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Form 990-PF Return o f P r i v a t e Foundationor Section 4947 ( a ) ( 1 ) Nonexempt Charitable TrustDepartment of t h e Treasury Treated as a P r i v a t e FoundationI n t e r n a l R e v e n u e S e r v i c e N o t e : T he foundation maybe a b l e t o us e a copy o f t h i s r e t u r n t o s a t i s f y s t a t e r e p o r t i ,

OMB No 1545-0052

2006F o r c a l e n d a r y e a r 2006 , or t a x y e a r b e g in n i n g , a n d e n d i n gG Check a l l t h a t a I : E-1 I n i t i a l r e t u r n F i n a l r e t u r n Amended r e t u r n 0d d r e s s c h a n c e Name c h a n c eUs e t h e I R S Name o f f o u n d a t i o n A Employer i de n t i f i ca t i o n number

l a b e l .O t h e r w i s e , Z . SMITH REYNOLDS FOUNDATION , INC. 58-6038145p r i n t Number an d s t r e e t ( or P O b ox number i f m a i l i s n o t d e li v e re d to s t r e e t address )

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R o o m i s u l t e B T e l e p h o n e numbero r t y p e 147 SOUTH CHERRY STREET 200 336-725-7541Se e S p e c i f i c

I n s t r u c t i o n s . C i t y or t o w n , s t a t e , a n d Z I P c o d e C If exemption application is pending , check h e r eWINSTON-SALEM , NC 27101 D 1 F o r e i g n o r g a n i z a t i o n s , c h e c k h e r eH Check t y p e o f o r g a n i z a t i o n : S e c t i o n 5 0 1 ( c ) ( 3 ) exempt p r i v a t e f o u n d a t i o n 2 F o r e i g n o r g a n i z a t i o n s meeting t h e 85% t e s t , 0.=check here an d a t t a c h computation

S e c t i o n 4 9 4 7 ( a ) ( 1 ) nonexempt c h a r i t a ble t r u s t O t h e r t a x a b l e p r i v a t e f o u n d a t i o n E I f t f t dI F a i r m a r k e t v a l u e o f a l l a s s e t s a t e n d of y e a r J A c c o u n t i n g m e t h o d : as h A c c r u a l p r i v a ou n io n s t a t u s was t e r m i n a t eau n d e r s e ct io n 5 0 7 ( b ) ( 1 ) ( A ) , c h e c k h e r e

( f ro m P ar t l l , c o l ( c ) , l i n e 1 6 ) =t h e r ( s p e c i f y ) F I f th e f o u n d a t i o n i s i n a 60-month t e r m i n a t i o$ 19 , 6 03 8 045 . ( P a r t 1 , column ( d ) m u s t be on cash b a s i s . ) nu n d e r s e c t i o n 507 ( b ) ( 1 B ) , c h e c k h e r ePart I A n a l y s i s of Revenue a n d Expenses ( a ) Revenue a n d ( b ) N e t i n v e s t m e n t ( c ) A d j u s t e d n e t ( d ) D i s b u r s em e n ts(The t o t a l of amounts in columns ( b ) , ( c ) , and ( d) may no t

necessarily equal th e amounts in column ( a ) ) e x p e n s e s p er books i n c o m e income fo r charitable purposes(cash b a si s only)1 C o n t r i b u t i o n s , g i f t s , g r a n t s , e t c . , r e c e i v e d 1 9 , 723 , 849 . N/ A2 C h e c k l i t h e f o u n d a t i o n I s n o t r e q u i r e d t o a t t a c h S c h B3 I n t e r e s tinvestments an d temporary 5 91 , 2 06 . 5 91 , 2 0 6.4 D i v i d e n d s a n d i n t e r e s t f r o m s e c u r i t i e s5 a G r o s s r e n t sb Ne t rental income or ( l o s s )

6a Ne t gain o r ( loss) f r om s a l e o f a ssets no t on l i n e 10 1 , 070.C b Gross sales price fo r all 1,070.a s s e t s on l i n e ea

7 Capital g a in n e t income ( f ro m P ar t IV , l i n e 2) 1 , 070cc 8 N e t s h o r t - t e r m c a p i t a l g a i n

9 Income m o d i f i c a t i o n sG r o s s s a l e s l e s s r e t u r n s10a an d allowancesb Less Cost of goods soldc G r o s s p r o f i t o r ( l o s s )

1 1 O t h e r income1 2 T o t a l . Ad d l i n e s 1 t h r o u g h 1 1 2 0 316 125 . 513 Compensation of o f f i c e r s , d i r e c t o r s , t ru s t ee s , e t c 303 362 47 303 3621 4 O t h e r employee s a l a r i e s a n d wages 555 , 899. 0 1 . 5 5 5 , 8991 5 P e n s i o n p l a n s , employee b e n e f i t s 250 103. . ?t ? n 2 5 0 1 031 6 a L e g a l f e e s STMT 1 58 415. 58 415a b A c c o u n t i n g f e e s STMT 2 20 , 000- 20 , 000

c O t h e r p r o f es s i o n a l f e es1 7 I n t e r e s t1 8 T a x e s STMT 3 70 , 467. 0. 58 , 6 8 51 9 D e p r e c i a t i o n a n d d e p l e t i o n 108 , 737. 0.2 0 O c c u p a n c y 22 6 , 700. 0. 2 2 6 700

- 4 2 1 T r a v e l , c o n f e r e n c e s , a n d m e e t i n g s 147 532 . 0 . 147 532C 2 2 P r i n t i n g a n d p u b l i c a t i o n s 32 316. 0 . 3 2 31 62 3 O t h e r e x p e n s e s STMT 4 1 , 264 , 237. 0. 1 2 6 4 237

, J l ' 0 24 T o t a l o p e r a t i n g an d a d m i n i s t r a t i v ee x p e n s e s . Ad d l i n e s 1 3 t h r o u g h 2 3 3 , 037 , 768. 0. 2 , 91 7 249

2 5 C o n t r i b u t i o n s , g i f t s , g ra n ts p a id 1 6 , 564 , 045. 16 , 605 , 7402 6 T o t a l e x p e n s e s a n d d i s b u r s e m e n t s .

Ad d l i n e s 2 4 a n d 25 19 , 601 , 813. 0 . 19 , 522 , 9892 7 S u b t r a c t l i n e 2 6 f r o m l i n e 1 2 :

a E x c e s s o f r e v e n u e o v e r e x p e n s e s a n d d i s b u r s e m e n t s 71 4 , 312.b N e t i n v e s t m e n t income ( i f n e g a t i v e , e n t e r - 0 - ) 592 276.c A d j u s t e d n et i n c o m e ( i f n e g a t i v e e n t e r - o - ) N / A

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Balance Sheets A t t a c h e d S c h e d u l e s a n d a m o u n t s I n t h e d e s c r i p t i o n B e g i n n i n g o f y e a r En d o f y e a rPa r t I I c o l u m n s h o u l d b e f o r en d - o f - y e a r a m o u n t s o n l y ( a ) Book V a l u e ( b ) Book V a l u e ( c ) F a i r M a r k e t V a l u e1 ' C a s h - n o n - I n t e r e s t - b e a r i n g 18 , 431 , 756. 16 , 287 , 928. 16 , 287 , 928.2 S a v i n g s a n d t e m p o r a r y c a s h i n v e s t m e n t s 2 , 859 , 290. 2 8 5 9 2 9 03 A c c o u n t s r e c e i v a b l e ^ 8 , 643.

L e s s : a l l o w a n c e f o r d o u b t f u l a c c o u n t s ^ 13 , 767. 8 , 643. 8 , 643.4 P l e d g e s r e c e i v a b l e ^

L e s s : a l l o w a n c e f o r d o u b t f u l a c c o u n t s ^5 G r a n t s r e c e i v a b l e6 R e c e i v a b l e s d u e f r o m o f f i c e r s , d i r e c t o r s , t r u s t e e s , a n d o t h e r

d i s q u a l i f i e d p e r s o n s7 O t h e r n o t e s a n d l oa n s r e c e i v a b l e ^

L e s s : a l l o w a n c e f o r d o u b t f u l a c c o u n t s ^8 I n v e n t o r i e s f o r s a l e o r u s e9 P r e p a i d e x pe n s e s a n d d e f e r r e d c h a r g e s

1 0 8 I n v e s t m e n t s - U . S . a n d s t a t e government o b l i g a t i o n sb I n v e s t m e n t s - c o r p o r a t e s t o c kc I n v e s t m e n t s - c o r p o r a t e bonds

1 1 I n v e s t m e n t s - l a n d . b u l l d i n g s a n d e q u i p m e n t b a s i s ^ 703 615.L e s s a c c u m u l a t e d d e p r e c i a t i o n ^ 394 , 368. 320 , 273. 30 9 , 247. 30 9 , 247.

1 2 I n v e s t m e n t s - mortgage l o a n s1 3 I n v e s t m e n t s - o t h e r STMT 6 79 , 000. 94 , 000. 137 937.1 4 L a n d , b u i l d i n g s , a n d equipment b a s i s ^

L e s s a c c u m u l a t e d d e p r e c i a t i o n ^1 5 O t h er a s s et s ( d e s c ri b e ^

1 6 T o t a l a s s e t s t o b e com p l e t e d b y a l l f i l e r s 18 , 844 , 796. 19 , 559 , 108. 19 , 603 , 0451 7 A c c o u n t s p a y a b l e a n d a c c r u e d e x p e n s e s1 8 G r a n t s p a ya b l e

u )d 1 9 D e f e r r e d r e v e n u e20 Loans from o f f i c e r s d i r e c t o r s t r u s t e e s a nd o t h e r d i s q u a l i f i e d pe r so n s2 1 M o r t g a g e s a n d o t h e r n o te s p a ya b l e

J 2 2 O t h e r l i a b i l i t i e s ( d e s c r i b e ^

23 T o t a l l i a b i l i t i e s ( a d d l i n e s 1 7 t h r o w h 2 2 ) 0. 0.F o u n d a t i o n s t h a t f o l l o w SFAS 1 1 7 , c h e c k h e r e ^an d c o m p l e t e l i n e s 2 4 t h r ou g h 2 6 a n d l i n e s 3 0 a n d 3 1 .

24 U n r e s t r i c t e d25 T e m p o r a r i l y r e s t r i c t e d

c o 26 P e r m a n e n t l y r e s t r i c t e dC F o u n d a t i o n s t h a t d o n o t f o l lo w SFAS 1 1 7 , c h e c k h e r e ^

a n d com p le t e l i n e s 2 7 t h r o u gh 3 12 7 C a p it a l s t o c k , t r u s t p r i n c i p a l , o r c u rr e nt f u n d s 0. 0 .2 8 P a i d - i n o r c a p i t a l s u r p l u s , o r l a n d , b l d g . , a n d e q u i p m e n t f u n d 0. 0 .

< 29 R e t a i n e d e a r n i n g s , a c c u m u l a t e d i n c o m e , e n d o w m e n t , o r o t h e r f u n d s 18 , 844 , 796. 19 , 559 , 108 . STATEMENT 5Z 30 T o t a l n e t a s s e t s o r f u n d b a l a n c e s 18 , 844 , 796. 19 , 559 , 108.

3 1 T o t a l l i a b i l i t i e s and n e t a s s e t s / f u n d b a l a n c e s 18 , 844 , 796. 19 , 559 , 108 .Part I I I Analysis o f Ch a n g e s i n Ne t A sse t s or F u n d B a l a n c e s

1 T o t a l n e t a s s e t s o r f u nd b a l an c es a t b e g i n n i n g o f y e a r - P a r t I I , column ( a ) , l i n e 3 0( m u s t a g r e e w i t h e n d - o f - y e a r f i g u r e r e p o r t e d o n p r i o r y e ar ' s r e tu r n) 1 18 , 844 , 796

2 E n t e r a mou n t f r o m P a r t I , l i n e 2 7 a 2 714 , 3123 O t h e r i n c r e a s e s n o t i n c l u d e d i n l i n e 2 ( i t e m i z e ) ^ 3 04 Ad d l i n e s 1 , 2 , an d 3 4 19 , 559 , 1085 D e c r e a s e s n o t i n c l u d e d i n l i n e 2 ( i t e m i z e ) ^ 5 06 T o t a l n e t a s s e t s o r f u nd b a l an c es a t e n d o f y e a r ( l i n e 4 minus l i n e 5) - P a r t I I , column ( b ) , l i n e 3 0 6 19. 559 .10 882351103-08-07

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F o r m 9 9 0 - P F 2 0 0 6 ) Z. SMITH REYNOLDS FOUNDATION INC. 58-6038145 P a g ePart I V Capital Gains a nd Losses f o r Ta x on Investment Income

( a ) L i s t a n d d e s c r i b e t h e k i n d ( s ) o f p r o p e r t y s o l d ( e . g . , r e a l e s t a t e ,2 - s t o r y b r ic k w a r e h o u s e ; o r common s t o c k , 200 s h s . ML C C o . )

( b Ho w a c q u i r e dD - P u r c h a s eD - D o n a t i o n( c ) D a t e a c q u ir e d( m o . , d a y , y r . ) ( d) D a t e s o l d( m o . , d a y , y r . )

1 a WACHOVIA CLASS ACTION SUIT P V VARbcde

( e ) G r o s s s a l e s p r i c e( f ) D e p re c i a t i on a l l o w ed

( o r a l l o w a b l e )( g ) C o s t o r o t h e r b a s i sp l u s e x p e n s e o f s a l e

( h ) G a i n o r ( l o s s )( e ) p l u s ( f ) minus ( g )

a 1 , 0 7 0 . 1 , 0 7 0bcde

C o m p l e t e o n l y f o r a s s e t s s h o w i n g g a i n i n column ( h ) a n d owned b y t h e f o u n d a t i o n o n 1 2 / 3 1 / 6 9 ( I ) G a i n s ( C o l . ( h ) g a i n minus( I ) F . M . V . a s o f 1 2 / 3 1 / 6 9 ( j ) A d j u s t e d b a s i sa s o f 1 2 / 3 1 / 6 9

( k ) E x c e s s o f c o l . ( i )o v e r c o l . ( 1 ) , i f a n y

c o l . ( k ) , b u t n o t l e s s t h a n - 0 - ) o rL o s s e s ( f r o m c o l . ( h ) )

a 1 , 0 7 0bcde

2 C a p i t a l g a i n n e t income o r ( ne t c a p i t a l l o s s ) . f I f ( l l o s s ) , I e n t e r ^ - 0 - i n P a r t 1 1 ll ne 7 2 1 , 0703

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N e t s h o r t - t e r m c a p i t a l g a i n o r ( l o s s ) a s d e f i n e d i n s e c t i o n s 1 2 2 2 ( 5 ) a n d ( 6 ) :I f g a i n , a l s o e n t e r i n P a r t I , l i n e 8 , column ( c ) .I f ( l o s s ) , e n t e r - 0 - i n P a r t I , l i n e 8 3 N/ A

Part V I Qu a l if ic a t i on Under Section 4940( e) fo r Reduced Tax on Net Investment Income( F o r o p t io n a l u s e b y d o m e s t i c p r i v a t e f o u n d a t i o n s s u b j e c t t o t h e s e c t i o n 4 9 4 0 ( a ) t a x o n n e t i n v e s t m en t i n co m e . )I f s e c t i o n 4 9 4 0 ( d ) ( 2 ) a p p l i e s , l e a v e t h i s p a rt b l an k .Wa s t h e f o u n d a t i o n l i a b l e f o r t h e s e c t i o n 4942 t a x o n t h e d i s t r i b u t a b l e amount o f a n y y e a r i n t h e b a s e p e r i o d ? Ye sI f ' Y e s , t h e f o u n d a t i o n d o e s n o t q u a l i f y u n d e r s e c t i o n 4 9 4 0 ( e ) . Do n o t c o m p l e t e t h i s p a r t .1 E nt e r t h e a p p r o p ri a t e amount i n e a c h column f o r e a c h y e a r ; s e e i n s t r u c t i o n s b e f o r e making a n y e n t r i e s .

B a s e p e r i o d y e a r s A d j u s t e d q u a l i f y i n g s t r i b u t i o n s N e t v a l u e o f n o n c h a n t a b l e - u s e a s s e t s ( c o l . ( b ) d i v i d e d b y c o l . ( c ) )2 0 0 5 16 72 7 9 57. 9 , 50 7 , 2 1 1 . 1.759502 0 0 4 19 0 18 680. 7 , 773 , 381. 2.446642 0 0 3 2 0 754 310. 11 133 9 2 2 . 1.864062 0 0 2 2 5 62 7 84 5. 16 0 4 5 827. 1.597162 0 0 1 2 2 10 8 676. 13 9 83 815. 1.58101

2 T o t a l o f l i n e 1 , c o l u m n ( d ) 2 9.248393 A v e r a g e d i s t r i b u t i o n r a t i o f o r t h e 5 - y e a r b a s e p e r i o d - d i v i d e t h e t o t a l o n l i n e 2 b y 5 ,

t h e f o u n d a t i o n h a s b e e n i n e x i s t e n c e i f l e s s t h a n 5 y e a r so r b y t h e number o f y e a r s

3 1 . 84 9 6 7

4 E n t e r t h e n e t v a l u e o f n o n c h a r i t a b l e - u s e a s s e t s f o r 2006 f r o m P a r t X , l i n e 5 4 12 , 193 , 3985 M u l t i p l y l i n e 4 b y l i n e 3 5 2 2 , 553 , 8606 E n t e r 1% o f n et i n v e s t m e n t income (1% o f P a r t I , l i n e 2 7 b ) 6 5 , 923

7 Ad d l i n e s 5 a n d 6 7 2 2 , 559 , 7838 E n t e r q u a l i f y i n g d i s t r i b u t i o n s f r o m P a r t X I I , l i n e 4 8 19 , 620 , 701

I f l i n e 8 i s e q u a l t o o r g r e a t e r t h a n l i n e 7 , c h e c k t h e box i n P a r t V I , l i n e 1 b , a n d c o mp l e t e t h a t p ar t u s i n g a 1% t a x r a t e .See t h e P a r t V I i n st r u c t io n s.

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F o r m 9 9 0 - P F ( 2 0 0 6 ) Z. SMITH REYNOLDS FOUNDATION, INC. 58-6038145 P a a ePart V I Excise Ta x Bas ed on Investment Income (Section 4940 ( a ) , 4940 ( b ) , 4940( e ) , or 4948 - see i n s t r u c t i o n s )l a Exempt o p e r a t i n g f o u n d a t i o n s d e s c r i b e d i n s e c t i o n 4 9 4 0 ( d ) ( 2 ) , c h e c k h e r e ^ and e nt er ' N / A ' o n l i n e 1 .

D a t e o f r u l i n g l e t t e r : ( a t t a c h c o p y o f r u l i n g l e t t e r i f n e c e s s a r y - s e e i n s t r u c t i o n s )b D o m e s t i c f o u n d a t i o n s t h a t meet t h e s e c t i o n 4 9 4 0 ( e ) r e qu i re m e nt s i n P a r t V , c h e c k h e r e ^E] a n d e n t e r 1% 1 11 , 846.

of P a r t I , l i n e 27 bc A l l o t h e r d o m e s t i c f o u n d a t i o n s e n t e r 2 % o f l i n e 2 7 b . Exempt f o r e i g n o r g a n i z a t i o n s e n t e r 4% o f P a r t I , l i n e 1 2 , c o l . ( b )

2 T a x u n d e r s e c t i o n 5 1 1 ( d o m e s t i c s e c t i o n 4 9 4 7 ( a ) ( 1 ) t r u s t s a n d t a x a b l e f o u n d a t i o n s o n l y . O t h e r s e n t e r - 0 - ) 2 0.3 Add l i n e s 1 a n d 2 3 11 , 846.4 S u b t i t l e A ( i n c o m e ) t a x ( d o m e s t i c s e c t i o n 4 9 4 7 ( a ) ( 1 ) trusts a n d t a x a b l e f o u n d a t i o n s o n l y . O t h e r s e n t e r - 0 - ) 4 0.5 Ta x based o n i n ve s tm e n t income S u b t r a c t l i n e 4 f r o m l i n e 3 . I f z e r o o r l e s s , e n t e r - 0 - 5 11 , 846.6 C r e d i t s / P a y m e n t s :

a 2006 e s t i m a t e d t a x payments a n d 2005 o v e r p a y m e n t c r e d i t e d t o 2006 6 a 11 , 824.b Exempt f o r e i g n o r g a n i z a t i o n s - t a x w i t h h e l d a t s o u r c e 6 bc Tax p a i d w i t h a p p l i c a t i o n f o r e x t e n s i o n o f t i m e t o f i l e ( F o r m 8 8 6 8 ) 6 cd Backup w i t h h o l d i n g e r r o n e o u s l y w i t h h e l d 6 d

7 T o t a l c r e d i t s a n d p a y m e n t s . Add l i n e s 6 a t h r o u g h 6 d 7 11 , 824.8 E n t e r a n y p e n a l t y f o r underpayment o f e s t i m a t e d t a x . Check h e r e0f Form 2220 i s a t t a c h e d 89 Ta x d u e . I f t h e t o t a l o f l i n e s 5 a n d 8 i s more t h a n l i n e 7 , e n t e r amount owed ^ 9 22.

1 0 Overpayment . I f l i n e 7 i s more t h a n t h e t o t a l o f l i n e s 5 a n d 8 , e n t e r th e amount o v e r p a i d ^ 1 01 1 E n t e r t h e amount o f l i n e 1 0 t o b e : C r e d i t e d t o 2007 e s t i m a t e d t a x B O B , Refunded 1 1Part V I I -A S tatements Regarding A c t i v i t i e s1 a D u r i n g t h e t a x y e a r , d i d t h e f o u n da t i o n a t t e m p t t o i n f l u e n c e a n y n a t i o n a l , s t a t e , o r l o c a l l e g i s l a t i o n o r d id i t p a r t i c i p a t e o r i n t e r v e n e i n Yes No

a n y p o l i t i c a l campaign? 1 a Xb D i d i t s p e n d more t h a n $100 d u r i n g t h e y e a r ( e i t h e r d i r e c t l y o r i n d i r e c t l y ) f o r p o l i t i c a l p u r p o s e s ( s e e i n s t r u c t i o n s f o r d e f i n i t i o n ) ? 1 b X

I f t h e answer i s " Y e s " t o I s o r 1 b , a t t a c h a d e t a i l e d d e s cr i p t i on o f t h e a c t i v i t i e s a nd copies o f any m a t e r i a l s published o rd i s t r i b u t e d b y t h e foundation i n connection w i t h t h e a c t i v i t i e s

c D i d t h e f o u n d a t i o n f i l e Form 1120 -POL f o r t h i s y e a r ? 1 c Xd E n t e r th e amount ( i f a n y ) o f t a x o n p o l i t i c a l e x p e n d i t u r e s ( s e c t i o n 4 9 5 5 ) i m p o s e d d u r i n g t h e y e a r :

( 1 ) On t h e f o u n d a t i o n . ^ $ 0. ( 2 ) On f o u n d a t i o n $ 0.e E n t e r th e r e i m b u r s e m e n t ( i f a n y ) p a i d b y t h e f o u n d a t i o n d u r i n g th e y e a r f o r p o l i t i c a l e x p e n d i t u r e t a x imposed o n f o u n d a t i o n

m a n a g e r s . ^ $ 0.2 Ha s t h e f o u n d a t i o n engaged i n a n y a c t i v i t i e s t h a t h a v e n o t p r e v i ou s l y b e e n r e p o r t e d t o t he I R S ? 2 X

I f " Y e s , ' a t t a c h a d e t a i l e d d e sc r i p ti o n o f t h e a c t i v i t i e s3 Has t h e f o u n d a t i o n made a n y c h an g e s, n o t p r e v i ou s l y r e p o r t e d t o t he I RS , i n i t s g o v e r n i n g i n s t r u m e n t , a r t i c l e s o f i n c o r p o r a t i o n , o r

b y l a w s , or o t h e r s i m i l a r i n s t r u m e n t s ? I f " Y e s , " a t t a c h a conformed copy o f t he changes 3 X4 a D i d t h e f o u n d a t i o n h a v e u n r e l a t e d b u si n e ss g r o ss i n c o m e o f $ 1 , 0 0 0 or more d u r i n g t h e y e a r ? 4 a X

b I f ' Yes; h a s i t f i l e d a t a x r e t u r n o n Form 990 - T f o r t h i s y e a r ? N/A 4 b5 Wa s t h e r e a l i q u i d a t i o n , t e r m i n a t i o n , d i ss o lu t io n , o r s u b s t a n t i a l c o n t r a c t i o n d u r i n g t h e y e a r ? 5 X

I f " Y e s , " a t t a c h t h e statement required b y General I n s t r u c t i o n T6 A r e t he r e q u i r e m e n t s o f s e c t i o n 5 0 8 ( e ) ( r e l a t i n g t o s e c t i o n s 4 9 4 1 t h r o u g h 4 9 4 5 ) s a t i s f i e d e i t h e r :

B y l a n g u a g e i n t h e g o v e r n i n g i n s t r u m e n t , o r B y s t a t e l e g i s l a t i o n t h a t e f f e c t i v e l y amends t h e g o v e r n i n g i n s t r u m e n t s o t h a t n o m a n d a t o r y d i r ec t i on s t h at c o n f l i c t w i t h t h e s t a t e l a w

r e m a i n i n t h e g o v e r n i n g i n s t r u m e n t ? 6 X7 D id t he f o u n d a t i o n h a v e a t l e a s t $ 5 , 0 0 0 i n a s s e t s a t a n y t im e d u ri ng t he y e a r ? 7 X

I f " Y e s , ' complete P a r t / / , c o l ( c ) , and P a r t X V .8 a E n t e r th e s t a t e s t o w h i c h t h e f o u n d a t i o n r e p o r t s o r w i t h w h i c h i t i s r e g i s t e r e d ( s e e i n st r uc t io n s) ^

b I f th e a n s w e r i s ' Y e s ' t o l i n e 7 , h a s t he f o u n d a t i o n f u r n i s h e d a c o p y o f Form 9 9 0 - P F t o t h e A t t o rn e y G e n e r a l ( o r d e s i g n a t e )o f e a c h s t a t e a s r e q u i r e d b y General I n s t r u c t i o n G? I f " N o , " a t t a ch e x p l a na t i on 8 b X

9 I s t h e f o u n d a t i o n c l a i m i n g s t a t u s a s a p r i v a t e o p e r a t i n g f o u n d a t i o n w i t h i n t h e m e a n i n g o f s e ct io n 4 9 4 2 ( l ) ( 3 ) o r 4 9 4 2 ( 1 ) ( 5 ) f o r c a l e n d a ry e a r 2 0 0 6 o r t h e t a x a b l e y e a r b e g i n n i n g i n 2 0 0 6 ( s e e i n s t r u c t i o n s f o r P a r t X I V ) ? I f " Y e s , " c o m p l e t e P a r t X I V 9

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F o r m 9 9 0 - P F ( 2 0 0 6 ) Z. SMITH REYNOLDS FOUNDATION , INC. 58-6038145 P a g ePart V I I - A Statements Regarding A c t i v i t i e s C o n t i n u e d1 1 a A t any t im e l u r in g t h e y e a r , d i d t h e f o u n d a t i o n , d i r e c t l y o r i n d i r e c t l y , own a c o n t r o l l e d e n t i t y w i t h i n t h e m e a n i n g o f s e c t i o n 5 1 2 ( b ) ( 1 3 ) 7

I f ' Y e s , ' a t t a c h s c h e d u l e . ( s e e i n s t r u c t i o n s ) 1 1 a Xb i f ' Y e s , ' d id t h e f o u n d a t i o n h a v e a b i n d i n g w r i t t e n c o n t r a c t i n e f f e c t o n A u g u s t 1 7 , 2 0 0 6 , c o v e r i n g t h e i n t e r e s t , r e n t s , r o y a l t i e s , a n d

a n n u i t i e s d e s c r i b e d i n t h e a t t a c h m e n t f o r l i n e 1 1 a ?1 2 D i d t h e f o u n d at i o n a cq u ir e a d i r e c t o r i n d i r e c t i n t e r e s t i n a n y a p p l i c a b l e i n s u r a n c e c o n t r a c t ?

N/A1 3 D i d t h e f o u n d a t i o n c o m p l y w i t h t h e p u b l i c i n s p e c t i o n r e q u i r e m e n t s f o r i t s a n n u a l r e t u r n s a n d e x e m p t i o n a p p l i c a t i o n ? 1 1 3 I X

We b s i t e a d d r e s s ^ WWW. ZSR . ORG1 4 T h e b o o k s a r e i n c a r e o f ^ BARBARA MABE T e l e p h o n e n o . ' . 3 3 6 - 7 2 5 - 7 5 41

L o c a t e d a t ^147 S. CHERRY ST, ST 200 WINSTON- SALEM, NC Z I P + 4 27101-52871 5 S e c t i o n 4 9 4 7 ( a ) ( 1 ) n o n e x e m p t c h a r i t a b l e t r u s t s f i l i n g F o r m 9 9 0 - P F i n l i e u o f F o r m 1 0 4 1 - C h e c k h e r e ^E]

t h e amount o f

F i l e Form 4720 i f any item i s checked i n th e " Yes" column , unless an exception a p p l i e s .1 a D u r i n g t h e y e a r d i d t h e f o u n d a t i o n ( e i t h e r d i r e c t l y o r i n d i r e c t l y ) :

(1 ) Engage i n t he s al e o r e x c h a n g e , o r l e a s i n g o f p r o pe r t y w i t h a d i s q u a l i f i e d p e r s o n s 0eso( 2 ) Borrow money f r o m , l e n d money t o , o r o t h er w i se e x t en d c r e d i t t o ( o r a c c e p t i t f r o m )

a d i s q u a l i f i e d p e r s o n ? 0eso(3 ) F u r n i s h g o o d s , s e r v i c e s , o r f a c i l i t i e s t o ( o r a c c e p t them f r o m ) a d i s q u a l i f i e d p e r s o n ? 0eso(4 ) P a y c o m p e n s a t i o n t o , o r p a y o r r e i m b u r s e t h e e x p e n s e s o f , a d i s q u a l i f i e d p e r s o n ? es0o(5 ) T r a n s f e r a n y income o r a s s e t s t o a d i s q u a l i f i e d p e r s o n ( o r make a n y o f e i t h e r a v a i l a b l e

f o r t he b en ef it o r u s e o f a d i s q u a l i f i e d p e r s o n ) ? 0eso(6 ) A g r e e t o p a y money o r p r o p e r t y t o a government o f f i c i a l ? ( E x c e p t i o n . Check " N o "

i f t h e f o u n d a t i o n a g r e e d t o make a g r a n t t o o r t o employ t h e o f f i c i a l f o r a p e r i o d a f t e rt e r m i n a t i o n o f government s e r v i c e , i f t e r m i n a t i n g w i t h i n 9 0 d a y s . ) 0eso

b I f a n y a n s w e r i s " Y e s ' t o l a ( 1 ) - ( 6 ) , d id a n y o f t h e a c t s f a i l t o q u a l i f y u n d e r t h e e x c ep t i o ns d e s cr i be d i n R e g u l a t i o n ss e c t i o n 5 3 . 4 9 4 1 ( d ) - 3 o r i n a c u r r e n t n o t i c e r e g a r d i n g d i s a s t e r a s si s t an c e ( s ee p a g e 2 2 o f t h e i n s t r u c t i o n s ) ?O r g a n i z a t i o n s r e l y i n g o n a c u r r e n t n o t i c e r e g a r d i n g d i s a s t e r a s s i s t a n c e c h e c k h e r e ^LIc D id t he f o u n d a t i o n engage i n a p r i o r y e a r i n a n y o f t he a ct s d e s c r i b e d i n l a , o t h e r t h an e x c e p t e d a c t s , t h a t w e r e n o t c o rr e ct e d

b e f o r e t h e f i r s t d a y o f t he t ax y e a r b e g i n n i n g i n 2006?T a x e s o n f a i l u r e t o d i s t r i b u t e i n c o m e ( s e c t i o n 4 9 4 2 ) ( d o e s n o t a p p l y f o r y e a r s t h e f o u n d a t i o n wa s a p r i v a t e o p e r a t i n g f o u n d a t i o nd e f i n e d i n s e c t i o n 4942 ( j ) ( 3 ) o r 4942 ( j ) ( 5 ) ) :

a A t t h e e n d o f t ax y e a r 2006 , d i d t h e f o u n d a t i o n h a v e a n y u n d i s t r i b u t e d i n c o m e ( l i n e s 6 d a n d 6 e , P a r t X I I I ) f o r t a x y e a r( s ) b e g i n n i n gb e f o r e 2006 ? 0es NoI f " Y e s , l i s t t h e y e a r s ^

b A r e t h e r e a n y y e a r s l i s t e d i n 2 a f o r w h i c h t h e f o u n d a t i o n i s n o t a p p l y i n g t h e p r o v i s i o n s o f s e c t i o n 4942 ( a ) ( 2 ) ( r e l a t i n g t o i n c o r r e c tv a l u a t i o n o f a s s e t s ) t o t h e y e a r s u n d i s t r i b u t e d income? ( I f a p p l y in g s ec ti on 4942 ( a ) ( 2 ) t o a l l y e a r s l i s t e d , answer ' N o " a n d a t t a c hs t a t e m e n t - s e e i n s t r u c t i o n s . ) N/Ac I f t h e p r o v i s i o n s o f s e c t i o n 4942 ( a) ( 2 ) a r e b e i n g a p p l i e d t o a n y o f t h e y e a r s l i s t e d i n 2 a, l i s t th e y e a r s h e r e .

3a D i d t h e f o u n d at i o n h o ld more t h a n a 2% d i r e c t o r i n d i r e c t i n t e r e s t i n a n y b u s i n e s s e n t e r p r i s e a t a n y t i m ed u r i n g t h e y e a r ? LI Yeso

b I f ' Y e s ; d i d i t h a ve e x c es s b u si n es s h o l d i n g s i n 2006 a s a r e s u l t o f ( 1 ) a n y p u r c h a s e b y t h e f o u n d a t i o n o r d i sq u al i f ie d p e r s o n s a f t e rMa y 26 , 1 9 6 9 ; ( 2) t h e l ap se o f t he 5 - y e a r p e r i o d ( o r l o n ge r p e r io d a p p r o v e d b y t h e C o m m i s s i o n e r u n d e r s e c t i o n 4943 ( c ) ( 7 ) ) t o d i s p o s eo f h o l d i n g s a c q u i r e d b y g i f t o r b e q u e s t ; o r (3 ) t h e l a p s e o f t h e 1 0 - , 1 5 - , o r 2 0 - y e a r f i r s t p h a s e h o l d in g p e ri o d ? ( Us e Schedule C ,F or m 4 72 0 , t o determine i f t h e foundation ha d excess business holdings i n 2 0 0 6 . ) N/A

4 a D i d t h e f o u n d a t i o n i n v e s t d u r i n g th e y e a r a n y amount i n a manner t h a t would j e o p a r d i z e i t s c h a r i t a b l e p u r p o s e s ?b D id t he f o u n d a t i o n make a n y i n v e s t m e n t i n a p r i o r y e ar ( bu t a f t e r December 3 1 , 1 9 6 9 ) t h a t c o u l d j e o p a r d i z e i t s c h a r i t a b l e p u r p o s e t h a t

f r o m

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Part V I I - B I Statements Regarding A c t i v i t i e s f o r Which Form 4720 May Be Required C o n t i n u e d5 a D u r i n g t h e y e a r d i d t h e f o u n d a t i o n p a y o r i nc ur a n y amount t o :

( 1 ) C a r r y o n propaganda , o r o t h e r w i s e a t t e m p t t o i n f l u e n c e l e g i s l a t i o n ( s e c t i o n 4945 ( e ) ) ? Yeso( 2 ) I n f l u e n c e t h e outcome o f a n y s p e c i f i c p u b l i c e l e c t i o n ( s e e s e c t i o n 4955 ) ; o r t o c a r r y on , d i r e c t l y or i n d i r e c t l y ,

a n y v o t e r r e g i s t r a t i o n dnve2 =eso( 3 ) P r o v i d e a g r a n t t o a n i n d i v i d u a l f o r t r a v e l , s t u d y , o r o t h e r s i m i l a r p u r p o s e s es0o( 4 ) P r o v i d e a g r a n t t o a n o r g a n i z a t i o n o t h e r t h a n a c h a r i t a b l e , e t c . , o r g a n i z a t i o n d e s c r i b e d i n s e c t i o n

5 0 9 ( a ) ( 1 ) , ( 2 ) , o r ( 3 ) , o r s e c t i o n 4940 ( d ) ( 2 ) ? 0es N o( 5 ) P r o v i d e f o r a n y p u r p o s e o t h e r t h a n r e l i g i o u s , c h a r i t a b l e , s c i e n t i f i c , l i t e r a r y , o r e d u c a t i o n a l p u r p o s e s , o r f o r

t h e p r e v e n t i o n o f c r u e l t y t o c h i l d r e n o r a n i m a l s 0esob i f a n y a n s w e r i s ' Y e s ' t o 5 a ( 1 ) - ( 5 ) , d i d a n y o f t h e t r a n s a c t i o n s f a d t o q u a l i f y u n d e r t h e e x c e p t i o n s d e s c r i b e d i n R e g u l a t i o n s

s e c t i o n 5 3 . 4 9 4 5 o r i n a c u r r e n t n o t i c e r e g a r d i n g d i s a s t e r a s s i s t a n c e ( s e e i n s t r u c t i o n s ) ?O r g a n i z a t i o n s r e l y i n g o n a c u rr en t n ot ic e r e g a r d i n g d i s a s t e r a s s i s t a n c e c h e c k h e r e ^Q

c I f t h e answer i s ' Y e s ' t o q u e s t i o n 5 a ( 4 ) , d o e s t h e f o u n d a t i o n c l a i m e x e mp t io n f r om t he t ax b e c a u s e i t m a i n t a i n e de x p e n d i t u r e r e s p o n s i b i l i t y f o r t h e g r a n t s N/A Yes NoI f " Y e s , ' a t t a c h t h e statement required by Regulations s e c t i o n 5 3 . 4945-5(d)

6 a D i d t h e f o u n d a t i o n , d u r i n g t h e y e a r , r e c e i v e a n y f u n d s , d i r e c t l y o r i n d i r e c t l y , t o p a y premiums o na p e r s o n a l b e n e f i t c o n t r a c t ? Yeso

b D i d t h e f o u n d a t i o n , d u r i n g t h e y e a r , p a y p r e m i u m s , d i r e c t l y o r i n d i r e c t l y , o n a p e r s o n a l b e n e f i t c o n t r a c t ' ?I f yo u answered " Yes" t o 6b , a l s o f i l e Form 8870

7 a A t a n y t i m e d u r i n g t he t ax y e a r , was t h e f o u n d a t i o n a p a r t y t o a p r o h i b i t e d t a x s h e l t e r t r a n s a c t i o n ? YesoPart V I I I

Information About O f f i c e r s , D i r e c t o r s , Trustees, Foundation Managers , Highly0aid Employees, a nd ContractorsI L i s t a l l o f f i c e r s , d i r e c t o r s , t r u s t e e s , foundation m a na g er s a n d t h e i r compensation.(a ) Name and a d d r e s s (b ) T i t l e , a n d a v e r a g eh o u r s p e r week d e v o t e dt o p o s i t i o n ( c ) Compensation( I f n o t p ai d ,e n t e r - 0 - ( d ) C o n m b u h o n s t oe p o y e e b e n e f i t p l a n sa n d d e t e r r e dc o m p e n s a t i o n ( e ) Expensea c c o u n t , o t h ea l l o w a n c e sSEE STATEMENT 7 303 362. 77 , 109. 0.

2 Compensation o f fi v e highest-paid employees ( o t h e r than those included on l i n e 1 ) . I f none, enter " NO NE. "( a ) Name and a d d r e s s o f e a c h employee p a i d more t h a n $ 5 0 , 0 0 0 ( b T i t l e a n d a v er a geh o u r s p e r weekd e v o t e d t o p o s i t i o n ( c ) Compensation

( r d ? C o n t d b u t l o n s t oa p o y e e b e n e f i t p l a n scompennon

( e) E x p e n s ea c c o u n t , o t h ea l l o w a n c e sMARY FANT DONNAN PROGRAM OFFICER810 CLOVELLY ROAD , WINSTON-SALEM , NC 40.00 71 , 300. 25 , 226.BARBARA ROOLE PROGRAM OFFICER454 PEYTON COURT , WINSTON-SALEM , NC 40.00 54 , 850. 12 , 232.JOY VERMILLION HEINSOHN PROGRAM OFFICER5041 FLEETWOOD CIRCLE , WINSTON-SALEM , 40.00 57 , 300. 12 , 716.JOSEPH D CROCKER IR OF OPERATIONS3600 CHERRY LAUREL CRT , WINSTON-SALEM 40.00 120 800. 35,359.

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3 Five'highest - paid ind ep e nd e nt contractors f o r professional services . I f n o n e , enter " NONE."( a ) Name a n d a d d r e s s o f e a c h p e r s o n p a i d more t h a n $ 5 0 , 0 0 0 ( b ) T y p e o f s e r v i c e ( c ) Compensati

BROOKS , PIERCE , MCLENDON , HUMPHREY & LEONARD230 NORTH ELM ST. , SUITE 2000 , GREENSBORO , NC LEGAL SERVICES 58 , 415RALPH SIMPSON & ASSOCIATES PUBLIC RELATIONS &P 0 BOX 194 , WINSTON-SALEM , NC 27102 VIDEO PRODUCTIONS 82 , 279JFK CONSULTING GROUP INC STRATEGIC BUSINESS2950 HOPE VALLEY ROAD , WINSTON-SALEM , NC 2710P LANNING & ASSESSME 129 654

Total number o f o t h e r s r e c e i v i n g o v e r $ 5 0 , 0 0 0 f o r p r o f e s s i o n a l s e r v i c e s ^P ar t I X- A Summary o f Direct Charitable A c t i v i t i e sL i s t t h e f o u n d a t i o n ' s f o ur l a rg e st d i r e c t c h a r i t a b l e a c t i v i t i e s d u r i n g t h e t a x y ea r . I n cl u de r e le v a nt s t a t i s t i c a l i n f o r m a t i o n s u c h a s t h enumber o f o r g a n i z a t i o n s a n d o t h e r b e n e f i c i a r i e s s e r v e d , c o n f e r e n c e s c o n v e n e d , r e s e a r c h p a p e r s p r o du c e d, e t c . E x p e n s e s1SEE STATEMENT 10

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1 NONE

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A l l o t h e r p r o g r a m - r e l a t e d i n v e s t m e n t s . S e e i n s t r u c t i o n s .3 NONE

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F o r m 9 9 0 - P F ( 2 0 0 6 ) Z. SMITH REYNOLDS FOUNDATION, INC. 58-6038145 P a g ePart X Minimum Investment Return ( A l l d o m e s t i c f o u n d a t i o n s must c o m p l e t e t h i s p a r t . F o r e i g n f o u n d a t i o n s , s e e i n s t r u c t i o n s )

1 F a i r ` m a r k e t v a l u e o f a s s e t s n o t u s e d ( o r h e l d f o r u s e ) d i r e c t l y i n c a r r y i n g o u t c h a r i t a b l e , e t c . , p u r p o s e s :a A v e r a g e m o n t h l y f a i r m a r k e t v a l u e o f s e c u r i t i e s 1 a 12 , 325 , 978b A v e r a g e o f m o n t h l y c a s h b a l a n c e s l b 53 , 106c F a i r m a r k e t v a l u e o f a l l o t h e r a s s e t s 1 cd T o t a l ( a d d l i n e s l a , b , a n d c ) 1 d 12 , 379 , 084e R e d u c t i o n c l a i m e d f o r b l o c k a g e o r o t h e r f a c t o r s r e p o r t e d o n l i n e s la a n d

1 c ( a t t a c h d e t a i l e d e x p l a n a t i o n ) l e 0.2 A c q u i s i t i o n i n d e b t e d n e s s a p p l i c a b l e t o l i n e 1 a s s e t s 2 03 S u b t r a c t l i n e 2 f r o m l i n e l d 3 12 , 379 , 0844 C a s h deemed h e l d f o r c h a r i t a b l e a c t i v i t i e s . E n t e r 1 1/2% o f l i n e 3 ( f o r g r e a t e r a m o u n t , s e e i n s t r u c t i o n s ) 4 185 , 6865 N e t v a l u e o f n o n c h a r i t a b l e - u s e a s s e t s . S u b t r a c t l i n e 4 f r o m l i n e 3 . E n t e r h e r e a n d o n P a rt V , l i n e 4 5 12 , 193 , 3986 Minimum i n v e s t m e n t r e t u r n . E n t e r 5% o f l i n e 5 6 609.670Part XI Distributable Amount ( s e e i n s t r u c t i o n s ) ( S e c t i o n 4 9 4 2 ( 1 ) ( 3 ) a n d ( j ) ( 5 ) p r i v a t e o p er a ti n g f o u n d a ti o n s a n d c e r t a i nf o r e i g n o r g a n i z a t i o n s c h e c k h e r e ^0n d d o n o t c o m p l e t e t h i s p a r t . )

1 Minimum i n v e s t m e n t r e t u r n f r o m P a r t X , l i n e 6 1 609 , 6702a T a x o n i n v e s t m e n t income f o r 2006 f r o m P a r t V I , l i n e 5 2 a 11 , 846.

b Income t a x f o r 2 0 0 6 . ( T h i s d o e s n o t i n cl ud e t he t ax f r o m P a r t V I . ) 2 bc Add l i n e s 2 a a n d 2 b 2 c 11 , 846

3 D i s t r i b u t a b l e amount b e f o r e a d j u s tm e n t s. S u b t r a ct l i n e 2 c f r o m l i n e 1 3 597 , 8244 R e c o v e r i e s o f amounts t r e a t e d a s q u a l i f y i n g d i s t r i b u t i o n s 4 41 , 6955 Add l i n e s 3 a n d 4 5 639 , 5196 D e du c ti o n f r om d i s t r i b u t a b l e amount ( s e e i n s tr u ct i on s ) 6 07 D i s t r i b u t a b l e amount a s a d j u s t e d . S u b t r a c t l i n e 6 f r o m l i n e 5 . E n t e r h e r e a n d o n P a r t X I I I , l i n e 1 7 6 3 9 . 519Part X I I Qualifying D i s t r i b u t i o n s ( s e e i n s t r u c t i o n s )

1 Amounts p a i d ( i n c l ud i n g a d m i n is t r a t iv e e x p e n s e s ) t o a c c o m p l i s h c h a r i t a b l e , e t c . , p u r p o s e s :a E x p e n s e s , c o n t r i b u t i o n s , g i f t s , e t c . - t o t a l f r o m P a r t I , column ( d ) , l i n e 26 i s 19 , 522 , 989b P r o g r a m - r e l a t e d i n v e s t m e n t s - t o t a l f r o m P ar t I X - B l b 0

2 Amounts p a i d t o a c q u i r e a s s e t s u s e d ( o r h e l d f o r u s e ) d i r e c t l y i n c a r r y i n g o u t c h a r i t a b l e , e t c . , p u r p o s e s 2 97 , 7123 Amounts s e t a s i d e f o r s p e c i f i c c h a r i t a b l e p r o j e c t s t h a t s a t i s f y t h e :

a S u i t a b i l i t y t e s t ( p r i o r I R S a p p r o v a l r e q u i r e d ) 3 ab C a s h d i s t r i b u t i o n t e s t ( a tt a ch t h e r e q u i r e d s c h e d u l e ) 3 b

4 Q u a l i f y i n g d i s t r i b u t i o n s . Add l i n e s l a t h r o u g h 3 b . E n t e r h e r e a nd o n P a r t V , l i n e 8 , a n d P a r t X 1 1 1 , l i n e 4 4 19 , 620 , 7015 F o u n d a t i o n s t h a t q u a l i f y u n d e r s e c t i o n 4 9 4 0 ( e ) f o r t h e r e d u c e d r a t e o f t a x o n n e t i n v e s t m e n t

i n c o m e . E n t e r 1% o f P a rt I , l i n e 27b 5 06 A d j u s t e d q u a l i f y i n g d i s t r i b u t i o n s . S u b t r a c t l i n e 5 f r o m l i n e 4 6 19 , 620 , 701

N o t e : The amount on l in e 6 w i l l be used i n P a r t V , column ( b ) , i n subsequent y e a r s when c a l c u l a t i n g whether t h e foundation q u a li f i es f o r t h e s e ct i o4 9 4 0 ( e ) reduction o f t a x i n those years

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( a ) ( b )C o r p u s Y e a r s p r i o r t o 2005

I D i s t r i b u t a b l e amount f o r 2006 f r o m P a r t X l ,l i n e 7

2 U n d i s t r i b u t e d i n c o m e i f a n y , a s o f t h e e n d o f 2 0 0 5a E n t e r amount f or 2 0 0 5 o n l yb T ot al f o r p r i o r y e a r s :

3 E x c e s s d i s t ri b u t i o n s c a r ry o v e r, i f a n y , t o 2 0 0 6 :a From 2 0 0 1b From 2002c F ro m 2 00 3d From 2004e F ro m 2 00 5f T o t a l o f l i n e s 3 a t h r o u g h e

4 Q u a l i f y i n g d i s t r i b u t i o n s f o r 2006 f r o mP a r t X l l , l i n e 4 : 1 0 , $ 19 , 6 2 0 , 7 01

a A p p l i e d t o 2 0 0 5 , b u t n ot more t h a n l i n e 2 ab A p p l i e d t o u n d i s t r i b u t e d i n c o m e o f p r i o r

y e a r s ( E l e c t i o n r e q u i r e d - s e e i n s t r u c t i o n s )c T r e a t e d a s d i s t r i b u t i o n s o u t o f c o r p u s

( E l e c t i o n r e q u i r e d - s e e i n s t r u c t i o n s )d A p p l i e d t o 2006 d i s t r i b u t a b l e amounte Remaining amount d i s t r i b u t e d o u t o f corpus

5 E x c e s s d i s t r i b u t i o n s c a r r y o v e r a p p l i e d t o 2 0 0 6of a n amount appears i n column ( d ) , t h e same amountmust be shown i n column ( a ) )

6 E n t e r t h e n e t t o t a l o f e a c h column a si n d i c a t e d b e l o w :

a corpus Add lines 3 f, 4c , and 4e Subtract l i n e 5b P ri o r y e a rs ' u n d i s t r i b u t e d i n c o m e . S u b t r a c t

l i n e 4 b f r o m l i n e 2 bc E n t e r t h e amount o f p r i o r y e a r s '

u n d i s t r i b u t e d income f o r w h i c h a n o t i c e o fd e f i c i e n c y h a s b e e n i s s u e d , o r o n w h i c ht h e s e c t i o n 4 9 4 2 ( a ) t a x h a s b e e n p r e v i o u s l ya s s e s s e d

d S u b t r a c t l i n e 6 c f r o m l i n e 6 b . T a x a b l eamount - s e e i n s t r u c t i o n s

e U n d i s t r i b u t e d income f o r 2 0 0 5 . S u b t r a c t l i n e4a f r o m l i n e 2 a . T a x a b l e amount - s e e i n s t r .

f U n d i s t r i b u t e d income f o r 2 0 0 6 . S u b t r a c tl i n e s 4 d a n d 5 f r o m l i n e 1 . T h i s amount mustb e d i s t r i b u t e d i n 2007

7 Amounts t r e a t e d a s d i s t r i b u t i o n s o u t o fc o r p u s t o s a t i s f y r e q u i r e m e n t s imposed b ys e c t i o n 1 7 0 (b ) ( 1 ) (E ) o r 4 9 4 2 ( g ) ( 3 )

8 E x c e s s d i s t r i b u t i o n s c a r r y o v e r f r o m 2 0 0 1n o t a p p l i e d o n l i n e 5 o r l i n e 7

9 E x c e s s d i s t r i b u t i o n s c a r r y o v e r t o 2 0 0 7 .S u b t r a c t l i n e s 7 a n d 8 f r o m l i n e 6 a

1 0 A n a l y s i s o f l i n e 9 :a E x c e s s f r o m 2002b E x c e s s f r o m 2003c E x c e s s f r om 2004d E x c e s s f r o m 2005

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FormI tart MY ynyate operating 1-ounciatlons ( s e e i n s t r u c t i o n s and P a r t V I I - A , question 9 ) N/A

1 a I f t h e f o u n d a t i o n h a s r e c e i v e d a r u l i n g o r d e t e r m i n a t i o n l e t t e r t h a t i t i s a p r i v a t e o p e r a t i n gf o u n d a t i o n , a n d th e r u l i n g i s e f f e c t i v e f o r 2 0 0 6 , e n t e r t h e d a t e o f t h e r u l i n g ^

b Check b o x t o i n d i c a t e w h e t h e r t h e f o u n d a t i o n i s a p r i v a t e2 a E n t e r t h e l e ss er o f t h e a d j u s t e d n et T a x y e a r

income f r o m P a r t I o r t h e minimum (a ) 2006i n v e s t m e n t r e t u r n f r o m P a r t X f o re a c h y e a r l i s t e d

b 85 % o f l i n e 2 ac Q u a l i f y i n g d i s t r i b u t i o n s f r o m P a r t X I I ,

l i n e 4 f o r e a c h y e a r l i s t e dd Amounts i n c l u d e d i n l i n e 2 c n o t

u s e d d i r e c t l y f o r a c t i v e c o n d u c t o fexempt a c t i v i t i e s

e Q u a l i f y i n g d i s t r i b u t i o n s made d i r e c t l yf o r a c t i v e c o n d u c t o f exempt a c t i v i t i e s .S u b t r a c t l i n e 2 d f r o m l i n e 2 c

3 C o m p l e t e 3 a , b , o r c f o r t h ea l t e r n a t i v e t e s t r e l i e d u p o n :a " A s s e t s " a l t e r n a t i v e t e s t - e n t e r :

( 1 ) V a l u e o f a l l a s s e t s( 2 ) V a l u e o f a s s e t s q u a l i f y i n g

u n d e r s e c t i o n 4 9 4 2 ( j ) ( 3 ) ( B ) ( i )b ' E n d o w m e n t ' a l t e r n a t i v e t e s t - e n t e r

2 / 3 o f minimum i n v e s t m e n t r e t u r nshown i n P a r t X , l i n e 6 f o r e a c h y e a rl i s t e dc ' S u p p o r t ' a l t e r n a t i v e t e s t - e n t e r :

( 1 ) T o t a l s u p p o r t o t h e r t h a n g r o s si n v e s t m e n t income ( i n t e r e s t ,d i v i d e n d s , r e n t s , payments o ns e c u r i t i e s l o a n s ( s e c t i o n5 1 2( a) ( 5 ) ) , o r r o y a l t i e s )

( 2 ) S u p p o r t f r o m g e n e r a l p u b l i cand 5 o r more exempto r g a n i z a t i o n s a s p r o vi d e d i ns e c t i o n 4 9 4 2 ( j ) ( 3 ) ( B ) ( i i i )

( 3 ) L a r g e s t amount o f s u p p o r t f r o ma n exempt o r g a n i z a t i o n

P r i o r 3 y e a s( b ) 2005 ( c ) 2004

o r 4 9 4 2 ( 1 ) ( 5 )2003 ( e ) T o t a I

Part XV Supplementary Information (Complete t h i s p a r t only i f the foundation h ad $5,000 or m o r e i n assetsa t any time du r i n g th e year-see page 2 8 o f the i n s t r u c t i o n s . )1 Information Regarding Foundation Managers:

a L i s t a n y managers o f t h e f o u n d a t i o n wh o h a v e c o n t r i b u t e d more t h a n 2% o f t h e t o t a l c o n t r i b u t io n s r e c e i v e d b y t h e f o u n d a t i o n b e f o r e t h e c l o s e o f a n y t a xy e a r ( b u t o n l y i f t h e y h a v e c o n t r i b u t e d more t h a n $ 5 , 0 0 0 ) . ( S e e s e c t i o n 5 0 7 ( d ) ( 2 ) . )NONE

b L i s t a n y managers o f t h e f o u n d a t i o n wh o own 10 % o r more o f t h e s t o c k o f a c o r p o r a t i o n ( o r a n e q u a l l y l a r g e p o r t i o n o f t h e o w n e r s h i p o f a p a r t n e r s h i p oro t h e r e n t i t y ) o f w h i c h t h e f o u n d a t i o n h a s a 10 % o r g r e a t e r i n t e r e s t .NONE2 I n f o r m a t i o n Regarding C o n t r i b u t i o n , G r a n t , G i f t , L o a n , S c h o l a r s h i p , e t c . , Programs:

Check h e r e ^L1 i f t h e f o u n d a t i o n o n l y makes c o n t r i b u t i o n s t o p r e s e l e c t e d c h a r i t a b l e o r g a n i z a t i o n s a n d d o e s n o t a c c e p t u n s o l i c i t e d r e q u e s t s f o r f u n d s . I fth e f o u n d a t i o n makes g i f t s , g r a n t s , e t c . ( s e e i n s t r u c t i o n s ) t o i n d i v i d u a l s o r o r g a n i z a t i o n s u n d e r o t h e r c o n d i t i o n s , c o m p l e t e i t e m s 2 a , b , c , a n d d .

a T he n a m e , a d d r e s s , a n d t e l e p h o n e number o f t h e p e r s o n t o w h o m a p p l i c a t i o n s s h o u l d b e a d d r e s s e d :

SEE STATEMENT 8b T he f o r m i n w h i c h a p p l i c a t i o n s s h o u l d b e s u b m i tt e d a n d i n f o r m a t i o n a n d m a t e r i a l s t h e y s h o u l d i n c l u d e :

c Any s u b m i s s i o n d e a d l i n e s :

d Any r e s t r i c t i o n s o r l i m i t a t i o n s o n a w a r d s , s u c h a s b y g e og r a ph i c al a r e a s , c h a r i t a b l e f i e l d s , k i n d s o f i n s t i t u t i o n s , o r o t h e r f a c t o r s :

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3 G r a n t s a nd Contributions P ai d D ur i ng t he Y e a r o r A n o r o v e d f o r F u t u r e P a y m e n tR e c i p i e n t I f r e c i p i e n t i s a n i n d i v i d u a l ,s h o w a n y r e l a t i o n s h i p t o F o u n d a t i o n P u r p o s e o f g r a n t o r

f d t s t a t u s o f c o n t r i b u t i o n A m o u n tN a m e and a d d r e s s ( h o m e o r b u s i n e s s ) a n y o u n a i o n managero r s u b s t a n t i a l c o n t r i b u t o r r e c i p i e n ta P a i d d u r i n g t h e year

GRANTS PAID SEE STATEMENT1 1 16605740.

T o t a l ^ 3 a 16605740.b A p p r o v e d f o r f u t u r e p a y m e n t

FUTURE PAYMENTS SEESTATEMENT 1 2 11879015.

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E n t e r g r o s s amounts u n l e s s o t h e r w i s e i n d i c a t e d U n r e l a t e d b u s i n e s s income Exclu ded b y section 512 , 513 , o r 514 (e ).

1 Program s e r v i c e r e v e n u e :( a )B u s i n e s sc o d e

( b )Amount

E ^-S i o nc o d e

( d )Amount

R e l a t e d o r exemptf u n c t i o n i n c o m e

abcdefg F e e s an d c o n t r a c t s f r o m government a g e n c i e s

2 Membership d u e s an d a s s e s s m e n t s3 I n t e r e s t o n s a v i n g s a n d t e m p o r a r y c a s h

i n v e s t m e n t s 14 591 , 206.4 D i v i d e n d s an d i n t e r e s t f r o m s e c u r i t i e s5 N e t r e n t a l i n c o m e o r ( l o s s ) f r o m r e a l e s t a t e :

a D e bt - f i n a n c e d p r o p e r t yb N o t d e b t - f in a n c e d p r o p e r ty

6 N e t r e n t a l i n c o m e o r ( l o s s ) f r o m p e r s o n a lp r o p e r t y

7 O t h e r i n v e st m e n t income8 G a i n o r ( l o s s ) f r o m s a l e s o f a s s e t s o t h e r

t h a n i n v e n t o r y 18 1 , 070.9 N e t income o r ( l o s s ) f r o m s p e c i a l e v e n t s

1 0 G r o s s p r o f i t o r ( l o s s ) f r o m s a l e s o f i n v e n t o r y1 1 O t h e r r e v e n u e :

abcde

1 2 S u b t o t a l . Ad d columns ( b ) , ( d ) , a n d ( e ) 0. 592 , 276. 1 01 3 T o t a l . Ad d l i n e 1 2 , columns ( b ) , ( d ) , a n d ( e ) 1 3 592,276.( S e e w o r k s h e e t i n l i n e 1 3 i n s t r u c t i o n s t o v e r i f y c a l c u l a t i o n s . )Part XVI- B Relationship o f A c t i v i t i e s t o the Accomplis hment o f Exempt Pu rpo sesL i n e No .r

E x p l a i n b e l o w how e a c h a c t i v i t y f o r w h i c h i n c o m e i s r e p o r t e d i n column ( e ) o f P a r t X V I - A c o n t r i b u t e d i m p o r t a n t l y t o t h e a c c o m p l i s h m e n t o fth e f o u n d a t i o n ' s exempt p u r p o s e s ( o t h e r t h a n b y p r o v i d i n g f u n d s f o r s u c h p u r p o s e s ) .

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D i d t h e o r g a n i z a t i o n d i r e c t l y o r i n d i r e c t l y engage i n a n y o f t h e f o l l o w i n g w i t h a n y o t h e r o r g a n iz a t i o n d e s c r i b e d i n s e c t i o n 5 0 1 ( c ) o f Yes Not h e Code ( o t h e r t h a n s e c t i o n 5 0 1 ( c ) ( 3 ) o r g a n iz a t i o ns ) o r i n s e c t i o n 5 2 7 , r e l a t i n g t o p o l i t i c a l o r g a n i z a t i o n s ?

a T r a n s f e r s f r o m t h e r e p o r t i n g f o u n d a t i o n t o a n o n c h a r i t a b l e exempt o r g a n i z a t i o n o f .( 1) Cash l a ( l ) X( 2 ) O t h e r a s s e t s 1 a 2 X

b O t h e r t r a n s a c t i o n s :( 1 ) S a l e s o f a s s e t s t o a n o n c h a r i t a b l e exempt o r g a n i z a t i o n I b ( l ) X( 2 ) P u r c h a s e s o f a s s e t s f r o m a n o n c h a r i t a b l e exempt o r g a n i z a t i o n b ( 2 ) X( 3 ) R e n t a l o f f a c i l i t i e s , e q u i p m e n t , o r o t h e r a s s e t s X( 4 ) Reimbursement a r r a n g e m e n t s

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