CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Financial Statements
September 30, 2013 and 2012
(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 financial statements of the California Association for Research in
Astronomy, which comprise the statements of financial position as of September 30, 2013 and 2012, 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.

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

Opinion
In our opinion, the financial statements referred to above present fairly in all material respects, the financial
position of the California Association for Research in Astronomy as of September 30, 2013 and 2012, andthe results of its operations and its cash flows for the years then ended in accordance with U.S. generally
accepted accounting principles.

Honolulu, Hawaii
March 21, 2014

2

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Statements of Financial Position
September 30, 2013 and 2012
AssetsCurrent assets:
Cash and cash equivalents
Grants and contracts receivable
Contributions receivable
Prepaid expenses
Investments

2013

2012

17,106,409
569,298
100,000
51,10562,437

15,187,703
589,269
100,000
44,540—    

17,889,249

15,921,512

54,844,813

58,364,270$

72,734,062

74,285,782$

3,031,250

2,298,076

10,831,581
1,491,600
904,330
592,91128,645

10,721,008
1,483,401
64,619617,969
30,637

16,880,317

15,215,710

54,657,234
544,525
651,986

58,380,539
305,191
384,342

55,853,745

59,070,072

72,734,062

74,285,782$

Total current assets
Noncurrent asset:
Property and equipment, at cost less accumulated depreciation
Total assets
Liabilities and Net Assets
Current liabilities:
Accounts payable and accrued expenses
Advances
University of California – Observatory operations
W.M. Keck Foundation
Association of Universities for Research in Astronomy
Gordon and Betty Moore Foundation
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.

3

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Statements of Activities
Years ended September 30, 2013 and 2012
2013

2012

424,857

3,145,443

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

11,715,451
4,429,106
1,260,573
785,394
3,102,216

251,861
188,505
299,185

393,000
223,137
379,733

Total unrestricted revenues

22,247,552

25,434,053

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

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

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

23,030,198

20,527,118(782,646)

4,906,935

2,701,325

38,287,695(3,483,971)(33,380,760)

566,829(299,185)

501,546(379,733)

267,644

121,813(3,216,327)(33,258,947)

59,070,072

92,329,019

55,853,745

59,070,072

Changes in unrestricted net assets:
Unrestricted operating support and revenues:
Contributions
Operating revenue:
University of California: Observatory operations
National Aeronautics and Space Administration
Association of Universities for Research in Astronomy
National Science Foundation
Other
Interest earned:
Observatory operations
Other income
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
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.

4

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Statements of Cash Flows
Years ended September 30, 2013 and 2012
2013

2012

(3,216,327)(33,258,947)

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

5,492,232—    
46,31938,287,695(3,063,792)

19,971(6,565)

119,213(16,474)

733,174
931,433(702,458)
2,789,507

7,458,956

9,693,295(5,521,889)(57,761)
39,400(7,345,030)—    
24,600Net cash used in investing activities(5,540,250)(7,320,430)

Net increase in cash and cash equivalents

1,918,706

2,372,865

15,187,703

12,814,838

17,106,409

15,187,703

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 loss (gain) on disposal of property and equipment
Impairment loss on instrumentation
Contribution of equipment
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
Purchases of investments
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:
Contribution of equipment$

See accompanying notes to financial statements.

5

—    

3,063,792

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2013 and 2012(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.
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 2013 and 2012, CARA received operating support for Keck I operations of$8,042,930 and $7,885,920, respectively. For fiscal years 2013 and 2012, CARA received operating
support for Keck II operations of $5,370,865 and $5,164,302, respectively. For fiscal years 2013 and 2012,CARA recognized operating revenue for Keck I and Keck II operations from UC of $13,303,223 and$11,715,451, 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
Financial Statement – Other Presentation Matters. Under FASB ASC Section 958-205-45-2, CARA
6

(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2013 and 2012is 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, 2013 and 2012, 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, 2013 and2012, CARA had cash and cash equivalents in an account with UC totaling $15,893,918 and$14,827,417, respectively.

(c)

Investments
Investments are reported at fair value with unrealized gains and losses included in the statements ofactivities.
Gains and losses on investments are reported in the statements of activities as increases or decreases
in unrestricted net assets unless their use is temporarily or permanently restricted by explicit donor
stipulations or by law.
CARA utilizes valuation techniques that maximize the use of observable inputs and minimize the useof unobservable inputs to the extent possible. CARA determines fair value based on assumptions thatmarket participants would use in pricing an asset or liability in the principal or most advantageous
market. When considering market participant assumptions in fair value measurements, the following
fair value hierarchy distinguishes between observable and unobservable inputs, which are
categorized in one of the following levels:•

Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities
accessible to the reporting entity at the measurement date.

7(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2013 and 2012(d)•Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for theasset or liability, either directly or indirectly, for substantially the full term of the asset or
liability.

•

Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to theextent that observable inputs are not available, thereby allowing for situations in which there islittle, if any, market activity for the asset or liability at measurement date.

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 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.
(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.

(f)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.

8(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2013 and 2012

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 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
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.

(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.
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 21, 2014, thedate at which the financial statements were available to be issued. There are no other matters todisclose.
9(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2013 and 2012(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. In 2013, NASA renewed thecooperative agreement through 2018. Revenues under the two cooperative agreements were $4,146,855
and $4,429,106 in 2013 and 2012, respectively.

(4)

Association of Universities for Research in Astronomy Agreements
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 $1,560,289 and $1,260,573 in 2013
and 2012, respectively. As of September 30, 2013 and 2012, unspent receipts under the AURA contracts
amounted to $904,330 and $64,619, respectively, and are included as advances in the accompanying
statements of financial position.

(5)

National Science Foundation (NSF)(a)

Grant Awards
In 2009, NSF awarded CARA a three-year $1,355,500 grant to improve the Keck II laser launchfacility of which $481,582 and $136,303, respectively, was recognized as revenue in 2013 and 2012.
In 2010, NSF awarded CARA a four-year $1,866,000 grant to develop the Keck I laser guide star
adaptive optics facility of which $163,382 and $643,516, respectively, was recognized as revenue in2013 and 2012.
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 $166,370 was recognized as revenue
in 2013.
Revenues recognized under these grants with NSF amounted to $811,334 and $785,394 in 2013 and2012, respectively.

(b)

Contributions
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

10(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2013 and 2012

grant and valued at $3,063,792. At September 30, 2013, the contributed value is included in theproperty and equipment.
(6)

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 at September 30, 2013 and 2012.

(7)

Property and Equipment
A summary of property and equipment at September 30, 2013 and 2012 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
$

2013

2012

72,311,789
5,027,677

72,262,958
3,476,086

77,339,466

75,739,044

19,845,839
10,832,661

19,756,807
8,621,718

30,678,500

28,378,525

3,473,298
1,229,594

3,129,206
3,065,197

4,702,892

6,194,403

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

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

54,844,813

58,364,270

Depreciation expense amounted to $6,340,021 in 2013 and $5,492,232 in 2012, respectively.
(8)

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
11(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2013 and 2012

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.
(9)

Related-Party Transactions
Caltech and UC provide various instrument and adaptive optics development services to CARA. During
fiscal years 2013 and 2012, total expenditures for these services charged to CARA were $2,090,329 and$1,433,065, respectively, by Caltech, and $402,488 and $603,019, respectively, by UC.
CARA 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. In fiscal 2013, total expenditures for theseprojects was $1,666,311.

(10) Investments
CARA maintains investments that are held to fund the 457(b) deferred compensation obligation, which is
described in note 15(b). The investments held to fund deferred compensation totaled $62,437 at
September 30, 2013.
(11) 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, 2013 follows:

Operations
Laser guide star and adaptive optics
systems
Instrumentation

$

Total

$

2,076,799
1,371,670
850,880
4,299,349(12) 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
12(Continued)

CALIFORNIA ASSOCIATIONFOR RESEARCH IN ASTRONOMY
DBA W.M. KECK OBSERVATORY(A Nonprofit California Public Benefit Corporation)
Notes to Financial Statements
September 30, 2013 and 20122013 and 2012, CARA received contributions of $239,334 and $81,651, respectively, which wereboard-designated for the Director’s Fund. At September 30, 2013 and 2012, $544,525 and $305,191,
respectively, was available in the fund.
(13) Temporarily Restricted Net Assets
In 2013 and 2012, CARA received restricted contributions for various instrumentation & adaptive optics
technology development and Advancement Office initiatives totaling $566,829 and $501,546, respectively.
In 2013 and 2012, $299,185 and $379,733, respectively, of temporarily restricted net assets were released
from restriction in satisfaction of equipment acquisition and program restrictions. At September 30, 2013
and 2012, $651,986 and $384,342, respectively, was available for these activities.
(14) In-Kind Contributions
CARA received the following in-kind contributions during the year ended September 30, 2013:

Professional services
Advancement events
Miscellaneous$

23,97919,430984$

44,393(15) 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 $865,027 and $806,618 for
fiscal years 2013 and 2012, respectively.

(b)457(b) Plan
In 2013, 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 $62,437 as of September 30, 2013, are included on theaccompanying balance sheets.
13