Annual Report 2004 - Charles Stewart Mott Foundation

NOTES TO FINANCIAL STATEMENTS
Costs of office furnishings and equipment are consistently charged to expense, because the Foundation
does not deem such amounts to be sufficiently material to warrant capitalization and depreciation.
Operating Leases
The Foundation has non-cancelable operating leases for certain office equipment. These leases are for
terms of one to five years. Aggregate minimum future rental payments, under non-cancelable operating
leases having remaining terms in excess of one year as of December 31, 2004, total $125,491. Lease
expense for the year 2004 amounted to $91,238.
Cash Equivalents
Cash equivalents with original maturities of three months or less are reflected at market value and
include short-term notes and commercial paper, which are included with investments.
Reclassifications
Certain prior period financial statement amounts have been reclassified to conform to the 2004
presentations.
C. Investments:
Investments held at December 31, 2004 and 2003, were as follows (in thousands):
2004 2003
Market Value Cost Basis Market Value Cost Basis
Equities $1,927,350 $1,178,779 $1,823,361 $1,033,424
U.S. Government obligations 235,752 242,521 295,109 297,798
Corporate bonds 53,183 51,924 76,707 73,295
Cash equivalents 188,441 188,441 73,848 73,848
Total $2,404,726 $1,661,665 $2,269,025 $1,478,365
D. Excise Tax & Distribution Requirements:
The Foundation is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue
Code. In accordance with the provisions of the Tax Reform Act of 1969, the Foundation is subject to an
excise tax on net investment income, including realized gains as defined in the Act.
The liability for excise tax is composed of the following (in thousands):
2004 2003
Currently refundable $ (655) $ (440)
Deferred 14,455 15,180
Total $13,800 $14,740
The deferred excise tax represents the tax on unrealized marketable security and partnership gains and
losses. Excise tax payments of $3,850,000 and $2,750,000 were paid in 2004 and 2003, respectively.
The Foundation will be required to make qualifying distributions of approximately $12.7 million during
2005 to meet distribution regulations of the Internal Revenue Code for private foundations.
82 CHARLES STEWART MOTT FOUNDATION