CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Financial Statements
September 30, 2014 and 2013
(With Independent Auditors’ Report Thereon)

KPMG LLP
Suite 2100
1003 Bishop Street
Honolulu, HI 96813-6400

Independent Auditors’ Report
The Board of Directors
California Association for Research in Astronomy:
We have audited the accompanying financial statements of the California Association for Research in
Astronomy, which comprise the statements of financial position as of September 30, 2014 and 2013, andthe related statements of activities and cash flows for the years then ended, and the related notes to thefinancial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements inaccordance with U.S. generally accepted accounting principles; this includes the design, implementation,and maintenance of internal control relevant to the preparation and fair presentation of financial statementsthat are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted
our audits in accordance with auditing standards generally accepted in the United States of America. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditors’ judgment, including the assessmentof the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fairpresentation of the financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of significant accounting estimates made by management,
as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
OpinionIn our opinion, the financial statements referred to above present fairly, in all material respects, thefinancial position of the California Association for Research in Astronomy as of September 30, 2014 and2013, and the changes in its net assets and its cash flows for the years then ended, in accordance with
U.S. generally accepted accounting principles.

Honolulu, Hawaii
March 20, 2015

KPMG LLP is a Delaware limited liability partnership,
the U.S. member firm of KPMG International Cooperative(“KPMG International”), a Swiss entity.

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Statements of Financial Position
September 30, 2014 and 2013
Assets2014

Current assets:
Cash and cash equivalents
Grants and contracts receivable
Contributions receivable
Prepaid expenses and other assets$

9,178,045
437,056—    
148,313

17,106,409
569,298
100,000
113,542

9,763,414

17,889,249

5,857,216
54,328,833—    54,844,813$

69,949,463

72,734,062$

2,520,534
12,498,326

3,031,250
13,849,067

15,018,860

16,880,317

54,141,311
354,038
435,254

54,657,234
544,525
651,986

54,930,603

55,853,745

Total current assets
Noncurrent asset:
Long-term investments (note 3)
Property and equipment, at cost less accumulated depreciation
Total assets

2013

Liabilities and Net Assets
Current liabilities:
Accounts payable and accrued expenses
Advances (note 2)
Total current liabilities
Net assets:
Unrestricted
Unrestricted – board-designatedTemporarily restricted
Total net assets
Commitments—    
Total liabilities and net assets$

See accompanying notes to financial statements.

2

69,949,463—    72,734,062

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Statements of Activities
Years ended September 30, 2014 and 2013
2014

2013

161,606

424,857

14,229,688
7,434,348
338,851444,867
145,226

13,303,223
7,779,921
251,861
4,676
183,829433,352

299,185

Total unrestricted revenues

23,187,938

22,247,552

Expenses:
Program services:
Observatory operations
California Institute of Technology asset project
Research
Administrative and general
Fund-raising

16,862,967
3,286,304
45,496
3,204,811
494,770

17,501,056
1,666,311
5,398
3,192,678
664,755

23,894,348

23,030,198(706,410)(782,646)—    

2,701,325(706,410)(3,483,971)

216,620(433,352)

566,829(299,185)

Change in temporarily restricted net assets(216,732)

267,644

Change in net assets(923,142)(3,216,327)

55,853,745

59,070,072

54,930,603

55,853,745

Changes in unrestricted net assets:
Unrestricted operating support and revenues:
Contributions
Operating revenue:
University of California: Observatory operations
Other (note 4)
Interest income
Net realized and unrealized gains on investments
Other income
Net assets released in satisfaction of equipment acquisition
restrictions$

Total expenses
Change in unrestricted net assets, before impairment
loss on instrumentation
Impairment loss on instrumentation
Change in unrestricted net assets
Change in temporarily restricted net assets:
Contributions
Net assets released from restrictions

Net assets at beginning of year
Net assets at end of year$

See accompanying notes to financial statements.

3

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Statements of Cash Flows
Years ended September 30, 2014 and 20132014
Cash flows from operating activities:
Change in net assets
Adjustments to reconcile change in net assets to net cash
provided by operating activities:
Depreciation
Net realized and unrealized gain on investments
Net gain on disposal of property and equipment
Impairment loss on instrumentation
Contributions restricted for investment in property
and equipment
Decrease (increase) in operating assets:
Grants and contracts receivable, net
Contributions receivable, net
Prepaid expenses
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses
Advances$

2013(923,142)(3,216,327)

6,177,720(444,867)(45,121)—    

6,340,021(4,676)(39,400)
2,701,325(216,620)—    

132,242
100,000
18,67819,971—    (6,565)(510,716)(1,350,741)

733,174
931,433

2,937,433

7,458,956(5,661,740)(5,465,798)
45,121(5,521,889)(57,761)
39,400(11,082,417)(5,540,250)

Cash flows from financing activities:
Contributions restricted for investment in property and equipment

216,620—    

Net cash provided by financing activities

216,620—    

Net cash provided by operating activities
Cash flows from investing activities:
Purchases of property and equipment
Purchases of investments
Proceeds on sale of property and equipment
Net cash used in investing activities

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year$

See accompanying notes to financial statements.

4(7,928,364)

1,918,706

17,106,409

15,187,703

9,178,045

17,106,409

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2014 and 2013

(1)

Description of Reporting Entity
California Association for Research in Astronomy (CARA) is a nonprofit corporation formed by the
California Institute of Technology (Caltech) and the University of California (UC) in January 1985 to buildand operate the W. M. Keck Observatory (Observatory) on the summit of Mauna Kea in Hawaii. Tax
exempt under Section 501(c)(3) of the Internal Revenue Code, CARA is a nonprofit California publicbenefit corporation and, as such, is qualified as a nonprofit corporation in the state of Hawaii.
The principal purpose of CARA is to foster astronomical research and to provide technical direction for thedevelopment and operation of astronomical facilities on the island of Hawaii, principally on land owned by
the state of Hawaii, leased to the University of Hawaii, and subleased to Caltech. The Observatory is
owned by Caltech and is leased to CARA for $1 per year. In consideration for subleasing the land to
Caltech for $1 per year through 2033, the University of Hawaii receives an opportunity to use theObservatory and related facilities and improvements. The astronomical facilities include two 10-metertelescopes (Keck I and Keck II), related instrumentation, adaptive optics technology, support facilities, andrequired infrastructure improvements.
The costs of development of the Observatory and the development of adaptive optics technology wereborne by Caltech, the majority of which were funded by grants from the W. M. Keck Foundation(the Foundation). Caltech’s funding for Keck I and Keck II development costs was $75,222,000 and$78,600,000, respectively. Keck I development was completed in 1996; Keck II was largely completed in1998 with the remaining development costs completely expended by 2005.
UC provided financial support to CARA for pre operating costs during the Observatory’s development
periods, acquisition of focal plane instrumentation, and observatory operations. UC provides continuing
operating support for Keck I operations in the amount of $3,500,000 per year, which continues throughfiscal year 2017, and $1,750,000 for the six-month period ending March 31, 2018, all measured in 1984
dollars. UC provides support for Keck II operations in the amount of $2,105,000 per year, which continues
through fiscal year 2017, and $1,052,500 for the six-month period ending March 31, 2018, all measured in1990 dollars. For fiscal years 2014 and 2013, CARA received operating support for Keck I operations of$8,138,235 and $8,042,930, respectively. For fiscal years 2014 and 2013, CARA received operating
support for Keck II operations of $5,585,702 and $5,370,865, respectively. For fiscal years 2014 and 2013,CARA recognized operating revenue for Keck I and Keck II operations from UC of $14,229,688 and$13,303,223, respectively.

(2)

Summary of Significant Accounting Policies(a)Financial Statement Presentation
The accompanying financial statements have been prepared in accordance with U.S. generally
accepted accounting principles (GAAP).
CARA follows the requirements of Financial Accounting Standards Board (FASB) AccountingStandards Codification (ASC) Section 958-205-45-2, Not-for-Profit Entities – Presentation of
5(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2014 and 2013

Financial Statement – Other Presentation Matters. Under FASB ASC Section 958-205-45-2, CARA
is required to report information regarding its financial position and activities according to threeclasses of net assets: unrestricted net assets, temporarily restricted net assets, and permanently
restricted net assets based upon the existence or absence of donor-imposed stipulations. Accordingly,
net assets of CARA and changes therein are classified and reported as follows:
Unrestricted Net Assets – net assets that are not subject to donor-imposed stipulations andthat may be expended for any purpose in performing the objectives of CARA.
Temporarily Restricted Net Assets – net assets subject to donor-imposed stipulations that
may or will be met either by actions and/or the passage of time. As the restrictions are
satisfied, temporarily restricted net assets are reclassified and reported in the accompanying
financial statements as net assets are released from restrictions.
Permanently Restricted Net Assets – net assets subject to donor-imposed stipulations that
resources must be maintained in perpetuity. As of September 30, 2014 and 2013, CARA had
no permanently restricted net assets.
(b)

Cash and Cash Equivalents
CARA considers all highly liquid instruments with original maturities of three months or less to be
cash equivalents. As of September 30, 2014 and 2013, cash equivalents of $8,949,520 and$15,893,918, respectively, were invested in the University of California Short-term Investment Pool
(UC STIP). Investments included in the UC STIP are highly liquid investments held by the UC andhave original maturities of three months or less. These investments include indirect observable inputs
and therefore are considered to be Level 2 in the fair value hierarchy.

(c)Long-term Investments
CARA records its investments at fair value as defined in Financial Accounting Standards Board(FASB) Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures.
Investments are stated at fair value with gains and losses included in the statement of activities as anincrease or decrease in unrestricted net assets unless their use is temporarily or permanently
restricted by a donor.
CARA follows the measurement provisions of Accounting Standards Update (ASU) No. 2009-12,
Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent), tocertain investments in funds that do not have readily determinable fair values including private
investments, hedge funds, real estate, and other funds of funds. This guidance allows for theestimation of the fair value of investments in investment companies for which the investment does
not have a readily determinable fair value using net asset value per share or its equivalent.
At September 30, 2014, CARA has $5,857,216 of its funds invested in the University of California’s
General Endowment Pool (UC GEP), which is reported at net asset value as of September 30, 2014.
6(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2014 and 2013

The UC GEP is a unitized fund whereby the University participates in investment returns and incomeon an equivalent pro-rated basis with all participants in the pool. For these investments, CARA has
concluded that the net asset value reported by the underlying fund is a practical expedient toestimating fair value. The amounts reported at net asset value at September 30, 2014, are redeemablewith the fund at net asset value under the original terms of the investment agreement with the UC
subject to the restrictions discussed in note 3. Due to the nature of the investments held by the funds,changes in market conditions and the economic environment may significantly impact the net asset
value of the funds and, consequently, the fair value of CARA’s interests in the funds.
(d)Property and Equipment
Expenditures incurred by CARA for observatory instrumentation and facilities, operating equipment,
and vehicles are capitalized at cost, except for donated property that is valued at fair market value atthe date of the gift, and depreciated when placed in service. Depreciation is provided over theestimated useful lives of the respective assets using the straight-line method. The estimated useful
lives are as follows:

Class of assets

Estimated
useful lives

Observatory instrumentation
Observatory facility
Vehicles and equipment

10–20 years
3–15 years
3–25 years

CARA reports contributions designated by donors to acquire long-lived assets as temporarily
restricted support. Absent explicit donor stipulations about how long those long-lived assets must be
maintained, CARA reports net assets released in satisfaction of equipment acquisition restrictions in
the accompanying statements of activities when the acquired long-lived assets are placed in service.
(e)

Advances
Operating and instrumentation funds received from UC are recorded as advances until expended for
operating expenditures, observatory instrumentation, or vehicles and equipment. Funds received
from the Association of Universities for Research in Astronomy (AURA) for the purpose ofdeveloping certain instruments for the Keck telescopes or adaptive optics development are recorded
as advances until expended for their stated purpose.

7(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2014 and 2013

A summary of advances at September 30, 2014 and 2013 is as follows:

University of California – Observatory operations
W.M. Keck Foundation
Gordon and Betty Moore Foundation
Association for Universities for Research in Astronomy
Other
Advances
(f)

2014

2013

$

10,325,829
1,174,242
851,374
118,836
28,045

10,831,581
1,491,600
592,911904,330
28,645$

12,498,326

13,849,067

Contributions
Contributions are recorded in the period received. CARA reports gifts as temporarily restrictedsupport if they are received with donor-imposed stipulations that limit the use of the donated assets.
When a donor restriction expires, that is, when a stipulated time restriction ends or purpose
restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets
and reported in the statements of activities as net assets released from restrictions.
As described in note 1, CARA leases the observatory and related facilities and improvements from
Caltech for $1 per year. As the use of the Observatory is so specific that there is no assignable value,
it is impractical to determine a fair rental value to be reported as contribution revenue in theaccompanying statements of activities.

(g)

Use of Estimates
The preparation of the financial statements in accordance with U.S. generally accepted accounting
principles requires management of CARA to make a number of estimates and assumptions relating
to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during thereporting period. Significant items subject to such estimates and assumptions include the carrying
amount of property and equipment, valuation allowances for receivables and the fair value ofinvestments. Actual results could differ from those estimates.

(h)Long-Lived Assets
Long-lived assets, such as property and equipment, are reviewed for impairment whenever events orchanges in circumstances indicate that the carrying amount of an asset may not be recoverable. If
circumstances require a long-lived asset be tested for possible impairment, CARA first compares
undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If thecarrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, animpairment is recognized to the extent that the carrying value exceeds its fair value. Fair value isdetermined through various valuation techniques, including discounted cash flow models, quoted
market values, and third-party independent appraisals, as necessary.
8(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2014 and 2013

In 2012, the National Aeronautics and Space Administration (NASA) notified CARA that it wouldcease funding the development and operation of the Keck Interferometer instrumentation(Interferometer) effective December 31, 2012. As of September 30, 2012, no alternative sources offunding to complete and operate the Interferometer were identified, and accordingly, an impairment
loss of $38,287,695 was recorded. In fiscal September 30, 2013, an additional $2,701,325
impairment loss was recorded for certain long-lived assets ancillary to the Interferometer.
(i)

Sponsored Programs, Grants, and Contracts
Governmental and private grants and contracts normally provide for the recovery of direct andindirect costs, subject to audit. CARA recognizes revenues associated with direct costs as incurred.
Indirect costs recovered on federally sponsored programs are based on cost reimbursement rates
negotiated with CARA’s cognizant agency, the Office of Naval Research. Indirect costs recoveredon all other grants and contracts are based on rates negotiated with the respective parties.

(j)Subsequent Events
CARA has evaluated subsequent events from the balance sheet date through March 20, 2015, thedate at which the financial statements were available to be issued and determined that there are noother items to disclose.

(3)Long-term Investments
CARA’s long-term investments are stated at fair value. Investment purchases and sales are recorded on a
trade-date basis. Unrealized appreciation or depreciation on investments is recorded in the statement ofactivities. Dividend income is recorded on the ex-dividend date. Interest income is recorded when earned.
As of September 30, 2014, CARA’s long-term investments consisted of $5,857,216 in the UC GEP. As of
September 30, 2013, CARA had no long-term investments.
The UC GEP is valued based on net asset value as discussed in note 1(c). The pool includes the following
at September 30, 2014: 15.5% U.S. equity securities, 25.9% international equity securities, 8.9% U.S. fixedincome securities, 2.5% international fixed income securities, 8.4% U.S. real estate funds, 10.9% private
equity funds, 22.2% absolute return funds – dividends, and 5.7% absolute return funds – international
index and real assets. The level in the fair value hierarchy within which a fair value measurement in its
entirety falls is based on the lowest-level input that is significant to the fair value measurement in its
entirety. As the pool includes investments with unobservable inputs, the fair value of the pool is considered
to be Level 3 in the fair value hierarchy.

9(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2014 and 2013

The following is a summary of the inputs used as of September 30, 2014 in valuing CARA’s long-term
investments carried at fair value:

2014:
University of California
General Endowment Pool$

Quotedprices inactivemarkets for
identical
assets(Level 1)

Significant
other
observable
inputs(Level 2)

Significant
unobservable
inputs(Level 3)

Total

—

—

5,857,216

5,857,216——

5,857,216

5,857,216

Under CARA’s investment agreement with the UC, the funds held in the UC GEP are not subject to an
initial lockup period, however, fund redemptions are limited to 5% per year unless additional redemption
are approved by the UC.
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) wereused in determining fair value:
Balance at September 30, 2013
Total gains included in income:
Realized
Unrealized
Purchases, issuance, and settlements (net)$

Balance at September 30, 2014$——
441,216
5,416,000
5,857,216

CARA’s accounting policy is to recognize transfers between levels of the fair value hierarchy on the dateof the event or change in circumstances that caused the transfer. There were no significant transfers into or
out of Level 1, 2, or 3 for the year ended September 30, 2014.

10(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2014 and 2013(4)

Operating Revenues
A summary of operating revenue for the years ended September 30, 2014 and 2013 is as follows:

University of California – Observatory operations (note 1)
National Aeronautics and Space Administration
Association for Universities for Research in Astronomy
National Science Foundation
Other
Operating revenue

(5)

2014

2013

$

14,229,688
3,707,620
985,494
729,2902,011,944

13,303,223
4,146,855
1,560,289
811,334
1,261,443$

21,664,036

21,083,144

Contributions Receivable
Contributions receivable represent unconditional promises to give by donors. In accordance withFASB ASC Section 958-605-25, Not-for-Profit Entities – Recognition – Promises to Give, contributions
receivable are recorded at their estimated fair value. Amounts due more than one year later are recorded at
the present value of the estimated future cash flows, discounted at an interest rate commensurate with theassociated risks in the years in which the promises were received. Contributions receivable due in one year
or less was $0 and $100,000 at September 30, 2014 and 2013, respectively.

11(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2014 and 2013

(6)

Property and Equipment
A summary of property and equipment at September 30, 2014 and 2013 follows:

Instrumentation:
Property and equipment
Construction in progress$

Adaptive optics:
Property and equipment
Construction in progress
Infrastructure:
Property and equipment
Construction in progress
Vehicles and equipment
Less accumulated depreciation
$

2014

2013

72,393,013
8,437,060

72,311,789
5,027,677

80,830,073

77,339,466

19,845,839
13,606,817

19,845,839
10,832,661

33,452,656

30,678,500

3,742,948—

3,473,298
1,229,594

3,742,948

4,702,892

4,960,493(68,657,337)

4,708,124(62,584,169)

54,328,833

54,844,813

Depreciation expense amounted to $6,177,720 and $6,340,021 in 2014 and 2013, respectively.
(7)

Income Taxes
CARA has received a determination from taxing authorities that it is an organization exempt from taxation
under Section 501(c)(3) of the U.S. Internal Revenue Code and Section 23701d of the California Revenue
and Taxation Code and is generally not subject to federal or state income taxes. However, CARA is subject
to income taxes on any income derived from a trade or business, regularly carried on, and not in
furtherance of the purposes for which it was granted exemption. No income tax provision has beenrecorded as income, if any from unrelated trade or business, in the opinion of management, is not material
to the financial statements taken as a whole.
CARA applies the provisions of Financial Accounting Standards Board (FASB) Accounting Standards
Codification (ASC) Topic 740, Income Taxes, which prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax position taken or expected to betaken in a tax return, and provides guidance on derecognition, classification, interest, and penalties,
disclosure, and transition. Management believes that no such uncertain tax position exists for CARA

12

(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2014 and 2013

requiring accrual or disclosure at September 30, 2014 or 2013. CARA is no longer subject to U.S. federal
income tax examinations by tax authorities for years before 2010.
(8)

Related-Party Transactions
Caltech and UC provide various instrument and adaptive optics development services to CARA. During
fiscal years 2014 and 2013, total expenditures for these services charged to CARA were $2,273,089 and$2,090,329, respectively, by Caltech, and $384,084 and $402,488, respectively, by UC.
CARA has provided services for projects on Caltech’s observatory assets located in Hawaii including
ongoing repair of the telescope mirror segments, a telescope control system upgrade, and installation of
two photovoltaic systems on Caltech’s Waimea headquarters buildings. During fiscal years 2014 and 2013,
total expenditures for these projects was $3,286,304 and $1,666,311, respectively.

(9)

Commitments
CARA has entered into various contractual agreements for operations, laser guide star and adaptive optics
systems, observatory construction and development of instrumentation, and interferometer systems. A
summary of commitments at September 30, 2014 follows:

Operations
Laser guide star and adaptive optics
systems
Instrumentation

$

Total

$

970,039
797,692
1,133,721
2,901,452(10) Board-Designated Net Assets
In 2006, CARA established a board-designated Director’s Fund separate from its unrestricted,
undesignated net assets for receipt of all unrestricted contributions and their subsequent expenditures. In
2014 and 2013, CARA received contributions of $161,606 and $239,334, respectively, which wereboard-designated for the Director’s Fund. At September 30, 2014 and 2013, respectively, the fund totaled$354,038 and $544,525.
(11) Temporarily Restricted Net Assets
In 2014 and 2013, CARA received restricted contributions for various instrumentation & adaptive optics
technology development and Advancement Office initiatives totaling $216,620 and $566,829, respectively.
In 2014 and 2013, $433,352 and $299,185, respectively, of temporarily restricted net assets were releasedin satisfaction of equipment acquisition and program restrictions. At September 30, 2014 and 2013,$435,254 and $651,986, respectively, was available for these activities.

13(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2014 and 2013(12) In-Kind Contributions
CARA received the following in-kind contributions during the years ended September 30, 2014 and 2013:2014
Professional services
Advancement events
Miscellaneous

2013

$

12,443——

23,97919,430984$

12,44344,393(13) Deferred Compensation(a)403(b) PlanCARA has a defined contribution retirement plan (the Plan), which was established under
Section 403(b) of the U.S. Internal Revenue Code. All eligible employees participate in the Plan. An
eligible employee is defined as an employee regularly scheduled to work at least 20 hours per week
subject to the appropriate waiting period and employment classification as defined in the Plan.
CARA is required to make contributions to the Plan at various percentages of base salary dependingon the participant’s age and grade. Contributions to the Plan amounted to $933,633 and $865,027 forfiscal years 2014 and 2013, respectively.

(b)457(b) Plan
In 2014, CARA established a voluntary deferred compensation plan for a specific group of
management designed in accordance with the provisions of Section 457 of the Internal Revenue
Code. The plan allows participants to defer a portion of their compensation until after employment
termination. Assets in the plan are held by CARA on a nontrust basis and are subject to the claims of
its creditors. The plan is funded entirely from the compensation of the participants and vests with theemployee immediately. CARA makes no contributions to the plan. The 457(b) plan assets andrelated liability obligation to participants of $115,886 and $62,437 as of September 30, 2014 and
September 30, 2013, respectively, are included within other assets on the accompanying balance
sheets.

14