Minnesota Orchestra Reports Fiscal 2016 Balanced Budget

The Minnesota Orchestra's 2016 Annual Meeting today celebrated the artistic and financial milestones of the Orchestra's 2015-16 season, a year in which the Orchestra returned to Carnegie Hall and Europe, completed its celebrated Sibelius symphonies recording cycle, launched a new education program for high school students-and achieved a balanced budget. Marilyn Carlson Nelson, who was announced as the Orchestra's Chair Elect in September, was elected Board Chair by the Orchestra's Board of Directors, succeeding Warren Mack, who completed a two-year term.

"The 2015-16 season was a year of strong ticket sales and solid fundraising for the Minnesota Orchestra," said Warren Mack, who served as host for the meeting. "We are grateful to this community for their contributions and their attendance, which propelled the Orchestra to a second consecutive year of balanced budget operations." Fiscal 2016 net operating results yielded a balanced budget with a surplus of $12,000 on a $31.7 million budget. The Orchestra's annual endowment contribution was based on its policy of a 5 percent draw for operations. Incoming Chair Marilyn Carlson Nelson remarked, "This Orchestra is experiencing such positive momentum?with audiences and donors inspired by what they hear and feel in the concert hall?that I am proud to commit my time here and am very optimistic about what we can accomplish in the years ahead." Nelson, who is the former chairman and chief executive officer of global travel and hospitality company Carlson, has a long and deep relationship with the Orchestra. She chaired the Orchestra's Symphony Ball in 1973 and joined the board later that year. She was named a Life Director in 2006, and funded, along with her late husband Glen Nelson, the Orchestra's historic 2015 tour to Cuba and its 2016 Beethoven Marathon.

That high-intensity, two-week Beethoven Marathon, which featured Music Director Osmo Vänskä leading the Orchestra in all nine Beethoven symphonies and all five piano concertos with Yevgeny Sudbin, reached more than 15,000 people in eight January concerts, five of which were sell-outs. Additional artistic highlights of the 2015-16 season included a four-country European Tour that featured a performance and international radio broadcast hosted by MPR from Amsterdam's Concertgebouw; a much-anticipated, critically-acclaimed return to Carnegie Hall in March; the release of the third and final album in Vänskä and the Orchestra's Sibelius symphonies cycle; the launch of Symphonic Adventures, an education program for metro-area high school students, conceived by Minnesota Orchestra musicians; and a week-long Common Chords residency in Detroit Lakes, among other activities.

"This Orchestra is in the midst of a truly exceptional period of artistic growth and collaboration," said Herbert Winslow, Associate Principal Horn and Chair of the Musicians' Committee. "Whether we're home at Orchestra Hall, touring musical capitals like New York and Amsterdam, or bringing the full force of symphonic music to students and families across our region, we hear again and again that this Orchestra stands among the world's finest. And now, with one of Minnesota's most respected and revered business leaders stepping up to lead our board, we're expecting even greater days ahead."

Financial Report

Total expenses for Fiscal 2016 were $31.7 million, an increase over the prior year's $31.1 million, largely due to the undertaking of a European Tour. (The tour was supported by a gift from an anonymous couple and from the Doug and Louise Leatherdale Music Director Chair Fund.)

Strong fundraising income was one of the factors that helped the Orchestra to achieve a balanced result. Essentially mirroring the previous year's result, the organization raised a total of $18 million in Fiscal 2016, from its annual Guaranty Fund, Symphony Ball, Oakleaf Trust distributions, European Tour funding and gifts released from restrictions.

"Our number of contributors has now risen to more than 7,200 donors," said President and CEO Kevin Smith. "Support for the Orchestra continues to come in from donors at all giving levels. Our community donors, in particular, increased by 1,000 people over last year. We are heartened to see this solid and growing base of support." The organization defines community donors as those who donate amounts up to $2,500 a year.

Earned revenue results were also strong, totaling $9.6 million or a nearly 13 percent increase over Fiscal 2015's $8.5 million. Total capacity for all concerts reached 87 percent, compared to 83 percent the prior year. In total, the number of ticketed concerts the organization offered increased by 4 percent in Fiscal 2016, while the total number of tickets sold increased by 9 percent. In further positive news, the total number of subscribers increased by 12 percent.

"One of the important drivers of earned revenue for us in the renovated Orchestra Hall continues to be income from rental opportunities and food and beverage sales," said Smith. "This year we exceeded that budget by nearly $250,000."

In Fiscal 2016 Board-designated draws from investments for operating support totaled $4.2 million and were based on a 5 percent draw for operations across all endowments and trusts. The Orchestra's total investments decreased from $140 million to $132 million in F2016 due to a number of factors, including market volatility, operating draws, the timing of planned pledge payments and required payments to fund frozen pension plans.

"Building the assets in our endowments through new contributions is one of the critical financial and fundraising priorities of the new Strategic Plan the board approved last spring," said Smith. "Without question, fundraising support will continue to play a growing role in the success of the organization over the life of this plan. The Orchestra is fortunate to be based in such a generous community that values world class music-making."

MINNESOTA ORCHESTRAL
ASSOCIATION ELECTION RESULTS

Directors elected to a first term: Dr. Karen Hsiao Ashe, Douglas M. Baker, Jr., Evan Carruthers, Gary L. Cunningham, Tim Geoffrion, Hubert Joly, Michael A. Lindsay, William P. Miller, Ravi Norman, Mary Sumners

Re-elected Directors (second term): Barbara Burwell, Jay V. Ihlenfeld, Martin R. Lueck, Anne W. Miller

Re-elected Directors (third term): Philip Isaacson, Allen U. Lenzmeier, John Wilgers

Retiring Directors: Jane P. Gregerson, Susan Hagstrum, Steven Kennedy, Anita M. Pampusch, Gordon M. Sprenger

Life Director: Nancy E. Lindahl

Executive Committee: Margaret A. Bracken, Mark Copman, Kathy Cunningham, Luella G. Goldberg, Joseph T. Green, Karen L. Himle, Jay V. Ihlenfeld, Michael Klingensmith, Allen U. Lenzmeier, Nancy E. Lindahl, Martin R. Lueck, Ronald E. Lund, Kita McVay, Warren E. Mack, Anne W. Miller, Marilyn Carlson Nelson, Kevin Smith, Mary Sumners, John Wilgers, Aks Zaheer

Chair Marilyn Carlson Nelson
Immediate Past Chair Warren E. Mack
Vice Chair Mark Copman
Vice Chair Allen U. Lenzmeier
Secretary Aks Zaheer
Treasurer Martin R. Lueck
President and CEO Kevin Smith

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