2014-02-13T11:21:35-06:00 2013-06-29 911233794 HAGEN KURTH PERMAN & CO PS 1111 THIRD AVENUE SUITE 800 SEATTLE WA 98101 990 2012-07-01 910568708 SEATTLE GOODWILL INDUSTRIES SEAT 2063291000 700 DEARBORN PLACE S SEATTLE WA 98144 MICHAEL JURICH 2063291000 2014-02-12 1 PHILIP LAUBE CPA P00016966 2066829200 2012 2015-11-30 17:44:51Z X MICHAEL JURICH 700 DEARBORN PLACE S SEATTLE WA 98144 124400259 0 X WWW.SEATTLEGOODWILL.ORG X 1923 WA SEATTLE GOODWILL IS A NONPROFIT ORGANIZATION THAT PROVIDES EMPLOYMENT TRAINING AND BASIC EDUCATION TO INDIVIDUALS EXPERIENCING SIGNIFICANT BARRIERS TO ECONOMIC OPPORTUNITY. OUR THRIFT STORE OPERATION IS AN INTEGRAL PART OF THE ORGANIZATION AND PROVIDES ON THE JOB TRAINING AND FUNDING FOR TRAINING AND EDUCATION PROGRAMS. SEE FORM 990, PART III, LINES 4A AND 4B FOR MORE INFORMATION. 22 21 2737 372 0 0 1983821 1926539 77233379 86443657 63864 291729 3182255 3540819 82463319 92202744 816367 1064875 0 0 45037740 50638370 0 0 527347 24986132 27905387 70840239 79608632 11623080 12594112 71170015 93426495 30221009 39727545 40949006 53698950 GOODWILL PROVIDES QUALITY, EFFECTIVE EMPLOYMENT TRAINING AND BASIC EDUCATION TO INDIVIDUALS EXPERIENCING SIGNIFICANT BARRIERS TO ECONOMIC OPPORTUNITY. BECAUSE JOBS CHANGE LIVES. 0 0 68938472 93245315 RETAIL PROGRAM:WE CONTINUE TO SEE GROWING COMMUNITY NEED FOR OUR THRIFT STORES WHICH SELL QUALITY, VALUE PRICED, CLOTHING AND HOUSEHOLD GOODS. WE OPENED A NEW STORE IN THE SOUTH LAKE UNION NEIGHBORHOOD OF SEATTLE. WE CONTINUED TO IMPROVE OUR OPERATIONS WHICH IS EVIDENT IN OUR FINANCIAL RESULTS AND INCREASED PEOPLE SERVED. WE PROCESSED, SOLD AND RECYCLED THOUSANDS OF TONS OF DONATED GOODS, PROVIDING MUCH NEEDED VALUE TO OUR CUSTOMERS, TRAINING, EDUCATION AND EMPLOYMENT OPPORTUNITIES FOR PEOPLE WITH MULTIPLE BARRIERS TO EMPLOYMENT AND THE ENVIRONMENTAL BENEFIT OF KEEPING THESE ITEMS OUT OF LANDFILLS. 7644794 1064875 0 JOB TRAINING AND EDUCATION PROGRAM:WE CELEBRATED OUR 90TH ANNIVERSARY AND HELPED OVER 8,500 PEOPLE PREPARE FOR OR OBTAIN EMPLOYMENT THROUGH OUR FREE JOB TRAINING AND EDUCATION PROGRAMS AND COLLABORATIONS, AN INCREASE OF 35% OVER LAST YEAR. 733 STUDENTS WERE PLACED IN EMPLOYMENT, WHICH REFLECTS A 6% INCREASE OVER LAST YEAR. THE AVERAGE JOB PLACEMENT WAGE WAS $10.97/HOUR. WE COMPLETED CONSTRUCTION OF OUR FLAGSHIP JOB TRAINING AND EDUCATION CENTER IN SEATTLE, DOUBLING CAPACITY TO SERVE THE SEATTLE COMMUNITY IN A DIGNIFIED LEARNING ENVIRONMENT. OUR SHORELINE AND MARYSVILLE JOB TRAINING CENTERS WERE REMODELED TO INCREASE SERVICE CAPACITY BY 34% AND 28% RESPECTIVELY. 76583266 1 1 0 1 0 0 0 0 0 0 1 1 0 0 1 1 1 0 0 0 0 0 0 0 1 0 0 0 1 1 1 0 0 0 0 0 0 0 1 0 1 1 0 0 0 0 0 0 0 0 1 353 0 1 2737 1 0 0 0 0 1 1 0 0 0 0 0 X 22 21 0 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 0 0 WA X MICHAEL JURICH VPCFO 2068605709 700 DEARBORN PLACE S SEATTLE WA 98144 RICHARD N PAHRE 1.00 X 0 0 0 DANIEL DA SILVA 1.00 X 0 0 0 LAURIANN REYNOLDS 1.00 X 0 0 0 REAH DEPRIEST 1.00 X 0 0 0 JOHN HAYDUK 1.00 X 0 0 0 SCOTT MISSALL 1.00 X 0 0 0 SHELLIE SADR 1.00 X 0 0 0 SCOTT WILSON 1.00 X 0 0 0 KEN COLLING 40.00 X X X 292033 0 6811 ROBERT JEFFREY 1.00 X 0 0 0 WAYNE LAU 1.00 X 0 0 0 CLEO MOLINA 1.00 X 0 0 0 CATHERINE GIBSON 1.00 X 0 0 0 JERRY WALKER 1.00 X 0 0 0 MARKEE A FOSTER 1.00 X 0 0 0 BRODERICK SMITH 1.00 X 0 0 0 PAUL T KILLPATRICK 1.00 X 0 0 0 TODD R SPROUL 1.00 X 0 0 0 MARIANNE SHORT 1.00 X 0 0 0 JAMES THOMAS 1.00 X 0 0 0 MICHAEL KILLEEN 1.00 X 0 0 0 DERRYL WILLIS 1.00 X 0 0 0 MICHAEL JURICH 40.00 X X 198472 0 13617 CYNTHIA FORSLUND 40.00 X X 198217 0 13608 BG NABORS-GLASS 40.00 X 131146 0 10807 SUSANNE EBLING 40.00 X 141518 0 4290 CATHERINE MCCONNELL 40.00 X 130950 0 2825 ELBERT FISH III 40.00 X 127857 0 5688 NICOLE ROBERTS 40.00 X 127988 0 2289 1348181 0 59935 9 0 1 0 0 X 3916 251367 288243 1383013 50242 1926539 PROGRAM SERVICES 453310 86443657 86443657 86443657 547164 547164 14729 0 14729 14729 14729 28199938 3215 28451398 7190 -251460 -3975 -255435 -255435 78716 251367 78716 0 6801658 3660211 3141447 3141447 MISCELLANEOUS 453310 203440 203440 PUBLIC SUPPORT-OTHER 453310 181203 181203 384643 92202744 89969747 0 306458 1064875 1064875 1560795 912493 633144 15158 40626267 39695185 727309 203773 137490 128404 5969 3117 3589001 3530213 48616 10172 4724817 4610334 90548 23935 81157 78842 2315 59220 59220 16791 16791 2537745 2183627 231631 122487 874289 866262 4880 3147 639584 552776 85416 1392 5874929 5794450 80479 92932 84438 8190 304 691692 665169 26361 162 160824 160813 11 4539775 4282059 251618 6098 671013 659957 10466 590 SUPPLIES 2347334 2320811 24512 2011 DISPOSAL 1981465 1972420 9045 0 TELEPHONE AND UTILITIES 1439859 1391537 47215 1107 POSTAGE AND SHIPPING 1435165 1411735 4050 19380 4461613 4216866 130233 114514 79608632 76583266 2498019 527347 26346 5974 13363 7009 10583133 2246002 90861 4365425 329886 311003 677188 1255720 14141 20981 2023466 2311427 1322674 1380857 76997984 29563393 32190619 47434591 19492315 33392659 4445732 707830 71170015 93426495 5759122 7334098 126000 71250 20291637 28755477 4044250 3566720 30221009 39727545 X 40595828 53552797 353178 146153 40949006 53698950 71170015 93426495 12594112 155832 0 X X 0 1 X 1 0 X 575732 644063 776927 1983821 1926539 5907082 52811287 62620940 70668575 83304715 93245315 362650832 53387019 63265003 71445502 85288536 95171854 368557914 0 13074 452483 259554 288741 212094 1225946 13074 452483 259554 288741 212094 1225946 367331968 299354 201402 236512 276715 561893 1575876 299354 201402 236512 276715 561893 1575876 365458 336576 250099 298284 384643 1635060 54051831 63802981 71932113 85863535 96118390 371768850 0.98810 0.98920 0.00420 0.00400 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED X 0 1 0 0 0 0 1 1332 0 1 16791 18123 0 EXPLANATION OF LOBBYING ACTIVITIES: PART II-B, LINE 1: SEATTLE GOODWILL PARTNERS WITH GOODWILL INDUSTRIES INTERNATIONAL AND SEVERAL GOODWILL MEMBER AFFILIATES TO ENGAGE A GOVERNMENT RELATIONS FIRM TO ASSIST US IN SEEKING FEDERAL FUNDS TO BE USED FOR CAPITALIZATION FUNDING OF NEW GOODWILL FACILITIES. THESE NEW FACILITIES WOULD BECOME SELF SUSTAINING AFTER THE INITIAL CAPITAL INVESTMENT, THUS PROVIDING AN ONGOING SOURCE OF REVENUE TO INCREASE OUR FREE JOB TRAINING AND EDUCATION SERVICES. SEATTLE GOODWILL ALSO COLLABORATES WITH GOODWILL INTERNATIONAL TO ATTEND AN ANNUAL ADVOCACY DAY ON CAPITOL HILL IN WASHINGTON DC. MEMBERS OF CONGRESS WERE ENGAGED IN A DIALOGUE ABOUT THE FOLLOWING TOPICS IMPORTANT TO OUR MISSION: REAUTHORIZATION OF THE WORKFORCE INVESTMENT ACT AND FUNDING FOR BASIC FOOD AND EMPLOYMENT TRAINING. SEATTLE GOODWILL ALSO PARTNERS WITH OTHER WASHINGTON STATE GOODWILL AFFILIATES TO ENGAGE A WASHINGTON STATE LOBBYIST. THIS LOBBYIST HELPS US BUILD STRONG RELATIONSHIPS WITH LEGISLATORS, MONITORS BILLS FOR POTENTIAL MISSION IMPACT, IDENTIFIES OPPORTUNITIES TO ADVANCE OUR MISSION THROUGH LEGISLATION AND PURSUES STATE FUNDING OPPORTUNITIES. LEGISLATION OF PARTICULAR INTEREST INCLUDED ELECTRONIC WASTE RECYLING, EMPLOYMENT OF VETERANS, WORKER COMPENSATION, RETAIL THEFT, AND PRODUCT SAFETY. 6499065 6499065 29702687 4797156 24905531 13086792 8517283 4569509 23929608 15601758 8327850 3779832 647196 3132636 47434591 CD'S AND CORPORATE BONDS 33392659 F 33392659 CAPITAL LEASE OBLIGATIONS 335810 INTEREST RATE SWAP CONTRACT 2166432 STRAIGHT-LINE RENT OBLIGATION 743897 DEFERRED TENANT ALLOWANCES, NET 320581 3566720 X 96125007 155836 27500 3738927 3922263 92202744 0 92202744 83375059 27500 3738927 3766427 79608632 0 79608632 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X, LINE 2: FINANCIAL STATEMENT FIN 48 FOOTNOTE TEXT: SEATTLE GOODWILL USES THE ASSET AND LIABILITY METHOD IN PROVIDING FOR INCOME TAXES ON ALL TRANSACTIONS THAT HAVE BEEN RECOGNIZED IN THE FINANCIAL STATEMENTS. THIS METHOD IS IN ACCORDANCE WITH FINANCIAL ACCOUNTING STANDARDS BOARD ACCOUNTING STANDARDS CODIFICATION (ASC) 740, ACCOUNTING FOR INCOME TAXES. THE ASSET AND LIABILITY METHOD PROVIDES THAT DEFERRED TAXES BE ADJUSTED TO REFLECT THE TAX RATES AT WHICH FUTURE TAXABLE OR DEDUCTIBLE AMOUNTS WILL BE SETTLED OR REALIZED. DURING THE 2012 FISCAL YEAR, SEATTLE GOODWILL CONTINUED ITS APPLICATION OF ASC 740-10 AS IT RELATES TO UNCERTAIN TAX POSITIONS AND HAS EVALUATED ITS TAX POSITIONS TAKEN FOR ALL OPEN TAX YEARS. CURRENTLY, THE 2009, 2010 AND 2011 TAX YEARS ARE OPEN AND SUBJECT TO EXAMINATION BY THE INTERNAL REVENUE SERVICE. HOWEVER, SEATTLE GOODWILL IS NOT CURRENTLY UNDER AUDIT NOR HAS SEATTLE GOODWILL BEEN CONTACTED BY ANY JURISDICTION. BASED ON THE EVALUATION OF SEATTLE GOODWILL'S TAX POSITIONS, MANAGEMENT BELIEVES ALL POSITIONS TAKEN WOULD BE UPHELD UNDER AN EXAMINATION. THEREFORE, NO PROVISION FOR THE EFFECTS OF UNCERTAIN TAX POSITIONS HAS BEEN RECORDED FOR THE YEAR ENDED JUNE 29, 2013. PART XI, LINE 2D - OTHER ADJUSTMENTS: COST OF GOODS SOLD - SEE ADDITIONAL EXPLANATION GLITTER GALA FUNDRAISING EVENT DIRECT EXPENSES - SEE ADDITIONAL EXPLANATION PART XII, LINE 2D - OTHER ADJUSTMENTS: COST OF GOODS SOLD - SEE ADDITIONAL EXPLANATION GLITTER GALA FUNDRAISING EVENT DIRECT EXPENSES - SEE ADDITIONAL EXPLANATION PARTS XI AND XII, LINES 2D, DETAIL FOR OTHER ADJUSTMENTS: DIRECT FUNDRAISING EXPENSES OF $78,716 IS SHOWN NETTED AGAINST GROSS INCOME FROM FUNDRAISING EVENTS (FORM 990, PART VIII, LINE 8B) AND CORRESPONDINGLY EXCLUDED FROM EXPENSES. COST OF GOODS SOLD OF $3,660,211 IS SHOWN NETTED AGAINST GROSS SALES OF INVENTORY (FORM 990, PART VIII, LINE 10B) AND CORRESPONDINGLY EXCLUDED FROM EXPENSES. GLITTER GALA FASHIONSHOW 330083 251367 78716 61180 17536 330083 251367 78716 61180 17536 78716 0 1 JILL JONES AWARDS 216 39717 STIPEND 251 223247 YOUTH STIPEND 58 196458 AWARDS & GRANTS 1453 252227 109559 PURCHASE COSTS GOODWILL COUPON CERTIFICATES AND GROCERY/DEPARTMENT STORE GIFT CARDS GED EXAM FEES 87 13196 TRANSIT PASSES/BUS TICKETS 1920 230471 FMV BUS TICKETS PROCEDURE FOR MONITORING GRANTS IN THE U.S.: PART I, LINE 2: SCHEDULE I, PART I, LINE 2: JILL JONES AWARDS: THIS FUND HOLDS BOARD DESIGNATED AND DONOR RESTRICTED FUNDS TO HELP CLIENTS WHO NEED EMERGENCY FINANCIAL ASSISTANCE, FOR EXAMPLE, TO PAY DELINQUENT RENT OR UTILITIES. THIS ASSISTANCE IS GOVERNED BY A FUND POLICY AND PAYMENTS ARE PAID DIRECTLY TO VENDORS, NOT THE CLIENT, AFTER RECEIVING APPROPRIATE DOCUMENTATION. STIPEND: SEATTLE GOODWILL INDUSTRIES' RETAIL/CUSTOMER SERVICE SECTOR TRAINING PROGRAM OFFERS STUDENTS A STIPEND TO THOSE WHO MAINTAIN ATTENDANCE STANDARDS ESTABLISHED PER POLICY. THESE STIPENDS HELP STUDENTS STAY IN THE PROGRAM, AS MANY HAVE LITTLE OR NO INCOME. YOUTH STIPEND: THE YOUTH PROGRAM PROVIDES PARTICIPANTS WITH JOB SKILLS TRAINING, ENVIRONMENTAL STEWARDSHIP EDUCATION, COLLEGE PREPARATION, THE COMMUNITY SERVICE HOURS REQUIRED TO GRADUATE FROM HIGH SCHOOL, AND AN OPPORTUNITY TO BUILD THEIR TEAMWORK, LEADERSHIP, AND OTHER SOFT SKILLS. THE PROGRAM RUNS ALL DAY FOR TWO MONTHS DURING THE SUMMER WITH CONTINUED SERVICES THROUGHOUT THE SCHOOL YEAR. THIS PROGRAM SERVES YOUTHS WHO HAVE NOT YET COMPLETED HIGH SCHOOL. PARTICIPANTS ARE PAID A STIPEND THAT IS DEPENDENT UPON THEIR ATTENDANCE, PARTICIPATION, AND PROGRESS. AWARDS & GRANTS: CASE MANAGEMENT SUPPORT SERVICES HELP STABILIZE THE LIVES OF OUR CLIENTS, THEREBY IMPROVING RETENTION AND OUTCOMES. AWARDS AND GRANTS REFLECT COSTS FOR ITEMS PURCHASED OR PROVIDED TO CLIENTS THROUGH CASE MANAGEMENT, SUCH AS FOOD, CLOTHING, PERSONAL AND HOUSEHOLD ITEMS. EACH YEAR A FEW STUDENTS WHO HAVE GRADUATED FROM SEATTLE GOODWILL INDUSTRIES JOB TRAINING AND EDUCATION PROGRAMS ARE SELECTED, ACCORDING TO ESTABLISHED GUIDELINES, TO RECEIVE MARTIN SMITH MEMORIAL SCHOLARSHIPS TO ASSIST THE STUDENTS WITH THEIR FURTHER EDUCATION. GED EXAM FEES: SEATTLE GOODWILL PAYS EXAM FEES FOR CLIENTS PURSUING THEIR GED. TRANSIT PASSES/BUS TICKETS: STUDENTS MAY RECEIVE LIMITED FINANCIAL ASSISTANCE TOWARDS BUS TRANSPORTATION TO AND FROM JOB TRAINING AND EDUCATION FACILITIES. THIS SUPPORT ENABLES STUDENTS WITH TRANSPORTATION BARRIERS TO ATTEND TRAINING. X X X X 0 0 0 1 0 1 0 1 0 KEN COLLING 235783 0 56250 0 0 0 5655 0 1156 0 298844 0 115000 0 MICHAEL JURICH 181091 0 17381 0 0 0 7939 0 5678 0 212089 0 89933 0 CYNTHIA FORSLUND 180991 0 17226 0 0 0 7929 0 5679 0 211825 0 89833 0 SUPPLEMENTAL INFORMATION PART III RETAIL MANAGEMENT BONUSES ARE BASED ON NET CONTROLLABLE CONTRIBUTION MARGIN, WHICH INCLUDES REVENUE AS PART OF THE EQUATION. BONUSES ARE CAPPED AT 1.5 TIMES THE TARGET BONUS FOR THE SPECIFIC POSITION. BONUSES IN EXCESS OF THE TARGET ARE EARNED BASED ON HOW MUCH NET CONTROLLABLE CONTRIBUTION MARGIN EXCEEDS BUDGET. VICE PRESIDENTS' BONUSES ARE BASED ON THE ACHIVEMENT OF VARIOUS GOALS AND OBJECTIVES, INCLUDING MEETING THE NET INCOME GOAL FOR THE ORGANIZATION. BONUSES ARE CAPPED AT 10% OF SALARY. CEO BONUS IS CAPPED AT 25% OF SALARY AND IS PAID AT THE DISCRETION OF THE BOARD AS RECOMMENDED BY THE COMPENSATION COMMITTEE. A WASHINGTON ECONOMIC DEVELOPMENT FINANCE AUTHORITY 911493002 NONEAVAIL 2010-12-16 30000000 REFINANCE EXISTING FACILITY DEBT; FINANCE NEW FACILITIES/RENOVATION 0 0 0 A 1244523 29480070 237166 26324280 2918624 2011 0 0 0 1 A 0 0 0 0 0 0 0 A 0 0 0 0 1 1 BANK OF AMERICA NA 5.400000000000 0 0 0 0 0 SCHEDULE K, PART II, LINE 3 TOTAL PROCEEDS OF ISSUE: AS OF YEAR ENDING 6/29/13, TRANCHE 1 IN THE AMOUNT OF $4,996,445, TRANCHE 2 IN THE AMOUNT OF $3,025,000 AND TRANCHE 4 IN THE AMOUNT OF $10,628,555 HAD BEEN FULLY DRAWN UNDER THE BOND. TRANCHE 3 WAS PARTIALLY DRAWN IN THE AMOUNT OF $10,830,070 AT YEAR END, LEAVING $519,930 OPEN TO BORROW. TRANCHE 3 PROJECT COMPLETION WAS APRIL 5, 2013. SCHEDULE K, PART II, LINE 11 OTHER SPENT PROCEEDS: $2,918,624 OF THE PROCEEDS RETIRED PRIOR DEBT INCURRED TO IMPROVE EQUIPMENT AND FACILITIES. SCHEDULE K, PART II, LINE 13 YEAR OF SUBSTANTIAL COMPLETION: TRANCHE 1 PROJECT 7/23/10 TRANCHE 2 PROJECT 12/24/11 TRANCHE 3 PROJECT 4/5/13 TRANCHE 4 PROJECT 3/30/11 SCHEDULE K, PART III PRIVATE BUSINESS USE: THE BOND LISTED IN PART I IS A POST DECEMBER 31, 2002 QUALIFIED 501(C)(3) BOND AND THE BOND-FINANCED PROPERTY DOES NOT RESULT IN PRIVATE BUSINESS USE. SCHEDULE K, PART IV, LINE 3C TERM OF HEDGE: 5.4 YEARS AVERAGE TERM: TRANCHE 1 = 6.9 YEARS TRANCHE 2 = 5.6 YEARS TRANCHE 3 = 3.9 YEARS TRANCHE 4 = 5.1 YEARS SHELLIE SADR DIRECTOR 794208 SHELLIE SADR IS EMPLOYED BY BANK OF AMERICA AND BANK OF AMERICA PROVIDES DEPOSITORY, DISBURSEMENT, CASH MANAGEMENT, EQUIPMENT LEASING AND CREDIT SERVICES TO SEATTLE GOODWILL. SHELLIE SADR'S RESPONSIBILITIES WITHIN BANK OF AMERICA DO NOT INVOLVE THE SALE OF SERVICES PROVIDED BY THE BANK TO SEATTLE GOODWILL AND SHE RECUSES HERSELF FROM ANY BOARD DECISIONS RELATED TO BANK OF AMERICA. 0 MICHAEL KILLEEN DIRECTOR 77929 MICHAEL J. KILLEEN IS A PARTNER IN THE LAW FIRM OF DAVIS WRIGHT TREMAINE, LLP (DWT). DWT IS USED BY SEATTLE GOODWILL AS AN OUTSIDE COUNSEL. MICHAEL KILLEEN DOES NOT PERFORM ANY PAID WORK PERSONALLY. ALL OF HIS TIME ON SEATTLE GOODWILL MATTERS IS PRO BONO. 0 SCOTT MISSALL DIRECTOR 12865 SCOTT MISSALL IS AN EQUITY PARTNER IN THE LAW FIRM OF SHORT CRESSMAN AND BURGESS, PLLC (SCB). SCB IS USED BY SEATTLE GOODWILL AS AN OUTSIDE COUNSEL. 0 X 7,590,575 - PART II X 78,853,084 - PART II X 2 50242 STOCK MARKET QUOTE 0 1 1 THIRD PARTY USE: PART I, LINE 32B: AS PART OF SEATTLE GOODWILL'S RETAIL PROGRAM, SOME DONATED MERCHANDISE, INCLUDING BOOKS, IS SOLD ONLINE THROUGH ENTITIES SUCH AS EBAY, SHOPGOODWILL.COM, AMAZON, ABEBOOKS, ALIBRIS AND HALF.COM. NON REPORTING OF REVENUE: PART I, LINE 33: SEATTLE GOODWILL RECEIVES CONTRIBUTIONS OF BOOKS, CLOTHING AND HOUSEHOLD GOODS (INVENTORY) AND PROCESSES THESE CONTRIBUTIONS AS MERCHANDISE OFFERED FOR SALE IN ITS RETAIL THRIFT STORES. SEATTLE GOODWILL BELIEVES THAT INVENTORY OF CONTRIBUTED GOODS AND MATERIALS DO NOT POSSESS AN ATTRIBUTE THAT IS EASILY MEASURABLE OR VERIFIABLE WITH SUFFICIENT RELIABILITY TO DETERMINE AN INVENTORY VALUE AT THE TIME OF DONATION. ACCORDINGLY, CONTRIBUTED GOODS AND MATERIALS INVENTORY ARE VALUED AT ZERO PRIOR TO BEING OFFERED FOR SALE. AS REPORTED ON FORM 990, SCHEDULE M, LINES 4 AND 5, THE REVENUE FOR THE CURRENT YEAR OF THESE DONATED PROPERTIES ARE $7,590,575 AND $78,853,084, RESPECTIVELY. THESE AMOUNTS ARE INCLUDED IN PROGRAM SERVICES REVENUE ON FORM 990, PART VIII, LINE 2A. FORM 990, PART VI, SECTION B, LINE 11 SEATTLE GOODWILL ENGAGES AN OUTSIDE ACCOUNTING FIRM TO PREPARE THE FORM 990 FROM INPUT AND DATA PROVIDED BY THE CHIEF FINANCIAL OFFICER AND ACCOUNTING DIRECTOR. A DRAFT FORM IS REVIEWED BY THE CHIEF FINANCIAL OFFICER AND ACCOUNTING DIRECTOR FOR ACCURACY BEFORE A FINAL FORM 990 IS PRODUCED. THE FINAL FORM 990 IS THEN PROVIDED TO ALL BOARD MEMBERS APPROXIMATELY ONE WEEK BEFORE THE FORM 990 IS FILED WITH THE IRS, AS PER IRS GUIDANCE. THE BOARD MEMBERS ARE NOT REQUIRED TO APPROVE THE FORM 990. FORM 990, PART VI, SECTION B, LINE 12C CONFLICT OF INTEREST DISCLOSURE FORMS ARE DISTRIBUTED ANNUALLY AND COMMUNICATION IS MADE ABOUT THE IMPORTANCE OF DISCLOSURE OF ANY REAL OR POTENTIAL CONFLICTS OF INTEREST SO THAT THEY CAN BE APPROPRIATELY MANAGED. EACH NEW BOARD MEMBER IS ALSO PROVIDED THIS SAME FORM AND INFORMATION. KEY EMPLOYEES ALSO RECEIVE AN ANNUAL CONFLICT OF INTEREST DISCLOSURE FORM AND HAVE BEEN TRAINED ON OUR ETHICS POLICIES. CLEAR PROCEDURES ARE ESTABLISHED FOR THE ANONYMOUS REPORTING OF ETHICS VIOLATIONS THROUGH A 1-800 REPORTING SERVICE OR DIRECTLY TO THE COMPLIANCE OFFICER OR CHAIR OF THE BOARD FINANCE AND AUDIT COMMITTEE. EACH YEAR, THE COMPLIANCE OFFICER MAKES A REPORT TO THE FINANCE AND AUDIT COMMITTEE OF THE BOARD AND TO THE FULL BOARD OF DIRECTORS ON COMPLIANCE POLICY MATTERS, INCLUDING A SUMMARY OF CONFLICT OF INTEREST FORM DISCLOSURES. FORM 990, PART VI, SECTION B, LINE 15A CEO COMPENSATION IS ESTABLISHED BY THE COMPENSATION COMMITTEE OF THE BOARD MADE UP OF INDEPENDENT DIRECTORS, USING COMPETITIVE SALARY SURVEYS AND CONSIDERING ORGANIZATION AND INDIVIDUAL PERFORMANCE. THE COMPENSATION COMMITTEE REPORTS ITS RECOMMENDATION TO THE BOARD ANNUALLY BEFORE CHANGES ARE MADE TO THE CEO COMPENSATION. THE VP POSITIONS ARE APPROVED BY THE BOARD, BUT VP COMPENSATION IS ESTABLISHED BY THE CEO, ALSO CONSIDERING INDIVIDUAL PERFORMANCE AND COMPETITIVE SALARY SURVEYS. THE COMPENSATION COMMITTEE RECEIVES A REPORT OF THE VP COMPENSATION AT THE SAME TIME IT CONSIDERS CEO COMPENSATION EACH YEAR. FORM 990, PART VI, SECTION C, LINE 19 OUR FORM 990 IS PUBLISHED ON OUR WEBSITE. WE DO NOT PUBLISH OUR GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY OR FINANCIALS TO THE GENERAL PUBLIC. THESE ARE PROVIDED TO GRANT FUNDERS, LESSORS, AND LENDERS UPON REQUEST. SUMMARY FINANCIAL INFORMATION IS PROVIDED, ALONG WITH MISSION OUTCOMES, TO THE PUBLIC IN OUR ANNUAL REPORT. THE ANNUAL REPORT IS PROVIDED TO THOSE WHO HAVE REQUESTED TO BE ON OUR DISTRIBUTION LIST AND PUBLISHED ON OUR WEBSITE. FORM 990, PART VIII, LINE 7(C) COLUMN (I), SECURITIES NET GAIN OR (LOSS): REALIZED AND UNREALIZED GAINS AND LOSSES INCLUDE AMORTIZATION OF PURCHASE PREMIUMS OR DISCOUNTS ON CD AND CORPORATE BONDS. FORM 990, PART XII, LINE 2C, COMMITTEE OVERSIGHT OF AUDIT PROCESS: NO CHANGE TO PROCESS FROM PRIOR YEAR. SCHEDULE D, SUPPLEMENTAL FINANCIAL STATEMENTS, PART VII, INVESTMENTS-OTHER: SEATTLE GOODWILL HAS CERTIFICATES OF DEPOSIT (CDS) AND CORPORATE BONDS WITH READILY DETERMINABLE FAIR VALUES AS OF JUNE 29, 2013. CERTIFICATES OF DEPOSIT AND CORPORATE BONDS HAVE REMAINING TERMS RANGING FROM LESS THAN 1 MONTH TO 19 MONTHS. THE CDS AND CORPORATE BONDS ARE VALUED AT FAIR VALUE IN ACCORDANCE WITH FINANCIAL ACCOUNTING STANDARDS BOARD ACCOUNTING STANDARDS CODIFICATION (ASC) 958-320-NOT FOR PROFIT ENTITIES, DEBT AND EQUITY SECURITIES. REALIZED AND UNREALIZED GAINS AND LOSSES INCLUDE AMORTIZATION OF PURCHASE PREMIUMS OR DISCOUNTS ON CD AND CORPORATE BONDS. INVESTMENT INCOME AND GAINS ON RESTRICTED INVESTMENTS WHOSE RESTRICTIONS ARE MET IN THE SAME REPORTING PERIOD ARE REPORTED AS UNRESTRICTED REVENUE AND SUPPORT. SEATTLE GOODWILL MAINTAINS SIGNIFICANT LIQUIDITY ("RESERVES") AND WILL LIKELY CONTINUE TO DO SO IN THE FUTURE. IN CONSIDERING THE APPROPRIATE LEVEL OF RESERVES, SEATTLE GOODWILL EVALUATES THE FOLLOWING: - PLANS FOR REPLACEMENT OF FACILITIES ON ITS DEARBORN CAMPUS IN SEATTLE - OPERATING RESERVES OF UP TO SIX MONTHS' EXPENSES - POTENTIAL IMPACTS OF HEALTH CARE REFORM - LIQUIDITY REQUIREMENTS UNDER ITS BOND FINANCING - POTENTIAL DEBT MARKET CONDITIONS IN 2017 WHEN BANK OF AMERICA HAS THE RIGHT TO EVALUATE WHETHER IT WILL CALL FOR FULL PRINCIPAL REPAYMENT UNDER SEATTLE GOODWILL'S BOND FINANCING. SCHEDULE L, TRANSACTIONS WITH INTERESTED PERSONS, PARTS IV AND V: ALL OF THE BUSINESS TRANSACTIONS AND RELATIONSHIPS REPORTED ON SCHEDULE L, PARTS IV AND V, WERE CARRIED OUT IN THE NORMAL COURSE OF BUSINESS AND AT COMMERCIALLY REASONABLE RATES.