Endowment/Trusts:

MOA has four main endowments/trusts that have invested assets worth $138.4M as of July 31, 2012. -- MOA is unable to continue to take unsustainable draw rates from its Endowment.
MOA Endowment The value of the endowments assets is $61.2 M as of 7/31/12 The first funds raised for the endowment were in the 1960s with matching funds from the Ford Foundation. In 2010, a new independent investment consultant, Cambridge Associates, was hired to manage the portfolio. Building Fund The value of the Building Funds assets are $7.7M as of 7/31/12 The fund is used to support the operating costs of the building, and to service the $1.69M outstanding debt for the last hall refurbishment in 1997. Draw 6% of net value after subtracting $1.69M debt from last fiscal year average market value. Oakleaf Trust The value of the Oakleaf Trust is $57.3M as of 07/31/12 The Trust is governed by a trust document and administered by five trustees appointed by MOA. MOA receives an annual distribution from the Trust, calculated by the Yale draw formula. Which is 70% of prior years draw plus 1.5% of YE December 31st market value. 10% penalty for each year not in financial equilibrium. Average draw rate the last five years was 4.3% Established Building for the Future Endowment for new endowment donations. It is managed under bylaws of Oakleaf Trust. Value of $8.1M as of 7/31/12. There is $3M more pledged. Goals is to raise $20M by F2015. St. Paul Foundation The value of the St. Paul Foundation Trust is $1.2M as of 7/31/12 The St. Paul Foundation pledged $250K in a matching grant to the new endowment campaign in the 1990s. Foundation reports to MOA quarterly on the value and makes a distribution once a year as a draw. Average draw rate the last five years was 4.8% 1

Endowment Revenue
MOAs invested assets were more than 40% lower in FY 2012 than planned back in 2007
As a result, FY 2012 projected draw amounts are $4.7M lower than planned Shortfall significantly adds to MOAs structural deficits Note: Updated F2012 to reflect up-to-date figures. Previously F2012 Projected invested assets was $139.3M and expected draw was $7.6M Invested Assets Value in $Ms
$250.0 $200.0 $150.0 $100.0 $50.0 $7.0 $2008 2009 2010 2011 2012 Proj
2007 Assumptions 2012 Update

Expected Draw Amounts in $Ms

$232.7 $13.0 $12.2 $12.0 $11.0 $10.9 $10.3 $9.7 $9.6 $8.9 $8.1 $8.0 $7.7 $7.5 $11.5

$192.4 $168.5

$201.4

$211.4

$221.6

$135.3

$137.0

$140.7

$138.4

$10.0 $9.0

$6.0 2008 2009 2010 2011 2012 Proj

2007 Assumptions 2011 Update

F2012 Projection includes the $8.1M in the New Endowment from which at present MOA is not able to draw upon

MOA Endowment Draws

Since F2007 MOAs Endowment had $50.5M in operating draws for an average annual draw rate of 11.2%
The operating draw rate has increased from 6.4% in F2007 to nearly 18% for F2012 Earlier slide covering last 10 years through F2011 showed average annual draw at 9.9%

MINNESOTA ORCHESTRAL ASSOCIATION ENDOWMENT HISTORY

Total Endowment as of 8/31 $61.2 $69.0 $74.6 $74.0 $93.4 $106.3 Operating Draw ($10.8) ($9.4) ($8.5) ($8.0) ($7.0) ($6.8) ($50.5) Operating Draw % 17.7% 13.6% 11.4% 10.7% 7.5% 6.4%

(In $Ms) F2012 (as of 07/31/12) F2011 F2010 F2009 F2008 F2007

A VERA GE OPERA TING DRA W RA TE

11.2%
3

Note: Operating draw excludes Endowment draws for pension funding, capital asset purchases and non-labor BFF campaign costs

In Summary:

Paying our musicians at the current compensation and benefit levels going forward would require the MOA to continue to take unsustainable draws from the MOA Endowment MOA Endowment would be depleted by F2018 The result would necessitate substantially deeper cuts from the musicians than current proposal In order to protect the long-term artistic quality and the financial viability of the Minnesota Orchestra it is imperative the proposed adjustments be made at this time

 MOAs Endowment over the last 5 years has had an average annual return of -0.1% - Compares to the portfolio benchmark of -1.6% - The portfolio benchmark reflects the major asset classes in the portfolio and accounts for the cash flows over this time period --- Analysis provided by Cambridge and Associates

5-Year Average Annual Return

0.0% MOA Endowment -0.2% -0.4% -0.6% -0.8% -1.0% -1.2% -1.4% -1.6% -1.8% -0.1% Portfolio Benchmark

-1.6%