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[[underlined]] Financial Report [[/underlined]]

Mr. Hohenlohe, the Treasurer, highlighted the Financial Report which had been distributed in advance of the meeting.

The Regents were advised of recent action by OMB denying this year's program supplemental request of $1,448,000 to cover a utilities deficit and to support treaty-related costs for the Smithsonian Tropical Research Institute.  Ways to meet these needs, including possible reprogramming of appropriations, are being explored.

Mr. Hohenlohe mentioned the receipt recently of a favorable ruling from the Internal Revenue Service regarding the application of unrelated business income tax to the advertising revenues of the Institution.  It was agreed that the $2.4 million reserve set aside to cover this potential liability be kept intact pending resolution of other tax questions still remaining before IRS; the future of the reserve to cover potential tax liability will be considered by the Regents in the context of the presentation of the next consolidated budget.  
   
The Financial Report follows:

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