Ka Wai Ola - Office of Hawaiian Affairs, Volume 29, Number 12, 1 December 2012 — KAMEHAMEHA SCHOOLS [ARTICLE+ILLUSTRATION]

KAMEHAMEHA SCHOOLS

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For the fiscal year ended June 30, 2012 - the 125th year of its existence - Kamehameha Schools expended $339 million in its campus- and community-based educational programs and services statewide, an increase of nearly $33 million over the previous year. Kamehameha Schools official trust spending rate is reported at $263 million, or 3.17 percent, for the fiscal year, and when factoring in an additional $76 million in debt and reserve activity during the period, the trust's effective spending rate, at $339 million, was 4.09 percent based on the five-year average value. Kamehameha Schools spent $146 million on campusbased programs and $112 million on community-focused programs over the fiscal year. Highlights of that spending include nearly $15 million awarded in Pauahi Keiki Scholarships to more than 2,572 preschool students and more than $2.6 million awarded to 489 students through the Pauahi Keiki Scholarships Kindergarten Scholarships. Additionally, nearly $13 million in post-high scholarships was awarded to 1,954 students. More than $20 million was utilized in collaboration efforts with 54 community organizations statewide over the fiscal year. Total spending on Hawai'i State Department of Education funding and collaborations was $29.5 million. That amount included $9.5 million in per pupil funding and support to 4,100 students in 17 of the state's 31 public charter schools, $6.5 million for on-site literacy instruction by Kamehameha Schools staff in 13 DOE schools (K-3 classrooms) statewide and $6.8 million in funding support for a variety of programs for students in DOE schools, including tutoring, summer enrichment programs, homework centers, plaeebased learning and distance learning. As of June 30, 2012, the overall fair value of the Kamehameha Schools endowment was $9.2 billion. The Consolidated Balance Sheet below shows total assets to be $7.2 billion; it values real estate at cost rather than fair value, and includes non-endowment assets such as educational, agricultural, and conservation assets. Fiscal year 2012 was the seventh year of Kamehameha Schools 10-year Education Strategic Plan, adopted in 2005 and based on the Kamehameha Schools Strategic Plan 2000-2015. The number of children and families impacted by Kamehameha Schools' campus and community programs increased from approximately 46,900 learners to more than 47,400 learners. Nearly 13,500 parents and caregivers in the prenatal to grade 12 community received training and support. PRENATAL TO 8 YEARS OF AGE Kamehameha Schools served nearly 10,325 keiki ages 0-8 and their parents and caregivers through its KS center-based preschools, preschool scholarships, literacy instruction and various educational collaborations. That number included

more than 1,550 students at 31 KS preschool sites across the state. GRADES 4 THROUGH POST-HIGH Kamehameha Schools served more than 18,200 learners through its enrichment, campus outreach, collaborations, distance learning and summer school programs such as the Explorations Series, Kamehameha Scholars, 'Ike Pono and Career & Post-High Counseling & Guidance. More than 1,700 non-campus learners were enrolled in campus-based summer programs. CAMPUS PROGRAMS Kamehameha Schools educated more than 5,380 learners, including graduating 688 seniors, at campus programs on Hawai'i, on Maui and at Kapālama. Orphan and indigent children comprised approximately 31 percent of students invited to campus programs. For more, including a copy of Kamehameha Schools audited wConsolidated Financial Statements and Supplemental Schedules" for fiscal year 2012, please visit www.ksbe.edu/ annualreports. KAMEHAMEHA SCHOOLS ENDOWMENT The endowment that supports Kamehameha Schools' mission is the legacy of Princess Bernice Pauahi Bishop. It was valued at $9.2 hillion at June 30, 201 2. A global, diversified financial assets portfolio comprised $6.0 hillion, and Hawai'i commercial real estate represented $3.2 bi I lion atfairvalue.

KAMEHAMEHA SCHOOLS LANDS Commercially zoned lands make up 1 percent of total acreage (363,363 acres) belonging to Kamehameha Schools. Agricultural and conservation lands comprise 99 percent and are considered sustainability assets, not included in the endowment fund. During the fiscal year 201 2, Kamehameha Schools spent $8 million (net of agricultural rents) to steward agricultural and conservation lands and natural resources.

CONSOLIDATED BALANCE SHEET JUNE 30, 201 2 (in thousands) ASSETS Current Assets Cash and cash equivalents $ 73,1 58 Receivables, net lnterest $ 9,496 Tenant and tuition receivables 5,892 Trade 2,085 Other 2,116 Less: Allowanee for doubtful accounts (3,533) 16,056 Other 5,626 Total Current Assets 94,840 lnvestments Marketable debt and equity securities Common and preferred stocks 689,728 Fixed ineome 785,115 Short-term investments and 40,91 1 cash equivalents Mutual funds 209,571 1,725,325 Other investments Hedgefunds 2,644,471 Private equity funds 1 ,061 ,072 Commingled funds 580,747 Other 39,418 4,325,708 Amounts receivable for securities sold 1 4,1 82 Property and equipment, net Educational property and equipment 51 7,746 All other property and equipment 328,677 Construction in progress 66,964 913,387 Real estate held for development and sale 25,992 Deferred charges and other 108,321 TOTAL ASSETS $7,207,755 LIABILITIES AND NET ASSETS Current liabilities Accounts payable and accrued expenses $ 52,189 Current portion of notes payable 22,646 Deferred ineome and other 22,530 Total Current Liabilities 97,365 Notespayable 249,708 Accrued pension liability 1 1 4,371 Accrued postretirement benefits 41 ,681 Amounts payable for securities purchased 8,641 Other long-term liabilities 17,955 Total liabilities 529,721 Commitments and contingencies Net assets - unrestricted 6,678,034 TOTAL LIABILITIES AND NET ASSETS $7,207,755

KAMEHAMEHA SCHOOLS®

13 ANNIVERSARY