2011-05-27T15:29:29-05:00 2010-07-31 Deloitte Tax LLP 350 South Grand Ave Los Angeles CA 900713462 990 2009-08-01 956052058 National Academy of Recording Arts & Sciences Inc NATI 3103923777 3030 Olympic Blvd Santa Monica CA 90404 NEIL PORTNOW 3103923777 2011-05-27 1 2136880800 2009 2016-02-24 21:20:13Z The Recording Academy Neil Portnow 3030 Olympic Blvd Santa Monica CA 904045073 207217283 0 X www.grammy.com; www.grammy.org; www.grammy365.com X 1987 DE Our mission is to advance the arts and science of recording and to foster creative leadership. 40 40 162 0 92822 34523 1626846 1633521 57350622 57440950 -2729055 1134035 443271 240350 56691684 60448856 4418771 4320467 0 14542141 13914357 0 0 41020750 55531370 59981662 73766194 -3289978 -13317338 89970162 80923538 18587172 18189252 71382990 62734286 The primary exempt purpose of The Recording Academy 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. The Recording Academy recognizes outstanding creative achievement in the recording arts by conferring annual awards of merit upon those deemed to be most worthy by their colleagues. The Recording Academy maintains libraries of the recordings for reference purposes. The Recording Academy also fosters and engages in study, education and research relating to the recording industry. 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 1 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 1 1 0 1 318 0 1 162 1 1 1 0 0 0 1 1 40 40 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 Flanigen 1.00 X 0 0 0 Doug Frank 1.00 X 0 0 0 Glenn Lorbecki 1.00 X 0 0 0 James Harris 1.00 X 0 0 0 Dee Dee Murray 1.00 X 0 0 0 Jan Smith 6109 - 53110 1.00 X 0 0 0 Michael Freeman 6109 - 53110 1.00 X 0 0 0 Donald Lawrence 6109 - 53110 1.00 X 0 0 0 Alice Peacock 1.00 X 0 0 0 Trevor Fletcher 6109 - 53110 1.00 X 0 0 0 Eric Schilling 1.00 X 0 0 0 Mike Clink 1.00 X 0 0 0 Maureen Crowe 1.00 X 0 0 0 Lamont Dozier 1.00 X 0 0 0 Harvey Mason Jr 1.00 X 0 0 0 Gail Mitchell 1.00 X 0 0 0 Jon Platt 6109 - 53110 1.00 X 0 0 0 Tom Sturges 1.00 X 0 0 0 Cynthia Simien 1.00 X 0 0 0 Jody Stephens 1.00 X 0 0 0 Mark Bright 1.00 X 0 0 0 Darrell Brown 1.00 X 0 0 0 Joanna Carter 6109 - 53110 1.00 X 0 0 0 Terry Hemmings 6109 - 53110 1.00 X 0 0 0 Jimmy Bralower 6109 - 53110 1.00 X 0 0 0 Charles Feldman 6109 - 53110 1.00 X 0 0 0 Phil Galdston 1.00 X 0 0 0 Beth Ravin 1.00 X 0 0 0 David Meinert 6109 - 53110 1.00 X 0 0 0 Nancy Rumbel 1.00 X 0 0 0 Terry Jones 1.00 X 0 0 0 Larry Batiste 6109 - 53110 1.00 X 0 0 0 Leslie Ann Jones 1.00 X 0 0 0 Yolanda Adams 6109 - 53110 1.00 X 0 0 0 Christine Albert 1.00 X 0 0 0 Dan Workman 1.00 X 0 0 0 John Poppo 1.00 X 0 0 0 John Simson 6109 - 53110 1.00 X 0 0 0 Paul Katz 1.00 X 0 0 0 Phil Nicolo 1.00 X 0 0 0 Gregory Gordon 1.00 X 0 0 0 James McKinney 1.00 X 0 0 0 Glenn Schick 6110 - 73110 1.00 X 0 0 0 Peter Strand 6110 - 73110 1.00 X 0 0 0 Carlos Alvarez 6110 - 73110 1.00 X 0 0 0 John Burk 6110 - 73110 1.00 X 0 0 0 Pete Fisher 6110 - 73110 1.00 X 0 0 0 Fletcher Foster 6110 - 73110 1.00 X 0 0 0 Karen Sherry 6110 - 73110 1.00 X 0 0 0 Steve Sterling 6110 - 73110 1.00 X 0 0 0 Steve Mack 6110 - 73110 1.00 X 0 0 0 Stephen Hart 6110 - 73110 1.00 X 0 0 0 Billy Zero 6110 - 73110 1.00 X 0 0 0 Neil Portnow 40.00 X 924662 0 76326 David Grossman 40.00 X 379465 0 45439 Wayne Zahner 40.00 X 234558 0 17505 Nancy Shapiro 40.00 X 278707 0 24563 Evan Greene 40.00 X 275887 0 39276 Angelia Bibbs-Sanders 40.00 X 246740 0 31066 Branden Chapman 40.00 X 189527 0 32712 Daryl Friedman 40.00 X 232371 0 31138 Gaetano Frizzi 40.00 X 183076 0 26514 William Freimuth 40.00 X 168209 0 32586 Peter Anton 40.00 X 211910 0 39190 Doug Gore 40.00 X 186245 0 37208 3511357 0 433523 27 0 1 0 John Cossette Productions Inc 2040 Stoner Ave Los Angeles CA 900250000 GRAMMY AWARDS PRODUCTION 10545675 Greenberg Traurig LLP 3290 Northside Parkway Atlanta GA 303270000 LEGAL FEES 1480575 Along Came Mary Events Inc 5265 West Pico Blvd Los Angeles CA 900190000 EVENT PRODUCTION 763384 Proskauer Rose LLP 1585 Broadway New York NY 100368299 LEGAL FEES 684615 Bounce Event Marketing Inc 714 West Olympic Blvd Los Angeles CA 900150000 EVENT PRODUCTION 683279 26 1633521 1633521 Telecast Related Incom 900099 42698432 42698432 Grammy Ticket Sales 711130 6756695 6756695 Sponsorship Income 711130 6155796 6155796 NARAS Related events 711130 1481712 1481712 Publications Income 541800 348315 291015 57300 57440950 981346 981346 122799 122799 146906358 146753669 152689 152689 152689 50280 14758 35522 35522 Film clip 900099 37493 37493 Annuity Income 900099 9591 9591 Recovery of Unclaimed 900099 2150 2150 32795 32795 82029 60448856 8564367 92822 50158146 4320467 3053084 8586116 172430 1299738 802989 2210299 395520 78000 122269 2709838 3317336 1826431 1366957 3426002 1567713 945934 1113478 1426598 Lease Termination Fee 17250000 Event Production 11939570 Event Expenses 5430910 Entertainment 311966 Miscellaneous 92549 73766194 3600 3300 16391994 19168943 2045245 1439921 23168 727738 1075731 10955817 3290196 8655099 7665621 26846321 12513366 21019202 11368 11970657 17259 2310306 39004861 89970162 80923538 4200590 3252654 14097211 14542408 289371 394190 18587172 18189252 X 71382990 62734286 0 71382990 62734286 89970162 80923538 X 0 1 1 X 0 0 0 0 1633521 280793 280793 408380 -127587 59878167 2000000 5781348 55000000 128890 12530625 64744138 -4457333 408638 59878167 1.00000 1 0 6880457 1152189 5728268 2520447 1442578 1077869 1554913 695429 859484 7665621 Airline and Hotel Barter Inventory 91476 Other Receivables 7597 Miscellaneous Assets 11510 Other Retirement Liability - 457(B) 79943 Due from Naras Foundation, Inc. 311073 Due from Musicares Foundation, Inc. 51398 Due from Latin Academy of Recording Arts & Sciences, Inc. 372627 Due from Naras Properties, Inc. 37038337 Royalty Receivable due from Latin Academy of Recording Arts & Sciences, Inc. 1040900 39004861 Other Retirement Liability - 457(B) 79943 Pension Liability 314247 394190 Part V, Line 4: Description of Intended Use of Endowment Funds: 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. Part X: Description of Uncertain Tax Positions Under FIN 48: Effective August 1, 2009, The Recording Academy adopted the provisions of ASC 740. Income Taxes (formerly FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes- an interpretation of FASB statement No. 109). ASC 740 requires that a position taken or expected to be taken in a tax return be recognized in the financial statements when it is more likely than not that the position would be sustained upon examination by tax authorities. A recognized tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The adoption of ASC 740 did not affect The Recording Academy's combined financial statements. The Recording Academy does not believe it had any uncertain tax position as of July 31, 2010. Form 990, Schedule D, Part IX, Due from NARAS Properties, Inc.: On December 15,2009, NARAS Properties, Inc., a related Section 501(c)(2) tax-exempt organization controlled by The Recording Academy, purchased the corporate headquarters in Santa Monica, California to be used by The Recording Academy and its affiliated tax-exempt organizations. The Recording Academy and its affiliated tax-exempt organizations had previously rented office space from an unrelated third party. The Recording Academy determined that it would be financially prudent to own its own office building through NARAS Properties, Inc. To that end, The Recording Academy liquidated a portion of its endowment fund and then loaned $38,900,000 to NARAS Properties, Inc. to enable NARAS Properties, Inc. to purchase the building. The purchase price per the contract was $45,265,127 paid by NARAS Properties, Inc. plus an additional $15,000,000 for a lease termination fee to be paid by The Recording Academy for the early termination of its existing lease. In accordance with GAAP accounting, the purchase price was adjusted on the audited financial statements to reflect an asset of $43,015,127 plus an expense of $17,250,000. Prior to the NARAS Properties, Inc. purchase of the building, The Recording Academy leased office space to MusiCares Foundation, Inc. and NARAS Foundation, Inc. at a below-market rate for rent (with the excess of the market rate above the amount charged reported as a contribution to the affiliate). After purchasing the building, The Recording Academy contributes all rent to MusiCares Foundation, Inc. and NARAS Foundation, Inc. As of July 31, 2010, after applying an offset of rent due by The Recording Academy to NARAS Properties, Inc., the balance on the loan is $37,038,337. 1 The Georgia Trust 1516 Peachtree NW Atlanta GA 303090000 237357226 501(c)(3) 10000 General Support Grammy Museum 800 West Olympic Blvd A245 Los Angeles CA 900150000 261447714 501(c)(3) 345980 FMV Printed advertising spots received as barter General Support Naras Foundation 3030 Olympic Blvd Santa Monica CA 904040000 953199223 501(c)(3) 1314561 250551 FMV Grammy and other event tickets, barter assets, and rent Contributions and Program Service Support Musicares Foundation 3030 Olympic Blvd Santa Monica CA 904040000 954470909 501(c)(3) 2091953 216148 FMV Grammy and other event tickets, barter assets, and rent Contributions and Program Service Support City of Hope 1055 Wilshire BLVD Los Angeles CA 900170000 953435919 501(c)(3) 13800 General Support Community Foundation of Middle Tennessee 3833 Cleghorn Ave Nashville TN 372150000 621471789 501(c)(3) 11000 General Support 6 Other Information: Part IV: Chapters of 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 Committee for final approval. A presentation is made disclosing information about the beneficiary, it's tax-exempt status, the nature of the use of the funds and other pertinent information. The national headquarters of The Recording Academy sponsors through purchases of tables at events, or advertisements in program books and from time-to-time minimal cash donations to charities in the communities it serves. The Recording Academy provides assistance to its affiliated entities: MusiCares Foundation, Inc., NARAS Foundation, Inc., and GRAMMY Museum Foundation, Inc. X 1 1 X X X X 1 1 0 Neil Portnow 875698 0 0 0 48964 0 65599 0 10727 0 1000988 0 22000 0 David Grossman 373807 0 1750 0 3908 0 22000 0 23439 0 424904 0 0 0 Wayne Zahner 229587 0 1750 0 3221 0 0 0 17505 0 252063 0 0 0 Nancy Shapiro 240241 0 33961 0 4505 0 22000 0 2563 0 303270 0 0 0 Evan Greene 240248 0 30780 0 4859 0 16500 0 22776 0 315163 0 0 0 Angelia Bibbs-Sanders 241641 0 1750 0 3349 0 16500 0 14566 0 277806 0 0 0 Branden Chapman 184628 0 1750 0 3149 0 16500 0 16212 0 222239 0 0 0 Daryl Friedman 225663 0 1750 0 4958 0 16500 0 14638 0 263509 0 0 0 Gaetano Frizzi 176467 0 1750 0 4859 0 16500 0 10014 0 209590 0 0 0 William Freimuth 161627 0 1750 0 4832 0 16500 0 16086 0 200795 0 0 0 Peter Anton 205247 0 1750 0 4913 0 16500 0 22690 0 251100 0 0 0 Doug Gore 84323 0 13101 0 88821 0 10250 0 26958 0 223453 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 travel. Additionally, The Recording Academy receives, as part of its sponsorship income, barter tickets for first class, business and coach travel. The Recording Academy also has a practice to utilize barter tickets first for business 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. Part I, Line 4a Doug Gore received severance in the amount of $136,452.75. Of this amount, $85,915 was received and reported on his 2009 Form W-2. The remaining amount of $50,538 will be paid and reported on his 2010 Form W-2. Part I, Line 4b: Neil Portnow participated in The Recording Academy's Supplemental Employee Retirement Benefit Plan ("SERP"), which is considered to be a supplemental nonqualified retirement plan under IRC section 457(f). Amounts deferred under the Section 457(f) plan are subject to substantial risk of forfeiture. These amounts will be reported as compensation for the year paid. Mr. Portnow was not paid any amounts during calendar year 2009 as his participation was still subject to substantial risk of forfeiture. Schedule J, Part II, Column C for Mr. Portnow includes $43,599 of Section 457(f) deferred compensation that was accrued, but not received. Additionally, the $43,599 amount represents a reasonable estimate of the accrual for calendar 2009 as the actual number is not readily available. Part II: The amount reported for Neil Portnow in Part II, column (B)(iii) includes a payout of $22,000 from Mr. Portnow's Section 457(b) plan, which amount had become substantially vested. This amount was previously reported as deferred compensation on The Recording Academy's prior year Form 990s. 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: James Bralower and Phil Galdston Business relationship: Glenn Lorbecki, James Harris, Neil Portnow, Wayne Zahner, and David Grossman Business relationship: Yolanda Adams and Phil Galdston 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 Supermajority 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 committee for their review. Any comments resulting from their review are incorporated into the final filing of the Form 990. Form 990, Part VI, Section B, line 12c The Corporate Secretary distributes the Statement of Conflict of Interest Policy at each Fall 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 15a) The President/CEO compensation was determined by the Executive Committee of the Board of Trustees. The decision was then ratified by the Board of Trustees. The Committee relied upon the counsel 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. However, the organization's Statement of Financial Position and Statement of Activities are made part of this return, which is open to public inspection. Form 990, Part XI, Line 2: 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 IX, Line 24a Lease Termination Fee On December 15, 2009, NARAS Properties, Inc., a related Section 501(c)(2) tax-exempt organization controlled by The Recording Academy, purchased the corporate headquarters in Santa Monica, California to be used by The Recording Academy and its affiliated tax-exempt organizations. The Recording Academy and its affiliated tax-exempt organizations had previously rented office space from an unrelated third party. The Recording Academy determined that it would be financially prudent to own its own office building through NARAS Properties, Inc. To that end, The Recording Academy liquidated a portion of its endowment fund and then loaned $38,900,000 to NARAS Properties, Inc. to enable NARAS Properties, Inc. to purchase the building. The purchase price per the contract was $45,265,127 paid by NARAS Properties, Inc. plus an additional $15,000,000 for a lease termination fee to be paid by The Recording Academy for the early termination of its existing lease. In accordance with GAAP accounting, the purchase price was adjusted on the audited financial statements to reflect an asset of $43,015,127 plus an expense of $17,250,000. Prior to the NARAS Properties, Inc. purchase of the building, The Recording Academy leased office space to MusiCares Foundation, Inc. and NARAS Foundation, Inc. at a below-market rate for rent (with the excess of the market rate above the amount charged reported as a contribution to the affiliate). After purchasing the building, The Recording Academy contributes all rent to MusiCares Foundation, Inc. and NARAS Foundation, Inc. As of July 31, 2010, after applying an offset of rent due by The Recording Academy to NARAS Properties, Inc., the balance on the loan is $37,038,337. Naras Properties Inc 3030 Olympic Blvd Santa Monica CA 904045073 954516666 Hold title to Real Property CA Section 501(c)(2) N/A National Academy Recording Arts & Sciences Inc Naras Foundation Inc 3030 Olympic Blvd Santa Monica CA 904045073 953199223 Advancement of music CA Section 501(c)(3) Line 11, bII N/A Grammy Museum 800 W Olympic Blvd Suite A245 Los Angeles CA 900150000 261447714 Explores and celebrates all Forms of music CA Section 501(c)(3) Line 11, aI National Academy Recording Arts & Sciences Inc 0 1 0 1 0 0 0 0 1 1 0 0 0 1 1 1 1 0 NARAS Properties Inc D 38900000 NARAS Properties Inc J 2073429 NARAS Properties Inc N 83971 NARAS Properties Inc O 285406 NARAS Properties Inc P 626467 NARAS Properties Inc Q 213266 The Grammy Museum Foundation Inc B 345980 NARAS Foundation Inc B 1565112 NARAS Foundation Inc J 60355 NARAS Foundation Inc N 137556 NARAS Foundation Inc P 105155