CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Financial Statements
September 30, 2012 and 2011
(With Independent Auditors’ Report Thereon)

KPMG LLPPO Box 4150
Honolulu, HI 96812-4150

Independent Auditors’ Report

The Board of Directors
California Association for Research in Astronomy:
We have audited the accompanying statements of financial position of California Association for Researchin Astronomy (CARA) as of September 30, 2012 and 2011, and the related statements of activities andcash flows for the years then ended. These financial statements are the responsibility of CARA’s
management. 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 ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes consideration ofinternal control over financial reporting as a basis for designing audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of CARA’s internal
control over financial reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonablebasis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, thefinancial position of California Association for Research in Astronomy as of September 30, 2012 and2011, and the changes in its net assets and its cash flows for the years then ended in conformity with
U.S. generally accepted accounting principles.

March 1, 2013

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, 2012 and 2011
AssetsCurrent assets:
Cash and cash equivalents
Receivables:
Jet Propulsion Laboratory
National Aeronautics and Space Administration
National Science Foundation
Contributions
Other
Prepaid expenses

$

2012

2011

15,187,703

12,814,838

222,475
169,822
132,168
100,000
64,80444,540Total current assets

15,921,512

13,651,386

58,364,270

91,806,294$

74,285,782

105,457,680$

125,567
282,875
1,889,634

122,563
610,125
2,267,846

10,721,008
1,483,401
617,969
64,61930,637

9,386,237
—    
—    
710,984
30,906

15,215,710

13,128,661

58,380,539
305,191
384,342

91,822,872
243,618
262,52959,070,072

92,329,019

74,285,782

105,457,680

Property and equipment, at cost less accumulated depreciation
Total assets

274,588
204,811
280,700—    
48,38328,066

Liabilities and Net Assets
Current liabilities:
Accounts payable and accrued expenses:
University of California
California Institute of Technology
Other
Advances:
University of California:
Observatory operations
W. M. Keck Foundation
Gordon and Betty Moore Foundation
Association of Universities for Research in Astronomy
Other
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

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Statements of Activities
Years ended September 30, 2012 and 2011
2012
Changes in unrestricted net assets:
Unrestricted operating support and revenues:
Contributions:
National Science Foundation
Director’s Fund
Operating revenue:
University of California: Observatory operations
National Aeronautics and Space Administration
Gordon and Betty Moore Foundation
Association of Universities for Research in Astronomy
Jet Propulsion Laboratory
National Science Foundation
Yale University
W. M. Keck Foundation
Other
Interest earned:
Observatory operations
Observatory technology
Other income
Satisfaction of equipment acquisition restrictions$

Total unrestricted revenues

2011

3,063,792
81,651—    
75,745

11,715,451
4,429,106
1,382,031
1,260,573
1,210,121
785,394483,300
16,599
10,165

11,972,464
4,289,544—    
1,347,013
1,191,364
1,449,214
—    
—    
2,799

347,41545,585
223,137
379,733

292,840—    
193,239
512,182

25,434,053

21,326,404

17,283,583
46,1452,718,880
478,510

16,115,783
5,161
2,413,273
424,430

Total expenses

20,527,118

18,958,647

Change in unrestricted net assets, before impairment
loss on instrumentation

4,906,935

2,367,757

Expenses:
Program services:
Observatory operations
Research
Administrative and general
Fund-raising

Impairment loss on instrumentation

38,287,695

Change in unrestricted net assets
Change in temporarily restricted net assets:
Contributions
Interest earned
Net assets released from restrictions
Change in temporarily restricted net assets
Change in net assets
Net assets at beginning of year
Net assets at end of year$

See accompanying notes to financial statements.
3

—    

(33,380,760)

2,367,757

501,546—    
(379,733)

398,437
1,398(512,182)

121,813(112,347)(33,258,947)

2,255,410

92,329,019

90,073,609

59,070,072

92,329,019

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Statements of Cash Flows
Years ended September 30, 2012 and 2011
2012

2011

(33,258,947)

2,255,410

5,492,232
46,319(3,063,792)
38,287,695

4,867,303(33,838)
—    
—    

119,213(16,474)(386,710)
22,974(702,458)
2,789,507(157,425)(149,723)

9,693,295

6,417,991(7,345,030)
24,600(7,159,313)
33,838Net cash used in investing activities(7,320,430)(7,125,475)

Net increase (decrease) in cash and cash equivalents

2,372,865(707,484)

12,814,838

13,522,322

15,187,703

12,814,838

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 loss (gain) on disposal of property and equipment
Contribution of equipment
Impairment loss on instrumentation
Decrease (increase) in assets:
Receivables, net
Prepaid expenses
Increase (decrease) in liabilities:
Accounts payable and accrued expenses
Advances$

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

Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year$

Supplemental disclosure of noncash transaction:
In fiscal year 2012, CARA recorded a contribution of equipmentof $3,063,792
See accompanying notes to financial statements.

4

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2012 and 2011

(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 maximum liability for Keck I and Keck II development costs was $75,222,000,
measured in 1984 dollars, and $78,600,000, measured in 1990 dollars, respectively. The Foundation’s
grant to Caltech for adaptive optics technology was $6,300,000.
UC provided financial support to CARA for preoperating 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 2012 and 2011, CARA received operating support for Keck I operations of$7,885,920 and $7,592,235, respectively. For fiscal years 2012 and 2011, CARA received operating
support for Keck II operations of $5,164,302 and $4,965,674, respectively. For fiscal years 2012 and 2011,
CARA recognized operating revenue for Keck I and Keck II operations from UC of $11,715,451 and$11,972,464, respectively.
During 1993, Caltech and UC modified their original funding and governance agreement. Certain
modifications provided for third-party participation by the National Aeronautics and Space Administration(NASA) in the funding of the costs of the Observatory. In a cooperative agreement between Caltech andNASA, NASA contributed $44,005,000 to Caltech through fiscal year 2000 in return for collaboration in
the project.

5(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2012 and 2011(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
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, 2012 and 2011, CARA had
no permanently restricted net assets.

(b)

Cash and Cash Equivalents
For purposes of the statements of cash flows, CARA considers all highly liquid instruments withoriginal maturities of three months or less to be cash equivalents. As of September 30, 2012 and2011, CARA had cash and cash equivalents in an account with UC totaling $14,827,417 and$11,484,391, respectively.

6(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2012 and 2011(c)

Property and Equipment
Expenditures incurred by CARA for observatory instrumentation and facilities, operating equipment,
and vehicles are capitalized at cost, and depreciated when placed in service. Depreciation is provided
over the estimated useful lives of the respective assets using the straight-line method. The estimateduseful 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 restricted support.
Absent explicit donor stipulations about how long those long-lived assets must be maintained,
CARA reports expirations of donor restrictions when the acquired long-lived assets are placed inservice.
(d)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.

(e)Contributions
Contributions are recorded in the period received. CARA reports gifts as restricted support 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 isaccomplished, 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.

(f)

Use of Estimates
The preparation of the financial statements in accordance with GAAP requires management of
CARA to make a number of estimates and assumptions relating to the reported amounts of assets andliabilities and the disclosure of contingent assets and liabilities at the date of the financial statements
7(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2012 and 2011

and the reported amounts of revenues and expenses during the reporting period. Significant items
subject to such estimates and assumptions include the carrying amount of property and equipment
and valuation allowances for receivables. Actual results could differ from those estimates.
(g)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.
As of September 30, 2012, the National Aeronautics and Space Administration (NASA) has ceased
funding for CARA’s development and operation of the Interferometer instrumentation. No
alternative sources of funding has been identified to complete the project and fund annual operationsof the Interferometer instrumentation. An impairment loss of $38,287,695 has been recorded for theyear ended September 30, 2012 in the accompanying statements of activities.

(h)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.

(i)

Subsequent Events
CARA has evaluated subsequent events from the balance sheet date through March 1, 2013, the date
at which the financial statements were available to be issued. There are no other matters to disclose.

(3)

NASA Funding Agreements
In 2008, NASA awarded CARA a five-year cooperative agreement for telescope viewing time,
infrastructure renewal, and the development of an archived database. Revenues under the cooperative
agreement were $4,411,396 and $4,289,544 in 2012 and 2011, respectively.

(4)

Jet Propulsion Laboratory (JPL) Agreements
In 2005, CARA entered into a $7,284,011 cost-reimbursement subcontract with JPL for the Keck
Interferometer project. In 2007, JPL renewed the contract for an additional $5,142,000 throughSeptember 30, 2008. In 2009, JPL extended the subcontract for an additional $2,114,000 throughDecember 30, 2010. In 2011, JPL provided additional funding for the subcontract of $990,000. In 2012,8(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2012 and 2011

JPL extended the contract for an additional $911,000 through December 31, 2012. During fiscal 2012 and2011, $1,243,964 and $1,233,284, respectively, was received under the subcontract.
Revenues under the cost-reimbursement subcontract were $1,191,852 and $1,189,010 in 2012 and 2011,
respectively. Amounts due to CARA under the cost-reimbursement subcontract of $222,475 and $274,588
as of September 30, 2012 and 2011, respectively, are included as receivables in the accompanying
statements of financial position.
(5)

Association of Universities for Research in Astronomy Agreements
In 2004, CARA entered into a fixed price contract with AURA for adaptive optics development. CARA
was awarded and advanced $1,080,981 for the development of the next generation of optical wavefront
sensor detectors.
In 2008, CARA entered into a fixed price contract with AURA for next-generation adaptive optics(NGAO) development. CARA was awarded $2,047,360 for the preliminary design phase of the next
generation of optical wavefront sensor detectors.
In 2010, CARA entered into a fixed price contract with AURA for Keck II instrumentation development.
CARA was awarded $1,228,416 to construct the Keck Cosmic Web Imager.
In 2011, CARA entered into a new fixed price contract with AURA for Keck II instrumentation
development. CARA was awarded $1,228,416 to continue constructing the Keck Cosmic Web Imager.
In 2012, CARA entered into a new fixed price contract with AURA for Keck II instrumentation
development. CARA was awarded $2,900,000 to continue constructing the Keck Cosmic Web Imager.
Revenues recognized under these contracts with AURA amounted to $1,260,573 and $1,347,013 in 2012
and 2011, respectively. As of September 30, 2012 and 2011, unspent receipts under the AURA contracts
amounted to $64,619 and $710,984, respectively, and are included as advances in the accompanying
statements of financial position.

(6)

National Science Foundation (NSF)
Grant Awards
In 2009, NSF awarded CARA a three-year $1,355,500 grant to improve the Keck II laser launch facility ofwhich $136,303 and $565,046, respectively, was recognized as revenue in 2012 and 2011.
In 2010, NSF awarded CARA a four-year $1,716,000 grant to develop the Keck I laser guide star adaptive
optics facility of which $643,516 and $884,168, respectively, was recognized as revenue in 2012 and 2011.
In 2012, NSF awarded CARA a two-year $684,000 grant to develop and demonstrate Point Spread
Function (PSF) determination for science observations of which $5,575 was recognized as revenue in2012.
9(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2012 and 2011

Revenues recognized under these grants with NSF amounted to $785,394 and $1,449,214 in 2012 and2011, respectively.
Contribution
In August 2012, CARA received title to a 20-watt laser system for Keck I from NSF to further research in
the field of astronomy. The laser was procured by the Gemini Observatory under an NSF grant and valued
at $3,063,792. At September 30, 2012, the contributed value is included in the property and equipment.
(7)

Gordon and Betty Moore Foundation
In 2012, the Gordon and Betty Moore Foundation awarded CARA a $2,000,000 four-year grant to acquirea laser for the Keck II telescope. CARA recorded $1,382,031 of operating revenue and $36,297 of interest
earned for this grant. As of September 30, 2012, unspent receipts under the award amounted to $617,969
and are included as advances in the accompanying statements of financial position.

(8)

W.M. Keck Foundation
In 2012, the W. M. Keck Foundation awarded CARA a $1,500,000 four-year grant to provide next
generation laser capability for the LGS AO facility on the Keck II telescope. Revenues under the
grant, including earned interest of $9,288, were $25,887 in 2012. As of September 30, 2012, unspentreceipts under the award amounted to $1,483,401 and are included as advances in the accompanying
statements of financial position.

(9)

Yale University
In 2012, Yale University entered into a five-year program agreement with CARA. The purpose of the
program is to expand scientific collaboration between the institutions by involving additional scientificinvestigators from Yale University in the use of the Keck telescopes to address new scientific questions.
Revenues under the agreement were $483,300 in 2012.

(10) 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 $100,000 and $0 at September 30, 2012 and 2011, respectively.

10(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2012 and 2011(11) Property and Equipment
A summary of property and equipment at September 30, 2012 and 2011 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
$

2012

2011

72,262,958
3,476,086

54,846,035
55,860,774

75,739,044

110,706,809

19,756,807
8,621,718

11,244,207
10,934,058

28,378,525

22,178,265

3,129,206
3,065,197

2,737,303
3,088,865

6,194,403

5,826,168

4,428,678(56,376,380)

4,217,161(51,122,109)

58,364,270

91,806,294

Depreciation expense amounted to $5,492,232 in 2012 and $4,867,303 in 2011, respectively.
(12) 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 net 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 the net income, if any from any unrelated trade or business, in the opinion of management, is
not material to the financial statements taken as a whole.
In accordance with FASB Interpretation No. 48 (Interpretation 48), Accounting for Uncertainty in Income
Taxes (included in FASB ASC Subtopic 740-10 – Income Taxes – Overall, CARA recognizes the effect ofincome tax positions only if those positions are more likely than not of being sustained. Recognizedincome tax positions are measured at the largest amount that is greater than 50% likely of being realized.
Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.
Prior to the adoption of Interpretation 48, CARA recognized the effect of income tax positions only if such
positions were probable of being sustained.
11(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2012 and 2011(13) Related-Party Transactions
Caltech and UC provide various instrument and adaptive optics development services to CARA. During
fiscal years 2012 and 2011, total expenditures for these services charged to CARA were $1,433,065 and$1,592,357, respectively, by Caltech, and $603,019 and $466,993, respectively, by UC.
(14) Commitments
CARA entered into various contractual agreements for operations, laser guide star and adaptive optics
systems, observatory construction and development of instrumentation and interferometry systems. A
summary of commitments at September 30, 2012 follows:

Operations
Laser guide star and adaptive
optics systems
Instrumentation
Total

$

1,241,336
1,239,939
172,591$

2,653,866(15) 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
2012 and 2011, CARA received contributions of $81,651 and $75,746, respectively, which wereboard-designated for the Director’s Fund. At September 30, 2012 and 2011, $305,191 and $243,618,
respectively, was available in the fund.
(16) Temporarily Restricted Net Assets
In December 2005, CARA received a restricted contribution pledge of $4,899,875 for Keck I
instrumentation development of MOSFIRE. In 2012 and 2011, $0 and $153,521, respectively, of
temporarily restricted net assets were released from restriction in satisfaction of equipment acquisition
restrictions.
CARA received various restricted contributions for instrument development and advancement activities
totaling $501,546 and $398,437, respectively, in 2012 and 2011. In 2012 and 2011, $379,733 and$344,283, respectively, of temporarily restricted net assets were released from restriction in satisfaction ofequipment acquisition and advancement activity restrictions. At September 30, 2012 and 2011, $384,342
and $262,529, respectively, was available for these activities.
(17) Deferred Compensation 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 isdefined as an employee regularly scheduled to work at least 20 hours per week subject to the appropriate
12(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2012 and 2011

waiting period as defined in the Plan. CARA is required to make contributions to the Plan at various
percentages of base salary depending on the participant’s age and grade. Contributions to the Plan
amounted to $806,618 and $739,755 for fiscal years 2012 and 2011, respectively.

13