HomeMy WebLinkAboutBPW-04-01-15-09 - Indiana Symphony SocietyRESOLUTION NO. BPW- 04- 01 -15 -9
RESOLUTION OF THE CITY OF CARMEL BOARD OF PUBLIC WORKS AND SAFETY
ACKNOWLEDGING RECEIPT OF CONTRACT
WHEREAS, pursuant to Indiana Code 36- 1 -4 -7, the City of Carmel, Indiana ( "City "), is authorized to
enter into contracts; and
WHEREAS, pursuant to Indiana Code 36- 4 -5 -3, the City's mayor may enter into contracts on behalf of the
City; and
WHEREAS. pursuant to his authority under Indiana law, the City's mayor, the Honorable James C.
Brainard, has caused to be signed the City contract attached hereto as Exhibit A (the "Contract"); and
WHEREAS, Mayor Brainard now wishes to present the contract to the City's Board of Public Works and
Safety for it to be publicly acknowledged, filed in the Clerk - Treasurer's Office, and made available to the public for
review.
follows:
NOW, THEREFORE, BE IT RESOLVED by the City of Carmel Board of Public Works and Safety as
1. The foregoing Recitals are incorporated herein by this reference.
2. The receipt of the Contract is hereby acknowledged.
3. The Contract shall be promptly filed in the office of the Clerk - Treasurer and thereafter made available to
the public for review.
SO RESOLVED this 15� day of �� - 1 1 . 2015.
CITY OF CARMEL, INDIANA
By and through its Board of Public Works and Safety
BY:
lames Braina • P :.iding P ficer
Date:
Mary Ann rkei vlelpbe 1
Date: �J /
l
Lori S. V'atso
Date:
ATTEST:
ember
1�(i�
Tana Cordray, IMCA ' lerk- Treasurer
Date:
S: \E Bass\My Documents \BPW - Resolutions 120151 INDIANA SYMPHONY SOCIETY Acknowledge Arts Grant Program Agreement - 2015.docx3/2y201512:39 PM
ARTS GRANT PROGRAM
AGREEMENT
This Grant Agreement (herein referred to as "Agreement ") entered into by and between the City
of Carmel (the "City ") and Indiana Symphony Society, Inc. (the
"Grantee "), is executed pursuant to the terms and conditions set forth herein. In consideration of
those mutual undertakings and covenants, the parties agree as follows:
1. That on behalf of Grantee, a not - for - profit corporation, I, Gary Ginstling
an authorized representative of Grantee, have applied for a City of Carmel
( "Grantor ") Arts Grant, said application attached hereto and made a part hereof as
Exhibit "A."
2. Grant Agreement. The City, after review and recommendation by the Mayor and by
the City Council, agrees to grant $ 7,500.00 to the Grantee for
the eligible costs of the project (the "Project ") or services as described in Exhibits
"A" and `B" of this Agreement. The funds shall be used exclusively in accordance
with the provisions contained in this Agreement.
3. Design and Implementation of Project. The Grantee agrees to use any and all grant
funds in accordance with the proposal contained within this agreement and any
documents attached to this Agreement, which are incorporated by reference.
4. Warranty of non - profit status. Grantee hereby represents and warrants that it is a
not - for - profit entity with a determination letter from the Internal Revenue Service
declaring that it is exempt from Federal income tax.
5. Payment of Grant Funds by the City. The payment of this Grant by the City to the
Grantee shall be made in accordance with the following conditions:
A. This Agreement must be fully executed and signed by both Grantee and Grantor.
B. Grantee has attached all the following information, which it represents and warrants
to be true and accurate, all which have been incorporated fully by reference:
1. An application and description of the proposed use of the grant funds (EXHIBIT
A);
2. A budget for the calendar or fiscal year for which the grant is requested
(EXHIBIT B);
3. Certified copies of incorporation as a not - for - profit corporation under state law
(EXHIBIT C);
4. A not - for - profit application or determination letter from the U.S. Internal Revenue
Service identifying that it is a not - for - profit corporation that is exempt from
Federal income tax (EXHIBIT D);
5. Any audits, reviews or compilations available describing the financial condition
of the Grantee, including most recent available IRS Form 990, and the attached
Affidavit (EXHIBIT E);
6. A list of the Grantee's board of directors and officers listed (EXHIBIT F);
7. A Year End Report from the previous year IF Grantee received an Arts Grant
from the City of Carmel in the previous calendar year, pursuant to paragraph 7
herein (EXHIBIT G).
C. Any other grant conditions that City requires to be met by Grantee, specifically:
6. Grantor's right to request audit or review. Grantee shall submit to an audit or
review by an independent Certified Public Accountant of funds at the City's request,
and shall make all books, accounting records and other documents available at all
reasonable times during the term of this Grant Agreement, and for a period of three
(3) years after final payment of funds under this Agreement, for the purpose of an
audit by the City of Carmel, the State of Indiana, or their designees.
7. Year end review. Grantee agrees to provide the City of Carmel a year -end report
( "Year End Report") for each year, describing how the grant was used and the impact
of the dollars received. This Grant award may not exceed one third (1/3) of Grantee's
combined contributed income, revenue of sales, and /or ticket revenue from the
2
previous year. If the Grant amount is in excess of sixty thousand dollars
($60,000.00), the Grantee agrees to provide, at Grantee's cost, a review or audit of the
grantee. Said review or audit shall be performed by a Certified Public Accountant
( "CPA ") who is neither an employee of Grantee nor a member of the Grantee's Board
of Directors, to be provided to the City of Carmel by March 31 of the following year.
8. Funding Credit. Grantee agrees to credit the City of Carmel in the printed materials
associated with a funded program or project. The City of Carmel will supply, upon
request, Grantee with the graphics /logos necessary for compliance.
9. Statutory Authority of Grantee. The Grantee expressly represents and warrants to
the State that it is statutorily eligible to receive these monies and it expressly agrees to
repay all monies paid to it under this Grant, should a legal determination of its
ineligibility be made by any Court of competent jurisdiction.
10. Use of Grant Funds by Grantee. The funds received by the Grantee pursuant to this
Agreement shall be used only to implement the Project or provide the services in
conformance with the Budget and for no other purpose. If it is determined by the
City that misappropriation of funds have occurred, the Grantee must return all funds
received, by Grantor and individuals who misuse Grant funds may also be subject to
civil and/or criminal liability under Indiana or Federal law.
11. Employment Eligibility Verification. The Grantee affirms under the penalties of
perjury that he /she /it does not knowingly employ an unauthorized alien.
The Grantee affirms under the penalties of perjury that he /she /it has enrolled and is
participating in the E- Verify program as defined in IC 22- 5 -1.7. The Grantee agrees
to provide documentation to the City that he /she /it has enrolled and is participating in
the E- Verify program.
The City may terminate for default if the Grantee fails to cure a breach of this
provision no later than thirty (30) days after being notified by the State.
12. Governing Law; Lawsuits. This Agreement is to be construed in accordance with
and governed by the laws of the State of Indiana, except for its conflict of laws
provisions. The parties agree that, in the event a lawsuit is filed hereunder, they
waive their right to a jury trial, agree to file any such lawsuit in an appropriate court
in Hamilton County, Indiana only, and agree that such court is the appropriate, yeriue
for and has jurisdiction over same. '
13. Relationship of Parties. The relationship of the parties hereto shall be as provided
for in this Agreement, and neither Grantee nor any of its compensated officers,
employees, contractors, subcontractors and/or agents are employees of City. The
3
Grant amount set forth herein shall be the full and maximum compensation and
monies required of City to be paid to Grantee under or pursuant to his Agreement.
14. Severability. If any term of this Agreement is invalid or unenforceable under any
statute, regulation, ordinance, executive order or other rule of law, such term shall be
deemed reformed or deleted, but only to the extent necessary to comply with same,
and the remaining provision of this Agreement shall remain in full force and effect.
15. Entire Agreement. This Agreement, together with any exhibits attached hereto or
referenced herein, constitutes the entire agreement between Grantee and City with
respect to the subject matter hereof, and supersedes all prior oral or written
representations and agreements regarding same. Notwithstanding any other term or
condition set forth herein, but subject to paragraph 15 hereof, to the extent any term
or condition contained in any exhibit attached to this Agreement or in any document
referenced herein conflicts with any term or condition contained in this Agreement,
the term or condition contained in this Agreement shall govern and prevail. This
Agreement may only be modified by written amendment executed by both parties
hereto, or their successors in interest.
IN WITNESS WHEROF, the parties hereto have made and executed this Agreement as follows:
India a- Symphon Soc. - c ( "Grantee ")
By:
Printe ame o
Date:
fficer:
Gary Ginstling
Date: 3/17/2015
Title: Chief Executive Officer
CITY OF CARMEL ( "Grantor ")
By: ice`
James Brainard, Mayor
Date: 3/17/2015
If you have any question concerning the City of Carmel's 2015 Arts Grant Program, grant writing, guidelines or application materials, contact:
Sharon Kibbe, City of Carmel, One Civic Square, Carmel, IN 46032, Phone: 317 -571 -2483, skibbe@carmel.in.gov. carmel.in.gov.
4
Exhibit "A"
An application and description
of the proposed use of the grant
funds
Exhibit "A"
An Application and Description of the Proposed Use of the Grant Funds
APPLICANT:
Name of organization: Indiana Symphony Society, Inc. (dba Indianapolis Symphony Orchestra)
Address: 32 E. Washington Street, Suite 600
Indianapolis. IN 46204
Telephone: (317) 262.1100 Fax: (317) 262.1159
Contact Person: Meg Williams
Email: mwilliams @IndianapolisSymphony.org
APPLICATION AMOUNT: $ 100,000
Not to exceed 1/3 of previous year revenue/iiwome
DESCRIPTION OF THE PROPOSED USE OF THE GRANT FUNDS:
Please see attached.
By:
Printed Name of Officer: Gary Ginstling
Title: Chief Executive Officer
Date: / -/z - /,J_
(Additional pages may be added to Exhibit "A ")
5
INDIANAPOLIS 1 SYMPHONY ORCHESTRA
Exhibit A
Description of the Proposed Use of the Grant Funds
Indianapolis Symphony Orchestra's Palladium Series
The Indianapolis Symphony Orchestra (ISO) respectfully requests a grant in the amount of $100,000 to
offset the programming costs for six full orchestra concerts performed at the Palladium of The Center
for the Performing Arts. The Palladium Series will provide an opportunity for residents of Carmel to
experience the ISO's world -class orchestra, conductors, and guest artists in their extraordinary facility.
The Indianapolis Symphony Orchestra is one of the leading professional orchestras in the nation with a
strong commitment to artistic excellence, diverse and creative programming, engagement with
communities throughout the state of Indiana, and a unique and ambitious plan to grow audiences with
innovative programs and new collaborations. The ISO plays a critical role in enhancing the quality of life
for area residents both artistically and economically.
The organization's artistic vision is led by the ISO's Music Director, Krzysztof Urbariski. Appointed as the
ISO's seventh music director at the age of 28, Urbariski is one of the youngest conductors among major
orchestras in the United States, and was recently called "one of the classical music world's rising stars"
by The Wall Street Journal. Maestro Urbariski is a highly respected conductor among top orchestras in
Europe, Asia and the United States, and over the past year has been invited to conduct some of the
world's preeminent orchestras, including the Berlin Philharmonic, New York Philharmonic and Chicago
Symphony Orchestra.
The programs for the six concert Palladium Series were intentionally chosen to showcase a symphony
orchestra in a number of the most powerful and dramatic classical symphonic works. The repertoire will
include The Messiah, Beethoven's Ninth Symphony and Mahler's Fifth Symphony, all chosen to
demonstrate the power and sonic splendor of a full symphony orchestra in Carmel's acclaimed
Palladium concert hall. Through the Palladium Series, the residents of Carmel will have the unique
opportunity to experience a world -class orchestra, led by one of the most sought -after conductors, in
one of Indiana's finest concert halls.
Concerts of this season's Palladium Series include the following:
• Saturday, December 19, 2014 —The Messiah
• Saturday, February 7, 2015 — Urbariski Conducts Shostakovich 7
• Friday, March 20, 2015 — Zach De Pue Plays Barber
• Friday, April 17, 2015 — Mendelssohn's "Reformation"
• Friday, June 5, 2015 — Urbariski Conducts Mahler 5
• Sunday, June 14 — Beethoven's Ninth
The ISO is committed to sharing extraordinary musical experiences with the residents of Carmel. Thank
you for your consideration of this request.
HANDEL'S MESS1 I
RIDAY DECEMBER 19 8P1
ERICSTARK CONDUCTOR;
DIANAROLIS SYMPHONIC''CN
ETHOVEN'S PIIN
UNDAY JUNE 14 8PN
KRZYSZTOI 'URBANSKI CONDUCTO
INDIANAPOLIS SYMPHONIC CHOIR
Exhibit "B"
A budget for the calendar or
fiscal year for which the grant is
requested
INDIANAPOLIS SYMPHONY ORCHESTRA
Exhibit B
Project Budget: Palladium Series
Timeline: Fiscal Year 2015 (September 2014 - August 2015)
Income
Ticket Revenue
Contributed Income (Pending or Confirmed)
Request to the City of Carmel
Total Income
Expenses
Artistic: Conductor & Guest Artist Expenses
Artistic: Orchestra Expenses
Concert Production
Marketing
Total Expenses
Budget Narrative
176,800
177,090
100,000
$453,890
83,125
260,000
64,265
46,500
$453,890
Artistic: Conductor & Guest Artist Expenses includes fees, hospitality, lodging and other expenses for
conductors and guest artists.
Artistic: Orchestra Expenses include an allocation of orchestra member salary and wages for six
performances, six rehearsals and one sound check (13 orchestra services).
Concert Production includes facility rental, stagehand fees, instrument rental /tuning, bus and semi
rental, front of house expenses and other miscellaneous expenses.
Marketing includes direct mail, print and other marketing expenses.
Indiana Symphony Society, Inc.
Statement of General Operating Activities
Budget
FINAL
FY15
Earned Income
Ticketing:
Ticket Sales
Special Events
Ticket Handling Fees
Facilities:
Symphony Centre
Hall Rental
6,984,100
132,600
266,813
7,383,513
320,737
112,900
433,637
Other Income:
Program Advertising 165,000
Fee Income 326,500
Learning Community 137,294
Symphony Pops Consortium 44,580
Miscellaneous -
673,374
Total Earned Income 8,490,524
Contributed Income
Annual Fund
Individuals 5,185,465
Corporate 1,820,000
Foundations 2,106,541
ISOA /Other 140,000
Special Events 226,656
Life Is Better Campaign /Addt'I Contributed Ir 850,000
Capital Campaign Phase I - Operational 65,500
10,394,162
ISO Foundation 5,482,340
Restricted /Designated Funding 177,088
Total Income 24,544,114
Expenses
Musician Salaries & Benefits
Salaries 5,380,628
Benefits 2,011,146
Pension Expense 977,772
Other Orchestra Expense
Orchestra - Operations
Orchestra - Artistic
8,369,546
965,885
705,303
1,671,188
Concert Production
Operations 1,958,012
Artistic 2,653,806
Marketing 1,590,807
6,202,625
Departmental
6 &A - Departmental 2,024,544
Benefits 1,059,453
Development 1,115,736
Patron Services 343,438
Learning Community 632,087
Program Book 145,600
Special Events 38,958
5,359,815
Facilities
Symphony Centre
Hall Operations
644,536
942,743
1,587,278
Depreciation 343,688
Total Expenses 23,534,141
Change in Net Assets 1,009,973
Adjustments
Restricted /Designated Funding (177,088)
Depreciation Expense 343,688
Pension - Expense (FAS Accrual) 977,772
Pension - Funding Requirement (cash) (1,777,342)
Capital Expenditures (200,000)
Transitional Expenses (157,033)
Other Balance Sheet Changes
Net Cash Flow 19,970
Line of Credit - Beginning of Year 7,922,166
Net Cash Flow 19,970
Line of Credit - End of Year 7,902,196
Exhibit "C"
Certified copies of
incorporation as a not-for-profit
co oration under state law
INDIANA BUSINESS ENTITY REPORT
Indiana Secretary of State
4/23/2013 2:23:47 PM
Filer Name Filer Title
ADAM WHITE CPA
Years Filed
2013
Entity name and current principal office address
INDIANA SYMPHONY SOCIETY, INC.
32 EAST WASHINGTON ST.
SUITE 600
INDIANAPOLIS, IN 46204
Entity Creation Date Domicile State
4/16/1937 INDIANA
Entity Type
NON - PROFIT DOMESTIC CORPORATION
Current registered agent and registered address
GARY GINSTLING
32 EAST WASHINGTON ST.
SUITE 600
INDIANAPOLIS, IN 46204
Current principal(s) and address(es)
OTHER
JOHN R. THORNBURGH
32 EAST WASHINGTON ST.
SUITE 600
INDIANAPOLIS, IN 46204
TREASURER
HOLLY M. PANTZER
32 EAST WASHINGTON ST.
SUITE 600
INDIANAPOLIS, IN 46204
OTHER
MARTHA D. LAMKIN
32 EAST WASHINGTON ST.
SUITE 600
INDIANAPOLIS, IN 46204
Page: 1 of 2
Packet: 193086 -009
DCN: 2013042300596
CEO
GARY GINSTLING
32 EAST WASHINGTON STREET, SUTIE 600
INDIANAPOLIS, IN 46204
SECRETARY
CHARLENE BARNETTE
32 EAST WASHINGTON STREET, SUTIE 600
INDIANAPOLIS, IN 46204
Page: 2 of 2
Packet: 193086 -009 DCN: 2013042300596
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
ARTICLES OF AMENDMENT
To Whom These Presents Come, Greeting:
WHEREAS, there has been presented to me at this office, Articles of
Amendment for:
INDIANA SYMPHONY SOCIETY, INC.
and said Articles of Amendment have been prepared and signed in accordance
with the provisions of the laws of Indiana, as amended.
NOW, THEREFORE, I, SUE ANNE GILROY, Secretary of State of Indiana, hereby
certify that I have this day filed said articles in this office.
The effective date of these Articles of Amendment is December 08, 1998.
In Witness Whereof, I have hereunto set my
hand and affixed the seal of the State of
Indiana, at the City of Indianapolis, this
Eighth day of December , 1998.
SUE ANNE GILROY, Secretar f State
Deputy
Article 1 - Amendment(s)
Section 4
1. The name of this corporation shall be Indiana Symphony Society, Inc.
5. [Deleted.]
7. The corporation shall have two categories of membership, individual and corporate. Each
category of membership shall be divided into two classes, voting and non- voting. The
requirements for membership and for being a voting member shall be specified in the Code of
Bylaws. Subject to the foregoing, all members shall be entitled to such privileges, not
inconsistent with the statutes of the State of Indiana, the Articles of Incorporation, and the
Code of Bylaws of the corporation, as the Board of Directors may from time to time in its
discretion determine.
8. The affairs of the corporation shall be managed by a Board of not less than twenty -one (21)
Directors, the number and terms of office of whom shall be specified in the Code of Bylaws.
Artl amend l 198
SS-C-38
State Form 37019
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
CERTIFICATE OF AMENDMENT
To Whom These Presents Come, Greeting:
1, EDWIN J. SIMCOX, Secretary of State of Indiana, hereby certify that
INDIANA STATE SYMPHONY SOCIETY, INC
a corporation duly organized and existing under the laws of the State of Indiana, has this day filed
in the office of the Secretary of State, Articles of Amendment showing an amendment to the
articles of incorporation of said company, in accordance with the Indiana General Not - For - Profit
Corporation Act (approved March 7, 1935) / The Indiana Not - For - Profit Corporation Act of 1971
(IC 23- 7 -1.1).
WHEREAS, upon due examination, 1 find that they conform to law:
NOW, THEREFORE, I, EDWIN J. SIMCOX, Secretary of State, hereby certify that I have this day
endorsed my approval upon all copies of Articles so presented, and, having received the fees
required by law, have filed one copy of the Articles in this office and returned the remaining copies
bearing the endorsement of my approval to the Corporation.
In Witness Whereof, I have hereunto set my hand and affixed
the seal of the State of Indiana, at the City of Indianapolis,
this 2nd day of
January
• , Secretor f State
Deputy
' INSTRUCTIONS
Present 2 Executed Copies to Secretary of
State, Room 155, State House,_ Indianapolis,
Indiana.46204.
y
FILING FEE is $26.00
State Form 4161
Corporate Form No. 364 -2 (Sept.-1980)
ARTICLES OF AMENDMENT (Amending Indi-
vidual Articles Only) -
Prescribed by Edwin J. Simcox, Secretary
of State of Indiana
ARTICLES OF AMENDMENT.
OF THE
ARTICLES OF INCORPORATION
OF
-- APPROVED
AND
FILED
JANO 2.1986
STATE OF INDIAN •
The undersigned officers of Indiana State Symphony Society._ Tnc.
(hereinafter referred to as the "Corporation ") existing pursuant to the provisions of: (Check appropriate box)
IZThe Indiana Not - For - Profit Corporation Act of 1971 (LC. 23- 7 -1.1), as amended, or
13Indiana General Not - For - Profit Corporation Act (approved March 7, 1935)
(hereinafter referred to as the "Act "), desiring to give notice of corporate action effectuating amendment of its Articles of
Incorporation certify the following facts:
ARTICLE I-
AMENDMENT(S)
SECTION 1.
The date of incorporation of the corporation is. April 14, 1917
SECTION 2.
The name of the corporation following this amendment to the Articles of Incorporation is:
Indiana State Symphony Society', Inc.
SECTION 3.
The exact text of Article(s) 2. 4 , 5 , 6 , 7 , 8 ,12 (a) , 12 (b) re— of the Articles of Incorporation now
is as follows: yoked, & 12 (c) ,
2. The purpose or purposes for which it is formed are as follows:
The cultivation and performace of instrumental music and not
for pecuniary profit. No part of the earnings of the corporation
shall inure to the benefit of any private member or individual. The
activities of the corporation shall always be limited to such objects
and for such purposes as to make the corporation exempt from taxes
under both State and Federal laws.
Corporate Form No. 364 -2 (Sept.-1980)
Page Two =
ARTICLE II
Manner of Adoption and Vote
Section 1. Action by Directors (select appropriate paragraph).
(a) The Board of Directors of the Corporation, at a meeting thereof, duly called, constituted and held on
September 18 , 19 85 , at which a quorum of such Board of Directors was present, duly adopted a
resolution proposing to the Members of the Corporation entitled to vote in respect of the Amendments that the
provisions and terms of Article(s) 1 i stpr9 hrive of its Articles of Incorporation be amended so as to
read as set forth in the Amendments; and called a meeting of such Members, to be held October 23
- 19 85 , to adopt or reject the Amendments, unless the same were so approved prior to such date by
unanimous written consent.
(b) By written consent executed on , 19. , signed by all of the members of the
Board of Directors of the Corporation, a resolution was adopted proposing to the Members of the Corporation
entitled to vote in respect of the Amendments, that the provisions and terms of Articles of its Articles of Incor-
poration be amended so as to read as set forth in the Amendments, and a meeting of such Members was called
to be held , 19 , to adopt or reject the Amendments, unless the same were so approved
prior to such date by unanimous written consent.
Section 2. Action by Members (select appropriate paragraph).
(a) The Members of the Corporation entitled to vote in respect of the Amendments, at a meeting thereof, duly called,
constituted and held on October 23
adopted the Amendments.
,1985
, at which a quorum of such members was present,
4. The post office address of its principal office is
amended to 45 Monument Circle, Indianapolis, Indiana.
5. The name of its resident agent is amended to
Robert C. Jones.
6. The post office address of the resident agent is
amended to 45 Monument Circle, Indianapolis, Indiana.
7. The corporation shall consist of both individual
and corporate members who have voting rights. Subject to
the foregoing, all members shall be entitled to such privi-
leges, not inconsistent with the statutes of the State of
Indiana, the Articles of Incorporation, and the Code of By -Laws
of the corporation, as the Board of Directors may from time to
time in its discretion determine.
8. The affairs of the corporation shall be managed by
a Board of not less than twenty -one (21) and not more than
seventy -five Directors, to be elected in numbers and for
terms as provided in the By -Laws of the corporation.
12(a) The corporation shall be regulated and controlled
by the statutes of the State of Indiana, including, without
limiting the generality thereof, the Indiana Not for Profit
Corporation Act, and also its Articles of Incorporation, as
amended from time to time, and its Code of By -Laws, power to
make, alter, amend, or repeal which Code of By -Laws is hereby
vested in the Board of Directors.
12(b) Revoked.
12(c) The Board of Directors may elect an Executive
Committee of such number and with such powers as it shall
from time to time by appropriate By -Laws determine. The
members of such Executive Committee shall hold office for
such term or terms as shall be specified in the resolution
electing them. Such Executive Committee shall have and may
exercise during the intervals between the meetings of the
Board of Directors all the powers vested in the Board of
Directors, except the power to make, alter, amend, or repeal
the Code of By -Laws, which power is exclusively reserved to
the Board of Directors.
IN
WITNESS 'WHEREOF, ' the :undersigned officers execute these - Articles of Amendment of the Articles
of Incorporation of the Corporation, and certify to the truth of the facts herein stated, this day of 41.0-1!e4—<-64...‘s
198
Corporate Form No. -$f4 -2 (Sept. - 1980).
-;Page Pour_ ..
(Written Sig ..re,
Robert -C. i" ores$
(Panted Signaiuml
President or Vice President
STATE OF INDIANA
COUNTY OF Marion
SS:
(Written Signature)
Mrs. C. Harvey Bradley, Jr.
(Printed Signature)
Secretary or Assistant Secretary
I, the undersigned, a Notary Public duly commissioned to take acknowledgements and administer oaths
in the State of Indiana, certify that Robert C. Jones
and Mrs. C. Harvey Bradley, Jr. , the
the Vice— President,
Secretary of the Corporation, the
officers executing the foregoing Articles of Amendment of the Articles of Incorporation, personally appeared
before me, acknowledged the execution thereof, and swore or attested to the truth of the facts therein stated.
Witness,my:hand and Notarial Seal this 14th day of
/.,
trrr.trr'r /\
My Cornmissiii}i�'Expires:
_Apri1 1, 1989
November
1985
IWnttcn signature)
Josephine M. Tussey
IPnmed Signatuml
NOTARY PUBLIC
My County of Residence is:
Marion
fir
ARTICLES OF INCORPORATION
OF
INDIANA STATE SYMPHONY SOCIETY, INC.
These Articles of Incorporation include all
amendments covered by certificates filed on _
July 31, 1940, August 18, 1943, November 5,
1943, and October , 1985.
ARTICLES OF INCORPORATION
AFTER SUGGESTED AMENDMENTS
The undersigned, being three or more natural persons of
lawful age,vat least a majority of whom are citizens of the
United States, do hereby adopt the following Articles of
Incorporation, representing beforehand to the Secretary of
State of the State of Indiana and all persons whom it may
concern, that a membership list or lists of the above named
corporation for which certificate of incorporation is hereby
applied for have heretobefore been opened in accordance
with law and that at least three (3) persons have signed
such membership list.
Be it further remembered that the following Articles of
Incorporation and all matters heretobefore done or hereafter
to be done are in accordance with "An Act concerning domestic
and foreign corporations not for profit, providing for fees,
providing penalties for the violation thereof, and repealing
certain laws," approved March 7, 1935, and all acts amendatory
thereof and supplemental thereto.
1. The name of this corporation shall be INDIANA STATE
SYMPHONY SOCIETY, 'INC.
2. The purpose or purposes for which it is formed are
as follows:
The cultivation and performance of instrumental
—music -and-not-for pecuniary .profit. No part ,o.f' the
earnings of the corporation shall inure to the benefit
of anv private member or individual_ The activities
of the corporation shall always be limited to such
objects and for such purposes as to make the corpora-
tion exempt from taxes under both State and Federal
laws.
3. The period during which. it is to continue as a
corporation is perpetually.
4. The post office address of its principal office is
amended to 45 Monument Circle, Indianapolis, Indiana.
5. The name of its resident .agent is amended to Robert
'C. Jones.
6. The post office address of the resident agent is
amended to 45 Monument.Circle, Indianapolis, Indiana.
7. The corporation shall consist of.both individual
and corporate members who have voting rights. Subject to
the foregoing, all members shall be entitled to such privileges,
not inconsistent with the statutes of the State of Indiana,
the Articles of Incorporation, and the Code of ByLaws of the
corporation, as the Board of Directors may from time to time
in its discretion determine.
-2-
8. The affairs of the corporation shall be managed by
a Board of not less than twenty -one (21) and not more than
seventy -five (75) Directors, to be elected in numbers and for
terms as provided in the by -laws of the corporation.
9. The names and addresses of the first board of directors
are as follows:
Name
William H. Ball
L. A. Pittinger
C. J. Lynn
G. H. A. Cloc+s
Arthur V. Brown
T. B. Griffith
Peter C. Reilly
Leonard A. Strauss
Otto N. Frenzel, Jr.
William Ray Adams
Herbert M. Woollen
Street.
Ball Brothers
5600 Sunset Lane
Golden Hill
3172 N. Meridian
940 West 42nd St.
Merchants Bank Bldg.
c/o Kahn Tailoring Co.
.5008 N. Meridian
4936 N. Meridian
P. 0. Box 368
City
Muncie
Muncie
Indpls.
Indpls.
Indpls.
Indpls.
Indpls.
Indpls.
Indpls.
Indpls.
Indpls.
County State
Delaware Indiana
Delaware Indiana
Marion Indiana
Marion Indiana
Marion Indiana
Marion Indiana
Marion Indiana
Marion Indiana
Marion Indiana
Marion Indiana
Marion Indiana
10. The names and post office addresses of the incorporators
are as follows:
Name
G. H. A. Clowes
Albert 0. Defuse
Herbert M. titollen
Peter C. Reilly
Leonard A. Strauss
William H. Ball
Street • City
Olden Hill Indpls.
Board of Trade Bldg. Indpls.
P. O. Box 368 Indpls.
Merchants Bank Bldg. Indpls.
c/o Kahn Tailoring Co. Indpls.
c/o Ball Bros. Co. Muncie
County State
Marion Indiana
Marion . Indiana
Marion Indiana
Marion Indiana
Marion Indiana
Delaware Indiana
11. A statement of the property and an estimate of the
value thereof, to be taken over by this corporation at or upon
its incorporation:
All the property and assets of every kind and
description belonging in whole or in part to the Indiana
State Symphony Society, subject, however, to any and all
liabilities of said Indiana State Symphony Society,
this
this
shall be taken over by this corporation upon its incorp-
oration. Such property and assets have an estimated
net value of $25,000.00.
12. Any other provisions, consistent with the laws of
state, for the regulation and conduct of the affairs of
corporation, and creating, defining, limiting or
regulating the powers of this corporation, of the directors
or of the members or any class or classes of members:
(a) The corporation shall be regulated and controlled
by the statutes of the State of Indiana, including, without
limiting the generality thereof, The Indiana Not for Profit
Corporation Act, and also its Articles of Incorporation, as
amended from time to time, and its Code of By -Laws, power to
make, alter, amend, or repeal which Code of By -Laws is
hereby vested in the Board of Directors.
(c) The Board of Directors may elect an Executive
Committee df such number and with such powers as it shall
from time to time by appropriate By -Laws determine. The
members of such Executive Committee shall hold office for
such term or terms as shall be specified in the resolution
electing them. Such Executive Committee shall have and may
exercise during the intervals between the meetings of the
Board of Directors all the powers vested in the Board of
Directors, except the power to make, alter, amend, or repeal
the Code of By -Laws, which power is exclusively reserved to
the Board of Directors.
(d) All annual meetings of the active members of
this corporation shall be held within the City of Indianapolis
at such place or places as the Board of Directors in its
discretion may from time to time determine.
(e) Twenty -five members of the corporation entitled
to vote represented in person or by proxy at any regular or
special meeting of the members shall constitute a quorum.
(f) No assessment shall be made against or be
binding upon any member unless said member's written consent
to said assessment was duly filed with the Secretary of the
corporation prior to the meeting at which said assessment
was voted. -
(Signed)
-4-
William H. Ball
Herbert M. Woollen
Albert 0. Deluse
Peter C. Reilly
Leonard A. Strauss
George H. A. Clowes
STATE OF INDIA1A )
) ss:
COUNTY OF MARION )
Before mo, Perry O'Neal, a Notary Public in and for
said County and State, personally appeared William H. Ball,
HuAert M. Woollen, Albert 0. Deluxe, Peter C. Reilly,
Leonard'S. Strauss and G. H. C. Cloves, and severally
acknowlodged the exocution of the foregoing articles of
incorporation.
WITNESS ray hand and notarial seal this. 14th day of
April, 1937.
(SEAL)
(Signed) Perry E. O'Neal
My commission expires Jan. 24, 1938.
Notary Public
Exhibit "D"
IRS etemination Letter
Internal Revenue Service
District Director
Department of the Treasury
P.O. Box 2508
Cincinnati, OH 45201
Date: July 21, 1999 Person to Contact:
Vicki Adams 31 -04011
Customer Service Representative
Indiana Symphony Society, Inc. Telephone Number:
45 Monument Circle 877 -829 -5500
Indianapolis, IN 46204 -2907 Fax Number:
513- 684 -5936
Federal Identification Number:
35- 0998627
Dear Sir cr Madam:
This is in response to our receiving your Amended Articles of Incorporation changing the name
of your organization to what is shown above.
In September 1998 we issued a determination letter that recognized your organization as
exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code. That
letter is still in effect.
Based on the information supplied, we recognized the subordinates named on the list your
organization submitted as exempt from federal income tax under section 501(c)(3) of the
Code. Additionally, we have classified the subordinates your organization operates,
supervises, or controls, and which are covered by written notification.to us, as organizations
that are not private foundations because they are organizations of the type described in
sections 509(a)(1) and 170(b)(1)(A)(vi) of the Code.
Donors may deduct., contributions to your organization's subordinates as provided in section
170 of the Code. Bequests, legacies, devises, transfers or gifts to the subordinates or for their
use are deductible for federal estate and gift tax purposes if they meet the applicable
provisions of sections 2055, 2106, and 2522 of the Code.
Your organization and its subordinates are required to file Forrn 990, Return of Organization
Exempt from Income Tax, only if the gross receipts each year are normally more than $25,000.
If a return is required, it must be filed by the 15th day of the fifth month after the end of the
organization's annual accounting period. The law imposes a penalty of $20 a day, up to a
maximum of $10,000, when a return is filed late, unless there is reasonable cause for the
delay.
Your organization and its subordinates are not required to file federal income tax returns
unless subject to the tax on unrelated business.income under section 511 of the Code. If
subject to this tax, the organization must file an income tax return on Form 990 -T, Exempt
Organization Business Income Tax Return: In this letter, we are not determining whether any
• of your organization or its subordinates' present dr proposed activities are unrelated trade or
business as defined in section 513 of the Code.
Indiana Symphony Society, Inc.
35- 0998627
Unless specifically excepted, your organization and its subordinates are liable for taxes under
the Federal Insurance Contributions Act (social security taxes) on remuneration of $100 or
more paid to each of its employees during a calendar year. Your organization and its
subordinates are not liable for the tax imposed under the Federal Unemployment Tax Act
(FUTA).
Each year, at least 90 days before the end of your organization's annual accounting period,
please send the•following itemsto the Internal Revenue Service Center at the address shown
below:
1. A statement describing any changes during the year in the purposes,
character, or method of operation of your organization's subordinates;
2. A list showing the names, mailing addresses (including Postal ZIP Codes),
actual addresses if different, and employer identification numbers of
subordinates that:
a. Changed names or addresses;
b. Were deleted from the roster, or
c. Were added to the roster.
For subordinates to be added, attach:
a. A statement that the information on which your organization's
present group exemption letter is based applies to the new
subordinates;
b. A statement that each has given your organization written
authorization to add its name to the roster,
c. A list of those to which the Service previously issued
exemption rulings or determination letters;
d. A statement that none of the subordinates is a private foundation
as defined in section 509(a) of the Code if the group exemption
letter covers organizations described in section 501(c)(3);
e. The street address of subordinates where the mailing address is a P.O.
Box; and
3
Indiana Symphony Society, Inc.
35- 0998627
f. The information required by Revenue Procedure 75 -50,
1975 -2 C.B. 587 for each subordinate that is a school
claiming exemption under section 501(c)(3). Also include
any other information necessary to establish that the school
is complying with the requirements of Revenue Ruling
71 -447, 1971 -2 C.B. 230. This is the same information
required by Schedule A, Form 1023, Application for
Recognition of Exemption Under Section 501(c)(3) of the
Intemal Revenue Code.
4. If applicable, a statement that your organization's group exemption roster did
not change since the previous report.
The above information should be sent to the following address:.
Internal Revenue Service Center
Attn: Entity Control Unit
Ogden, UT 84409
The law requires you to make your organization's annual return available for public inspection
without charge for three years after the due date of the return. You are also required to make
available for public inspection a copy of your organization's exemption application, any
supporting documents and the exemption letter to any individual who requests such
documents in person or in writing. You can charge only a reasonable fee for reproduction and
actual postage costs for the copied materials. The law does not require you to provide copies
of public inspection documents that are widely available, such as by posting them on the
Internet (World Wide. Web). You may be liable for a penalty of $20 a day for each day you do
not make these documents available for public inspection (up to a maximum of $10,000 in the
case of an annual return).
Your organization's Group Exemption Number is 8262.
If you have any questions, please call us at the telephone number shown in the heading of this
letter.
Sincerely,
C. Ashley Bullard
District Director
Exhibit "E"
Any audits, reviews or
compilations available
describing the financial
condition of the Grantee,
including most recent available
I S Form 990, and the
Affidavit
STATE OF INDIANA
) SS:
COUNTY OF HAMILTON )
I, Gary Ginstling
of Indiana Symphony Society, Inc. ( "Grantee "), being first duly sworn upon
my oath, state that pursuant to paragraph 7 of the City of Cannel Arts Grant Program Agreement,
all income of Grantee, including a City of Carmel arts grant, if applicable, revenue of sales,
and /or ticket revenue, etc., in the Grantee's year ending in 2014 totaled $ 23,524,772
AFFIDAVIT
, an authorized representative
Subscribed and sworn to before me, the undersigned Notary Public, this 1 a day of
anu(\ ri
,20IS.
Printed Name 47-1L,on ,4r0,0 Mi _
Resident of /'1C. t r,
My Commission Expires:
County, Indiana
X47 /, 0,o17
OFFICIAL SEAL
ANTHONY ARONOWITZ
NOTARY PUBLIC - INDIANA
MARION COUNTY
r a B My Comm, Expires May 12, 2017
INDIANA SYMPHONY SOCIETY, INC.
FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
INDIANA SYMPHONY SOCIETY, INC.
TABLE OF CONTENTS
AUGUST 31, 2014 AND 2013
Page
Report of Independent Auditors 1
Financial Statements
Statements of Financial Position 3
Statements of Activities 4
Statements of Cash Flows 8
Notes to Financial Statements 9
CPAS •ADVISORS
bIue
Btue & Co.,LLC r 12800 N. Meridian Street, Suite 400 ! Carmel, IN 46032
roam 317,848 8920 !a. 317.573 -2458 elndil blueeblueandco.com
REPORT OF INDEPENDENT AUDITORS
The Board of Directors
Indiana Symphony Society, Inc.
Report on the Financial Statements
We have audited the accompanying financial statements of the Indiana Symphony
Society, Inc. (the Society), which comprise the statements of financial position as of
August 31, 2014 and 2013, and the related statements of activities and cash flows for
the years then ended, and the related notes to the financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the United
States of America; this includes the design, implementation, and maintenance of
internal control relevant to the preparation and fair presentation of financial statements
that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our
audits. We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts
and disclosures in the financial statements. The procedures selected depend on the
auditor's judgment, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's preparation
and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the entity's internal control. Accordingly, we express no such
opinion. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
1
REPORT OF INDEPENDENT AUDITORS
(CONTINUED)
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material
respects, the financial position of the Society as of August 31, 2014 and 2013, and the
changes in its net assets and its cash flows for the years then ended in accordance with
accounting principles generally accepted in the United States of America.
Carmel, Indiana
November 21, 2014
2
INDIANA SYMPHONY SOCIETY, INC.
STATEMENTS OF FINANCIAL POSITION
AUGUST 31, 2014 AND 2013
ASSETS
Cash
Receivables:
Pledges, net (Note 3)
Government Grants
Accounts
Total Receivables
Prepaid Expenses and Other Assets
Property and Equipment, net (Note 2)
Interest in Net Assets of ISO Foundation
Total Assets
2014
2013
$ 152,782 $ 247,938
6,647,477
150,055
282,549
7,080,081
820,748
2,381,714
99,458,048
$ 109,893,373
LIABILITIES AND.NET ASSETS
Liabilities
Accounts Payable
Accrued Expenses
Other Liabilities
Deferred Revenue
Line of Credit (Note 4)
Pension Liability (Note 11)
Total Liabilities
Net Assets
Unrestricted
General Operating
Pension Plan (Note 11)
Board Designated (Note 5)
Total Unrestricted
Temporarily Restricted
Society (Note 6)
ISO Foundation (Note 6)
Total Temporarily Restricted
Permanently Restricted
ISO Foundation (Note 7)
Total Net Assets
Total Liabilities and Net Assets
$ 760,828
711,094
150,265
1,973,074
7,695,543
10,461,414
21,752,218
8,051,196
128,198
465,441
8,644,835
519,435
1,775,005
92,766,561
$ 103,953,774
$ 650,714
489,536
131,725
1,835,166
7,334,992
10,312,929
20,755,062
(9,338,625) (9,604,880)
(10,526,414) (10,411,312)
115,697 157,179
(19,749,342) (19,859,013)
8,432,449 10,291,164
67,015,926 60,379,439
75,448,375 70,670,603
32,442,122 32,387,122
88,141,155 83,198,712
$ 109,893,373 $ 103,953,774
See accompanying notes to financial statements.
3
INDIANA SYMPHONY SOCIETY, INC.
STATEMENT OF ACTIVITIES
YEAR ENDED AUGUST 31, 2014
(With Comparative Total for the Year Ended August 31, 2013)
Revenue
Eamed Revenue
Ticket Sales and Fee Income $ 7,463,729 $ -0- $ -0- $ -0- $ 7,463,729 $ -0- $ -0- $ -0- $ -0- $ 7,463,729 $ 6,425,390
Rental lncome 413,238 -0- -0- -0- 413,238 -0- -0- -0- -0- 413,238 428,788
Program Advertising 144,479 -0- -0- -0- 144,479 -0- -0- -0- -0- 144,479 155,790
Education 214,978 -0- -0- -0- 214,978 -0- -0- -0- -0- 214,978 182,887
Other 50,236 -0- -0- -0- 50,236 -0- -0- -0- -0- 50,236 181,854
Total Earned Revenue 8,286,660 -0- -0- -0- 8,286,660 -0- -0- -0- -0- 8,286,660 7,374,709
2014 2013
Permanently
Unrestricted Temporarily Restricted Restricted
General Pension Board ISO ISO
Operating Elan gelignated Facilities IQtal Society Foundation Istal Foundation Total Total
Contributed Income
Annual Fund 5,239,563 -0- -0- -0- 5,239,563 2,685,231 -0- 2,685,231 -0- 7,924,794 13,440,867
Provision for Loss on Annual Fund Pledge -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- (16,500)
Modification of Donor Intent- Annual Giving 300,000 -0- -0- -0- 300,000 (300,000) -0- (300,000) -0- -0- 46,000
Net Assets Released - Annual Fund (Note 8) 3,850,140 -0- -0- -0- 3,850,140 (3,850,140) -0- (3,850,140) -0- -0- -0-
Project Funding 77,821 -0- -0- -0- 77,821 -0- -0- -0- -0- 77,821 1,347,446
Net Assets Released - Project Funding (Note 8) 115,770 -0- -0- -0- 115,770 (115,770) -0- (115,770) -0- -0- -0-
Capital Campaign -0- -0- -0- -0- -0- 9,333 -0- 9,333 -0- 9,333 (3,119)
Provision for Loss on Capital Campaign Pledge -0- -0- (4,000) -0- (4,000) (6,000) -0- (6,000) -0- (10,000) (6,500)
Modification of Donor Intent - Capital Campaign -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- (46,000)
Net Assets Released - Capital Campaign (Note 8) -0- -0- 266,461 -0- 266,461 (266,461) -0- (266,461) -0- -0- -0-
Board Designated Transfer - Capital Campaign 264,461 -0- (264,461) -0- -0- -0- -0- -0- -0- -0- -0-
Capital Assets -0- -0- -0- -0- -0- 76,200 -0- 76,200 -0- 76,200 1,012,425
Net Assets Released - Depreciation (Note 8) 91,108 -0- -0- -0- 91,108 (91,108) -0- (91,108) -0- -0- -0-
Board Designated Transfer - Depreciation 39,482 -0- (39,482) -0- -0- -0- -0- -0- -0- -0- -0-
Total Contributed Income 9,978,345 -0- (41,482) -0- 9,936,863 (1,858,715) -0- (1,858,715) -0- 8,078,148 15,774,619
ISO Foundation
Net Assets Released (Note 8) 5,209,767 -0- -0- 1,250,000 6,459,767 -0- (6,459,767) (6,459,767) -0- -0- -0-
Service Fee 50,000 -0- -0- -0- 50,000 -0- -0- -0- -0- 50,000 50,000
Total ISO Foundation 5,259,767 -0- -0- 1,250,000 6,509,767 -0- (6,459,767) (6,459,767) -0- 50,000 50,000
Total Revenue
23,524,772 -0- (41,482) 1,250,000 24,733,290 (1,858,715) (6,459,767) (8,318,482) -0- 16,414,808 23,199,328
See accompanying notes to financial statements.
4
INDIANA SYMPHONY SOCIETY, INC.
STATEMENT OF ACTIVITIES
YEAR ENDED AUGUST 31, 2014 (Continued)
(With Comparative Total for the Year Ended August 31, 2013)
2014 2013
Permanently
Unrestricted Temporarily Restricted Restricted
General Pension Board ISO ISO
Operating Plan Designated Facilities I4fgl Society Foundation Total Foundation Total Total
Expenses
Concert Related Expenses
Orchestra Operations 8,986,728 -0- -0- -0- 8,986,728 -0- -0- -0- -0- 8,986,728 8,540,873
Defined Benefit Pension Plan Expense (Notes 9 and 11) 1,130,431 -0- -0- -0- 1,130,431 -0- -0- -0- -0- 1,130,431 1,470,402
Concert Production 4,726,694 -0- -0- -0- 4,726,694 -0- -0- -0- -0- 4,726,694 4,329,601
Marketing 1,803,327 -0- -0- -0- 1,803,327 -0- -0- -0- -0- 1,803,327 2109,658
Total Concert Related Expenses 16,647,180 -0- -0- -0- 16,647,180 -0- -0- -0- -0- 16,647,180 16,450,534
Departmental Expenses
General and Administrative 2,191,000 -0- -0- -0- 2,191,000 -0- -0- -0- -0- 2,191,000 2,191,368
Development 1,281,746 -0- -0- -0- 1,281,746 -0- -0- -0- -0- 1,281,746 1,318,784
Patron Services 354,448 -0- -0- -0- 354,448 -0- -0- -0- -0- 354,448 340,941
Education 716,994 -0- -0- -0- 716.994 -0- -0- -0- -0- 716,994 632,034
Program Book 149,135 -0- -0- -0- 149,135 -0- -0- -0- -0- 149,135 126,275
Other 39,463 -0- -0- -0- 39,463 -0- -0- -0- -0- 39,463 34,279
Total Departmental Expenses 4,732,786 -0- -0- -0- 4,732,786 -0- -0- -0- -0- 4,732,786 4,643,681
Facilities
Depreciation (Note 9)
Total Expenses
Revenue Over (Under) Expenses
1,595,076 -0- -0- 1,250,000 2,845,076 -0- -0- -0- -0- 2,845,076 2,771,426
283,475 -0- -0- -0- 283,475 -0- -0- -0- -0- 283,475 339,684
1,878,551 -0- -0- 1,250,000 3,128,551 -0- -0- -0- -0- 3,128,551 3,111,110
23,258,517 -0- -0- 1,250,000 24,508,517 -0- -0- -0- -0- 24,508 517 24,205,325
266,255 -0- (41,482) -0- 224,773 (1,858,715) (6,459,767) (8.318,482) -0- (8,093,709)
(1.005,997)
Nonoperating Gains (Losses)
Change in Interest in Net Assets of ISO Foundation -0- -0- -0- -0- -0- -0- 13,096,254 13,096,254 55,000 13,151,254 10,530,834
Pension Liability Adjustment (Note 11) -0- (115,102) -0- -0- (115,102) -0- -0- -0- -0- (115 102) 1556,241
Total Nonoperating Gains (Losses) -0- (115,102) -0- -0- (115,102) -0- 13,096,254 13,096,254 55,000 13,036,152 12,087,075
Change in Net Assets 266,255 (115,102) (41,482) -0- 109.671 (1,858,715) 6,636,487 4,777,772 55,000 4,942,443 11,081,078
Net Assets, Beginning of Year (9,604,880) (10,411,312) 157,179 -0- (19 859,013) 10 291,164 60,379,439 70,670,603 32,387,122 83,198 712 72,117,634
Net Assets, End of Year § (9,338,625) $ (10,526,414) $ 115,697 $ -0- $ (19,749,342) $ 8,432,449 $ 67,015,926 $ 75,448,375 $ 32,442,122 $ 88,141,155 $ 83,198,712
See accompanying notes to financial statements.
5
INDIANA SYMPHONY SOCIETY, INC.
STATEMENT OF ACTIVITIES
YEAR ENDED AUGUST 31, 2013
Revenue
Eamed Revenue
Ticket Sales and Fee Income $ 6,425,390 $ -0- $ -0- $ -0- $ 6,425,390 $ -0- $ -0- $ -0- $ -0- $ 6,425,390
Rental lncome 428,788 -0- -0- -0- 428,788 -0- -0- -0- -0- 428,788
Program Advertising 155,790 -0- -0- -0- 155,790 -0- -0- -0- -0- 155,790
Education 182,887 -0- -0- -0- 182,887 -0- -0- -0- -0- 182,887
Other 181,854 -0- -0- -0- 181,854 -0- -0- -0- -0- 181,854
Total Eamed Revenue 7,374,709 -0- -0- -0- 7,374,709 -0- -0- -0- -0- 7,374,709
Permanently
Unrestricted Temporarily Restricted Restricted
General Pension Board ISO ISO
Operating Elan Designated Facilities Total Society Foundatio0 Total Foundation Total
Contributed Income
Annual Fund 6,931,071 -0- -0- -0- 6,931,071 6,509,796 -0• 6,509,796 -0- 13,440,867
Provision for Loss on Annual Fund Pledge -0- -0- -0- -0- -0- (16,500) -0- (16,500) -0- (16,500)
Modification of Donor Intent - Annual Giving -0- -0- -0- -0- -0- 46,000 -0- 46,000 -0- 46,000
Net Assets Released - Annual Fund (Note 8) 2,236,491 -0- -0- -0- 2,236,491 (2,236,491) -0- (2,236,491) -0- -0-
Project Funding 969,409 -0- -0- -0- 969,409 378,037 -0- 378,037 -0- 1,347,446
Net Assets Released - Project Funding (Note 8) -0- -0- -0- -0- -0- -0- -0- -0- -0- -0-
Capital Campaign -0- -0• -0- -0- -0- (3,119) 0
(3,119) -0- (3,119)
Provision for Loss on Capital Campaign Pledge -0- -0- -0- -0- -0- (6,500) -0- (6,500) -0- (6,500)
Modification of Donor Intent - Capital Campaign -0- -0- -0- -0- -0- (46,000) -0• (46,000) -0• (46,000)
Net Assets Released - Capital Campaign (Note 8) -0- -0- 261,845 -0- 261,845 (261,845) -0- (261,845) -0- -0-
Board Designated Transfer - Capital Campaign 367,363 -0- (367,363) -0- -0- -0- -0- -0- -0- -0-
Capital Assets -0- -0• -0- -o- -0- 1,012,425 -0- 1,012,425 -0- 1,012,425
Net Assets Released - Depreciation (Note 8) 115,417 -0- -0- -0- 115,417 (115,417) -0- (115,417) -a -0-
Board Designated Transfer - Depreciation 51,073 -0- (51,073) -0- -0- -0- -o- -0- -o- -0-
Total Contributed Income 10,670,824 -0- (156,591) -0- 10,514,233 5,260,386 -0- 5,260,386 -0- 15,774,619
ISO Foundation
Net Assets Released (Note 8) 5,095,350 -0- -0- 1,250,000 6,345,350 -0- (6,345,350) (6,345,350)
Service Fee 50,000 -0- -0- -0- 50,000 -0- -0- -0-
Total ISO Foundation 5,145,350 -0- -0- 1,250,000 6,395,350 -0- (6,345,350) (6,345,350)
Total Revenue 23,190,883 -0- (156,591) 1 250,000 24,284,292 5,260,386 (6,345,350) (1,084,964)
-0- -0-
-0- 50,000
-0- 50,000
-0- 23,199,328
See accompanying notes to financial statements.
6
INDIANA SYMPHONY SOCIETY, INC.
STATEMENT OF ACTIVITIES
YEAR ENDED AUGUST 31, 2013 (Continued)
Permanently
Unrestricted Temporarily Restricted Restricted
General Pension Board ISO ISO
Operating Plan Designated Fa ilk ies Total Society Foundation Total Foundation Total
Expenses
Concert Related Expenses
Orchestra Operations 8,540,873
Defined Benefit Pension Plan Expense (Notes 9 and 11) 1,470,402
Concert Production 4,329,601
Marketing 2,109,658
Total Concert Related Expenses 16,450,534
Departmental Expenses
General and Administrative 2,191,368
Development 1,318,784
Patron Services 340,941
Education 632,034
Program Book 126,275
Other 34,279
Total Departmental Expenses 4,643,681
01440000
-o-
-0-
-o-
-o-
-0-
01000000
Facilities 1,521,426 -0- -0-
Depreciation (Note 9) 339,684 -0- -0-
1,861,110 -0- -0-
Total Expenses 22,955,325 -0- -o-
Revenue Over (Under) Expenses 235,558 -0- (156,591)
-0- 8,540,873
-0- 1,470,402
-0- 4,329,601
-0- 2,109,658
-0- 16,450,534
01000000
2,191,368
1,318,784
340,941
632,034
126,275
34,279
4,643,681
1,250,000 2,771,426
-0- 339,684
1,250,000 3,111,110
1,250,000 24,205,325
-0- -o- -o- -o- 8,540,873
-0- -0- -0- -0- 1,470,402
-0- -0- -0- -0- 4,329,601
-0- -0- -0- -0- 2,109,658
-0- -0- -0- -0- 16,450,534
01000000
01000000
01000000
01000000
2,191,368
1,318,784
340,941
632,034
126,275
34,279
4,643,681
-0- -o- -0- -0- 2,771,426
-0- -0- -o- -0- 339,684
-0- -0- -0- -0- 3,111,110
-0- -0- -0- -o- 24,205,325
-0- 78,967 5,260,386 (6,345,350) (1,084,964) -0- (1,005,997)
Nonoperating Gains
Change in Interest in Net Assets of ISO Foundation -0- -0- -0- -0- -0- -0- 10,479,802 10,479,802 51,032 10,530,834
Pension Liability Adjustment (Note 11) -0- 1,556,241 -0- -0- 1,556,241 -0- -0- -0- -0- 1,556,241
Total Nonoperating Gains -0- 1,556,241 -0- -0- 1,556,241 -0- 10,479,802 10,479,802 51,032 12,087,075
Change in Net Assets 235,558 1,556,241 (156,591) -0- 1,635,208 5,260,386 4,134,452 9,394,838 51,032 11,081,078
Net Assets, Beginning of Year (9,840,438) (11,967,553) 313,770 _ -0- (21,494,221) 5,030,778 56,244,987 61,275,765 32,336,090 72,117,634
Net Assets, End of Year $ (9,604,880) $ (10,411,312) $ 157,179 $ -0- $ (19,859,013) $ 10,291,164 $ 60,379,439 ; 70,670,603 $ 32,387,122 $ 83,198,712
See accompanying notes to financial statements.
7
INDIANA SYMPHONY SOCIETY, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED AUGUST 31, 2014 AND 2013
2014 2013
Operating Activities
Change in Net Assets $ 4,942,443 $ 11,081,078
Adjustments to Reconcile Change in Net Assets to
Net Cash Flows from Operating Activities
Non -Cash Items
Interest in Net Assets of ISO Foundation (6,691,487) (4,185,484)
Bad Debt Expense 182,135 126,188
Depreciation 283,475 339,684
Defined Benefit Pension Plan Expense 1,130,431 1,470,402
Pension Liability Adjustment 115,102 (1,556,241)
(4,980,344) (3,805,451)
Changes in Assets and Liabilities
Receivables 1,382,619 (3,943,268)
Prepaid Expenses and Other Assets (301,313) (76,479)
Accounts Payable, Accrued Expenses, and Other Liabilities 350,212 (405,219)
Pension Contribution (1,097,048) (1,782,171)
Deferred Revenue 137,908 2,667
Net Cash Flows from Operating Activities 434,477 1,071,157
Investing Activities
Capital Expenditures (890,184) (476,051)
Financing Activities
Advances on Line of Credit 13,357,276 15,543,253
Payments on Line of Credit (12,996,725) (15,980,394)
Net Cash Flows from Financing Activities 360,551 (437,141)
Net Change in Cash (95,156) 157,965
Cash, Beginning of Year 247,938 89,973
Cash, End of Year $ 152,782 $ 247,938
Supplemental Disclosure of Cash Flows Information
Cash Payments for Interest $ 61,961 $ 63,350
See accompanying notes to financial statements.
8
INDIANA SYMPHONY SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
1. NATURE OF ACTIVITIES
The Indiana Symphony Society, Inc. (the Society) is a not - for - profit corporation
formed in 1937 for the purpose of operating the Indianapolis Symphony Orchestra
(ISO). The ISO is one of Indiana's best known cultural resources receiving national
and international recognition and setting the highest musical standards within our
community.
The Indianapolis Symphony Orchestra Foundation, Inc. (the ISO Foundation) is a
separate entity that was formed in September 1990 for the purpose of educating
the public by providing financial and other support to the Society. The ISO
Foundation manages the endowment which was raised to support the Indianapolis
Symphony Orchestra, the Hilbert Circle Theatre, and the Symphony Centre
buildings. The ISO Foundation is under no obligation to transfer assets to the
Society.
Due to the purpose for which the ISO Foundation was formed, the Society and the
ISO Foundation are considered to be financially interrelated organizations even
though they operate independently of each other and have separate Boards of
Directors. Because the Society and the ISO Foundation are financially interrelated,
the Society has recognized its interest in the net assets of the ISO Foundation in its
financial statements. Additionally, based on the nature of the relationship between
the ISO Foundation and the Society, and the purposes for which the ISO
Foundation exists, the ISO Foundation qualifies under Internal Revenue Service
guidelines as a functionally integrated Type III supporting organization.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Net Assets
The financial statements report net assets and changes in net assets in classes
that are based upon the existence or absence of restrictions on use that are placed
by its donors, as follows:
Society Unrestricted Net Assets — Society unrestricted net assets are not
subject to donor - imposed stipulation. The only limits on the use of Society
unrestricted net assets are the broad limits resulting from the nature of the
Society, the environment in which it operates, the purposes specified in its
corporate documents and its application for tax - exempt status, and any limits
resulting from contractual agreements with creditors and others that are
entered into in the course of its operations. The Society maintains four
unrestricted net asset classifications, as follows:
General Operating - used to report contributions, revenues and expenses
from the general operations of the Society.
9
INDIANA SYMPHONY SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
Pension Plan - used to report the activity related to the pension liability
adjustment computed according to the provisions of Financial Accounting
Standards Board Accounting Standards Codification 715 -20 and 30
related to the non - contributory pension plan administered by the Society
for qualified employees.
Board Designated - established to account for Board of Director
designations.
Facilities - established to account for the grants received from the ISO
Foundation for the Hilbert Circle Theatre and Symphony Centre and
annual lease payments made to the ISO Foundation as discussed in Note
10.
Society Temporarily Restricted Net Assets — Society temporarily restricted
net assets are resources that are restricted by a donor for use for a particular
purpose or in a particular future period. The Society's unspent contributions
are classified in this class if the donor limited their use.
When a donor's restriction is satisfied, either by using the resources in the
manner specified by the donor or by the passage of time, the expiration of the
restriction is reported in the Statements of Activities by reclassifying the net
assets from temporarily restricted to unrestricted net assets. Net assets
restricted for acquisition of property or equipment (or the contribution of those
assets directly) are reported as temporarily restricted, and are reclassified to
unrestricted net assets as the specified asset is depreciated, unless the
donor provides more specific directions about the period of its use.
ISO Foundation Temporarily Restricted Net Assets — ISO Foundation
temporarily restricted net assets are resources that are restricted by a donor
for use for a particular purpose or in a particular future period. Included in
this net asset class are the unrestricted net assets of the ISO Foundation due
to implied time restrictions since such payments will be made from the ISO
Foundation to the Society in future periods. This net asset class is also used
to account for contributions where the donor has stipulated that the
contribution be used to purchase and improve land, the Hilbert Circle
Theatre, Symphony Centre, and for the investment return from the Hilbert gift
which is restricted for use for Hilbert Circle Theatre capital requirements, cost
of maintenance, and operations.
ISO Foundation Permanently Restricted Net Assets — ISO Foundation
permanently restricted net assets are resources which must be maintained by
the ISO Foundation in perpetuity. Net assets increase when the ISO
Foundation receives contributions for which donor - imposed restrictions limit
the ISO Foundation's use of the asset and /or its economic benefits and which
neither expire with the passage of time nor can be removed by the ISO
Foundation's meeting certain requirements.
10
INDIANA SYMPHONY SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Pledges Receivable
Pledges receivable consist of unconditional pledges received from a broad base of
contributors. Amounts pledged relate to the Annual Fund, the Life is Better with
Music Campaign (included in Annual Fund contributions in the Statements of
Activities), Project Funding, and Capital Campaign.
Unconditional pledges receivable that are expected to be collected within one year
are recorded at net realizable value. Unconditional pledges receivable that are
expected to be collected in future years are recorded at the present value of their
future cash flows. The discounts on those amounts are computed using United
States Treasury Bill rates with maturities commensurate to the time period of
expected collection of pledges. Discount rates used for the year ended August 31,
2014 ranged from 0.09% to 2.15% and for the year ended August 31, 2013 ranged
from 0.13% to 2.60 %. Amortization of the discounts is included in Contributed
Income.
Management estimates an allowance for uncollectible pledges receivable based on
current economic conditions, historical trends, and current and past experience with
their donor base. At August 31, 2014 and 2013, management determined that an
allowance of $192,019 and $96,830, respectively, was necessary.
Government Grants Receivable
Government grants receivable represent amounts awarded by various government
agencies. Govemment grants receivable are due within one year and are recorded
at their net realizable value. Management estimates an allowance for uncollectible
govemment grants receivable based on current economic conditions, historical
trends, and current and past experience with the individual grantors. Management
determined that no allowance was necessary at August 31, 2014 and 2013.
Accounts Receivable
Accounts receivable are stated at amounts expected to be received for tickets sold
by third party vendors, run out performances, and program advertising. Accounts
are monitored on an ongoing basis and significant effort is made to collect all
amounts due to the Society. After one year, amounts uncollected are written off as
bad debts. No interest is charged on past due accounts.
11
INDIANA SYMPHONY SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
Management estimates an allowance for uncollectible accounts receivable based
on current economic conditions, historical trends, and current and past experience
with their vendor base. Management determined that no allowance was necessary
at August 31, 2014 and 2013.
Property and Equipment
The Society capitalizes at cost all significant purchases of property and equipment
acquired for use, including expenditures that substantially increase the useful lives
of existing assets. Costs of ordinary maintenance and repairs are charged to
expense as incurred. Depreciation is calculated using the straight -line method,
including one -half year's depreciation in the year of acquisition. Property and
equipment are depreciated over their estimated useful lives, which range from three
to thirty -nine years.
Contributed property and equipment are recorded at their fair value at the date of
the gift. Assets donated with explicit restrictions regarding their use, and
contributions of cash that must be used to acquire property and equipment with
specific directions about the period of use, are reported as restricted support.
Absent donor stipulations regarding how long those donated assets must be
maintained, the Society reports expirations of donor restrictions as the donated or
acquired assets are depreciated. The Society reclassifies temporarily restricted net
assets to unrestricted net assets at that time.
The major classes of property and equipment, along with their respective
accumulated depreciation, are as follows at August 31:
Computer Equipment and Software
Musical Instruments and Orchestra Equipment
Stage Equipment
Transportation Equipment
Office Fumiture and Equipment
Hilbert Circle Theatre Property
Leasehold Improvements
Cost
2014
Accumulated
Depreciation
$ 702,376 $ 555,427
2,056,501 1,508,682
1,396,233 1,344,125
94,170 52,113
203,613 203,613
485,744 427,906
10,016,516 8,481,573
$ 14,955,153 $ 12,573,439
Net
Book Value
$ 146,949
547,819
52,108
42,057
-0-
57,838
1,534,943
$ 2,381,714
12
INDIANA SYMPHONY SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
Computer Equipment and Software
Musical Instruments and Orchestra Equipment
Stage Equipment
Transportation Equipment
Office Fumiture and Equipment
Hilbert Circle Theatre Property
Leasehold Improvements
Fair Value of Financial Instruments
2013
Accumulated
Cost Depreciation
$ 774,502
2,042,579
1,388,544
48,456
203,613
465,234
9,330,480
$ 14,253,408
$ 715,189
1,430, 617
1,315,862
48,456
203,387
419,144
8,345,748
$ 12,478,403
Net
Book Value
$ 59,313
611,962
72,682
-0-
226
46,090
984,732
$ 1,775,005
The carrying amount reported in the Statements of Financial Position for accounts
payable, accrued expenses, and other liabilities approximates fair value based on
short-term maturity.
Revenue and Expense Recognition
The Society derives its revenues from the sale of tickets and performance fees as
well as receiving contributions from the general public, governmental agencies,
philanthropic foundations, and other organizations. Ticket sales and performance
fees are recognized as increases in unrestricted net assets when earned. Ticket
sales in advance of concert performances are recorded as deferred revenue.
Pledges, government grants, and operating grants are recorded as assets when
the pledge commitments are received. The related revenue that is not restricted by
the donor or restricted by time is reported as an increase in unrestricted net assets.
Revenue that is restricted by the donor is reported as an increase in unrestricted
net assets if the restriction is met in the reporting period in which the revenue is
received. Expirations of temporary restrictions on net assets, either by fulfillment of
the stipulated purpose or the passage of time, are reported as reclassifications
between the applicable classes of net assets.
Annual fund contributions include amounts contributed to support operations or
specific productions that have been included in the annual operating budget.
Project funding contributions include support for specific projects not included in the
annual operating budget.
Concert Advertising Costs
The Society expenses concert advertising costs in the year in which the related
production occurs. Concert advertising expenses for the years ended August 31,
2014 and 2013 were $1,263,485 and $1,268,689, respectively. Prepaid advertising
expenses are $247,689 and $130,570 as of August 31, 2014 and 2013,
respectively, and are included in prepaid expenses and other assets.
13
INDIANA SYMPHONY SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
Income Taxes
The Society is exempt from Federal and state income taxes on related income
under Section 501(c)(3) of the Internal Revenue Code and similar state law. The
exemption is on all income except unrelated business income as noted under
Section 511 of the Internal Revenue Code. Internal Revenue Code Section 513(a)
defines an unrelated trade or business of an exempt organization as any trade or
business which is not substantially related to the exercise or performance of its
exempt purpose. The Society's net advertising income is considered unrelated
business income. The Society's related advertising expenses offset related income
and no tax was paid during fiscal 2014 and 2013.
Accounting principles generally accepted in the United States of America require
management to evaluate tax positions taken by the Society and recognize a tax
liability if the Society has taken an uncertain position that more likely than not would
not be sustained upon examination by various federal and state taxing authorities.
Management has analyzed the tax positions taken by the Society, and has
concluded that as of August 31, 2014 and 2013, there are no uncertain positions
taken or expected to be taken that would require recognition of a liability or
disclosure in the accompanying financial statements. The Society is subject to
routine audits by taxing jurisdictions; however, there are currently no audits for any
tax periods in progress.
The Society has filed its federal and state income tax returns for periods through
August 31, 2013. These income tax returns are generally open to examination by
the relevant taxing authorities for a period of three years from the later of the date
the return was filed or its due date (including approved extensions).
Reclassifications
Certain amounts in the fiscal 2013 financial statements have been reclassified
herein to conform to the fiscal 2014 presentation.
Subsequent Events
The Society evaluates events occurring subsequent to the date of the financial
statements in determining the accounting for and disclosure of transactions and
events that affect the financial statements. Subsequent events have been
evaluated through November 21, 2014, which is the date the financial statements
are available to be issued.
14
INDIANA SYMPHONY SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
3. PLEDGES RECEIVABLE
Pledges receivable consist of the following at August 31:
Annual Fund
Lilly Endowment, Inc.
Capital Campaign
Project Funding
Total Pledges Receivable
Less Unamortized Discount
Less Allowance for Uncollectible Contributions
Net Pledges Receivable
Amounts Due In:
Less Than One Year
One to Five Years
More Than Five Years
4. LINE OF CREDIT
2014
$ 5,156,611
1,237,000
517,000
-0-
6,910,611
(71,115)
(192,019)
$ 6,647,477
$ 3,907,546
2,995,565
7,500
$ 6,910,611
2013
$ 6,160,088
987,000
781,461
353,771
8,282,320
(134,294)
(96, 830)
$ 8,051,196
$ 3,305,632
4,966, 688
10,000
$ 8,282,320
The Society has an $8,000,000 line of credit agreement with an institutional lender
which expires on January 31, 2015. At August 31, 2014 and 2013, there was
$7,695,543 and $7,334,992, respectively, borrowed against this line. Interest is
charged at the one month LIBOR rate as defined in the agreement plus 0.70%
(0.855% at August 31, 2014). The ISO Foundation has guaranteed the line of
credit and pledged specific assets as collateral. The ISO Foundation's assets are
pledged at a 75% advance ratio, therefore, the maximum amount to be pledged by
the ISO Foundation is $10,667,000.
5. BOARD DESIGNATED NET ASSETS
Board Designated net assets consist of the following at August 31:
2014
2013
Capital Assets $ 115,697 $ 155,179
Capital Campaign -0- 2,000
$ 115,697 $ 157,179
15
INDIANA SYMPHONY SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
All pledges collected in cash or currently due for the Capital Campaign are reported
in the Board Designated fund unless otherwise restricted by the donor. When cash
is collected on these unrestricted pledges, the Board may approve a transfer of
funds to the General Operating fund. During the years ended August 31, 2014 and
2013, Capital Campaign pledges totaling $266,461 and $261,845, respectively,
were collected or became currently due. The Board approved transferring a total of
$264,461 to the General Operating fund for fiscal year 2014 to help fund
operations. The Board approved transferring a total of $367,363 to the General
Operating fund for fiscal year 2013 including $354,846 to help fund operations and
$12,517 for transitional expenses.
Board Designated net assets related to Capital Assets are transferred to the
General Operating fund as the assets are depreciated to offset the depreciation
expense being recognized. During the years ended August 31, 2014 and 2013,
such transfers were $39,482 and $51,073, respectively.
6. TEMPORARILY RESTRICTED NET ASSETS
Temporarily Restricted net assets are available for the following purposes or
periods at August 31:
Society
Annual Fund
Pledges /Grants Restricted Due to Timing
Annual Productions
Capital Campaign Pledges Restricted Due to Timing
Operations in Future Years
Capital Improvements - Funded Depreciation
Project Funding
Total Society
ISO Foundation
Unrestricted Net Assets of the ISO Foundation
Capital Improvements - Funded Depreciation
Pledges Restricted Due to Timing
Educational Purposes
Hilbert Circle Theatre Annual Facility Expenses
General Purposes
Orchestra's Artistic Endeavors
Total ISO Foundation
2014
$ 4,747,434
166,693
499,010
1,237,000
1,520,045
262,267
$ 8,432,449
$ 58,993,337
3,125,402
1,764,081
396,564
1,302,158
-0-
1,434,384
$ 67,015,926
2013
$ 6,167,477
461,559
762,139
987,000
1,534,952
378,037
$ 10,291,164
$ 53,390,742
3,398,473
1,680,545
-0-
453,675
6,252
1,449, 752
$ 60,379,439
16
INDIANA SYMPHONY SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
7. PERMANENTLY RESTRICTED NET ASSETS
Permanently Restricted net assets of the ISO Foundation are
perpetuity and are available to support the following at August 31:
Orchestra's General Operations
Hilbert Circle Theatre Annual Facility Expenses
Educational Purposes
Orchestra's Artistic Endeavors
2014
$ 21,045,084
6,260,000
3,768,425
1,368,613
$ 32,442,122
8. NET ASSETS RELEASED FROM RESTRICTIONS
restricted in
2013
$ 21,045,084
6,260,000
3,768,425
1,313,613
$ 32,387,122
Net assets were released from donor restrictions by incurring expenses satisfying
the restricted purposes or by occurrence of other events specified by donors as
follows during the years ended August 31:
Purpose Restriction Accomplished
Funded Depreciation on Capital Improvements
Project Funding
Capital Campaign Operational Projects
Annual Productions
Expiration of Time Restrictions
Current Year Operations
ISO Foundation Grants to the Society
2014
$ 91,108
115,770
266,461
328,041
2,535,099
987,000
6,459,767
$ 10,783,246
2013
$ 115,417
-o-
261,845
288,000
961,491
987,000
6,345,350
$ 8,959,103
17
INDIANA SYMPHONY SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
9. FUNCTIONAL EXPENSES
Expenses by program and supporting activities, including the allocation of
depreciation of $283,475 and $339,684 and defined benefit pension plan expense
of $1,130,431 and $1,470,402 for the years ended August 31, 2014 and 2013,
respectively, are as follows:
Programs
Orchestra Operations
Concert Production
Marketing
Education
Program Book
Other
Management and General
General and Administrative
Patron Services
Facilities
Fundraising
10. LEASES
Hilbert Circle Theatre
2014 2013
$ 10,199,174
4,754,957
1,803,327
716,994
149,135
39,463
17,663,050
2,217,323
354,448
2,991,950
5,563,721
1,281,746
$ 24,508,517
$ 10,094,199
4,389,013
2,109,658
632,034
126,275
34,279
17,385,458
2,214,318
340,941
2,945,824
5,501,083
1,318,784
$ 24,205,325
The Society has a lease agreement with the ISO Foundation for the Hilbert Circle
Theatre (the Theatre) expiring August 31, 2018. The agreement requires annual
rental payments of $850,000. The Society is responsible for utilities, maintenance,
insurance and other expenses incidental to the operations of the Theatre. During
both fiscal 2014 and 2013, the ISO Foundation contributed the $850,000 of annual
rental expense back to the Society (Note 13).
The Society has a sublease with the ISO Foundation whereby the Society leases
additional lobby space adjacent to Hilbert Circle Theatre. The lease agreement
calls for escalating monthly payments and expires on January 31, 2020. The lease
may be cancelled with at least twelve months prior written notice.
18
INDIANA SYMPHONY SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
Symphony Centre
The Society has a lease agreement with the ISO Foundation for the Symphony
Centre expiring August 31, 2023. At August 31, 2014, the lease agreement
requires annual rental payments aggregating $400,000. The lease agreement
provides for rent increases if additional tenant improvements are incurred by the
ISO Foundation. The Society is responsible for utilities, maintenance and other
operating costs of the facility. During both fiscal 2014 and 2013, the ISO
Foundation contributed the $400,000 of annual rental expense back to the Society
(Note 13).
The Society also subleases office space within the Symphony Centre to various
third party organizations. These agreements have maturity dates ranging from
January 2015 through December 2022.
In August 2014, a section of the exterior facade of the Symphony Centre dislodged
and damaged the roof of an adjacent building. The Society expects the damage
from the incident to be covered by insurance and has accrued the related
deductible of $1,000 as of August 31, 2014 under the general liability policy. The
Society has initiated a review of the structural integrity of the affected area of the
Symphony Centre; however no determination has been reached regarding the
extent of repairs, if any, which may be necessary. As such, no reasonable estimate
of the repair costs or commitment related to capital improvements that will be
required by the Society under the lease terms can be made at this time, and no
provision for loss has been recorded as of August 31, 2014.
Victoria Centre
The Society has an operating lease for a portion of the Victoria Centre. The lease
expires June 30, 2017 and includes one three -year and seven month renewal
option. The lease calls for escalating future minimum lease payments. Total rental
payments under this lease for the years ended August 31, 2014 and 2013 were
$62,081 and $61,128, respectively.
Fletcher Properties
The Society has an operating lease for warehouse space from Fletcher Properties.
The lease expires February 28, 2015. Total rental payments under this lease were
$40,208 for each of the years ended August 31, 2014 and 2013.
Conner Prairie
Effective February 18, 2013, the Society entered into a new operating lease with
Conner Prairie for facilities used for the Symphony on the Prairie Series. The lease
expires September 30, 2015 and includes a one -year extension option. The lease
calls for future minimum lease payments based on a minimum of 24 concerts per
19
INDIANA SYMPHONY SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
year. Total rental payments made to Conner Prairie for the years ended August 31,
2014 and 2013 were $398,944 and $398,342, respectively.
Future Minimum Lease Payments
Future minimum lease payments required under the aforementioned operating
leases are as follows:
Year Ending Hilbert Circle
August 31, Theatre
2015
2016
2017
2018
2019
Thereafter
Minimum
Payments
Less: Sublease
Rentals
$ 974,361
977,343
979,472
982,455
134,585
56,077
Symphony
Centre
Victoria Fletcher Conner
Centre Properties Prairie Total
$ 400,000 $ 63,058 $ 20,104 $ 368,256 $ 1,825,779
400,000 64,060 -0- -0- 1,441,403
400,000 54,093 -0- -0- 1,433,565
400,000 -0- -0- -0- 1,382,455
400,000 -0- -0- -0- 534,585
1,600,000 -0- -0- -0- 1,656,077
4,104,293 3,600,000 181,211 $ 20,104 $ 368,256 8,273,864
-0- (971,135) -0- -0- -0- (971,135)
$ 4,104,293 $ 2,628,865 $ 181,211 $ 20,104 $ 368,256 $ 7,302,729
Total rent expense for the years ended August 31, 2014 and 2013 was $1,873,607
and $1,869,268, respectively, including $1,250,000 for the rental of the Hilbert
Circle Theatre and Symphony Centre. Rent expense includes additional rent for
the Hilbert Circle Theatre lobby expansion of $122,373 and $119,590 for the years
ended August 31, 2014 and 2013, respectively. The additional rents are included
in Facilities expense in the General Operating unrestricted net asset class. Rent
expense has not been reduced by sublease rentals received on the office o perating
leases amounting to $290,865 and $296,366 for the years ended August 31, 2014
and 2013, respectively.
11. PENSION PLANS
Defined Benefit Plan
The Society has a non - contributory defined benefit pension plan for employees
covered by collective bargaining agreements (musicians with a hire date prior to
October 16, 2012 and stagehands) and seven other former employees who were
grandfathered into the plan and whose benefits have been frozen. The Society
makes annual contributions to the defined benefit plan at least equal to the amount
required to satisfy legal funding requirements.
20
INDIANA SYMPHONY SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
The following sets forth the funded status of the plan and amounts shown in the
accompanying Statements of Financial Position at August 31:
Funded Status
Benefit Obligation (both
projected and accumulated)
Fair Value of Plan Assets
Amounts Recognized in the
Statement of Financial Position
Accrued Pension Benefits
Amounts Not Yet Recognized as
Components of Net Periodic Pension Cost
Prior Service Cost
Net Loss
Pension Plan Net Asset Deficit
2014
$ 33,248,531
22,787,117
$ (10,461,414)
$ (10,461,414)
$ 89,588
10,436,826
$ 10,526,414
2013
$ 29,963,656
19,650,727
$ (10,312,929)
$ (10,312,929)
$ 211,305
10,200,007
$ 10,411,312
The measurement dates used in determining the pension benefit measurements
for plan assets and benefit obligations was August 31, 2014 and 2013, respectively.
The discount rate used in determining the actuarial present value of the projected
benefit obligation was 3.72% and 4.44% for fiscal 2014 and 2013, respectively, and
the expected long -term rate of return on assets was 7.50% for both fiscal 2014 and
2013.
The projected benefit obligation was computed using a $25 monthly retirement
benefit per year of service for office staff and a monthly retirement benefit per year
of service for musicians as follows:
For benefit service credited as of August 31, 2007
For benefit service credited commencing on
September 1, 2007 and before September 1, 2008
For benefit service credited commencing on
September 1, 2008 and before September 1, 2009
For benefit service credited commencing on or after
September 1, 2009 and before September 1, 2011
For benefit service credited commencing on or after
September 1, 2011
$ 86
$ 95
$ 105
$ 56
$ 86
21
INDIANA SYMPHONY SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
Net pension cost for the defined benefit plan for the years ended August 31, 2014
and 2013 included the following components:
Service Costs
Interest Costs
Return on Assets
Net Amortization and Deferral
Net Periodic Pension Costs
2014
$ 468,776
1,298,696
(3,233,741)
2,596,700
$ 1,130,431
2013
$ 542,413
1,259,557
(1,845,622)
1,514,054
$ 1,470,402
The amounts included in the pension plan net asset deficit that are expected to be
recognized as components of net periodic pension cost during the fiscal year
ending August 31, 2015 are as follows:
Amortization of Prior Service Cost $ 89,588
Amortization of Net Loss 672,332
$ 761,920
The Society made contributions to the plan of $1,097,048 and $1,782,171 during
the years ended August 31, 2014 and 2013, respectively. The Society expects to
make contributions of $1,456,885 to the plan during the year ending August 31,
2015. There are no participant contributions to the plan. Distributions from the
plan were $1,194,399 and $1,153,111 during the years ended August 31, 2014 and
2013, respectively.
The amount of benefits expected to be paid, based on the same assumptions used
to measure the benefit obligation (including, when applicable, benefits attributable
to estimated future service) through fiscal 2024 are as follows:
Year Ending
August 31,
2015
2016
2017
2018
2019
Years 2020 - 2024
$ 1,401,154
1,644,523
1,741,031
1,813,215
1,867,863
10,427,133
$ 18,894,919
22
INDIANA SYMPHONY SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
The Society's pension plan assets by asset category are as follows at August 31:
Cash and Cash Equivalents
Equity Mutual Funds
Disciplined Equity
International Equity
Small /Mid Cap Equity
Emerging Markets Equity
Fixed Income Mutual Funds
High Yield Bond
Emerging Markets Debt
Core Fixed Income
Opportunistic Income
Dynamic Asset Allocation Fund
2014
2013
$ 4,166 $
5,660,960
4,913,411
2,424,539
1,334,972
1,070,772
1,425,348
3,056,806
988,549
1,907,594
$ 22, 787,117
22
4,568,118
4,183,758
2,022,358
1,144, 334
985,546
1,309,623
2,903,655
966,969
1,566,344
$ 19,650,727
The Society's investment strategy is based on an expectation that equity securities
will outperform debt securities over the long term. Accordingly, the composition of
the Society's plan assets is broadly characterized as a 70% - 30% allocation
between equity and debt securities, respectively. The strategy utilizes indexed U.S.
equity securities and actively managed investment grade debt securities with lesser
allocations to high -yield and international debt securities. Plan assets consist of
mutual funds, which are considered to be Level 1 investments in the fair value
hierarchy (based on unadjusted quoted prices for identical assets in active
markets).
The Society attempts to mitigate investment risk by rebalancing between equity and
debt classes as the Society's contributions and benefit payments are made.
Although changes in interest rates may affect the fair value of a portion of the
investment portfolio and cause unrealized gains or losses, such gains or losses
would not be realized unless the investments are sold. The expected Tong -term
rate of return on plan assets is based on an independent advisor's projection of
return on the target portfolio, reduced by management for conservatism and
consistency.
Defined Contribution Plan
The Society implemented a 403(b) plan effective September 1, 2008. Under the
403(b) plan, the Society will match the staff employees' contributions up to 3% of
eligible compensation. Effective, September 1, 2011, the Society will match
contributions made by musicians covered under the collective bargaining
agreement with at least 40 years credited benefit service up to 5% of eligible
compensation. Effective October 16, 2012, for musicians hired after that date, the
23
INDIANA SYMPHONY SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
Society will contribute 5% of musicians' annual minimum salary covered under the
collective bargaining agreement through the 2015 -16 season, and 8% for the 2016-
17 season. Contributions to the 403(b) plan for the years ended August 31, 2014
and 2013 were $95,470 and $99,990, respectively.
12. SELF - FUNDED MEDICAL PLAN
The Society's medical and dental insurance is covered through a self- funded plan.
The Society is liable for claims under the plan, subject to an annual individual and
aggregate stop -loss insurance coverage of $75,000 and $1,000,000, respectively,
in the current policy year. Medical costs under the self- funded plan for the years
ended August 31, 2014 and 2013 were $1,523,960 and $1,142,383, respectively.
These expenses were offset by employee contributions to the plan of $142,895 and
$133,369, respectively.
The Society also offers a Health Savings Account to all employees covered under
the self- funded plan. Employer contributions to employee health savings accounts
for the years ended August 31, 2014 and 2013 were $106,800 and $98,650,
respectively.
13. INDIANAPOLIS SYMPHONY ORCHESTRA FOUNDATION, INC.
The Society has an $8,000,000 line of credit agreement with an institutional lender
(Note 4) which is guaranteed by the ISO Foundation. The ISO Foundation has
pledged assets as collateral for this line of credit.
Beginning in fiscal 2013, the Society entered into a new service agreement with the
ISO Foundation whereby the Society provides certain management services,
including endowment fund raising, administrative services, office space and
preparing financial records and reports. In return, the ISO Foundation paid the
Society an annual fee of $50,000 in fiscal 2014 and 2013, which is included in the
Statements of Activities under ISO Foundation revenue.
The ISO Foundation contributed $6,459,767 and $6,345,350 to the Society during
the years ended August 31, 2014 and 2013, respectively. The amounts contributed
are included in the Statements of Activities as net assets released from restrictions.
24
INDIANA SYMPHONY SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
The contributions were in support of the following programs or activities:
General Operating Fund
General Operating
Pension Grant
Education Grant
Pops Enhancement
Conductor Laureate
Other
Facilities (Note 10)
2014
$ 3,958,306
1,000,000
188,421
35,000
24,657
3,383
5,209,767
1,250,000
$ 6,459,767
2013
$ 3,453,822
1,000,000
478,823
86,389
67,376
8,940
5,095,350
1,250,000
$ 6,345,350
During fiscal 2013, the Society and ISO Foundation developed and implemented a
new business model that includes a more fiscally responsible operating draw grant
to the Society by the ISO Foundation. The general operating fund draw amount
above for fiscal 2014 and 2013 includes a 5% draw from the ISO Foundation's
investment portfolio, plus an additional $1,000,000 to reduce the Society's
unfunded pension liability.
The Society owed $500 and $84,812 to the ISO Foundation at August 31, 2014
and 2013, respectively.
14. CONDITIONAL PLEDGE
The Society received a pledge for general operating purposes from the Lilly
Endowment, Inc. for $1,237,000 for the period September 1, 2013 to August 31,
2014. Of the total pledge, $250,000 was conditioned on the Society raising
qualifying matching funds for new or increased contributions. The conditions were
fulfilled during the year ended August 31, 2014 and the $250,000 portion of the
pledge was recorded in the Society's financial statements as an unrestricted
contribution. In addition, the $987,000 non - conditional portion of the pledge was
released from temporarily restricted to unrestricted net assets in the Society's
financial statements as the timing requirement had been met in fiscal 2014.
During fiscal 2014, the Lilly Endowment, Inc. also pledged $1,237,000 for the
period September 1, 2014 to August 31, 2015, however, no portion of the pledge
was conditioned.
25
INDIANA SYMPHONY SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
15. CONCENTRATIONS
At August 31, 2014 and 2013, 41% and 72 %, respectively, of accounts receivable
were due from Marsh Supermarkets, LLC related to Symphony on the Prairie.
At August 31, 2014 and 2013, a pledge from one donor (Note 14) comprised 18%
and 12 %, respectively, of the gross pledge receivable balance.
Contributions from one donor (including the contributions described in Note 14)
represented approximately 19% and 22% of contributed income during the years
ended August 31, 2014 and 2013, respectively.
16. RISKS AND UNCERTAINTIES
The Society's defined benefit pension plan holds investments in debt and equity
securities (Note 11). In addition, a substantial portion of the assets of the ISO
Foundation are invested in a diversified long -term investment portfolio. Such
investments are exposed to various risks such as interest rate, market and credit.
Due to the level of risk associated with these securities and the level of uncertainty
related to changes in the value, it is at least reasonably possible that changes in the
various risk factors will occur in the near term that could materially affect the
amounts reported in the accompanying financial statements.
17. COLLECTIVE BARGAINING AGREEMENTS WITH MUSICIANS AND
STAGEHANDS
The Society recognizes Indianapolis Musicians Local No. 3 of the American
Federation of Musicians (Musicians' Union) and the International Alliance of
Theatrical Stage Employees Local No. 30 (Stagehands' Union) as the collective
bargaining agents for its musicians and stagehands, with respect to wages, hours
and conditions of employment.
The Society's prior contract with the musicians ended on September 2, 2012.
During the negotiations between the Society and the Musicians' Union toward a
new collective bargaining agreement there was a five week interruption in the
Society's concert schedule. The current Society agreement with the Musicians'
Union is effective through September 3, 2017.
The current Society agreement with the Stagehands' Union is effective through
August 31, 2018.
26
INDIANA SYMPHONY SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
18. MANAGEMENT'S OPERATIONAL PLANS
The Society has an unrestricted net asset deficit of $19,749,342 and $19,859,013
as of August 31, 2014 and 2013, respectively, resulting from operational deficits in
prior years and costs associated with the defined benefit pension plan.
The Society is operating under a new business model based on financially
responsible operating draws from the ISO Foundation (Note 13). Fiscal 2013 was
the first year of a five -year plan prepared to enable the Society to eliminate its
annual operating deficits while providing the cash flow required for contributions to
the defined benefit pension plan. The Society's change in net assets in the
General Operating fund was a positive $266,255 and $235,558 for the years ended
August 31, 2014 and 2013, respectively. Improvements resulted from various
expense reductions and increases in earned and contributed income.
The Society's line of credit (Note 4) matures on January 31, 2015. It is
management's intention to negotiate a renewal and extension of this credit facility,
although no renewal commitments have yet been sought or received from the
lender.
Management and the Board understand that the continued success of the Society
is dependent on achieving the operational, sales and fundraising results outlined in
the Society's annual operating budgets, and its ability to maintain appropriate credit
facilities. It is not possible at this time to predict the success of these plans.
27