The Museum of Modern Art
Consolidated Financial Statements
June 30, 2015 and 2014

The Museum of Modern Art
Index
June 30, 2015 and 2014
Page(s)Independent Auditor’s Report.............................................................................................................. 1
Consolidated Financial Statements
Statements of Financial Position ............................................................................................................. 2
Statements of Unrestricted Revenues, Expenses andChanges in Unrestricted Net Assets........................................................................................................ 3
Statements of Changes in Net Assets..................................................................................................... 4
Statements of Cash Flows ...................................................................................................................... 5
Notes to Financial Statements .......................................................................................................... 6–35

Independent Auditor’s Report
To the Board of Trustees of
The Museum of Modern Art
We have audited the accompanying consolidated financial statements of The Museum of Modern Art (the“Museum”), which comprise the consolidated statements of financial position as of June 30, 2015 and2014, and the related consolidated statements of unrestricted revenues, expenses and changes inunrestricted net assets, of changes in net assets and of cash flows for the years then ended.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated 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 preparationand fair presentation of consolidated 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 the consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the consolidated financial statements. The procedures selected depend on our judgment, including theassessment of the risks of material misstatement of the consolidated financial statements, whether due tofraud or error. In making those risk assessments, we consider internal control relevant to the Museum’s
preparation and fair presentation of the consolidated 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 Museum’s internal control. Accordingly, we express no such opinion. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness ofsignificant accounting estimates made by management, as well as evaluating the overall presentation of
the consolidated financial statements. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of The Museum of Modern Art at June 30, 2015 and 2014, and theirchanges in net assets and cash flows for the years then ended in accordance with accounting principles
generally accepted in the United States of America.

October 7, 2015
PricewaterhouseCoopers LLP, PricewaterhouseCoopers Center, 300 Madison Avenue, New York, NY 10017
T: (646) 471 3000, F: (813) 286 6000, www.pwc.com/us

The Museum of Modern Art
Consolidated Statements of Financial Position
June 30, 2015 and 20142015

(in thousands of dollars)
AssetsCash and cash equivalents
Receivables
Accounts receivable and other
Contributions receivable, net
The Trust for Cultural Resources
Inventories
Prepaid expenses and other assets
Investments
Accrued investment income and other receivables
Investments, at fair value
Interest in net assets of International Council
Property, plant and equipment, net
Museum collections (Note 1)
Total assets
Liabilities and Net Assets
Accounts payable, accrued expenses and other liabilities
Deferred revenue
Loans payable and bond premium, net of accumulated
amortization, of $9,111 and $12,070 in 2015 and 2014, respectively
Pension and postretirement benefit obligations
Total liabilities$$

54,076

7,852
191,310
34,532
12,6809,710

7,001
176,10735,395
11,21012,046

2,541
907,428
6,632
480,163-

4,186
838,906
6,427
502,310-$

1,736,730$

1,647,664$

42,7082,310$

41,39558,227

Net Assets
Unrestricted
Temporarily restricted
Permanently
Permanently restricted
restricted A16
Total net assets
Total liabilities and net assets

83,882

2014$

266,766
65,181
376,965

269,725
54,918424,265

777,724
332,895
249,146
1,359,765

704,936
270,545247,918
1,223,399

1,736,730$

1,647,664

The accompanying notes are an integral part of these consolidated financial statements.
2

The Museum of Modern Art
Consolidated Statements of Unrestricted Revenues,
Expenses and Changes in Unrestricted Net Assets
Years Ended June 30, 2015 and 2014
2015
Unrestricted Net Assets
Plant andEquipment
Funded by
Total
MuseumDesignatedUnrestricted
Operations
Gifts
Net Assets(in thousands of dollars)
Operating revenues and other support
Admissions
Membership
Investment income-spending policy
Annual fund contributions
Other grants and contributions
Circulating exhibition fees
Other
Revenue of auxiliary activities$

32,98918,042
29,62811,30820,9291,234
8,030
58,813$-$32,98918,042
29,62811,30820,9291,234
8,030
58,8132014
Unrestricted Net Assets
Plant andEquipment
Funded by
Total
MuseumDesignatedUnrestricted
Operations
Gifts
Net Assets$

31,75916,97528,296
12,661
18,6082,627
7,873
54,152$-$31,75916,97528,296
12,661
18,6082,627
7,873
54,152

Total operating revenues and other support

180,973-

180,973

172,951-

172,951

Net assets released from restrictions to fund operations

20,690-20,69019,574-

19,574

201,663-

201,663

192,525-

192,525

41,99012,955
5,802
54,471
4,747
4,293
11,64628,525
4,784
28,154

21,855-41,99012,955
5,802
54,471
26,602
4,293
11,64628,525
4,784
28,15440,41911,596
5,321
50,663
4,064
4,725
11,292
27,4784,712
26,45422,353-40,41911,596
5,321
50,663
26,417
4,725
11,292
27,4784,712
26,454

197,367

21,855219,222

186,724

22,353

209,077

4,296(21,855)(17,559)

5,801(22,353)(16,552)(25,249)
25,2493,144-(25,249)
25,2493,144(33,265)
33,265
5,718-(33,265)
33,265
5,718

2,510
2,215
(4,865)

-

2,510
2,215
(4,865)51,053
3,557(2,168)-51,053
3,557(2,168)(8,565)95,908-(8,565)95,908(6,040)--(6,040)-Total operating revenues and othersupport and reclassifications
Operating expenses
Curatorial and related support services
Exhibitions
Other museum programs
Cost of sales/auxiliary activities
Depreciation (nonauxiliary)
Public services
Membership, development and cultivation
Facilities, security and other
Public information
Administration and otherTotal operating expenses
Excess (deficit) of operating revenues and support
over operating expenses
Nonoperating revenues, expenses and other support
Acquisition of works of arts
Net assets released from restrictions for art acquisitions
Net assets released from restrictions for debt service and reduction
Excess of investment income over amounts designatedfor operations and specific purposes
Board-designated and other contributions, net
Defined benefit plan changes other than net periodic benefit cost
Interest expense, change in fair value of interest rate
swap agreements and other financing costs
Gain on sale of development rights
Total nonoperating revenues,
expenses and other support

90,347-

90,347

52,120-52,120Change in unrestricted net assets

94,643(21,855)

72,78857,921(22,353)

35,568Unrestricted net assets
Beginning of year
End of year

481,558$

223,378

576,201$

201,523

704,936$

777,724

423,637$

481,558

245,731$

223,378

669,368$

The accompanying notes are an integral part of these consolidated financial statements.
3704,936

The Museum of Modern Art
Consolidated Statements of Changes in Net Assets
Years Ended June 30, 2015 and 20142015

(in thousands of dollars)
Unrestricted net assets
Change in unrestricted net assets$

72,7882014$

35,568

Temporarily restricted net assets
Capital gifts and other contributions
Interest in net assets of International Council
Investment return
Net assets released from restriction
Sales of works of art
Change in temporarily restricted net assets

85,0532
7,687(49,083)
18,691
62,35073,016
5,372
36,060(58,557)
29,83285,723

Permanently restricted net assets
Capital gifts and other contributions
Interest in net assets of International Council
Investment return
Change in permanently restricted net assets
Total change in net assets

1,131
34
63
1,228
136,366

1,452
1,055
49
2,556
123,847

1,223,399

1,099,552

Net assets
Beginning of year
End of year$

1,359,765$

1,223,399

The accompanying notes are an integral part of these consolidated financial statements.
4

The Museum of Modern Art
Consolidated Statements of Cash Flows
Years Ended June 30, 2015 and 2014
(in thousands of dollars)

2015

Cash flows from operating activities
Change in net assets
Adjustments to reconcile change in net assets to net cash(used in) provided by operating activities
Depreciation and amortization
Defined benefit plan changes other than net periodic benefit cost
Change in interest in net assets of International Council
Net realized gains and unrealized appreciation on investments
Contributions restricted for capital acquisition and permanent endowment
Contributed securities
Change in fair value of interest rate swap agreement
Sales of works of art
Acquisition of works of art
Gain on sale of development rights
Changes in assets and liabilities
Increase in accounts receivable and other
Increase in contributions receivable
Decrease in accrued investment income and other investment
receivables(Increase) decrease in inventories
Decrease (increase) in prepaid expenses and other assets
Increase in accounts payable, accrued expenses and other liabilities(Decrease) increase in deferred revenue
Net cash (used in) provided by operating activities$

Cash flows from investing activities
Purchases of property, plant and equipment
Proceeds from disposition of investments
Purchase of investments
Distributions from Trust for Cultural Resources
Sales of works of art
Acquisition of works of art
Proceeds from sale of development rights
Net cash provided by (used in) investing activities
Cash flows from financing activities
Contributions restricted for capital acquisition and permanent endowment
Proceeds from debt issuance
Repayment of debt
Net cash provided by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents
Beginning of year

136,366

2014$

123,847

24,377
4,865(205)(40,574)(41,112)(1,769)(358)(18,691)
25,249(95,908)

24,135
2,168(6,427)(111,497)(34,279)(3,768)(359)(29,832)
33,265-(851)(15,203)(640)(6,044)

3,414(1,470)2,336
4,674(1,007)(15,867)

13,384
567
(567)
17
6,627
10,597(23,882)
209,876(237,824)
863
18,691(25,249)
62,086
4,561(11,309)
304,035(310,962)
250
29,832(33,265)(21,419)

41,112
1,200(1,200)41,11229,80634,2796,200(8,200)32,27921,45754,07632,619End of year$

83,882$54,076

Supplemental disclosures
Cash paid in the year for interest
Accruals of property, plant and equipment acquisitions$

12,157
2,395$

12,1602,331

The accompanying notes are an integral part of these consolidated financial statements.
5

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
1.

Organization and Summary of Significant Accounting Policies
The accompanying consolidated financial statements have been prepared on the accrual basis ofaccounting in conformity with accounting principles generally accepted in the United States ofAmerica and reflect the consolidation of the following entities:


The Museum of Modern Art (the “Museum”);



P.S. 1 Contemporary Art Center (“MoMA PS1”);Modern and Contemporary Art Support Corp. (the “Support Corp”); and

AFE, LLC.

Intercompany transactions have been eliminated in consolidation. The Museum is the solemember of MoMA PS1, the Support Corp, and AFE, LLC. In addition, the International Council of
The Museum of Modern Art (the “Council”) provides exhibition and programming support to theMuseum. In 2014, the Council amended its by-laws to exclusively support the Museum in its
international programs and activities. As a result of this amendment, the Museum has recorded its
interest in 100% of the Council’s net assets of $6,632 and $6,427 in the consolidated statements offinancial position as of June 30, 2015 and 2014, respectively. These net assets are classified aseither temporarily or permanently restricted due to timing or donor restrictions. The Council’s net
assets consist primarily of cash and cash equivalents and investments which were $379 and$6,272, respectively, at June 30, 2015 and $304 and $6,084, respectively, at June 30, 2014. All of
the Council’s investments (as of June 30, 2015 and 2014) are maintained within the Museum’s
investment portfolio (Notes 3 and 4).
The Museum, MoMA PS1, the Support Corp and the Council are not-for-profit organizations
exempt from tax under Section 501(c)(3) of the Internal Revenue Code; AFE, LLC is a limited
liability corporation.
The Museum’s significant accounting policies are described below:
Collections
The Museum is chartered as an educational institution whose collection of modern andcontemporary art is made available to its members and the public to encourage an ever-deeper
understanding and enjoyment of such art by the diverse local, national, and international audiencesthat it serves. Through the leadership of its Board of Trustees (the “Board”) and staff, the Museum
strives to establish, preserve, and document a permanent collection of the highest order thatreflects the vitality, complexity and unfolding patterns of modern and contemporary art; present
exhibitions and educational programs of unparalleled significance; sustain a library, archives, andconservation laboratory that are recognized as international centers of research; and support
scholarship and publications of preeminent intellectual merit.

6

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
The Museum’s collections, acquired through purchase and contributions, are not recognized asassets on the consolidated statements of financial position. Purchases of collection items arerecorded in the year in which the items were acquired as decreases in unrestricted net assets.
Contributed collection items are not reflected in the consolidated financial statements. Proceedsfrom sales of works of art, which are reflected as increases in temporarily restricted net assets, areused exclusively to acquire other items for the collection.
Net Assets
The Museum reports information regarding its consolidated financial position and changes in
activities in one of three classes of net assets: permanently restricted, temporarily restricted, andunrestricted.
Permanently restricted net assets contain donor-imposed restrictions stipulating that theresources be maintained permanently but permit the Museum to use or expend part or all of
the investment return from the donated assets for specified or unspecified purposes (Note 10).

Temporarily restricted net assets contain donor-imposed restrictions that permit the Museum
to use up or expend the donated assets as specified. The restriction is satisfied either by thepassage of time or by actions of the Museum. Investment income and gains/losses on
permanently restricted net assets are reported as temporarily restricted until appropriated for
expenditure in accordance with donor imposed stipulations. The appropriation and spendingof such income is subject to a standard of prudence, as more fully disclosed in Note 10.

Unrestricted net assets are neither permanently restricted nor temporarily restricted bydonor-imposed restrictions. As reflected in the accompanying consolidated statements offinancial position, the Museum has designated unrestricted net assets into the following two
categories:a.

Museum operations comprise net assets that are an integral part of the Museum’s
programs and supporting activities, including fixed assets purchased from general
operating support funds and net assets designated for long-term investments which
include realized capital gains and unrealized appreciation on permanently restricted net
assets which have no donor-imposed restrictions on either income or capital
appreciation.

b.

Plant and equipment funded by designated gifts represents fixed assets constructed or
acquired with donor specified contributions.

Contributions
Contributions, including promises to give, are recorded as restricted support if they are received
with donor stipulations that limit the use of the donated assets. When a donor restriction expires,that is, when a stipulated purpose restriction is satisfied either by the passage of time or the actionsof the Museum, temporarily restricted net assets are reclassified to unrestricted net assets andreported in the consolidated statements of unrestricted revenues, expenses and changes in net
assets as net assets released from restrictions. It is the Museum’s policy to record temporarily
restricted contributions and investment returns thereon that are received and expended in thesame accounting period in the unrestricted net asset category.

7

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
It is the Museum’s policy to recognize contributions restricted by a donor for the acquisition orconstruction of long-lived assets as temporarily restricted support and to reclassify such support tounrestricted net assets as net assets released from restriction when the asset has been acquired
and placed in service.
Nonmonetary contributions are recorded at estimated fair value at date of receipt if the Museum
received certain goods and services that meet criteria under generally accepted accounting
principles (“GAAP”) for recognition as contributions. No material nonmonetary contributions weremade in the years ended June 30, 2015 and 2014. A substantial number of volunteers havecontributed significant amounts of time to the Museum; however, no amounts have been reflectedin the accompanying consolidated financial statements for such contributed services as these
services do not meet the criteria for recognition as contributions under GAAP. Contributed
securities of $7,722 and $12,175 were received and subsequently liquidated in 2015 and 2014,
respectively. Additionally, contributed securities of approximately $1,769 and $3,768 werereceived in June 2015 and June 2014, respectively, and subsequently liquidated after the fiscal
year end.
Property, Plant and Equipment
Property, plant and equipment are stated at cost, if purchased, or, if donated, at a fair value at dateof gift. Depreciation is computed by the straight-line basis over the estimated useful life of the
Buildings and building components
Leasehold improvements
Equipment, machinery and other
Software5 to 50 years
Lesser of useful life or lease term
5 to 20 years
3 to 5 years

Investments
The long term focus of the Museum’s investment portfolio is to support the Museum’s mission by
providing a reliable source of funds for current and future use.
Equity securities, registered mutual funds and exchange traded funds are reported on the basis ofquoted market value as reported on the last business day of the year on securities exchanges
throughout the world. Government and corporate bonds are valued using market quotations.
Income from pooled investments and realized gains and losses and unrealized appreciation anddepreciation on security transactions are allocated among individual restricted and unrestrictedfunds on the basis of the respective percentage share in the fund balance which exists at the
beginning of each month in which income and realized gains or losses and unrealized appreciationand depreciation are earned.

8

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
The Museum’s investment funds, which include equity funds, fixed income funds, hedge funds,
private equity funds and real assets, consist of the Museum’s ownership interest in externallymanaged funds, which may be invested in less liquid investments. The fair value of theseinvestments is determined based on the net asset value (the “NAV”) provided by the external
investment managers of the underlying funds. For all these investments fair value represents theMuseum’s original investment plus the Museum’s allocated share of income, realized gains andlosses and unrealized appreciation and depreciation, net of fees and distributions. The Museum
believes that the NAV of these investments is a reasonable estimate of fair value as of June 30,
2015 and 2014. Because these investments may not be readily marketable, the fair value may besubject to uncertainty and, therefore, may differ from the value that would have been used had aready market for the investment existed. Such differences could be material. The amount of gainor loss associated with these investments is reflected in the accompanying consolidated financial
statements.
Purchases and sales are reflected on a trade-date basis. Realized gains and losses are
determined on the basis of average cost of securities sold and are reflected in the consolidated
statements of unrestricted revenues, expenses and changes in unrestricted net assets. Dividend
income is recorded on the ex-dividend date, and interest income is recorded on an accrual basis.
Investments denominated in foreign currency are translated at the year-end spot rate.
Inventories
The Museum values its inventories, consisting primarily of publishing and retailing merchandise, atthe lower of weighted average cost or market.
Cash and Cash Equivalents
The Museum considers all highly liquid investments with maturities of three months or less andmoney market funds when purchased, other than those held in the investment portfolio, to be cash
equivalents.
Museum Operations
The Museum includes in its measure of operations all revenues and expenses that are an integral
part of its programs and supporting activities. Museum operations do not include acquisition of art
work, net assets released from restrictions for art and capital acquisitions and debt reduction,
excess of investment income over amounts designated for operations and specific purposes,interest expense, change in fair value of interest rate swap agreements and other financing costs,
board-designated and other contributions, net defined benefit plan changes other than net periodic
benefit cost, or gain on sale of development rights. The measure of operations also includes 5% ofinvestment income pursuant to the spending policy (Note 4), but excludes investment return inexcess of that amount.
Membership, Development and Cultivation
Membership, development and cultivation expenses were $11,646 and $11,292, respectively, forthe years ended June 30, 2015 and 2014. These amounts include costs attributable to all
fundraising activities including Museum operations, expansion and renovation, endowment, and art
acquisitions. These costs include current and future donor cultivation, acquisition and retention ofmembership, membership fulfillment costs, fundraising events for the benefit of the Museum andcontribution processing and acknowledgement.

9

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
Bond Issuance Costs
Bond issuance costs, included in prepaid expenses and other assets in the consolidated
statements of financial position, represent costs to obtain financing for various projects of theMuseum. Amortization of these costs extends over the term of the applicable loans.
Functional Allocation of Expenses
The cost of providing program and supporting services has been summarized in Note 15.
Advertising Expense
Advertising is recorded as expense in the period incurred. Advertising expense for the years
ended June 30, 2015 and 2014 was $3,460 and $3,102, respectively.
Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make estimates andassumptions that affect the reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the dates of the financial statements, and the reported amounts of revenues
and expenses during the reporting period. The most significant estimates include the valuation
assumptions associated with investments without readily determinable fair values, net realizablevalue of contributions receivable, and pension and postretirement benefit liabilities. Actual results
could differ from those estimates.
Derivative Instruments
The Museum records derivative instruments (e.g., interest rate swap agreements) at fair value inaccordance with Derivatives and Hedges Accounting and Fair Value Accounting guidance. Thechange in fair value during the reporting period together with the net effect of the interest rate swap
is recognized below the operating measure in the consolidated statements of unrestricted
revenues, expenses and changes in unrestricted net assets.
New Accounting Pronouncements
During 2015, the Museum early adopted new guidance about Fair Value Measurement andDisclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its
Equivalent). This guidance requires the Museum to present investments that use net asset value(NAV) as a practical expedient for valuation purposes separately from other investments
categorized in the fair value hierarchy described in Note 3. This disclosure change, which wasapplied retrospectively, can be seen in the investment leveling tables shown in Note 3 for bothfiscal years 2015 and 2014.
In May 2014, the FASB issued a standard on Revenue from Contracts with Customers. This
standard implements a single framework for recognition of all revenue earned from customers.
This framework ensures that entities appropriately reflect the consideration to which they expect tobe entitled in exchange for goods and services by allocating transaction price to identified
performance obligations and recognizing revenue as performance obligations are satisfied.
Qualitative and quantitative disclosures are required to enable users of financial statements tounderstand the nature, amount, timing, and uncertainty of revenue and cash flows arising fromcontracts with customers. The standard is effective for fiscal years beginning after December 15,
2017. The Museum is evaluating the impact this will have on the consolidated financial statements
beginning in fiscal year 2019.

10

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
2.

Contributions Receivable
Contributions receivable at June 30, 2015 and 2014 are as follows:
2015
Museum operations and programs
Future periods-split interest agreements
Capital construction and acquisition$

Less: Discount for present value
Allowance for doubtful accounts

124,488
1,418
82,937
208,843

2014$(4,734)(12,799)

Amounts due inLess than one year
One to five years
More than five years

130,449
1,418
60,587
192,454(3,542)(12,805)$

191,310$

176,107$

39,99440,930127,919$

25,28835,011132,155$

208,843$

192,454

Multi-year pledges initially fair valued in fiscal year 2015 and 2014 are computed using a risk freerate adjusted for a market risk premium or the credit worthiness of the donor.
3.

Financial Instruments
The Museum follows guidance with respect to accounting and reporting for the fair value of theirfinancial assets and liabilities. This guidance establishes a fair value hierarchy that prioritizes the
inputs to valuation techniques used to measure fair value. Fair value is defined as the exchange
price that would be received for an asset or paid to transfer a liability (an exit price) in the principal
or most advantageous market for the asset or liability in an orderly transaction between participantson the measurement date. Fair value requires an organization to determine the unit of account, themechanism of hypothetical transfer, and the appropriate markets for the asset or liability being
measured.
This guidance also establishes a hierarchy of valuation inputs based on the extent to which the
inputs are observable in the marketplace. Observable inputs reflect market data obtained fromsources independent of the reporting entity and unobservable inputs reflect the entities own
assumptions about how market participants would value an asset or liability based on the best
information available. Valuation techniques used to measure fair value must maximize the use ofobservable inputs and minimize the use of unobservable inputs. The standard describes a fairvalue hierarchy based on three levels of inputs, of which the first two are considered observableand the last unobservable, that may be used to measure fair value.

11

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
The three input levels are as follows:
Level 1

Quoted prices in active markets that the Museum has the ability to access for identicalassets and liabilities for which significant observable inputs exist. Market price data is
generally obtained from exchange or dealer markets. The Museum does not adjust
the quoted price for such assets and liabilities. Investments included in Level 1 may
include certain equity securities, registered mutual funds and exchange traded funds.

Level 2

Inputs other than Level 1 that are observable, either directly or indirectly, such as
quoted prices for similar assets or liabilities; quoted prices in markets that are notactive; or other inputs that are observable or can be corroborated by observable
market data for substantially the same term of assets or liabilities. This includes useof model based valuations techniques for which all significant assumptions areobservable in the market or can be corroborated by observable market data for
substantially the full term of the assets. Inputs are obtained from various sources
including market participants, dealers and brokers.
Investments included in Level 2 may include certain U.S. government bonds, money
market funds, fixed income, equity funds and other multi-strategy funds, for whichobservable inputs exist and trade in markets not considered to be active.

Level 3

Unobservable inputs, as they trade infrequently or not at all, that are supported bylittle or no market activity and that are significant to the fair value of the assets or
liabilities.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest levelof input that is significant to the fair value measurement. Inputs are used in applying the various
valuation techniques and broadly refer to the assumptions that market participants use to makevaluation decisions. Inputs may include price information, credit data, liquidity statistics and otherfactors. The Museum considers observable data to be that market data which is readily available
and reliable and provided by independent sources. The categorization of a financial instrument
within the hierarchy is therefore based upon the pricing transparency of the instrument and does
not necessarily correspond to the Museum’s perceived risk of that investment.
The Fair Value Option for financial assets and liabilities gives entities the option, at specific election
dates, to measure certain financial assets and liabilities at fair value. The election may be applied
to financial assets and liabilities on an instrument by instrument basis, is irrevocable, and may only
be applied to entire instruments. Unrealized gains and losses on instruments for which the fairvalue option has been elected are reported in earnings at each subsequent reporting date. During
fiscal year 2015 and 2014, the Museum did not elect fair value accounting for any assets or
liabilities that are not currently required to be measured at fair value.

12

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
The following tables summarize the financial instruments reported within the consolidated
statements of financial position carried at fair value as of June 30, 2015 and 2014, by caption andlevel within the fair value accounting hierarchy:
QuotedPrices in
ActiveMarkets(Level 1)
AssetsCash equivalents
Government and corporate bonds
Equity securities
Futures contracts
Investment funds
Registered mutual funds
Fixed income$

Significant
Other
Observable
Inputs(Level 2)

223,972
3,765$

35,722
263,459

98,09543,382-Significant
Unobservable
Inputs(Level 3)$532
142,009-

June 30,
2015
Total Fair
Value

$

-

35,722
532
405,468

Investments measured at NAV

584,962

Total assets at fair value
Liabilities
Interest rate swaps

98,09543,382
223,972
3,765$

990,430

$

-

$

6,821

$

-

$

6,821

Total liabilities at fair value $

-

$

6,821

$

-

$

6,821

QuotedPrices in
ActiveMarkets(Level 1)
AssetsCash equivalents
Government and corporate bonds
Equity securities
Investment funds
Registered mutual funds
Fixed income$

Significant
Other
Observable
Inputs(Level 2)

200,947$

34,436
235,383

88,90235,751-Significant
Unobservable
Inputs(Level 3)$

607
125,260-

June 30,2014
Total Fair
Value

$

-

34,436607
360,643

Investments measured at NAV

534,109

Total assets at fair value
Liabilities
Interest rate swaps

88,90235,751200,947$

894,752

$

-

$

7,179

$

-

$

7,179

Total liabilities at fair value $

-

$

7,179

$

-

$

7,179

There were no significant transfers in or out of Level 1 and Level 2 of the fair value hierarchy.

13

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
Financial instruments such as those above, involve, to varying degrees, elements of market risk
and credit risk in excess of the amounts recorded on the consolidated statements of financial
position. For the Museum, market risk represents the potential loss due to the decrease in thevalue of financial instruments; credit risk represents the maximum potential loss due to possible
nonperformance of contract terms by obligors and counter parties.
Interest rate swap arrangements have inputs which can generally be corroborated by market data
and are therefore classified as Level 2. Interest rate swaps are valued using both observable andunobservable inputs, such as quotations from the counter party, whenever available, andconsidered reliable. The value of the interest rate swap depends upon the contractual terms of andspecific risks inherent in the instrument as well as the availability and reliability of observable
inputs.
The methods described above may produce a fair value calculation that may not be indicative of
net realizable value or reflective of future values. Furthermore, while the Museum believes its
valuation methods are appropriate and consistent with other market participants, the use ofdifferent methodologies or assumptions to determine the fair value of certain financial instruments
could result in a different estimate of fair value at the reporting date.
The Museum uses NAV to determine the fair value of all underlying investments which (a) do nothave a readily determinable fair value and (b) prepare their financial statements consistent with themeasurement policies of an investment company or have the attributes of an investment company.

14

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
Per the applicable guidance, the following tables list investments in other investment companies(in partnership format) by major category. All percentages are based on NAV as of June 30, 2015
and 2014.

Investment
Strategy
Fixed Income Investment funds

Adjusted Fair
Value
Determined
Using NAV in Number of(000's)Funds$

UnfundedCommitments(in 000's)

Redemption Terms

Redemption
Restrictions andTerms in Placeat Year End

Redemption
Restrictions andTerms

31,794

2

N/A

N/A

Monthly: 67% (with 30 days
notice)Quarterly: 33% (with 60 days
notice)1 fund, representing
67% of assets has aGate, triggered at
10% of fund-level
NAV monthly or 40%
annually.

None

Equity - Investment
funds

239,591

5

N/A

N/A

Bimonthly: 14% (with 3 days
notice)Month-end: 26% (with 15 days
notice)Quarterly: 41% (with 30 days
notice)Annual at 12/31: 10% (with 90
days notice)
12/31/17 and then annual: 9%(with 90 days notice)

None

None

Absolute Return Multi-strategy andother67,178

5

N/A

N/A

Quarterly: 23%
Annual at 12/31: 62%
Sidepocket (> 3 Yrs): 15%(All funds require notice periods
that range from 60 to 180 days)

1 fund, representing
23% of assets has aGate, triggered at
33% of original
investment over arolling 12-month
period.

Full redemption requests
made for two funds(representing 5% of assets),with remaining balances
comprised of special
investments to be liquidated
over time.

Absolute Return Equity long/short

23,122

3

N/A

N/A

Quarterly: 100% (with 30 days
notice)Pending final redemption: <1%

2 funds, representing
100% of assets haveGates. Gates are
triggered at 25% of
fund-level NAV for
both funds.

The remaining fund (<1% ofassets) is pending final
redemption.

Absolute Return Credit

93,487

6

N/A

N/A

Annual at 12/31: 47%
Quarterly: 12%
6/30/16 and relocking for 36
months: 17%
3/31/17 and relocking for 24months: 3%
12/31/17 and relocking for 36
months: 17%
3/31/18 and relocking for 24months: 3%
Sidepocket (> 3 Yrs): <1%
Pending final redemption: <1%
5 funds, representing 100% ofassets, require 90 days notice.
The remaining fund is pending
final redemption.

1 fund, representing
24% of assets has aGate, triggered at
20% of fund-level
NAV annually.

<1% (one fund) was fully
redeemed on 6/30/11. An
investor-level gate was
imposed, and theinvestment will be fully
redeemed over several
quarters.

Absolute Return Event driven

41,016

2

N/A

N/A

Quarterly: 100%
(All funds require notice periods
that range from 45 to 60 days)

2 funds, representing
100% of assets haveGates. One Gate is
triggered at 25% ofinvestor-level NAV /quarter, and the otheris triggered at 25% of
fund-level NAV /quarter.

None

Private Equity

80,24027

0-3 Years: 42%
3-5 Years: 37%>5 Years: 21%$

98,989

N/A

N/A

N/A

Real Assets

8,534

7

0-3 Years: 30%
3-5 Years: 0%>5 Years: 70%

13,726

N/A

N/A

N/A

$
1

Remaining
Life1584,962$ 112,715

Defined as the period between June 30, 2015 and the Termination Date of the fund as defined in legal documentation.

15

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)

Investment
Strategy
Fixed Income–Investment funds

Adjusted Fair
Value
Determined
Using NAV in(000's)$Remaining
Life1

UnfundedCommitments(in 000's)

Redemption
Restrictions andTerms in Placeat Year End

Redemption
Restrictions and
Terms

Redemption Terms

26,501

2

N/A

N/A

Monthly: 60% (with 30 days notice)
Quarterly: 40% (with 60 days notice)

1 fund, representing 60% ofassets has a Gate, triggered at
10% of fund-level NAV monthly
or 40% annually.

None

Equity–Investment
funds

202,374

5

N/A

N/A

Bimonthly: 16% (with 3 days notice)
Month-end: 30% (with 15 days notice)
Quarterly: 43% (with 30 days notice)
12/31/14 and then annual (with 90
days notice): 10%

See redemption terms.

None

Absolute Return
Multi-strategy andother76,611

7

N/A

N/A

Quarterly: 52%
Annual at 12/31: 36%
Sidepocket (> 3 Yrs): 11%(All funds require notice periods
that range from 45 to 180 days)

3 funds, representing 52% ofassets have Gates. One Gate is
triggered at 33% of original
investment over a rolling 12-month
period, another is triggered at 25%
of investor-level NAV / quarter, andthe third is triggered at 25% of
fund-level NAV / quarter.

Full redemption requests
made for two funds(representing 4% of assets),with remaining balances
comprised of special
investments to beliquidated over time.

Absolute ReturnEquity long/short

20,947

3

N/A

N/A

Quarterly: 100%(with 30 days notice)
Pending final redemption: <1%

2 funds, representing 100% ofassets have Gates. Gates are
triggered at 25% of fund-level
NAV for both funds.

The remaining fund (<1% ofassets) is pending final
redemption.

Absolute ReturnCredit

81,162

5

N/A

N/A

Quarterly: 13%
12/31/14 and relocking for 36 months: 22%
6/30/16 and relocking for 36 months: 22%
Sidepocket (> 3 Yrs): <1%
Pending final redemption: <1%
4 funds, representing 100% of assets,require 90 days notice. The
remaining fund is pending
final redemption.

1 fund, representing 21%
of assets has a Gate,
triggered at 20%
of fund-level NAV
annually<1% (one fund) was fully
redeemed on 6/30/11.
An investor-level gate was
imposed, and theinvestment will be fully
redeemed over
several quarters.

Absolute ReturnEvent driven

36,587

2

N/A

N/A

Quarterly: 100%
(All funds require notice periods
that range from 45 to 60 days)

2 funds, representing 100% ofassets have Gates. One Gate is
triggered at 25% of investor-level
NAV/ quarter, and the other istriggered at 25% of fund-level NAV/
quarter.

N/A

Private Equity

80,98322

0-3 Years: 24%
3-5 Years: 43%>5 Years: 33%$

22,538

N/A

N/A

N/A

Real Assets

8,944

9

0-3 Years: 3%
3-5 Years: 0%>5 Years: 97%

16,937

N/A

N/A

N/A

$

1

Number of
Funds

534,109$39,475

Defined as the period between June 30, 2014 and the Termination Date of the fund as defined in legal documentation.

16

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
4.

Investments
Investments at June 30, 2015 and 2014 are as follows:
2015
Cost
Cash equivalents
Equity securities
Government and corporate bonds
Investment funds
Registered mutual funds
Fixed income
Equity (long only)
Equity long/shortCreditMulti-strategy and other
Event-driven
Private equity
Real assets
Investments$

23,122
174,736
43,597$25,89132,450207,732
3,186
87,04630,624
39,66556,0808,330
732,459$

23,122
223,972
43,196
34,68331,794
239,591
23,122
93,487
67,17841,01680,2408,534
909,935

Futures contracts
Less: Investments maintained for the Council
Investments per the consolidated
statements of financial position

2014
Fair Value

$

Cost
$

$

41,160147,519
35,318Fair Value$

26,314
26,220166,257
3,194
68,352
36,83934,78954,204
6,680
646,846

41,159200,947
35,53533,24026,501
202,374
20,947
81,162
76,611
36,58780,983
8,944
844,990

3,765
913,700

844,990(6,272)(6,084)907,428$

838,906

For fiscal year 2015 and 2014, the total investment return was approximately 5.1% and 16.5%,
respectively.
Equity and fixed income investments consist of investments in publicly traded U.S. equities, mutual
funds, government and corporate bonds and funds that invest in equity and fixed income based
strategies. The fair values of publicly traded investments are based on quoted market prices.
Investments that are listed on an exchange are valued, in general, at the last reported sale price(or, if there is no sales price, at the last reported bid price, or, in the absence of reported bid prices,at the mean between the last reported bid and asked prices thereof). Fund investments in equity
and fixed income based strategies that are not exchange traded are valued based upon NAV
provided by the investment managers of the underlying funds. Some of these funds may not havereadily ascertainable market values and may be subject to withdrawal restrictions. The fair value ofthe funds represents the amount the Museum expects to receive at June 30, 2015 and 2014, if it
had liquidated its investments in the funds on these dates. The Museum’s investment return iscalculated as a time weighted internal rate of return for all of the investments over the 2015 fiscal
year.
Private equity fund holdings include investments in buyouts, distressed companies and venture
capital. Hedge funds include credit, equity long/short, multi-strategy and other. Real Assets
include fund holdings in real estate. The Museum values these investments based upon NAV
provided by the investment managers of the underlying funds. As a general rule, investment
managers of hedge funds, private equity and real asset funds value investments based upon thebest information available for a given circumstance and may incorporate assumptions that are theinvestment manager’s best estimates after consideration of a variety of internal and external
factors. Hedge funds, private equity and real asset funds may make investments in securities that

17

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
are publicly traded, which are generally valued based on observable market prices, unless a
restriction exists. Investments for which observable market prices do not exist are reported at fairvalue as determined by the fund’s investment manager. The Museum’s management may
consider other factors in assessing the fair value of these investments. Some of these funds may
not have readily ascertainable market values and may be subject to withdrawal restrictions. The
fair value of the funds represents the amount the Museum expects to receive at June 30, 2015 and2014, if it had liquidated its investments in the funds on these dates.
The Museum invests in investment funds that are not registered under the Investment Company
Act of 1940, as amended, and invests in other financial instruments employing various investment
strategies and techniques, including leverage that may involve significant market, credit, andoperational risks. Such investments may allocate a high percentage of their assets in specificsectors of the market in order to achieve a potentially greater investment return. As a result, theinvestments may be susceptible to economic, political, and regulatory developments in a particularsector of the market, positive or negative, and may experience increased volatility in net asset
values.
Investment Income
Pursuant to the Museum’s spending policy, an amount equal to 5% of a lagged average market
value of endowment assets for twelve quarters was made available in fiscal 2015 and 2014 for
operating the Museum.
The following schedules summarize the investment return and its classification in the consolidated
statements of unrestricted revenues, expenses and other changes in unrestricted net assets for2015 and 2014:

Dividends and interest, net of investment
management and related fees of $11,208
Net realized gains, changes in unrealized
appreciation
Total return on long-term investments

Unrestricted

Temporarily
Restricted

Permanently
Restricted

$

$

$

240

Museum operations (spending policy)
Investment return in excess ofspending policy
Auxiliary activities
Investment return in excess of amounts
designated for operations and specificpurposes

$

63

$

1,015

32,47632,716

6,975
7,687

63

39,451
40,466(29,628)--(29,628)

3,088

7,687

63

10,838

(578)

-

-

(578)

2,510

18

712

Total
2015

$

7,687

$

63

$

10,260

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)

Dividends and interest, net of investment
management and related fees of $7,004
Net realized gains, changes in unrealized
appreciation
Total return on long-term investments

Unrestricted

Temporarily
Restricted

Permanently
Restricted

$

$

$

3,567

Museum operations (spending policy)
Investment return in excess ofspending policy
Auxiliary activities
Investment return in excess of amounts
designated for operations and specificpurposes

5.

$

177

49

Total
2014

$

3,793

76,32879,89535,88336,06049

112,211116,004(28,296)--(28,296)

51,59936,06049

87,708

(546)

-

-

(546)

51,053$36,060$49$

87,162Inventories
At June 30, 2015 and 2014, inventories are as follows:
2015
Publishing and retail
Available for sales
Work in process$

11,971677
12,648All other$

10,903239
11,142

32
$

6.

2014

68

12,680$11,210Property, Plant and Equipment
At June 30, 2015 and 2014, property, plant and equipment are as follows:
2015
Buildings
Leasehold improvements
Software, equipment, machinery and furniture and fixtures
Total property, plant and equipment at cost$

549,181
4,427
89,667643,275

2014$

548,057
4,427
85,699638,183

Less: Accumulated depreciation
Property, plant and equipment, net

325,144
318,131

297,830
340,353

Land, at cost
Undeveloped property

91,352
70,68091,35270,605$19

480,163$502,310

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
Capitalized interest primarily related to bond financing from the Museum’s prior expansion project(Note 8) was included in fixed assets for the years ended June 30, 2015 and 2014 and totaled$17,875 and $19,050, respectively.
In 2007 the Museum sold development rights to a developer to construct a building adjacent to theMuseum on undeveloped property. The Museum retained certain development rights that will be
used to add gallery space within the building when construction is completed. In addition, in 2009,
the Museum exercised an option to purchase additional development rights that were conveyed tothe development site; the developer contracted to purchase these additional development rightsfrom the Museum. In December 2009, the Museum and the developer agreed to delay the closingof the sale of the additional development rights over undeveloped property to 2013 with additional
extensions to 2015. As of June 30, 2014, the developer had exercised an extension through 2015.
In consideration of these extensions the Museum had received deposits of the purchase pricetotaling $54,440 which was reflected in deferred revenue on the consolidated statements offinancial position (Note 7).
As of June 30, 2014, costs related to the completed transactions totaled approximately $21,000
and were included in undeveloped property within property, plant and equipment.
In September 2014, the Museum and the developer completed the sale of the additional
development rights over the undeveloped property, at which point the developer paid the Museum
approximately $62,000 to complete the transaction, for a total of approximately $116,000. At thetime of closing, all consideration affecting a sale had been exchanged between the parties and theMuseum surrendered title of the development rights to the developer. As a result, the Museum
recognized a gain on sale of development rights of $95,908 within nonoperating revenues on the2015 consolidated statement of unrestricted revenues, expenses and changes in unrestricted net
assets.
7.

Deferred Revenue
At June 30, 2015 and 2014, deferred revenue is as follows:2015
Deposits on development rights
Deferred membership revenues
Other, principally deacession proceeds
Deferred exhibition fees

20

2014

$

1,802
353
155

$

54,440
1,615
1,179
993

$

2,310

$

58,227

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
8.

Loans Payable
Loans payable at June 30, 2015 and 2014 are as follows:

2015
Series 2008 One A bonds
Series 2010 One A bonds
Series 2012 One D bonds
Revolvers
Line of credit
Total debt$

Bond premium on 2008, 2010 One A, and2012 One D bonds, net of amortization

2014

130,825
55,28552,545
18,200800
257,655$

130,825
55,28552,545
18,200800
257,655

9,111

Total debt and bond premium$

266,766

12,070$269,725

Loans payable by the Museum relate primarily to both the renovation and expansion project of its
main facility, which reopened to the public in November 2004, and to the construction project of
MoMAQNS, the Museum’s storage facility in Long Island City, New York.
The Museum received bond proceeds of $75,750 in March 2000 (Series 2000 One A/B) and bondproceeds of $235,000 in December 2001 (Series 2001 One A/B/C/D). The bonds were issued by
the Trust for Cultural Resources (the “Trust”), a public benefit organization created by the State of
New York. The Series 2000 One A/B bonds and Series 2001 One A/B/C bonds were redeemed by
the Series 2008 One A bonds issued by the Trust for the benefit of the Museum in July 2008. A
portion of these bonds was subsequently redeemed by the Series 2010 One A bonds issued inJuly 2010.
The Series 2001 One D bonds callable on July 1, 2012 were redeemed in July 2012 through a
combination of refinancing proceeds from the Series 2012 One D bonds and a $43,000 short term
bridge loan, which the Museum repaid shortly after issuance.
The Series 2008 One A bonds, 2010 One A bonds, and 2012 One D bonds consisted of thefollowing amounts and maturities at June 30, 2015:
Principal
Refunding Bonds, Series 2008 One A
Serial bonds (callable in 2018)
Term Bonds (callable in 2018)$

Refunding Bonds, Series 2010 One A
Term bonds
Refunding Bonds, Series 2012 One D
Term bonds$

Yield at Issuance

Rate

Maturity

67,57063,255

4.36% - 4.51%
4.63%

5.0%
5.0%

April 1, 2025-2028
April 1, 2031

55,285

2.43%

5.0%

October 1, 2017

52,545

1.21%

4.0%

August 1, 2017

238,655

21

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
As part of the July 2008 transaction, the Museum terminated a swap that was entered into as partof the December 2001 bond transaction (notional amount of $85,000) and reversed a swap enteredinto in August 2005 (notional amount at the time of reversal of $50,000) with an offsetting swap.
The counterparty for the two remaining offsetting swap agreements is Goldman Sachs Bank USA(the “Counterparty”). Notional amount schedules, payment dates, and final maturity dates are
identical under each agreement, but the Museum is a fixed rate-payer under one and a floating
rate-payer under the other. The Museum has the right to optionally terminate each swap contract
for an agreed upon cash settlement amount based on market conditions. Under certain triggering
events tied to the Museum’s overall credit ratings, the Museum may be required to post collateral to
the Counterparty or the Counterparty may terminate the swap contracts, provided both areterminated simultaneously.
The accounting guidance for accounting and reporting derivatives and hedging requires that allderivatives be recognized in the consolidated statement of financial position as either an asset or
liability and be measured at fair value. Under GAAP, certain criteria must be satisfied in order forderivative financial instruments to be classified and accounted for as either a cash flow or a fairvalue hedge. Accounting for gains and losses on derivatives that are not elected for hedge
accounting treatment or that do not meet hedge accounting requirements are recorded in the
consolidated statements of unrestricted revenues, expenses and changes in unrestricted net
assets.
At June 30, 2015 and 2014, the fair value of the Museum’s derivative financial instruments were ina liability position of $6,821 and $7,179, respectively, and included in other liabilities on the
consolidated statements of financial position. The total gain recognized on these derivatives for theyears ended June 30, 2015 and 2014 was $358 and $359, respectively, and was included ininterest expense, change in fair value of interest rate swap agreement and other financing costs on
the consolidated statements of unrestricted revenues, expenses, and changes in unrestricted net
assets. Payments on the swaps totaled $608 for the years ended June 30, 2015 and 2014.
In January 2015, the Museum refinanced its $20,000 revolving note agreement. This revolver will
mature in January 2016 and has an interest rate based on various LIBOR maturities that was 0.5%
at June 30, 2015. In June 2015, MoMA PS1 entered into a $2,000 revolving note agreement with acommercial bank. This revolver will mature in June 2016 and has an interest rate based on various
LIBOR maturities that was 1.0% as of June 30, 2015. Borrowings under these two facilities totaled$18,200 at June 30, 2015.
At June 30, 2015, the Museum has available a $35,000 line of credit with a commercial bank. Theline of credit expires in November 2015. As of June 30, 2015, borrowings under the line of credit
totaled $800, at an interest rate based on LIBOR maturities that was 0.5%.
Annual principal payments as of June 30, 2015 due during the next five fiscal years and in total
thereafter under all of the aforementioned loans payable are approximately as follows:
2016
2017
2018
2019
2020
Thereafter

22$

19,000107,830
130,825$

257,655

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
The Museum’s revolver and line of credit agreements contain financial covenants, the mostrestrictive of which requires a certain ratio of unrestricted net assets to its principal amount ofoutstanding debt. The Museum met all covenant requirements as of June 30, 2015 and 2014.
Fair values of the Museum’s bonds are based on current traded value and are classified as
Level 2. The fair value of the Museum’s other loans approximate carrying value. These fair values
are based on unobservable market data and are therefore classified as Level 3.
The carrying amounts and fair values of the loans payable at June 30, 2015 and 2014 are as
follows:
2015
Carrying
Value
Level 1
Level 2
Level 3

9.

2014
Fair
Value

Carrying
Value

Fair
Value

$

247,766
19,000$261,503
19,000$250,725
19,000$268,906
19,000$266,766$

280,503$269,725$

287,906

Endowment Funds
The Museum’s endowment consists of approximately 150 individual funds established for a varietyof purposes. As required by GAAP, net assets associated with donor restricted endowment funds,
and funds designated by the Board of Trustees to function as endowments (“Board Designated”),
are classified and reported based on the existence or absence of donor-imposed restrictions.
On September 17, 2010, New York State enacted the New York Prudent Management ofInstitutional Funds Act (“NYPMIFA”). NYPMIFA contains provisions that govern charitable
institutions’ appropriation and use, among other things, of donor-restricted endowment funds.
NYPMIFA updated certain provisions of prior endowment management law that had become
outdated. Most significantly, under prior law, charitable institutions were required to maintain the“historic dollar value” of endowment funds, meaning that institutions could appropriate only: aprudent portion of a fund if the value of the fund were greater than the dollar value of the donor’s
contribution(s) to the fund (i.e., the “historic dollar value”), and the appropriation would not take thefund below that amount; or a prudent portion only of the income from the fund, if the value of thefund were less than the historic dollar value.
Under NYPMIFA, a detailed prudence standard governs appropriation from endowment funds, andthere is no longer a requirement to maintain historic dollar value. Prudent appropriation from afund whose value is less than its historic dollar value is permitted. In particular, NYPMIFA provides
that, unless a donor expresses a contrary intention in a gift instrument, a charitable institution may
appropriate as much of an endowment fund as it “determines is prudent for the uses, benefits,
purposes and duration for which the fund is established,” without regard for historic dollar value.
As with prior law, NYPMIFA retains the requirement that in making any decision to appropriate, “theinstitution shall act in good faith, with the care that an ordinarily prudent person in a like position
would exercise under similar circumstances.” It further provides a new requirement that the23

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
institution “shall consider, if relevant” the following eight factors in deciding whether or not toappropriate from a fund:The duration and preservation of the endowment fund;The purposes of the Museum and the endowment fund;General economic conditions;

The possible effect of inflation or deflation;

The expected total return from income and the appreciation of investments;

Other resources of the Museum;Alternatives to expenditure of the endowment fund; andThe investment policy of the Museum.

The provisions of NYPMIFA allowing prudent appropriation without regard to historic dollar value
apply to funds created after its effective date of September 17, 2010. Donors of funds created
before that date were given the option of requiring institutions to continue to observe the historic
dollar value restrictions contained in prior law. Some donors of Museum funds have elected thisoption. Moreover, as with prior law, a donor may incorporate in a gift instrument specificrestrictions on appropriation that are different from either NYPMIFA or prior law. Certain of theMuseum’s funds are governed by such instruments. Thus the Museum has funds that fall into
three categories with respect to appropriation: those from which it may prudently appropriate
without regard to historic dollar value; those from which it may prudently appropriate appreciation
only above historic dollar value; and those whose appropriation is governed by specific instructionsin the constitutive gift instrument.
Distributions available for spending are now drawn at 5% annually of a lagged average market
value of endowment assets for twelve quarters (for those funds not governed by contrary donorimposed restrictions).
The Museum’s spending policies are consistent with the Museum’s objectives to utilize income tosupport mission-critical programs while preserving capital and ensuring future growth of theendowment. Under these policies, and as approved by the Museum’s Board, the long-term focusof the endowment is to support the Museum’s mission by providing a reliable source of funds for
current and future use.
Under the direction and approval of the Investment Committee and the Board of Trustees, theendowment will seek to maximize long term returns consistent with prudent levels of risk.
10.

Financial Reporting of Endowments
Consistent with endowment accounting for not-for-profit organizations for funds subject to anenacted version of UPMIFA, the Museum classifies as permanently restricted net assets (a) theoriginal value of gifts donated to the permanent endowment, (b) the original value of subsequent24

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
gifts to the permanent endowment, (c) the net realizable value of future payments to permanently
restricted net assets in accordance with the donor’s gift instrument (outstanding endowment
pledges net of applicable discount), and (d) accumulations, including appreciation, gains andincome, to the permanent endowment made in accordance with the direction of the applicable
donor gift instrument at the time the accumulation is added to the fund.
For financial reporting purposes, donor-restricted endowment fund appreciation, gains and income
exceeding donor restrictions are classified as temporarily restricted net assets until those amounts
are appropriated for expenditure by the Museum in a manner consistent with the standard ofprudence prescribed by law. Upon appropriation, appreciation and earnings are reclassified as
unrestricted net assets.
Funds share in the overall earnings rate of the Museum’s portfolio except for two funds totaling$18,297 and $18,467 as of June 30, 2015 and 2014, respectively, which are managed by third
parties. Earnings are utilized in accordance with donor stipulations.
Endowment net asset composition by type of fund as of June 30, 2015 and 2014:
Permanently
Restricted
Donor-restricted endowment funds$
Board-designated endowment funds
Total funds$

Temporarily
Restricted248,059-$

103,700-$

30,394$

351,759
30,394

248,059$

103,700$

30,394$382,153

Permanently
Restricted
Donor-restricted endowment funds$
Board-designated endowment funds
Total funds

$

Total
2015

Unrestricted

Temporarily
Restricted

Total
2014

Unrestricted

246,863-$

102,791-$

30,428$349,654
30,428

246,863$

102,791$

30,428$380,08225

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
The composition of the Museum’s endowment by net asset class and purpose at the end of theperiod is:2015
Permanently restricted net assets
Museum programs
Acquisition of works of art
Museum operations and other activities
Total endowment funds classified aspermanently restricted net assets$

Temporarily restricted net assets
Museum programs
Acquisitions of works of art
Support of exhibitions
Operating support and other purposes
Total endowment funds classified as
temporarily restricted net assets
Unrestricted net assets
Unrestricted purposes
Total endowment funds classified as
unrestricted net assets
Total endowment funds$

55,80836,361
155,8902014$

54,18636,298156,379

248,059

246,863

21,571
12,143
15,20154,78521,316
11,90015,171
54,404

103,700

102,791

30,39430,42830,39430,428382,153$

380,082

At June 30, 2015 and 2014, there were no donor-restricted endowment funds where fair market
value was below historic dollar value.
Reconciliation from endowment net assets to investments, at fair value for June 30, 2015 and 2014is as follows:
2015
Endowment net assets$

Subtract
Contributions receivable, net, included in endowment net assets

907,428

380,082(113,757)

638,275$

26$(113,000)

Add
Unrestricted and temporarily restricted investments, at fair value
Investments, at fair value382,1532014

572,581$

838,906

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
A reconciliation of the beginning and ending balance of the Museum’s endowment, in total and by
net asset class are as follows:

Endowment net assets as of June 30, 2013

Permanently
Restricted

Temporarily
Restricted

Unrestricted

$

$

$

Investment return
Investment income
Net appreciation
Total investment return
Contributions
Appropriation of endowment assets for expenditure
Donor-restricted funds below historic dollar value
Endowment net assets as of June 30, 2014
Investment return
Investment income
Net appreciation
Total investment return
Contributions
Appropriation of endowment assets for expenditure
Endowment net assets as of June 30, 2015

11.

$245,362

80,41329,507

Total$

355,28249
6
55

25,1196,087
31,206

1,450
4
1,454

26,618
6,097
32,7151,452(6)(8,828)
-

(539)
6

1,452
(9,367)-

246,863

102,791

30,428380,082

63
2
65

16,692(6,234)
10,458

945
(410)
535

17,700(6,642)
11,0581,131-(9,549)

(569)

1,131
(10,118)

248,059$

103,700$

30,394$382,153

Temporarily Restricted Net Assets
At June 30, 2015 and 2014, temporarily restricted net assets were available for the following
purposes:2015
Museum programs
Acquisitions of works of art
Maintaining art collections
Support of exhibitions
Expansion and renovation
Operating support and other purposes

2014

$

43,04349,73913,634
21,054
115,060
90,365$40,58940,29913,20522,35652,868101,228$

332,895$

270,545

During fiscal 2015 and 2014, net assets were released from donor restrictions as a result of either
satisfying the restricted purpose or by the occurrence of other events specified by donors, as
follows:
2015
Museum programs and other
Exhibitions
Debt service and reduction
Acquisitions of works of art
Total releases from restriction

27

2014

$

18,354
2,336
3,144
25,249$18,5741,000
5,718
33,265$49,083$58,557

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
12.

Pension Plans and Other Postretirement Benefits
In fiscal year 2009, as part of the Museum’s proactive plan to stabilize operations in response to
the global economic and financial crisis, the Museum approved changes to its pension plans,
effective November 1, 2009. Generally, with certain differences amongst the Museum’s non-unionand various union staff, all employees in the Museum’s defined benefit plan opted either to remainin the defined benefit pension plan and forgo future matching contributions from the Museum in theMuseum’s 403(b) defined contribution plan, or receive an enhanced match in the Museum’s 403(b)defined contribution plan and forgo future accruals in the defined benefit plan. New employees
hired after June 30, 2009 are eligible to participate in the enhanced 403(b) Plan only, thereby
freezing the number of participants in the defined benefit plan.
For those remaining in the trusteed defined benefit pension plan, future benefits are based, among
other factors, on years of service, age, and average monthly compensation during the final years ofservice. The Museum’s funding policy is to contribute annually amounts to meet ERISA’s minimum
requirements, although it may make additional contributions beyond these requirements.
For those eligible for matching contributions in the 403(b) retirement savings plan based on the
choice noted above, the Museum matches up to a percentage of compensation dependent on an
employee’s compensation, contribution and length of service. In addition, the Museum provides anondiscretionary contribution for employees under certain base compensation levels dependent onlength of service. The Museum contributed $1,243 and $1,035 to the Plan for the years ended
June 30, 2015 and 2014, respectively. Regardless of match eligibility, the 403(b) retirementsavings plan is open for all non-union employees and employees in several unions under collective
bargaining agreements. Employees may contribute up to Internal Revenue code limits.
Postretirement health and welfare benefit costs are funded by the Museum on a pay-as-you-gobasis. Only employees hired before February 1, 2003 are eligible for these benefits. Additionally,as part of the package of changes in fiscal year 2009, employees who retire after November 1,
2009 share the cost of health coverage at the same percentage level as an active employee.
Effective July 1, 2009, the Museum required that, for active employees, most non-union and certain
union employees contribute to the Museum-provided healthcare plan based on salary andcoverage level. Plan design changes affecting all staff on the Museum’s active healthcare plan andfuture retirees were also effective as of July 1, 2009.
In fiscal year 2015, the Society of Actuaries released updated mortality tables which reflect longer
actuarial life expectancies. The Museum has incorporated these updated mortality tables in its
underlying estimates and financial obligations associated with the Museum’s defined pension plansand other postretirement benefits as required as of and for the year ended June 30, 2015.

28

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
The following table sets forth the amounts recognized in the consolidated statements of financial
position, the change in the benefit obligation, the change in plan assets, the funded status, andweighted-average assumptions for the plans:
Pension Benefits
June 30,
2015
2014
Change in benefit obligation
Benefit obligation at beginning of year
Service cost
Interest cost
Actuarial loss (gain)
Benefits paid
Employee contributions
Medicare Part D reimbursements$

Postretirement Benefits
June 30,
2015
2014

94,458 $
2,470
4,299
7,379
(2,864)-

84,173 $
2,307
4,173
6,518
(2,713)-31,874 $
1,053
1,503
(3,659)
(718)
28
34

27,089
886
1,367
3,124
(640)
19
29

Benefit obligation at end of year

105,742

94,45830,11531,874

Change in plan assets
Fair value of plan assets at beginning of year
Actual return on plan assets
Employer contributions
Employee contributions
Medicare Part D reimbursements
Benefits paid

71,4142,126(2,864)60,568
10,3393,220(2,713)

656
28
34
(718)

592
19
29
(640)

70,676

71,414--$(35,066) $(23,044) $(30,115) $(31,874)$(35,066) $(23,044) $(30,115) $(31,874)$(31,500) $(333)(22,111) $(409)(5,222) $787(9,893)
1,011$(31,833) $(22,520) $(4,435) $(8,882)$(10,835) $
1,446
76

(945) $
1,510
76

3,659 $
1,013
(224)

(3,124)
643
(328)

$

(9,313) $

641

4,448

(2,809)Fair value of plan assets at end of year
Funded status at end of year
Amounts recognized in the consolidated
statements of financial position consist ofPension and postretirement benefit obligations
Amounts recognized in unrestricted net
assets consist of
Net loss
Prior service (cost) credit

Defined benefit plan changes other than net
periodic benefit cost
Net (loss) gain
Amortization of net gain
Amortization of prior service credit (cost)2015
Weighted-average assumptions as of June 30
Discount rate
Expected return on plan assets
Rate of compensation increase

4.47 %
8.00
3.50

29

2014
4.61 %
8.00
3.50

$

2015
4.47 %
N/A
N/A

$

2014
4.61 %
N/A
N/A

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)

Amounts in unrestricted net assets expected
to be recognized in net periodic benefit costin 2015
Net loss
Prior service cost (credit)

PensionBenefits

Postretirement
Benefits

$

2,266
76

$

294
(224)

$

2,342

$

70

The accumulated benefit obligation for the pension plan at June 30, 2015 and 2014 was $91,506
and $81,679, respectively. Detail of the changes in the accumulated benefit obligation for thepension plan is as follows:
2015
Accumulated benefit obligation at beginning of year

$

2014

81,679

Accumulation of benefits, including experience gains/losses
Change in average discount period
Benefit payments
Change in actuarial assumptions$

72,9053,444
3,700(2,864)
5,547

Accumulated benefit obligation at end of year$

91,506

2,507
3,628(2,713)
5,352$

81,679The accumulated benefit obligation for the Supplemental Executive Retirement Plan at June 30,
2015 and 2014 was $2,832 and $2,569, respectively. The plan was frozen in fiscal year 2009.
In selecting the expected long-term rate of return on assets, the Museum considered the averagerate of earnings expected on the funds invested or to be invested to provide for the benefits of theplan. This included considering the trust’s asset allocation and the expected returns likely to beearned over the life of the plan.
The following table sets forth the components of the net pension and postretirement benefits costfor the years ended June 30, 2015 and 2014:
Pension Benefits
2015
2014
Service cost
Interest cost
Expected return on plan assets
Amortization of prior service (credit) cost
Amortization of accumulated loss
Net periodic benefit cost

Postretirement Benefits
2015
2014

$

2,470
4,299
(5,582)
76
1,446

$

2,307
4,173
(4,767)
76
1,510

$

1,053
1,503
(224)
1,013

$

885
1,367
(328)
643

$

2,709

$

3,299

$

3,345

$

2,567

The health care cost trend rate assumption used in determining the accumulated postretirement
benefit obligation for the coming year is 6.4% and 8.1% at June 30, 2015 and 2014, respectively.

30

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
The following data shows the effect of a one percentage point health care cost trend rate increase(decrease) for 2015, inclusive of the impact of a lower discount rate in fiscal 2015:
Percentage
Point
Increase
Effect on total of service and interest cost
Effect on postretirement benefit obligation$

Percentage
Point(Decrease)

525
5,292

$

(414)
(4,250)Target allocations at June 30, 2015, by asset category are as follows:
Asset category
Equity securities
Fixed income

78 %
22 %

The composition of asset categories and valuation techniques used to measure fair value aredescribed in Note 3.
Fair Value Measurements
Within the fair value hierarchy, the pension plan’s investments at fair value by level as of June 30,
2015 and 2014 are as follows:
QuotedPrices in
ActiveMarkets(Level 1)
AssetsCash and cash equivalents
Fixed income
Fixed income – other
Government & corporate
Equities
Securities
Registered mutual funds
Investment funds$

Total investments andcash equivalents$

Significant
Other
Observable
Inputs(Level 2)

146

$

191

Significant
Unobservable
Inputs(Level 3)

$

-

Total
Fair Value
2015

$

337

-

6,151
9,712

-

6,151
9,712

15,894
28,689-9,893-

15,894
28,6899,893

44,72931$

25,947$-$70,676

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)

QuotedPrices in
ActiveMarkets(Level 1)
AssetsCash and cash equivalents
Fixed income
Fixed income – other
Government & corporate
Equities
Securities
Registered mutual funds
Investment funds
Total investments andcash equivalents

$

$

546

Significant
Other
Observable
Inputs(Level 2)

Significant
Unobservable
Inputs(Level 3)

$

$

1,163

-

Total
Fair Value
2014

$

1,709

-

5,623
9,872

-

5,623
9,872

21,49922,871-

9,840-

21,49922,871
9,840

44,916$

26,498$-$71,414The investment funds categorized as Level 2 have monthly redemptions with a 15 day notice
period. There were no significant transfers between Level 1 and Level 2 in fiscal years 2015 and2014.
The Museum’s primary investment objective is to maximize the total rate of return, subject to thepreservation of capital. The primary means by which capital preservation is to be achieved isthrough diversification of the Plan’s assets across asset classes. The assets are viewed as ahaving a long term horizon with high liquidity needs.
Cash flows for the fiscal year ending June 30, 2015 are as follows:
PensionBenefits
Expected employer contributions
2016
Projected benefit payments for the fiscal year ending June 30
2016
2017
2018
2019
2020
2021–2025

Postretirement
Benefits

$

391

$

903

$

3,963
4,158
4,426
4,758
6,405
28,712

$

903
961
1,055
1,114
1,179
6,957

The Medicare Prescription Drug Act (The “Act”) introduced a prescription drug benefit under
Medicare Part D as well as a federal subsidy to employers whose plans provide an “actuarial
equivalent” prescription drug benefit. The Museum’s postretirement prescription drug benefit
qualified for this subsidy and consequently the Museum treats the effects of the Act as an actuarial
gain. The effects of the Act are not significant. Accordingly, there was minimal impact on the net
periodic postretirement benefit cost for fiscal year 2015.

32

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
13.

Advances to the Trust
The Museum, together with the Trust and a private developer, completed construction of a
combined-use building in 1980, providing renovated and expanded facilities for the Museum and acondominium project using development rights from the Museum’s real estate (“Museum Tower”).
In connection with the 1980 expansion, real property used for part of the expansion was transferredto the Trust, and a portion of the new construction was leased back to the Museum under arenewable 99-year net lease for a payment of one dollar annually. The lease also provides for theMuseum’s right to purchase the leased premises for one dollar under certain circumstances.
Under this arrangement, as further described below, related expenditures and the associated debt
for the 1980 expansion and renovation of the Museum are not reflected in these consolidated
financial statements.
Over the years, the Trust has issued serial bonds to the public for the purpose of refinancing earlier
bond issues in 1980, 1984, 1991, 1993, 1996 and 2001. In May 2012, the Trust refinanced theremaining 1996 and 2001 bond issues with Series 2012A Refunding Revenue Bonds of $38,360
with a final maturity in 2023. The Series 2012A bonds did not extend the maturity of the 1996 and2001 bond issues and are the only outstanding bonds with respect to the 1980 expansion.
In accordance with the New York State legislation pertaining to the Trust, the Museum Tower is
exempt from real property taxation, but the Trust collects the equivalent of real property taxes fromthe owners of individual condominium units in the Museum Tower. These tax-equivalency
payments (“TEPs”) are based on the real property tax assessment of the Museum Tower.
In connection with the 1980 expansion, the Museum agreed to advance funds to the Trust to theextent that TEPs and the proceeds of the Serial Bonds are not sufficient to pay debt service duefrom time to time from the Trust to the holders of the Serial Bonds and to complete the 1980
expansion project. Such advances totaled $34,532 and $35,395 at June 30, 2015 and 2014.
The advances bore interest at a rate of 9% annually through June 30, 2004. Pursuant to anagreement in January 2006 between the Museum and the Trust, the interest rate on theoutstanding advances from the Museum was converted to a market-based floating rate. The
Museum also agreed that no additional interest would accrue on the advances for a five-year
period beginning July 1, 2004 through June 30, 2009. Cumulative interest totaled $135,236 and$133,694 at June 30, 2015 and 2014, respectively.
Commencing on July 1, 2009 and thereafter, the unpaid balance of any outstanding advances willaccrue interest at a floating rate equal to the 3-year Treasury rate in effect on July 1 of that year.
The rate was 0.90% and 0.65% for fiscal years 2015 and 2014, respectively. This agreement
provided for the issuance of new instruments to the Museum to evidence the obligations of theTrust, which required the authorization of the Comptroller of the State of New York and of theComptroller of the City of New York. These authorizations were obtained in August 2006 and the
new instruments evidencing the Trust’s obligations have now been issued.

33

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
Pursuant to the New York Arts and Cultural Affairs Law, the Trust uses TEPs to pay administrative
expenses, the portion of the TEPs due to the City of New York, and debt service on the Serial
Bonds. Any TEPs that remain after such payments have been made are applied to repay theMuseum advances made to the Trust described above and interest earned thereon.
In the event that the Museum is required to make further advances to cover debt service on the
Serial Bonds described above, the Trust has agreed to issue to the Museum instruments for theamount of each such advance, which will be subject to the same terms and conditions as the
instruments currently outstanding with respect to the previous advances from the Museum.
Statutory law limits the Museum’s right to collect unpaid interest and principal with respect to any
advance not paid within 57 years from the date of the original advance. Accordingly, to the extent
that any advance and all accrued interest are not repaid in full within 57 years, the obligation of theTrust to the Museum will be extinguished and the Museum will thereafter have no right to collectfrom the Trust with respect to such obligations. The earliest expiration date for any advance will
occur in 2039.
During fiscal year 2015, TEPs available in accordance with the Arts and Cultural Affairs Law
described above to reimburse the Museum for its advances were $863 and $250 in 2015 and 2014,
respectively. The amounts were paid to the Museum, decreasing the receivable from the Trust.
The Museum receives annual audited financial statements of the Trust. In addition, the Museum
reviews the tax equivalency billings, subsequent collection and allocation of proceeds.
14.

Commitments
The Museum is obligated under lease agreements, which generally require the payment of baserents plus escalations. Rent expense under these leases amounted to $1,777 and $1,773 in 2015
and 2014, respectively.
Minimum lease payments under noncancelable operating leases as of June 30, 2015 are as
follows:
2016
2017
2018
2019
2020
Thereafter
Total minimum guaranteed rents

34

$

1,832
570
599
599
659
3,793

$

8,052

The Museum of Modern Art
Notes to Consolidated Financial Statements
June 30, 2015 and 2014
(in thousands of dollars)
15.

Expenses by Functional Classification
Expenses by functional classification for fiscal year 2015 and 2014 are as follows:
2015
Museum operating expenses excluding depreciation
Depreciation
Interest and other expenses (nonoperating)Museum program expenses
Curatorial and related program expenses
Exhibitions
Other museum programs
Public services
Cost of sales and expenses of auxiliary activities

2014

$

192,620
26,602
8,565$

182,660
26,417
6,040$

227,787$

215,117$

77,44723,894
5,802
4,293
54,471
165,907$74,726
21,438
5,321
4,725
50,663
156,873

Supporting services
Management and generalFundraising (including membership and fulfillment costs)

47,233
14,64761,880$227,787

44,251
13,99358,244$215,117

For the years ended June 30, 2015 and 2014, cost of sales and expenses of auxiliary activities
included $734 and $679 of depreciation expense, respectively, relating solely to such activities.
16.

Subsequent Events
The Museum has performed an evaluation of subsequent events through October 7, 2015, which isthe date the consolidated financial statements were issued.

35