LINCOLN CENTER FOR THE PERFORMING ARTS,...

LINCOLN CENTER FOR THE PERFORMING ARTS, INC. AND RELATED ENTITY

Consolidated Financial Statements and Consolidating Schedules

June 30, 2012

(With Independent Auditors’ Report Thereon)

Independent Auditors’ Report

The Board of Directors Lincoln Center for the Performing Arts, Inc.:

We have audited the accompanying consolidated balance sheet of Lincoln Center for the Performing Arts, Inc. and related entity (Lincoln Center) as of June 30, 2012, and the related consolidated statements of activities and cash flows for the year then ended. These consolidated statements are the responsibility of the management of Lincoln Center. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. The prior year summarized comparative information has been derived from Lincoln Center’s 2011 consolidated financial statements and, in our report dated November 11, 2011, we expressed an unqualified opinion on those financial statements.

We conducted our audit 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 of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Lincoln Center’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Lincoln Center for the Performing Arts, Inc. and related entity as of June 30, 2012, and the changes in their net assets and their cash flows for the year then ended in conformity with U.S. generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The supplementary information included in the accompanying consolidating schedules as of and for the year ended June 30, 2012 is presented for purposes of additional analysis and is not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements as a whole.

November 29, 2012

KPMG LLP 345 Park Avenue New York, NY 10154-0102

KPMG LLP is a Delaware limited liability partnership, the U.S. member firm of KPMG International Cooperative (“KPMG International”), a Swiss entity.

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LINCOLN CENTER FOR THE PERFORMING ARTS, INC.AND RELATED ENTITY

Consolidated Balance Sheet

June 30, 2012(with comparative amounts for 2011)

Assets 2012 2011

Cash and cash equivalents $ 15,278,320 44,844,688 Restricted cash (note 8) 41,093,373 7,248,868 Accounts and investment income receivable 15,669,502 16,386,614 Contributions and grants receivable (note 4) 76,935,508 81,918,039 Prepaid expenses, inventory, and other assets 6,361,643 7,691,905 Funds held by bond trustee – Redevelopment Projects (note 11) 96,707 184,761 Investments (notes 5 and 11) 189,570,649 199,490,493 Deferred bond issuance costs, net 1,738,850 1,878,921 Fixed assets, net (note 6) 369,752,531 379,604,863

Total assets $ 716,497,083 739,249,152

Liabilities and Net Assets

Liabilities:Accounts payable and accrued expenses $ 12,759,273 10,862,569 Accounts payable and accrued expenses:

Redevelopment Projects 1,514,402 7,281,691 Deferred revenue 6,512,873 11,386,584 Fair value of interest rate swaps (notes 8 and 11) 59,671,782 25,984,209 Long-term debt – Redevelopment Projects (note 8) 302,995,819 303,271,474

Total liabilities 383,454,149 358,786,527

Commitments and contingencies (notes 7, 14, and 15)

Net assets (notes 12 and 17):Unrestricted:

General operating 8,004,539 5,209,463 Board designated 96,910,083 102,591,355 Redevelopment and other physical capital 109,735,469 148,288,474

Total unrestricted 214,650,091 256,089,292

Temporarily restricted 34,374,592 40,772,060 Permanently restricted 84,018,251 83,601,273

Total net assets 333,042,934 380,462,625 Total liabilities and net assets $ 716,497,083 739,249,152

See accompanying notes to consolidated financial statements.

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Consolidated Statement of Activities

Year ended June 30, 2012(with summarized comparative information for 2011)

2012Unrestricted

Redevelopmentand other

General Board physical Temporarily Permanently 2011operating designated plant Total restricted restricted Total Total

Support and revenue:Contributions, private grants, and bequests $ 16,526,285 27,859 — 16,554,144 41,913,272 416,978 58,884,394 73,930,027 Government grants (note 13) 982,981 — — 982,981 965,972 — 1,948,953 15,977,690 Investment return (note 5):

Designated for current operations 4,402,694 — — 4,402,694 4,042,543 — 8,445,237 7,951,161 In excess of (less than) amounts designated for current operations 11,477 (5,352,018) — (5,340,541) (4,651,012) — (9,991,553) 21,645,561

Net realized and unrealized (loss) gain on swap agreements (note 8) — — (33,687,573) (33,687,573) — — (33,687,573) 7,202,904 Box office and other program service revenue 11,801,926 — — 11,801,926 — — 11,801,926 8,654,787 Facilities services 24,811,908 2,117,442 — 26,929,350 — — 26,929,350 26,402,890 Rental income 26,970,393 — — 26,970,393 — — 26,970,393 23,428,725 Other income 8,979,163 — 77,298 9,056,461 — — 9,056,461 4,821,379 Special event revenue, net of expenses of $1,871,683 and $1,462,514 in

2012 and 2011, respectively 9,666,926 — — 9,666,926 — — 9,666,926 7,498,861 Net assets released from restrictions 16,000,418 (219,122) 32,886,947 48,668,243 (48,668,243) — — —

Total support and revenue 120,154,171 (3,425,839) (723,328) 116,005,004 (6,397,468) 416,978 110,024,514 197,513,985

Expenses (note 16):Program services:

Performance presentations 26,924,831 — 125,559 27,050,390 — — 27,050,390 20,135,970 Education and outreach 9,210,342 — 372,645 9,582,987 — — 9,582,987 9,012,478 Facilities management and services 52,989,970 467,553 12,695,640 66,153,163 — — 66,153,163 63,422,263 Visitor and patron services 1,651,202 — — 1,651,202 — — 1,651,202 1,651,442 New ventures and special projects 3,964,399 — — 3,964,399 — — 3,964,399 2,961,134

Total program services 94,740,744 467,553 13,193,844 108,402,141 — — 108,402,141 97,183,287

Supporting services:Management and general 16,189,675 — 1,558,344 17,748,019 — — 17,748,019 16,869,063 Fundraising 5,703,676 — 134,230 5,837,906 — — 5,837,906 5,201,916

Total supporting services 21,893,351 — 1,692,574 23,585,925 — — 23,585,925 22,070,979

Interest and other financing costs, net — — 12,046,712 12,046,712 — — 12,046,712 13,700,776

Redevelopment Projects (note 16) — — 13,409,427 13,409,427 — — 13,409,427 40,438,211

Total expenses 116,634,095 467,553 40,342,557 157,444,205 — — 157,444,205 173,393,253

Excess (deficiency) of support and revenue over expenses 3,520,076 (3,893,392) (41,065,885) (41,439,201) (6,397,468) 416,978 (47,419,691) 24,120,732

Transfers:Renewal and replacement reserve (725,000) 725,000 — — — — — — Investment in fixed assets — (2,512,880) 2,512,880 — — — — —

Total transfers (725,000) (1,787,880) 2,512,880 — — — — —

Change in net assets 2,795,076 (5,681,272) (38,553,005) (41,439,201) (6,397,468) 416,978 (47,419,691) 24,120,732

Net assets at beginning of year 5,209,463 102,591,355 148,288,474 256,089,292 40,772,060 83,601,273 380,462,625 356,341,893 Net assets at end of year $ 8,004,539 96,910,083 109,735,469 214,650,091 34,374,592 84,018,251 333,042,934 380,462,625


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Consolidated Statement of Cash Flows

Year ended June 30, 2012(with comparative amounts for 2011)

2012 2011

Cash flows from operating activities:Change in net assets $ (47,419,691) 24,120,732 Adjustments to reconcile change in net assets to net cash

(used in) provided by operating activities:Net realized and unrealized depreciation (appreciation) on investments 1,189,221 (28,255,533) Change in fair value of interest rate swaps 33,687,573 (7,202,904) Depreciation and amortization 12,954,018 12,957,778 Contributions and grants restricted for permanent endowment (416,978) (13,063,586) Contributions restricted for capital assets — (5,114,187) Donated investment securities (350,000) — Changes in operating assets and liabilities:

Accounts and investment income receivable (1,113,599) (916,683) Contributions and grants receivable 1,999,509 57,217,203 Prepaid expenses, inventory, and other assets 1,330,262 (2,733,296) Accounts payable and accrued expenses 1,896,704 (1,288,441) Deferred revenue (4,873,711) 6,164,619

Net cash (used in) provided by operating activities (1,116,692) 41,885,702

Cash flows from investing activities:Purchase of fixed assets (3,237,270) (4,187,529) Account receivable – Redevelopment Projects 1,830,711 488,841 Accounts payable and accrued expenses – Redevelopment Projects (5,767,289) (22,778,742) Purchase of investments (99,718,103) (155,124,010) Proceeds from the sale of investments 108,798,726 155,654,017 Change in restricted cash (33,844,505) 4,730,049

Net cash used in investing activities (31,937,730) (21,217,374)

Cash flows from financing activities:Contributions restricted for permanent endowment 416,978 13,063,586 Contributions and grants restricted for capital assets — 5,114,187 Change in contributions receivable for permanent endowment and capital 2,983,022 (56,423) Decrease in funds held by bond trustee 88,054 30,932,507 Repayments on long-term debt - Redevelopment Projects — (50,000,000) Repayments on long-term debt - other — (5,615,413)

Net cash provided by (used in) financing activities 3,488,054 (6,561,556)

Net (decrease) increase in cash and cash equivalents (29,566,368) 14,106,772

Cash and cash equivalents:Beginning of year 44,844,688 30,737,916 End of year $ 15,278,320 44,844,688

Interest paid $ 12,269,653 13,831,180



Notes to Consolidated Financial Statements

June 30, 2012

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(1) Business

Lincoln Center for the Performing Arts, Inc. (LCPA) was founded in 1956 to develop and maintain a performing arts complex that would sustain and encourage the musical and performing arts. In addition to operating and maintaining some of the performance facilities at the LCPA site in New York City, LCPA provides programs and presents concerts and other performances that supplement the presentations of its fellow constituent organizations (collectively, the Constituents): the Chamber Music Society of Lincoln Center, the Film Society of Lincoln Center, Jazz at Lincoln Center, the Juilliard School, the Vivian Beaumont Theater (the Lincoln Center Theater), the Metropolitan Opera, the City Center for Music and Drama, Inc., encompassing the New York City Ballet and, in 2011, the New York City Opera, the Philharmonic-Symphony Society of New York, Inc., (New York City Philharmonic Orchestra), the New York Public Library for the Performing Arts, and the School of American Ballet. LCPA has agreements with its Constituents to provide certain use of facilities on the Lincoln Center campus, central facility services and to manage the consolidated Corporate Fund which benefits LCPA and its Constituents. Pursuant to these agreements, the costs of providing these services and the funds raised from the consolidated fundraising campaign are allocated among LCPA and its constituents.

On January 12, 2001, Lincoln Center Development Project, Inc. (LCDP) was incorporated to implement and oversee the redevelopment of certain specified components of the campus. On May 24, 2010, LCDP became a wholly owned related entity of LCPA. In accordance with generally accepted accounting principles, the accompanying consolidated financial statements include the accounts of LCDP. As of June 30, 2012, all major LCPA redevelopment projects were complete except for the new pedestrian bridge across 65th Street, which was subsequently completed in October 2012.

LCPA and LCDP are nonprofit organizations exempt from income tax under Section 501(c)(3) of the Internal Revenue Code.

(2) Significant Accounting Policies

(a) Consolidation

The accompanying consolidated financial statements include the assets, liabilities, net assets, and financial activities of LCPA and LCDP (collectively, Lincoln Center or the Organization). All significant inter-organization balances and transactions have been eliminated in consolidation.

(b) Basis of Presentation

The consolidated financial statements of Lincoln Center have been prepared on the accrual basis of accounting, in accordance with U.S. generally accepted accounting principles.

(c) Net Asset Classifications

Lincoln Center reports information regarding its financial position and activities according to three classes of net assets: permanently restricted, temporarily restricted, and unrestricted.

• Permanently restricted net assets contain donor-imposed restrictions, which stipulate that the resources be maintained permanently, but permit Lincoln Center to expend part or all of the income derived from the resources for either specified or unspecified purposes.



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• Temporarily restricted net assets contain donor-imposed restrictions that permit Lincoln Center to expend the resources as specified. The restrictions are satisfied either by the passage of time or by actions of Lincoln Center.

• Unrestricted net assets are not restricted by donors, or the donor-imposed restrictions have been met. Lincoln Center’s board of directors has designated a portion of the unrestricted net assets for working capital, renewal and replacement reserves, special operating reserves, investment in fixed assets, long-term investments (funds functioning as endowment), and charitable gift annuities.

Revenues are reported as increases in unrestricted net assets unless their use is limited by donor-imposed restrictions. Expenses are reported as decreases in unrestricted net assets. Gains and losses on assets and liabilities are reported as increases or decreases in unrestricted net assets unless their use is restricted by explicit donor stipulations or by law. Expirations of temporary restrictions on net assets (i.e., the donor-stipulated purpose has been fulfilled and/or the stipulated time period has elapsed) are reported as net assets released from restrictions. Contributions of cash and other assets restricted to the acquisition of long-lived assets are reported as restricted support that increases temporarily restricted net assets; those restrictions expire when the long-lived assets are placed in service.

(d) Cash and Cash Equivalents

Cash equivalents include investments with maturities of three months or less at time of purchase, except for such assets held by Lincoln Center’s investment managers as part of their long-term investment strategies.

(e) Investments

Investments in fixed income, equity securities, and mutual funds are presented at fair value based upon the last quoted market price at the end of the fiscal year. Alternative investments (nontraditional, not readily marketable vehicles), some of which are structured such that Lincoln Center holds limited partnership interests, hedge funds, and commingled funds, are stated at estimated fair value based on net asset values provided by the investment managers. Individual investment holdings within the alternative investments may be invested in both publicly traded securities and less liquid securities, which are valued by the investment managers after considering pertinent factors. Lincoln Center reviews and evaluates methods and assumptions used in determining the net asset values of the alternative investments. Lincoln Center believes that the carrying amount of its alternative investments is a reasonable estimate of fair value as of June 30, 2012 and 2011. Because alternative investments do not have readily determinable market values, the estimated value is subject to uncertainty and, therefore, may differ from the value that would have been used had a ready market for the investment existed, and such difference could be material.

(f) Fixed Assets

Fixed assets, which are recorded at cost, consist of land, building, equipment, and construction in progress for assets owned by Lincoln Center and leasehold improvements. The Lincoln Center campus includes land and property owned by the City of New York (the City), such as the New York



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State Theater, Library/Museum, Damrosch Park, and the Garage and Plaza. In addition, certain construction costs of Lincoln Center-owned buildings, e.g., the Rose Building, are owned by other tenant Constituents using the building. Such City-owned properties and construction costs owned by other Constituents using Lincoln Center-owned properties are not included in the accompanying consolidated financial statements.

Costs incurred by Lincoln Center relating to improvements to City-owned facilities, including the public spaces, are expensed as incurred. Lincoln Center has been reimbursed by the City for a portion of those project expenses through an agreement with the NYC Economic Development Corporation (NYCEDC).

The City-owned garage at Lincoln Center is operated under a License Agreement from the City. Pursuant to the License Agreement with the City, all operating surpluses from the garage are utilized to help fund the security and maintenance expenses for the public areas. If in any year there is an operating deficit, Lincoln Center may apply for reimbursement, but such reimbursement is not guaranteed, and therefore, Lincoln Center reports its pro rata share of expense. If at the end of the year there is an operating surplus, such surplus is reported as a liability in the consolidated balance sheet.

Buildings and building improvements and furniture, fixtures, and equipment are depreciated on the straight-line method over their estimated useful lives (buildings – 40 years; building improvements – remaining useful life of the building; furniture, fixtures, and equipment – 3 to 10 years). Works of art are not depreciated. Normal additions to and replacements of fixed assets below $25,000 are expensed as incurred.

(g) Deferred Bond Issuance Costs

Bond issuance costs are deferred and amortized on a straight-line basis over the term of the bonds.

(h) Operating Measure

The change in unrestricted general operating net assets includes operating support and revenue, operating expenses, transfers to a Board-designated renewal and replacement reserve, transfers to or from other unrestricted funds, and investment return, based on a spending rate, on certain permanently restricted endowment funds and unrestricted net assets functioning as endowment. The spending rate policy is designed to provide a predictable level of investment return (interest, dividends, and appreciation) in support of operations while maintaining the purchasing power of the endowment. For fiscal years 2012 and 2011, 5% of a 20-quarter rolling average market value of such funds was used.

The change in unrestricted general operating net assets excludes depreciation on buildings and equipment, investment return in excess of or less than the spending rate, investment return on renewal and replacement reserves, assessments to constituents for renewal and replacement reserves, bequests, contributions related to gift annuities, contributions restricted for capital projects, revenues and expenses related to the Redevelopment Projects and nonrecurring items.



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(i) Contributions

Contributions, including unconditional promises to give (pledges), are reported as revenue at the date the contribution is received or pledged. Contributions with purpose or time restrictions are reported as increases in temporarily restricted net assets and are reclassified to unrestricted net assets when the purpose or time restrictions are met. Contributions subject to donor-imposed stipulations that the corpus be maintained permanently are recognized as increases in permanently restricted net assets.

Conditional promises to give are not recognized until they become unconditional, that is, when the conditions on which they depend are substantially met. Contributions of assets other than cash are recorded at their estimated fair value.

Contributions receivable, less an allowance for uncollectible amounts, are reported at their net present value using a risk-adjusted rate. Amortization of the discount is recorded as additional contribution revenue in accordance with the donor-imposed restrictions, if any, on the contributions.

Contributed goods are recognized as revenue at their estimated fair value at date of receipt and expensed when used. Contributed services are recognized as revenue if the services create or enhance nonfinancial assets or require a specialized skill, are provided by individuals possessing those skills, and typically need to be purchased if not provided by donation. Contributed services that do not meet the above criteria are not recognized as revenues and are not reported in the accompanying consolidated financial statements.

(j) Functional Classification of Expenses

The costs of providing Lincoln Center’s programs and other activities have been summarized on a functional basis in the consolidated statement of activities. General and administrative expenses include executive and financial administration, as well as human resources, public relations, in-house legal and information technology. Fundraising activities include salaries and employee benefits of staff that develop proposals for fundraising; solicit contributions from individuals, corporations, government agencies, and foundations; and conduct special fundraising events. Fundraising costs are expensed as incurred.

(k) Estimates

The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Significant estimates made in the preparation of these consolidated financial statements include the fair value of alternative investments, fair value of swap agreements, and allowance for uncollectible contributions receivable. Actual results could differ from those estimates.



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(l) Accounting for Uncertainty in Income Taxes

Lincoln Center recognizes the benefit of tax positions when it is more-likely-than-not that the position will be sustainable based on the merits of the position.

(m) Comparative Financial Information

The accompanying consolidated statement of activities is presented with prior year summarized financial information in total, but not by net asset class. Such information does not include sufficient detail to constitute a complete presentation; accordingly, such information should be read in conjunction with Lincoln Center’s June 30, 2011 consolidated financial statements, from which the summarized information was derived.

(n) Reclassifications

Certain reclassifications have been made to the 2011 consolidated financial information to conform to the current year presentation.

(3) The Redevelopment Projects

The Redevelopment Projects consisted of three main initiatives:

1) 65th Street Project - the transformation of West 65th Street between Broadway and Amsterdam Avenue primarily the enhancement of the North Plaza and 65th Street as well as the renovation of Alice Tully Hall, which re-opened February 1, 2009;

2) Promenade Project – the revitalization of the main entrance to Lincoln Center, the area along Columbus Avenue between 62nd and 65th Streets with the upgrading of the Josie Robertson Plaza and the central fountain that adorns it, all completed June 30, 2010; and

3) David Rubenstein Atrium Project – transformation of a privately owned public space across from Lincoln Center into an arts-oriented public space with a visitor information and discount ticket facility. The Atrium opened November 2009.

Since 2001, LCDP received approximately $260 million of government funding to support the Redevelopment Project. As of June 30, 2012 and 2011, LCDP has a receivable of $944,702 from NYCEDC for erection of a new pedestrian bridge (Bridges Agreement). In July 2012, $850,693 was collected.

During the years ended June 30, 2012 and 2011, Lincoln Center Redevelopment Projects capital expenditures totaled $724,339 and $2,822,440, respectively. In addition, costs amounting to $26,927,904 and $52,666,446 for fiscal years 2012 and 2011, respectively, were expensed. These expensed items consist principally of improvements made to City-owned facilities, including the public spaces, fundraising costs associated with the Bravo Campaign (the fundraising campaign for the Redevelopment Projects), expenses relating to facilities while under renovation, administrative costs, financing costs, and Lincoln Center’s financial commitments (see below) to certain Constituents relating to the 65th Street Project.



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Bilateral agreements between Lincoln Center and four Constituents, which are specific to the 65th Street Project and which include specific financial commitments between Lincoln Center and these four Constituents, were first entered into in 2006. Pursuant to these agreements, there are remaining conditional contingent obligations to the Constituents related to fundraising matching participation at June 30, 2012 of $.5 million. During the years ended June 30, 2012 and 2011, $4.5 million and $11.0 million, respectively, of Lincoln Center’s obligation was recognized as redevelopment project expense in the consolidated statements of activities. Also, pursuant to these agreements, the Constituents have satisfied all contingent obligations to Lincoln Center related to construction cost participation.

Temporarily restricted net assets for the Redevelopment Projects aggregated $3,609,856 and $3,204,178 at June 30, 2012 and 2011, respectively.

(4) Contributions and Grants Receivable

Contributions and grants receivable at June 30, 2012 and 2011 are expected to be collected as follows:

2012 2011

Bravo Campaign:Within one year $ 26,785,543 30,202,769 One to five years 35,094,809 31,107,591

61,880,352 61,310,360

Less discount to present value at rates rangingfrom 0.39% to 5.00% (440,154) (665,648)

Total Bravo Campaign 61,440,198 60,644,712

General and program:Within one year 8,733,705 9,599,060 One to five years 6,363,333 11,553,333 More than five years 561,000 382,924

15,658,038 21,535,317

Less discount to present value at rates rangingfrom 0.39% to 0.71% (91,728) (190,990)

Total general and program 15,566,310 21,344,327

Allowance for doubtful accounts (71,000) (71,000) Total $ 76,935,508 81,918,039



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(5) Investments

Lincoln Center’s investments, at estimated fair value, consisted of the following at June 30:

2012 2011

Cash and cash equivalents $ 1,097,731 4,921,262 Fixed income (a) 531,176 591,920

Equities (a):Large cap equity 43,550,189 32,259,536 Small/mid cap equity 11,905,262 20,092,918

Total equities 55,455,451 52,352,454

Real assets mutual funds (a) 4,515,293 6,730,687

Alternative investments (b):Fixed income 25,079,606 36,244,071 International equity 30,451,796 28,139,534 Real assets 3,937,148 8,725,909 Absolute return 33,277,838 32,774,561 Hedged equity 34,207,445 27,919,647 Private equity 1,017,165 1,090,448

Total alternative investments 127,970,998 134,894,170

Total investments $ 189,570,649 199,490,493

(a) Marketable Securities

Equities and real assets mutual funds consist of a diversified portfolio principally including securities with large market capitalizations, managed by growth, value, and quantitative disciplines. Fixed income consists primarily of U.S. Treasury bonds and notes and Government National Mortgage Association (GNMA) mortgage-backed securities.

(b) Investments without a Readily Determinable Market Value

Alternative investments represent limited partnership and similar interests in funds that invest in public and private securities and follow a variety of investment strategies. Terms and conditions of these investments, including liquidity provisions, are different for each fund.

Fixed Income – This category includes a fund that invests primarily in U.S. Treasury Notes, Municipal Bonds, Corporate Bonds, and Federal Home Loan Mortgage Corp. (FHLMC), Federal National Mortgage Association (FNMA), and GNMA mortgage-backed securities. Redemptions are allowed daily.

International Equity – This category includes investments in funds that focus on long-only international equities. There is exposure to both developed and emerging markets. Some funds are



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subject to a lock-up period. For those investments not subject to a lock-up provision redemptions are allowed monthly.

Real Assets – This category includes investments in funds containing physical assets normally considered to be highly correlated to inflation. The funds contain, but are not limited to, investments in both U.S. and global equities related to the production or distribution of real assets, inflation-linked bonds, and commodities via futures contracts. Redemptions are allowed monthly.

Absolute Return – This category includes multi-strategy absolute return investments focused on analyzing the probability-adjusted returns of individual securities and assets and capturing the alpha in mis-priced assets/securities across conventional and alternative financial strategies. Managers initiate long and short positions targeting solid absolute risk-adjusted returns. Some funds are subject to a lock-up period. For those investments not subject to a lock-up provision, redemptions are allowed at a frequency that ranges from monthly to annually.

Hedged Equity – This category includes investments in hedge funds that invest both long and short primarily in U.S. common stocks. Managers of the hedge funds have the ability to shift investments from value to growth strategies, from small to large capitalization stakes, and from a net long position to a net short position. The investments dominate exposure in the U.S. market, but will also take advantage of investment opportunities in Europe, Asia, and Emerging Markets. Some funds are subject to a lock-up period. For those investments not subject to a lock-up provision, redemptions are allowed at a frequency that ranges from quarterly to annually.

Private Equity – This category includes private equity fund of funds that focus on early stage venture capital, including investments in the technology and life science sectors. These investments are not redeemable. Instead, the nature of the investments in this category is that distributions are received through the liquidation of the underlying assets in the fund. All funds are subject to lock-up provisions.

Investments are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investments, it is at least reasonably possible that changes in the values of investments will occur in the near term and that such changes could materially affect the amounts reported in the consolidated balance sheet.



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Lincoln Center’s alternative investments contain various monthly, quarterly, and annual redemption restrictions with required written notice ranging from 1 to 60 days. As of June 30, 2012, the following table summarizes the composition of such investments by the various redemption provisions:

Redemption period Amount

Daily $ 25,079,606 Monthly 29,754,329 Quarterly 24,015,853 Annual 21,852,971 Lock-up 27,268,239

Total $ 127,970,998

Investment return and its classification in the consolidated statements of activities were as follows:

2012 2011

Interest and dividend income $ 517,116 2,231,812 Investment management and custodial fees (874,210) (890,623) Net (depreciation) appreciation in fair value

of investments (1,189,222) 28,255,533

Total investment return (1,546,316) 29,596,722

Less investment return available under spending policy,including temporarily restricted amounts of $4,042,543and $3,575,584 in 2012 and 2011, respectively 8,445,237 7,951,161

Investment return (less) greater thanamounts available under spending policy,including temporarily restricted amountsof ($4,651,012) and $9,592,949 in2012 and 2011, respectively $ (9,991,553) 21,645,561



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(6) Fixed Assets

Fixed assets balances were as follows at June 30:

2012 2011

Land $ 15,513,280 15,513,280 Building and building improvements 511,177,470 520,211,269 Furniture, fixtures, and equipment 6,189,393 6,892,886 Fountain and works of art 1,690,114 1,690,114 Leasehold improvements 27,479,985 27,302,436 Construction in progress 200,000 95,000

Total fixed assets 562,250,242 571,704,985

Less accumulated depreciation (192,497,711) (192,100,122) Fixed assets, net $ 369,752,531 379,604,863

(7) Lines of Credit

On February 13, 2012, Lincoln Center entered into a $125 million revolving credit note agreement bearing interest at LIBOR plus 45bps with a termination date of February 12, 2014. It replaced a $100,000,000 credit note agreement bearing interest at LIBOR plus 75bps and a nonuse fee of 10bps with a termination date of April 30, 2012. There were no borrowings against the lines of credit during fiscal year 2012 or 2011.

(8) Long-Term Debt – Redevelopment Projects

Long-term debt – Redevelopment Projects at June 30, 2012 and 2011 consists of the following:

2012 2011

Trust for Cultural Resources of The City of New York:Series 2008A Revenue Bonds $ 151,250,000 151,250,000 Series 2008B Revenue Bonds 50,000,000 50,000,000 Series 2008C Revenue Bonds 101,745,819 102,021,474

$ 302,995,819 303,271,474

In fiscal year 2006, Lincoln Center entered into a long-term tax-exempt borrowing in the amount of $150 million with the Trust for Cultural Resources of The City of New York (the Trust) for the purpose of financing, through proceeds from the Series 2006A Revenue Bonds (Series 2006A Bonds), certain costs of the 65th Street Project. The Series 2006A Bonds were refunded in July 2008 with the issuance, through the Trust, of $151,250,000 Series 2008A variable rate tax-exempt bonds (Series 2008A Bonds). The Series 2008A Bonds are due December 1, 2035 and are secured by two irrevocable direct pay letters of credit issued by two major banks with an expiration date of June 17, 2015. The Series 2008 A-1, principal of $113,475,000, is secured by an irrevocable direct pay letter of credit with a facility fee rate of 60bps and



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15 (Continued)

the Series 2008 A-2, principal of $37,775,000, is secured by an irrevocable direct pay letter of credit with a facility fee rate of 50bps.

In October 2008, Lincoln Center entered into a long-term tax-exempt borrowing in the amount of $100,000,000 with the Trust for the purpose of financing, through proceeds from the Series 2008C Revenue Bonds (Series 2008C Bonds), certain costs relating to the Redevelopment Projects. The Series 2008C Bonds bear interest at 5.75% on $84,350,000 and 5.25% on $15,650,000 of the bonds with $59,525,000 due on December 1, 2016 and $40,475,000 due on December 1, 2018. The bonds were issued at a premium.

In November 2008, Lincoln Center entered into a long-term tax-exempt borrowing in the amount of $100,000,000 with the Trust, consisting of $50,000,000 Series 2008B-1 and $50,000,000 Series 2008B-2 variable rate tax-exempt bonds (Series 2008B Bonds), for the purpose of financing certain costs relating to the Redevelopment Projects. On February 1, 2011, the $50,000,000 Series 2008B-2 variable rate municipal bond was redeemed and the $50,000,000 letter of credit supporting it was terminated. The $50,000,000 Series 2008B-1 Bonds are due November 2038 and are secured by an irrevocable direct pay letter of credit with a facility fee rate of 60bps issued by a major bank with an initial expiration date of November 12, 2013.

The estimated fair value of Lincoln Center’s outstanding bonds at June 30, 2012 was $322,554,716.

Effective January 17, 2006, Lincoln Center entered into an interest rate swap agreement with a major investment banking institution as a hedge on $95,000,000 of variable rate debt. Under the terms of the agreement, Lincoln Center pays interest at a predetermined fixed rate of 3.70% and receives a variable rate. The term of this interest rate swap is 28.5 years. The collateral on this agreement was $27,413,373 and $6,098,868 at June 30, 2012 and 2011, respectively. Lincoln Center also has an interest rate swap contract for $50 million with a major bank in which Lincoln Center pays at a predetermined fixed rate of 4.01% and receives a variable rate. The start date was September 2008. The collateral on this agreement was $13,680,000 and $1,150,000 at June 30, 2012 and 2011, respectively.

The aggregate estimated fair value of these two agreements is $(59,671,782) and $(25,984,209) at June 30, 2012 and 2011, respectively. Such amount is recorded as a liability in the consolidated balance sheets. Unrealized losses of $(33,687,573) and unrealized gains of $7,060,285 on these swaps are reflected in the consolidated statements of activities for the years ended June 30, 2012 and 2011, respectively.

Bond interest expense and other financing costs reported in the consolidated statements of activities related to long-term debt – Redevelopment Projects is $12,046,712 and $12,673,596 in 2012 and 2011, respectively.

(9) Long-Term Debt – Other

During 2011, Lincoln Center repaid the outstanding long-term debt – other in the amount of $5,615,413 and terminated the related interest rate swaps. In addition, Lincoln Center paid $1,027,180 interest expense and loan repayment fees relating to long-term debt – other in fiscal year 2011.



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(10) Rose Building Garage

In 1990, Lincoln Center entered into a management agreement with Performance Parking LLC for management of the Rose Building Garage. Under terms of the agreement, as amended, Performance Parking LLC is entitled to the net receipts and pays Lincoln Center an annual amount. Lincoln Center received $2,509,694 and $2,460,485 in fiscal years 2012 and 2011, respectively. Such agreement provides for an increase each year of 2%, subject to further escalation as defined in the agreement.

(11) Fair Value

At June 30, 2012, the carrying value of Lincoln Center’s cash and cash equivalents, receivables, and accounts payable and accrued expenses approximates their fair values.

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 market participants at the measurement date. The three levels of the fair value hierarchy are as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that a reporting entity has the ability to access at the measurement date.

• Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3 inputs are unobservable inputs for the asset or liability.

For alternative investments, which do not have readily determinable fair values, including hedge funds, limited partnerships, and other funds, as a practical expedient, fair value is estimated using net asset value per share or its equivalent as reported by the investment managers.

Most investments classified in Levels 2 and 3 consist of shares or units in investment funds as opposed to direct interests in the funds’ underlying holdings, which may be marketable. Because the net asset value reported by each fund is used as a practical expedient to estimate fair value of Lincoln Center’s interest therein, its classification in Level 2 or 3 is based on Lincoln Center’s ability to redeem its interest at or near June 30. If the interest can be redeemed in the near term, the investment is classified as Level 2. The classification of investments in the fair value hierarchy is not necessarily an indication of the risks, liquidity, or degree of difficulty in estimating the fair value of each investment’s underlying assets and liabilities.



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Lincoln Center’s assets and liabilities at June 30, 2012 and 2011 that are reported at fair value are summarized in the following table by their classification in the fair value hierarchy:

June 30, 2012Fair value Level 1 Level 2 Level 3

Assets:Investments:

Cash and cash equivalents $ 1,097,731 1,097,731 — — Fixed income 531,176 531,176 — — Equities:

Large cap equity 43,550,189 43,550,189 — — Small/mid cap equity 11,905,262 11,905,262 — —

Real assets mutual funds 4,515,293 4,515,293 — — Alternative investments:

Fixed income 25,079,606 — 25,079,606 — International equity 30,451,796 — 25,817,181 4,634,615 Real assets 3,937,148 — 3,937,148 — Absolute return 33,277,838 — 18,857,715 14,420,123 Hedged equity 34,207,445 — 5,158,138 29,049,307 Private equity 1,017,165 — — 1,017,165

Total investments $ 189,570,649 61,599,651 78,849,788 49,121,210

Funds held by bond trustee $ 96,707 96,707 — —

Liabilities:Interest rate swaps $ 59,671,782 — 59,671,782 —



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18 (Continued)

June 30, 2011Fair value Level 1 Level 2 Level 3

Assets:Investments:

Cash and cash equivalents $ 4,921,262 4,921,262 — — Fixed income 591,920 591,920 — — Equities:

Large cap equity 32,259,536 32,259,536 — — Small/mid cap equity 20,092,918 20,092,918 — —

Real assets mutual funds 6,730,687 6,730,687 — — Alternative investments:

Fixed income 36,244,071 — 36,244,071 — International equity 28,139,534 — 28,139,534 — Real assets 8,725,909 — 8,725,909 — Absolute return 32,774,561 — 18,939,197 13,835,364 Hedged equity 27,919,647 — 11,207,973 16,711,674 Private equity 1,090,448 — — 1,090,448

Total investments $ 199,490,493 64,596,323 103,256,684 31,637,486

Funds held by bond trustee $ 184,761 184,761 — —

Liabilities:Interest rate swaps $ 25,984,209 — 25,984,209 —

The following table presents activity for the years ended June 30, 2012 and 2011 for Lincoln Center’s investments measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

International Absolute Hedged Privateequity return equity equity Total

Ending balance, June 30, 2010 $ — 12,779,397 14,427,346 1,087,588 28,294,331 Purchases — 4,500,000 3,000,000 — 7,500,000 Sales — (263,825) — (77,119) (340,944) Net appreciation in fair value — 1,796,907 1,675,737 79,979 3,552,623 Transfers to Level 2 — (4,977,115) (2,391,409) — (7,368,524)

Ending balance, June 30, 2011 — 13,835,364 16,711,674 1,090,448 31,637,486

Purchases 5,000,000 — 11,350,000 — 16,350,000 Sales — (166,401) (76,381) (174,863) (417,645) Net appreciation in fair value (365,385) 751,160 1,064,014 101,580 1,551,369

Ending balance, June 30, 2012 $ 4,634,615 14,420,123 29,049,307 1,017,165 49,121,210

The fair value of interest rate swaps is based on prevailing interest rates for swaps of the same maturity. As interest rates for swaps go up from the equivalent maturity, the fair value of the swap will improve from



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19 (Continued)

Lincoln Center’s perspective and vice versa. At the end of each day, the closing LIBOR yield curve is used to value the swaps.

(12) Net Assets

2012 2011

Unrestricted:General operating $ 8,004,539 5,209,463

Board designated:Board-designated endowment funds 86,233,947 91,773,471 Renewal and replacement reserves 7,618,143 7,759,891 Operations – special reserves 3,057,993 3,057,993

Total board designated 96,910,083 102,591,355

Redevelopment and other physical capital 109,735,469 148,288,474

Total unrestricted 214,650,091 256,089,292

Temporarily restricted for:Program support, primarily accumulated gains on

endowment 30,764,736 37,520,179 Lincoln Center Redevelopment Projects 3,609,856 3,204,178 Other — 47,703

Total temporarily restricted 34,374,592 40,772,060

Permanently restricted – endowment funds, incomerestricted for various programs 84,018,251 83,601,273

Total net assets $ 333,042,934 380,462,625

(13) Support from the City

Funds from the City support certain redevelopment project expenditures. There are several funding agreements between LCDP and the City, which subsequently pass through Lincoln Center for capital support. Lincoln Center recognized as revenue $13.6 million during fiscal year 2011, from the City for capital improvement purposes for the Redevelopment Projects. This amount is reflected in the consolidated statements of activities when requisitions are submitted to the City for reimbursement. The City made payments of $81.3 million in fiscal year 2011, for capital appropriations relating to the Redevelopment Projects. In fiscal year 2012, Lincoln Center did not recognize revenue or receive payments from the City for capital appropriations relating to the Redevelopment Projects.

(14) Pension Plan

Lincoln Center participates in a multiple-employer defined benefit pension plan along with certain of its Constituents, which covers substantially all nonunion employees. Employers’ contributions to the plan are commingled and available to pay the benefits of all plan participants. As of June 30, 2011, the actuarial



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20 (Continued)

value of plan assets was $51,239,562, the actuarial accumulated benefit obligation was $49,752,323 and the funded percentage was 103.0%. In addition, at June 30, 2011, the fair value of plan net assets available for benefits was $49,090,248 and the funded percentage based on the fair value of plan net assets was 98.7%. For fiscal years 2012 and 2011, Lincoln Center contributed $1,087,225 and $790,950, respectively, to the nonunion pension plan, although no contribution was required by Employee Retirement Income Security Act.

Lincoln Center also participates in two significant multiemployer pension plans based upon collective bargaining agreements. The two plans are outlined in the table below. Unless otherwise noted, the most recent Pension Protection Act (PPA) zone status is available at each plan’s year-end. The zone status is based on information that Lincoln Center received from the plan sponsor and, as required by the PPA, is certified by the plan’s actuary. Both plans certified a green zone status for the plan years ended 2011 and 2010. Similarly, neither plan imposed a surcharge as part of their respective collective bargaining agreements. In addition, Lincoln Center would be responsible for any withdrawal liability under the agreements with the unions.

Plan Contributions from LCPA AgreementPension Fund EIN year-end 2012 2011 expiration

32 BJ/Broadway LeaguePension Fund 13-1998219 12/31/2011 $ 282,503 277,469 8/31/2012;

8/31/2012;10/31/2012

Treasurers & Ticket SellersLocal 751 Pension Fund 13-6164776 8/31/2011 149,821 140,278 8/31/2012

Lincoln Center also participates in six plans that are not considered significant. Lincoln Center contributed less than 5% to these plans, which collectively amounted to $913,670 and $749,374 for fiscal years 2012 and 2011, respectively.

(15) Other Commitments and Contingencies

Lincoln Center is involved in several legal proceedings and claims. Management believes that the liabilities, if any, resulting from such proceedings will not have a material adverse effect on the financial condition of Lincoln Center.

At June 30, 2012, LCDP has entered into construction-related contracts with total remaining commitments of approximately $1.5 million. Of this amount, 48% are commitments with architects, engineers, and construction management firms. The remaining 52% are commitments to various owner-directed consultants and direct contracts.



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21 (Continued)

(16) Functional Expenses Program Management Fund Redevelopment Total Totalexpenses and general raising Projects 2012 2011

(In thousands)

Salaries and benefits $ 46,738 10,847 3,502 856 61,943 57,802 Artists and performing fees 14,035 5 — — 14,040 9,753 Legal and other professional fees 2,132 2,602 299 166 5,199 5,020 Travel and entertainment 730 432 41 2 1,205 848 Equipment, production, and

space rental 7,484 213 15 — 7,712 6,833 Advertising and promotion 3,715 1,188 54 — 4,957 4,533 Printing, postage, and delivery 191 42 196 21 450 488 Insurance 1,655 95 — — 1,750 1,592 Facilities management 6,904 338 146 — 7,388 6,733 Utilities 8,793 — — — 8,793 8,804 Other 3,711 1,452 1,451 77 6,691 6,288 Depreciation 12,314 534 134 — 12,982 12,639 Lincoln Center Redevelopment

Projects — — — 12,287 12,287 38,359 Interest and other financing costs — — — 12,047 12,047 13,701

Total $ 108,402 17,748 5,838 25,456 157,444 173,393

Redevelopment Projects expense, excluding interest and other financing costs, for the fiscal years ended June 30, 2012 and 2011, respectively, is detailed below:

2012 2011

Public space costs $ 6,128,857 24,008,589 Contributions to constituents 4,504,427 10,931,544 Management and general 1,866,580 3,471,078 Fundraising 909,563 2,027,000

Total Redevelopment Projects expense $ 13,409,427 40,438,211

(17) Endowment Funds

Lincoln Center’s endowment consists of 58 individual funds, including both donor-restricted endowment funds and amounts designated by the Board to function as endowments. Net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions.

In September 2010, New York State enacted the New York Prudent Management of Institutional Funds Act (NYPMIFA), which imposes guidelines on the management and investment of endowment funds. The Board of Directors of Lincoln Center has interpreted the relevant law as allowing Lincoln Center to appropriate for expenditures or accumulate so much of an endowment fund as Lincoln Center determines is prudent considering the uses, benefits, purposes, and duration for which the endowment fund is established, subject to the intent of the donor. Lincoln Center has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its



June 30, 2012

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endowment funds while seeking to protect the original value of the gift after inflation. Under this policy, the endowment assets are invested in a manner that is intended to produce results consistent with Lincoln Center’s overall investment strategy.

Accounting guidance associated with the enactment of NYPMIFA as set forth in Accounting Standards Codification (ASC) Topic 958-205-45, Classification of Donor-Restricted Endowment Funds Subject to UPMIFA, requires the portion of the donor-restricted endowment fund that is not classified as permanently restricted to be classified as temporarily restricted net assets until appropriated for expenditure in a manner consistent with the standard of prudence prescribed by NYPMIFA. The adoption of the ASC’s guidance resulted in a $13,689,988 reclassification from unrestricted to temporarily restricted net assets in 2011.

Lincoln Center classifies as permanently restricted net assets the original value of gifts to the permanent endowment and the investment return required by the donor to be added to the permanent endowment.

The net asset classes of Lincoln Center’s endowment funds, including contributions receivable, as of June 30, 2012 and 2011 are as follows:

June 30, 2012Temporarily Permanently

Unrestricted restricted restricted Total

Donor-restricted funds $ (68,256) 20,320,928 84,018,251 104,270,923 Board-designated fund 86,302,203 — — 86,302,203

Total endowment $ 86,233,947 20,320,928 84,018,251 190,573,126



Donor-restricted funds $ (4,554) 24,870,681 83,601,273 108,467,400 Board-designated fund 91,778,025 47,703 — 91,825,728

Total endowment $ 91,773,471 24,918,384 83,601,273 200,293,128



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The following tables present changes in Lincoln Center’s endowment funds, including contributions receivable, for the years ended June 30, 2012 and 2011:



Endowment net assets,June 30, 2011 $ 91,773,471 24,918,384 83,601,273 200,293,128

Interest and dividends, net (254,394) (102,700) — (357,094) Net depreciation in fair value

of investments (683,454) (505,768) — (1,189,222) Contributions and designations 27,859 — 416,978 444,837 Amounts appropriated for operations (4,402,694) (4,042,543) — (8,445,237) Other (226,841) 53,555 — (173,286)




Endowment net assets,June 30, 2010 $ 95,885,690 798,535 70,537,687 167,221,912

Adoption of ASC 958-205-45 (13,689,988) 13,689,988 — — Interest and dividends, net 737,654 603,535 — 1,341,189 Net appreciation in fair value

of investments 15,540,543 12,714,990 — 28,255,533 Contributions and designations 314,787 836,912 13,063,586 14,215,285 Amounts appropriated for operations (4,375,577) (3,575,584) — (7,951,161) Other (2,639,638) (149,992) — (2,789,630)


(a) Funds with Deficiencies

From time to time, the fair value of assets associated with an individual donor-restricted endowment fund may fall below the original value of the fund. Deficiencies of this nature are reported as unrestricted net assets. These deficiencies aggregated $68,256 and $4,554 at June 30, 2012 and 2011, respectively.



June 30, 2012

24

(b) Return Objectives and Risk Parameters

Lincoln Center has adopted investment policies for its endowment that attempt to provide a reasonable level of support, as determined by Lincoln Center’s spending policy, while seeking to preserve the real value of the endowment assets over time. Lincoln Center relies on a total return strategy under which investment returns are achieved through both appreciation (realized and unrealized) and yield (interest and dividends). Investments are diversified by asset class, as well as by investment manager and style, with a focus on achieving long-term return objectives within prudent risk constraints.

(18) Related Party Transactions

Members of Lincoln Center’s Board of Directors and senior management may, from time to time, be associated, either directly or indirectly, with companies doing business with Lincoln Center. For senior management, Lincoln Center requires annual disclosure of significant financial interests in, or employment or consulting relationships with, entities doing business with Lincoln Center. When such relationships exist, measures are taken to appropriately manage the actual or perceived conflict in the best interests of Lincoln Center, and to undertake periodic review of continuing such relationships. Lincoln Center has a written conflict of interest policy that requires, among other things, that no member of the Board of Directors can participate in any decision in which he or she (or immediate family member) has a material financial interest. Each director is required to certify compliance with the conflict of interest policy on an annual basis and indicate whether Lincoln Center does business with an entity in which the director has a material financial interest. When such a relationship exists, measures are taken to mitigate any actual or perceived conflict, including requiring that such transactions be conducted at arm’s length, for good and sufficient consideration, based on terms that are fair and reasonable to and for the benefit of Lincoln Center, and in accordance with applicable conflict of interest laws. No such associations are considered to be significant.

(19) Subsequent Events

During July 2012, LCDP amended its Certificate of Incorporation to expand its purposes beyond the boundaries of the Lincoln Center campus. The amendment embraces Lincoln Center’s goal of fostering the performing arts to improve the cultural life of communities throughout the United States and the world.

Events that have occurred subsequent to June 30, 2012 have been evaluated through November 29, 2012, the date LCPA’s financial statements were available to be issued and no additional subsequent event disclosures, other than those disclosed above, were identified.

25

Schedule 1LINCOLN CENTER FOR THE PERFORMING ARTS, INC.

AND RELATED ENTITY

Consolidating Balance Sheet

June 30, 2012

Lincoln Center Consolidationfor the Lincoln Center and

Performing Development Elimination ConsolidatedAssets Arts, Inc. Project Total Entries Total

Cash and cash equivalents $ 15,032,735 245,585 15,278,320 — 15,278,320 Restricted cash 41,093,373 — 41,093,373 — 41,093,373 Accounts and investment income receivable 17,255,226 2,014,834 19,270,060 (3,600,558) 15,669,502 Contributions and grants receivable 76,935,508 944,702 77,880,210 (944,702) 76,935,508 Prepaid expenses, inventory, and other assets 6,309,967 51,676 6,361,643 — 6,361,643 Funds held by bond trustee – Redevelopment Projects 96,707 — 96,707 — 96,707 Investments 189,570,649 — 189,570,649 — 189,570,649 Deferred bond issuance costs, net 1,738,850 — 1,738,850 — 1,738,850 Fixed assets, net 369,696,118 56,413 369,752,531 — 369,752,531

Total assets $ 717,729,133 3,313,210 721,042,343 (4,545,260) 716,497,083

Liabilities and Net Assets

Liabilities:Accounts payable and accrued expenses $ 12,759,273 — 12,759,273 — 12,759,273 Accounts payable and accrued expenses:

Redevelopment Projects 2,854,543 3,205,119 6,059,662 (4,545,260) 1,514,402 Deferred revenue 6,512,873 — 6,512,873 — 6,512,873 Fair value of interest rate swaps 59,671,782 — 59,671,782 — 59,671,782 Long-term debt – Redevelopment Projects 302,995,819 — 302,995,819 — 302,995,819

Total liabilities 384,794,290 3,205,119 387,999,409 (4,545,260) 383,454,149

Commitments and contingencies

Net assets:Unrestricted:

General operating 8,063,196 — 8,063,196 (58,657) 8,004,539 Board designated 96,910,083 — 96,910,083 — 96,910,083 Redevelopment and other physical capital 109,568,721 108,091 109,676,812 58,657 109,735,469

Total unrestricted 214,542,000 108,091 214,650,091 — 214,650,091

Temporarily restricted 34,374,592 — 34,374,592 — 34,374,592 Permanently restricted 84,018,251 — 84,018,251 — 84,018,251

Total net assets 332,934,843 108,091 333,042,934 — 333,042,934 Total liabilities and net assets $ 717,729,133 3,313,210 721,042,343 (4,545,260) 716,497,083

See accompanying independent auditors’ report.

26

Schedule 2LINCOLN CENTER FOR THE PERFORMING ARTS, INC.

AND RELATED ENTITY

Consolidating Statement of Activities

Year ended June 30, 2012

Lincoln Center Consolidationfor the Lincoln Center and

Performing Development Elimination ConsolidatedArts, Inc. Project Total Entries Total

Support and revenue:Contributions, private grants, and bequests $ 58,884,394 — 58,884,394 — 58,884,394 Government grants 1,948,953 — 1,948,953 — 1,948,953 Investment return:

Designated for current operations 8,445,237 — 8,445,237 — 8,445,237 In excess of (less than) amounts designated for current operations (9,991,553) — (9,991,553) — (9,991,553)

Net unrealized loss on swap agreement (33,687,573) — (33,687,573) — (33,687,573) Box office and other program service revenue 11,801,926 — 11,801,926 — 11,801,926 Facilities services 26,988,007 — 26,988,007 (58,657) 26,929,350 Rental income 26,970,393 — 26,970,393 — 26,970,393 Other income 8,979,163 8,137,951 17,117,114 (8,060,653) 9,056,461 Special event revenue, net of expenses of $1,871,683 9,666,926 — 9,666,926 — 9,666,926

Total support and revenue 110,005,873 8,137,951 118,143,824 (8,119,310) 110,024,514

Expenses:Program services:

Performance presentations 27,050,390 — 27,050,390 — 27,050,390 Education and outreach 9,582,987 — 9,582,987 — 9,582,987 Facilities management and services 66,153,163 — 66,153,163 — 66,153,163 Visitor and patron services 1,651,202 — 1,651,202 — 1,651,202 New ventures and special projects 3,964,399 — 3,964,399 — 3,964,399

Total program services 108,402,141 — 108,402,141 — 108,402,141

Supporting services:Management and general 17,333,964 1,861,779 19,195,743 (1,447,724) 17,748,019 Fundraising 5,837,906 — 5,837,906 — 5,837,906

Total supporting services 23,171,870 1,861,779 25,033,649 (1,447,724) 23,585,925

Interest and other financing costs 12,046,712 — 12,046,712 — 12,046,712 Redevelopment Projects 13,391,327 6,689,686 20,081,013 (6,671,586) 13,409,427

Total expenses 157,012,050 8,551,465 165,563,515 (8,119,310) 157,444,205

Deficiency of support and revenue over expenses (47,006,177) (413,514) (47,419,691) — (47,419,691)

Change in net assets (47,006,177) (413,514) (47,419,691) — (47,419,691)

Net assets at beginning of year 379,941,020 521,605 380,462,625 — 380,462,625 Net assets at end of year $ 332,934,843 108,091 333,042,934 — 333,042,934

See accompanying independent auditors’ report.

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