may be renewed before that date. Interest is charged at a rate of 1.0% on the letter of credit. As of June 30, 2009, there were no amounts borrowed or outstanding on the letter of credit. The Issuer lent the proceeds of the Series 2008 Bonds to the Museum pursuant to a Loan Agreement (the "Loan Agreement") by and between the Issuer and the Museum. Such proceeds received by the Museum were used to (i) redeem all of the Museum's 2004 and 2007 bonds, totaling $376,200,000, (ii) finance capitalized interest on the 2008 Bonds, and (iii) finance costs of issuance of the 2008 Bonds. Under the terms of the Loan Agreement, the Museum is subject to a certain financial covenant, the Adjusted Unrestricted Net Assets to Indebtedness ratio (UNA ratio), which is tested each June 30 and December 31. If the ratio falls below .75, it is an event of default. If the ratio falls below .95 or .85, the Museum is subject to certain requirements by the letter of credit banks and the swap counterparty. As of June 30, 2009, the UNA ratio was .93, which means the letter of credit banks and swap counterparty will require the Museum to deposit the equivalent of one year's interest into an account with the bond trustee. This amount is estimated to be $12,500,000 at June 30, 2009, and the Museum will use unspent bond proceeds to satisfy this requirement. As of June 30, 2009 and 2008, unspent bond proceeds held in trust with the trustee consisted of cash and United States Treasury securities, and are classified as Level 1 inputs under the valuation hierarchy. At June 30, 2009 and 2008, the balances on the unspent bond proceeds of the 2008 Bonds and 2004/2007 Bonds, were as follows: 2009 2008 2008 Bonds $ 103,126,030 $ - 2007 Bonds - 148,160,593 2004 Bonds - - Total revenue bond trust accounts $ 103,126,030 $ 148,160,593 As of June 30, 2009 and 2008, outstanding amounts due on the 2008 Bonds and 2004/2007 Bonds were as follows: 2009 2008 2008 Bonds $ 383,000,000 $ - 2007 Bonds - 200,000,000 2004 Bonds - 176,200,000 Total revenue bonds $ 383,000,000 $ 376,200,000 As of June 30, 2009, the Series 2008 Bond mandatory bond redemption requirements have been summarized as follows: Redemption Date December 1, 2030 $ 35,580,000 2031 35,965,000 2032 36,450,000 2033 75,155,000 2034 76,350,000 2035 39,810,000 2036 41,180,000 2037 42,510,000 Total $ 383,000,000 FORM 990, PART I, LINE 17 Other expenses are substantially lower for the year ended June 30, 2010 than for the year ended June 30, 2009 principally due to lower spending to acquire art and a planned reduction in operating budget expenditures to reflect lower anticipated revenues due to the recent downturn in the economy. FORM 990, PART I, LINE 19 While revenues less expenses for line 19 is reflected as a deficit of $2,555,767, the audited financial statements reflect a surplus of $7,001,535. As explained in the reconciliation on Schedule D part XI, Form 990 Part I does not include either the $23,166,786 of unrealized investment gains or the unrealized loss on swaps of $13,609,484 that would result in a $7,001,535 surplus for year ened June 30, 2010. form 990, Part VIII, Line 4: Not all of the income earned by the museum from investment of tax-exempt bond proceeds is reflected on its income statement. INSTEAD, IT HAS BEEN CAPITALIZED AND NETTED AGAINST HIGHER INTEREST EXPENSE IN CONSTRUCTION IN PROGRESS FOLLOWING GAAP. THE AMOUNT OF CAPITALIZED INCOME EARNED WAS $2,664,544. FORM 990, PART VIII, Line 7A: PROCEEDS FROM SALE OF STOCKS LACMA HAS INVESTMENT ACCOUNTS AND HEDGE FUNDS WITH MANY STOCK TRANSACTIONS. DUE TO THE LARGE QUANTITY OF STOCK TRANSACTIONS, THIS INFORMATION IS NOT INCLUDED IN THE RETURN, BUT IS AVAILABLE UPON REQUEST. FORM 990, PART IX, LINE 8 The large increase to the actuarial cost of the defined benefit pension plan for the year ended June 30, 2009 reflected the major impact of the decreased market value of pension plan assets due to the market crash in combination with lower interest rates inflating the present value of plan liabilities. The decrease to the actuarial cost of the defined benefit plan for the year ended June 30, 2010 reflected an improvement in the market value of plan assets due to recovering investment values that almost offset the impact of continued declines in interest rates on plan liabilities. FORM 990, PART X, LINE 25: The increase in other liabilities is principally tied to an unrealized loss in the value of an interest rate swap. This swap will self liquidate over the duration of museum debt and therefore does not represent an immediate non-discretionary claim on museum resources.