2013-02-13T16:42:51-06:00 2012-06-30 911233794 HAGEN KURTH PERMAN & CO PS 601 UNION STREET SUITE 2700 SEATTLE WA 98101 990 2011-06-26 910568708 SEATTLE GOODWILL INDUSTRIES SEAT 2063291000 1765 6TH AVENUE S SEATTLE WA 98134 MICHAEL JURICH 2063291000 2013-02-12 1 PHILIP LAUBE CPA P00016966 2066829200 2011 2016-02-25 16:41:14Z MICHAEL JURICH 1765 6TH AVENUE S SEATTLE WA 98134 102569749 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 2499 455 0 0 776928 1983821 65593968 77233379 144102 63864 2508478 3182255 69023476 82463319 528776 816367 0 0 39264479 45037740 0 0 657198 21945914 24986132 61739169 70840239 7284307 11623080 54338059 71170015 23329791 30221009 31008268 40949006 GOODWILL PROVIDES QUALITY, EFFECTIVE EMPLOYMENT TRAINING AND BASIC EDUCATION TO INDIVIDUALS EXPERIENCING SIGNIFICANT BARRIERS TO ECONOMIC OPPORTUNITY. BECAUSE JOBS CHANGE LIVES. 0 0 61833445 83304715 RETAIL PROGRAM:WE CONTINUE TO SEE GROWNING COMMUNITY NEED FOR OUR THRIFT STORES WHICH SELL QUALITY, VALUE PRICED, CLOTHING AND HOUSEHOLD GOODS. WE PREPARED FOR THE JULY 2012 OPENING OF 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 OUR LANDFILLS. 6365416 816367 0 JOB TRAINING AND EDUCTION PROGRAM;WE HELPED 6,300 PEOPLE PREPARE FOR OR OBTAIN EMPLOYMENT THROUGH OUR FREE JOB TRAINING AND EDUCATION PROGRAMS AND COLLABORATIONS, AN INCREASE OF 80% OVER LAST YEAR. 689 STUDENTS WERE PLACED IN EMPLOYMENT, WHICH REFLECTS A 67% INCREASE OVER LAST YEAR. THE AVERAGE JOB PLACEMENT WAGE WAS $11/HOUR. WE ALSO BEGAN CONSTRUCTION ON OUR FLAGSHIP JOB TRAINING AND EDUCATION CENTER AND AMINISTRATIVE SUPPORT SERVICES BUILDING IN SEATTLE WHICH WILL OPEN IN APRIL 2013. 68198861 1 1 0 1 0 0 0 0 0 0 1 1 0 1 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 0 1 455 0 1 2499 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 1765 6TH AVENUE S SEATTLE WA 98134 RICHARD N PAHRE 1.00 X 0 0 0 DANIEL DA SILVA 1.00 X 0 0 0 ALAN CORNELL 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 276658 0 6051 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 KC FREER 1.00 X 0 0 0 JAMES THOMAS 1.00 X 0 0 0 MICHAEL JURICH 40.00 X X 182990 0 12382 CYNTHIA FORSLUND 40.00 X X 178943 0 12222 BG NABORS-GLASS 40.00 X 123653 0 10005 SUSANNE EBLING 40.00 X 133956 0 3735 CATHERINE MCCONNELL 40.00 X 120966 0 3113 ELBERT FISH III 40.00 X 113376 0 4820 NICOLE ROBERTS 40.00 X 111499 0 1713 1242041 0 54041 9 0 1 0 0 2852 187541 203549 1589879 221883 1983821 PROGRAM SERVICES 453310 77233379 77233379 77233379 262919 262919 13796 0 13796 13796 13796 16609563 4051 16796279 16390 -186716 -12339 -199055 -199055 92600 187541 92600 0 6071336 3201161 2870175 2870175 MISCELLANEOUS 453310 167119 167119 PUBLIC SUPPORT-OTHER 453310 131165 131165 298284 82463319 80401838 0 77660 816367 816367 1463356 858800 590893 13663 36367986 35581396 618159 168431 129491 126689 489 2313 2745194 2698419 42653 4122 4331713 4231062 84941 15710 113114 110067 3047 61856 61856 19284 19284 2195612 1774175 104825 316612 821232 811401 8725 1106 604136 528195 75037 904 5364816 5338072 26744 74457 63799 10542 116 430862 429672 1190 156552 156541 11 4268796 4146878 115873 6045 581176 570702 10351 123 SUPPLIES 1867625 1853551 13442 632 DISPOSAL 1619762 1608962 10800 0 EQUIPMENT RENTAL/MAINT 1422636 1409993 12322 321 TELEPHONE AND UTILITIES 1379394 1365606 11451 2337 4004822 3718514 161545 124763 70840239 68198861 1984180 657198 52023 10781 18224 23018 9784786 10583133 193127 90861 64069 329886 486651 677188 13763 14141 1802658 2023466 1198464 1322674 57290822 25100203 29262674 32190619 11257971 19492315 273896 4445732 54338059 71170015 5586606 5759122 89480 126000 15556769 20291637 2096936 4044250 23329791 30221009 X 30943927 40595828 64341 353178 31008268 40949006 54338059 71170015 X 11623080 -1682342 X X 0 1 1 X 0 X 882357 575732 644063 776927 1983821 4862900 48519503 52811287 62620940 70668575 83304715 317925020 49401860 53387019 63265003 71445502 85288536 322787920 0 13074 452483 259554 288741 1013852 13074 452483 259554 288741 1013852 321774068 272222 299354 201402 236512 276715 1286205 272222 299354 201402 236512 276715 1286205 -38439 365458 336576 250099 298284 1211978 49635643 54051831 63802981 71932113 85863535 325286103 0.98920 0.98780 0.00400 0.00420 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED X 0 1 0 0 0 0 1 1793 0 1 19284 21077 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 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. OUR MOST NOTABLE SUCCESS WAS DEFENDING AGAINST CUTS IN THE WORKING CONNECTIONS CHILD CARE PROGRAM (WCCC), WHICH PROVIDES DAY CARE FOR FAMILIES ON TANF (TEMPORARY ASSISTANCE FOR NEEDY FAMILIES). MOST PARENTS GOODWILL ASSISTS COULD NOT ENROLL IN OUR PROGRAMS WITHOUT THIS ASSISTANCE. WE ALSO ASSISTED IN THE PASSAGE OF SSB 6226 WHICH EXTENDED APPROVAL PERIODS FOR THE WCCC PROGRAM FROM 6 TO 12 MONTHS. 6499065 6499065 15658190 4311747 11346443 11992029 7303923 4688106 19360775 13076018 6284757 3780763 408515 3372248 32190619 CD'S AND CORPORATE BONDS 19492315 F 19492315 LEASEHOLD INTEREST, NET 472559 LOAN FEES, NET OF AMORTIZATION 235679 CONSTRUCTION IN PROGRESS 3737494 4445732 CAPITAL LEASE OBLIGATIONS 415420 INTEREST RATE SWAP CONTRACT 2607214 STRAIGHT-LINE RENT OBLIGATION 756043 DEFERRED TENANT ALLOWANCES, NET 265573 4044250 82463319 70840239 11623080 -1682342 -1682342 9940738 84094738 -1682342 20000 3293761 1631419 82463319 0 82463319 74154000 20000 3293761 3313761 70840239 0 70840239 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X: 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 30, 2012. PARTS XII AND XIII, LINES 2D, OTHER RECONCILING AMOUNTS: DIRECT FUNDRAISING EXPENSES OF $92,600 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 $3,201,161 IS SHOWN NETTED AGAINST GROSS SALES OF INVENTORY (FORM 990, PART VIII, LINE 10B) AND CORRESPONDINGLY EXCLUDED FROM EXPENSES. GLITTER GALA FASHIONSHOW 280141 187541 92600 3480 70784 800 17536 280141 187541 92600 3480 70784 800 17536 92600 0 1 JILL JONES AWARDS 301 24800 STIPEND 250 265100 YOUTH STIPEND 40 187244 AWARDS & GRANTS 1023 112519 63173 FMV GOODWILL COUPON CERTIFICATES AND GIFT CARDS GED EXAM FEES 39 2398 TRANSIT PASSES/BUS TICKETS 1410 161133 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 SEATTLE GOODWILL YOUTH PROGRAM PROVIDES PARTICIPANTS WITH RETAIL AND CUSTOMER SERVICE 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 30 YOUTH PER YEAR 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 223658 0 53000 0 0 0 5364 0 687 0 282709 0 108500 0 MICHAEL JURICH 166690 0 16300 0 0 0 7320 0 5062 0 195372 0 82655 0 CYNTHIA FORSLUND 163044 0 15899 0 0 0 7158 0 5064 0 191165 0 80462 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. WASHINGTON ECONOMIC DEVELOPMENT FINANCE AUTHORITY 911493002 NONEAVAIL 2010-12-16 30000000 REFINANCE EXISTING FACILITY DEBT; FINANCE NEW FACILITIES/RENOVATION 0 0 0 236907 20527734 17371944 2011 0 0 0 0 0 0 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 6/30/12, 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 $1,877,734, LEAVING $9,472,266 OPEN TO BORROW. 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 4 PROJECT 3/30/11 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 ALAN CORNELL DIRECTOR (RESIGNED 10/1/12) 575423 ALAN CORNELL WAS EMPLOYED BYNITZE-STAGEN FOR PART OF FISCAL YEAR ENDING 6/30/12. NITZE-STAGEN IS THE PROPERTY MANAGER FOR OUR SEATTLE OUTLET FACILITY. SEATTLE GOODWILL MAKES TRIPPLE NET RENT PAYMENTS TO THE LANDLORD, THROUGH NITZE-STAGEN. ALAN CORNELL RECUSED HIMSELF FROM ALL RELATED DISCUSSIONS AND MEETINGS AT BOTH GOODWILL AND NITZE-STAGEN. 0 SHELLIE SADR DIRECTOR 314430 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. SHELLIE SADR RECUSES HERSELF FROM ANY GOODWILL DECISION RELATED TO BANK OF AMERICA. 0 MICHAEL KILLEEN DIRECTOR 97103 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 46440 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 0 X 7,019,357 - PART II X 70,214,022 - PART II X 1 164221 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 $7,019,357 AND $70,214,022, 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 A DISCUSSION IS HELD 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 MAILED TO THOSE ON OUR MAILING LIST AND PUBLISHED ON OUR WEBSITE. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 5: NET UNREALIZED LOSSES ON INVESTMENTS: -1,682,342. FORM 990, PART XI, 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 30, 2012 AND JUNE 25, 2011. CERTIFICATES OF DEPOSIT AND CORPORATE BONDS HAVE REMAINING TERMS RANGING FROM LESS THAN 1 MONTH TO 20 MONTHS. SEATTLE GOODWILL GENERALLY HOLDS ITS INVESTMENTS IN CDS AND CORPORATE BONDS TO MATURITY. THE CDS AND CORPORATE BONDS ARE VALUED AT FAIR VALUE WHICH INCLUDES UNAMORTIZED PREMIUM AND DISCOUNTS WHICH APPROXIMATES AMORTIZED COST. UNREALIZED GAIN AND LOSSES ON THE STATEMENT OF NET ASSETS 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 NOT MORE THAN 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 EVALUATES 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.