GBGM Financial Statements

GENERAL BOARD OF GLOBAL MINISTRIES OF

THE UNITED METHODIST CHURCH (Parent Only)

FINANCIAL STATEMENTS

DECEMBER 31, 2012 AND 2011

GENERAL BOARD OF GLOBAL MINISTRIES OF THE UNITED METHODIST CHURCH

(Parent Only)

Table of Contents Page INDEPENDENT AUDITOR’S REPORT ............................................................................ 1 - 2 FINANCIAL STATEMENTS Statements of Financial Position ................................................................................ 3 Statements of Activities ............................................................................................. 4 - 7 Statements of Cash Flows .......................................................................................... 8 Notes to Financial Statements .................................................................................... 9 - 31

The Astoria • 3803 Bedford Avenue, Suite 103 • Nashville, Tennessee 37215 • phone: 615-320-5500 • fax: 615-329-9465 • www.crosslinpc.com An Independent Member of The BDO Seidman Alliance

Independent Auditor’s Report The Board of Directors of the General Board of Global Ministries of The United Methodist Church The Audit Committee of the General Board of Global Ministries of The United Methodist Church The Committee on Audit and Review of the General Council on Finance and Administration of The United Methodist Church We have audited the accompanying financial statements of the General Board of Global Ministries of The United Methodist Church (Parent Only) (a nonprofit organization), which comprise the statements of financial position as of December 31, 2012 and 2011, and the related statements of activities and cash flows for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of 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 fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, 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 of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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General Board of Global Ministries of the United Methodist Church (Parent Only)

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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The General Board of Global Ministries of the United Methodist Church (Parent Only) as of December 31, 2012 and 2011, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Nashville, Tennessee May 28, 2013

See accompanying notes to the financial statements.

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2012 2011Assets

Cash and cash equivalents 11,781,589$ 34,518,039$ Cash held in pooled cash management - 34,242,741 Receivables:

Accrued World Service Fund allocation 9,069,363 9,101,613 Due from General Council on Finance and Administration (GCFA) 8,344,268 4,442,499 Due from GBGM-related entities 240,746 56,890 Accrued investment income 1,358,008 162,498 Bequests receivable 818,685 697,182 Mortgage loans to churches and staff, net of allowance 889,193 939,603 Other 587,515 1,576,519

Prepaid expenses and other assets 681,357 781,031 Investments 138,667,700 116,566,604 Buildings and equipment, net 712,350 874,692 Collins Health Plan for Missionaries 1,922,379 2,228,795 Beneficial interest in Collins Forests 37,789,000 38,767,000 Perpetual trusts held by others, including revolving loan funds 40,423,437 22,137,934

Total assets 253,285,590$ 267,093,640$

Liabilities and Net Assets

Liabilities:Accounts payable, accrued expenses and other liabilities 16,733,292$ 8,542,426$ Grants and projects payable 4,547,165 5,268,565 Due to GBGM-related entities 258,799 241,355 Annuities payable 658,581 708,370 Due to Collins Pension Plan 26,856,934 28,874,810 Assets held for related entities-pooled investments - 34,242,741 Assets held for others 21,832,642 21,773,749

Total liabilities 70,887,413 99,652,016

Net assets:Unrestricted:

General operating fund 20,404,195 9,941,495 Other undesignated 2,667,953 1,996,803 Designated for programs 13,476,464 12,214,746 Designated for missionaries retirement including pension & health

benefit costs 6,831,200 6,214,534 Total unrestricted 43,379,812 30,367,578

Temporarily restricted 29,722,977 28,304,785 Permanently restricted 109,295,388 108,769,261

Total net assets 182,398,177 167,441,624

Total liabilities and net assets 253,285,590$ 267,093,640$

GENERAL BOARD OF GLOBAL MINISTRIES OFTHE UNITED METHODIST CHURCH

(Parent Only)

Statements of Financial Position

December 31, 2012 and 2011


4 (Continued)

Temporarily PermanentlyUnrestricted Restricted Restricted Total

Operating revenue:World Service Fund:

Allocation 25,526,202$ -$ -$ 25,526,202$ National Plan for Hispanic Ministries - 568,892 - 568,892 Substance Abuse and Related Violence - 631,141 - 631,141 Asian American Language Ministry - 333,398 - 333,398 Korean American Task Force - 671,679 - 671,679

Native American Awareness Sunday - 92,791 - 92,791 World Communion Offering - 347,665 - 347,665 Human Relations Day - 374,658 - 374,658 Advance Special Gifts:

Support for persons in mission - 4,940,137 - 4,940,137 Other 924,114 5,511,872 - 6,435,986

United Methodist Women appropriation 677,772 5,100 - 682,872 United Methodist Committee on Relief appropriation 2,622,543 - - 2,622,543 United Methodist Development Fund appropriation 1,077,743 - - 1,077,743 Benefit Trust distribution 1,250,199 - - 1,250,199 Agency Group Insurance fund distribution 489,453 - - 489,453 Bequests 696,680 574,171 - 1,270,851 Grants and other contributions 480,052 141,768 - 621,820 Interest income on cash equivalents, mortgage loans

and perpetual trusts 516,489 98,654 7,941 623,084 Investment income, net of fees 1,399,098 660,894 - 2,059,992 Collins Forests income distribution 3,019,049 - - 3,019,049 Service fees 348,789 - - 348,789 Missionary salary reimbursements 1,510,119 - - 1,510,119 Other 844,724 - - 844,724

Total 41,383,026 14,952,820 7,941 56,343,787

Net assets released from restrictions 16,623,397 (16,623,397) - -

Total operating revenue (loss) 58,006,423$ (1,670,577)$ 7,941$ 56,343,787$

Year Ended December 31, 2012

Statement of Activities

(Parent Only)THE UNITED METHODIST CHURCH

GENERAL BOARD OF GLOBAL MINISTRIES OF


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Operating expenses:Program Services:

Mission and Evangelism:Mission and evangelism 4,287,268$ -$ -$ 4,287,268$ Mission theology and new initiatives 3,238,568 - 3,238,568 Justice and discipleship 1,634,506 - - 1,634,506 Mission relationships 1,839,576 - - 1,839,576 Missionary services 14,420,534 - - 14,420,534

Board-wide mission program expenses 4,619,683 - - 4,619,683 Advance special projects 5,683,034 - - 5,683,034 Distribution of designated funds 5,425,686 - - 5,425,686

Total program services 41,148,855 - - 41,148,855

Supporting services:Management and general 8,033,711 - - 8,033,711 Fund-raising 2,637,257 - - 2,637,257

Total supporting services 10,670,968 - - 10,670,968

Total operating expenses 51,819,823 - - 51,819,823

Increase (decrease) in net assets from operations 6,186,600 (1,670,577) 7,941 4,523,964

Nonoperating activities:Net appreciation in fair value of investments 6,448,457 3,088,769 - 9,537,226 Net appreciation in fair value of perpetual trusts - - 1,194,094 1,194,094 Collins Forests - - (978,000) (978,000) Collins Pension and Health Benefits Plan (688,540) - - (688,540) Endowment contributions, including perpetual trusts - - 302,092 302,092 Other income 1,065,717 - - 1,065,717

Total nonoperating activities 6,825,634 3,088,769 518,186 10,432,589

Increase in net assets 13,012,234 1,418,192 526,127 14,956,553

Net assets at beginning of year 30,367,578 28,304,785 108,769,261 167,441,624

Net assets at end of year 43,379,812$ 29,722,977$ 109,295,388$ 182,398,177$


(Parent Only)




6 (Continued)


Operating revenue:World Service Fund:Allocation 25,929,320$ -$ -$ 25,929,320$

National Plan for Hispanic Ministries - 596,682 - 596,682 Substance Abuse and Related Violence - 661,971 - 661,971 Asian American Language Ministry - 349,683 - 349,683 Korean American Task Force - 704,489 - 704,489

Native American Awareness Sunday - 80,815 - 80,815 World Communion Offering - 332,875 - 332,875 Human Relations Day - 362,556 - 362,556 Advance Special Gifts:

Support for persons in mission - 4,458,038 - 4,458,038 Other 590,062 3,473,307 - 4,063,369

United Methodist Women appropriation 752,354 - - 752,354 United Methodist Committee on Relief appropriation 3,388,016 - - 3,388,016 United Methodist Development Fund appropriation 879,119 - - 879,119 Benefit Trust distribution 524,620 - - 524,620 Agency Group Insurance fund distribution 489,453 - - 489,453 Bequests 277,865 98,214 - 376,079 Grants and other contributions 558,036 77,943 - 635,979 Interest income on cash equivalents, mortgage loans

and perpetual trusts 315,993 105,811 - 421,804 Investment income, net of fees 1,181,641 545,587 - 1,727,228 Collins Forests income distribution 2,616,964 - - 2,616,964 Service fees 358,142 - - 358,142 Missionary salary reimbursements 1,683,045 - - 1,683,045 Other 573,799 - - 573,799

Total 40,118,429 11,847,971 - 51,966,400

Net assets released from restrictions 15,535,956 (15,535,956) - -

Total operating revenue (loss) 55,654,385$ (3,687,985)$ -$ 51,966,400$


(Parent Only)




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Operating expenses:Program Services:Mission and Evangelism:

Mission and evangelism 4,447,897$ -$ -$ 4,447,897$ Justice and discipleship 4,204,218 - - 4,204,218 Mission relationships 2,024,081 - - 2,024,081 Missionary services 12,660,246 - - 12,660,246

Board-wide mission program expenses 5,231,371 - - 5,231,371 Advance special projects 3,573,126 - - 3,573,126 Distribution of designated funds 6,831,070 - - 6,831,070

Total program services 38,972,009 - - 38,972,009

Supporting services:Management and general 7,929,072 - - 7,929,072 Fund-raising 2,641,811 - - 2,641,811

Total supporting services 10,570,883 - - 10,570,883

Total operating expenses 49,542,892 - - 49,542,892

Increase (decrease) in net assets from operations 6,111,493 (3,687,985) - 2,423,508

Nonoperating activities:Net depreciation in fair value of investments (1,207,165) (1,045,877) - (2,253,042) Net depreciation in fair value of perpetual trusts - - (635,275) (635,275) Collins Pension and Health Benefits Plan (12,713,720) - - (12,713,720) Endowment contributions, including perpetual trusts 9,000 - 470,605 479,605

Total nonoperating activities (13,911,885) (1,045,877) (164,670) (15,122,432)

Decrease in net assets (7,800,392) (4,733,862) (164,670) (12,698,924)

Net assets at beginning of year 38,167,970 33,038,647 108,933,931 180,140,548

Net assets at end of year 30,367,578$ 28,304,785$ 108,769,261$ 167,441,624$


(Parent Only)




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2012 2011Cash flows from operating activities:

Increase (decrease) in net assets 14,956,553$ (12,698,924)$ Adjustments to reconcile increase (decrease) in net assets to net cash (used in)

provided by operating activities:Depreciation 328,455 327,121 Decrease in value of Collins Forest 978,000 - Net (appreciation) depreciation in fair value of investments (9,537,226) 2,253,042 Net (appreciation) depreciation in fair value of perpetual trusts (1,194,094) 635,275 Net appreciation in fair value of investments held for others (1,314,801) (586,438) Increase in perpetual trusts held by others, from contributions (17,091,409) (11,279) Contributions and investment return restricted for long-term investment (302,092) (470,605) Actuarial loss on annuity obligations 115,984 25,741 (Increase) decrease in receivables (4,197,528) 218,739 Decrease (increase) in prepaid expenses and other assets 99,674 (86,952) Decrease in Collins Health Plan for Missionaries 306,416 810,758 Increase (decrease) in accounts payable, accrued expenses, and other liabilities 8,190,866 (500,370) Change in due from GBGM-related entities (183,856) 829,265 Change in due to GBGM-related entities 17,444 128,797 (Decrease) increase in due to Collins Pension and Health Benefits Trust (2,017,876) 10,102,962 Decrease in grants and projects payable (721,400) (575,051) Increase in assets held for others 58,893 716,105

Net cash (used in) provided by operating activities (11,507,997) 1,118,186

Cash flows from investing activities:Proceeds from sale of investments 190,998,325 79,887,169 Purchases of investments (202,247,394) (74,812,152) Purchases of equipment (166,113) (370,324) Principal collections on mortgages 50,410 1,744,153

Net cash (used in) provided by investing activities (11,364,772) 6,448,846

Cash flows from financing activities:Payment of annuity obligations (165,773) (131,178) Contributions and investment return restricted for long-term investment 302,092 470,605

Net cash provided by financing activities 136,319 339,427

Net (decrease) increase in cash and cash equivalents (22,736,450) 7,906,459

Cash and cash equivalents at beginning of year 34,518,039 26,611,580

Cash and cash equivalents at end of year 11,781,589$ 34,518,039$


(Parent Only)

Statement of Cash Flows

Years Ended December 31, 2012 and 2011

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(Parent Only)

Notes to Financial Statements

December 31, 2012 and 2011 (1) Nature of Organization The General Board of Global Ministries of The United Methodist Church (“GBGM”) is a tax-

exempt, not-for-profit organization incorporated in New York which functions through its program units described as follows:

Mission and Evangelism

This program area carries the responsibilities within the General Board of Global Ministries as it seeks to enhance the involvement of all United Methodists in Christian mission and develop ways to facilitate this mission involvement and collaborates in realizing the radical will of God for the transformation of the world. It develops mission programming around the following areas: Identification and analysis of the missional concerns that shape the conditions under which the church is called to engage in God’s Mission; Providing opportunities for United Methodists to understand the global mission of The United Methodist Church and for personal and corporate witness through involvement in and support of this mission; Working with ecumenical agencies in fulfilling mission education responsibilities; and Providing opportunities for United Methodists to gather and witness as a global church. Mission Theology and New Initiatives This program area provides strategic, long-term vision and leadership for the mission of the agency. The unit provides mission theology expertise to/for the Board projects, develops and creates programs geared to the mission education of United Methodist and other constituents, is also responsible for special program initiatives which are not part of established portfolios in any department, such as global migration, microfinance initiative, relating with the Large Churches Mission Connection, and the planning and expansion of the agency’s regional presence. It is also responsible for the supervision and relationships with the General Conference mandated plans assigned to the General Board of Global Ministries: the Special Program on Substance Abuse and Related Violence (“SPSARV”), the National Plan for Hispanic/Latino Ministry (“NPHLM”), the Korean Ministry Plan (“KMP”), the Asian American Language Ministry (“AALM”), and the Plan for Pacific Islander Ministry (“PPIM”).

Justice and Discipleship

This program develops mission programming around the following areas: Resourcing leadership training programs and administering scholarships; Congregational development, particularly among racial ethnic congregations and congregations in transitional communities/ neighborhoods; Initiating and developing programs and resources that will encourage persons of particular cultures to become receivers and bearers of the gospel across boundaries and to live faithfully within a multicultural world; Church and community development; Community-based programs in areas such as agricultural mission, communications, student and youth ministries;

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December 31, 2012 and 2011 Development of strong local and regional organizations for community development; Fostering cooperative patterns of ministry, including rural and urban ministries; Resource sharing for projects and programs—especially those serving women, children, and youth of partner churches and ecumenical bodies; Providing information and assisting in developing action and advocacy for global justice, peace, and freedom through working cooperatively with other agencies of the Church; other denominations and ecumenical, interfaith, and secular coalitions; and Initiating and developing special programs and resources through which children and youth may understand the mission of the Church. Mission Relationships This program develops mission programming around the following areas: Congregational and Community Development among people who have not heard or heeded the gospel; Strategic new mission initiatives where United Methodism and/or cooperative church relationships do not exist; Identifying, preparing, training and empowering persons for leadership in the church and community so that vital mission-oriented congregations may be developed; Working with denominational, ecumenical, and secular coalitions, as appropriate, to develop new patterns of joint mission; Development of and sustaining cooperative relationships and mission partnerships that include sharing of opportunities and resources, networking and collaboration; Developing missional relationships in countries where The United Methodist Church has no commitments; Liaising with each central conference and its conferences, both annual and provisional, and each affiliated autonomous Methodist church or united church; Fostering interaction of churches and ecumenical groups for the purpose of mutuality in the definition and implementation of Christian mission and international concerns; and Relating to persons in mission of partner churches. Missionary Services

The program develops mission programming around the following areas: Mission volunteer opportunities for short-term assignments, including promoting and interpreting the need for volunteers with a variety of skills and abilities; and Promoting opportunities for mission service related to the General Board of Global Ministries throughout the constituencies of the Church, through the recruitment, selection, preparation, commissioning, and assignment of all categories of mission personnel, with necessary supervision and support of those persons in assignments in the widest variety of church and ecumenical partners in the United States and around the globe.

In addition, the following describes other functional areas in which GBGM conducts additional program activities not assigned to a specific program unit:

Board-wide Mission Programs Board-wide programs offer each section of GBGM unique opportunities to provide global

program support and resourcing in media production, financial development in support of missions, grants to emerging mission initiatives, releases to General Conference designated programs, and mission interpretation through New World Outlook.

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(Parent Only)



Advance Special Gifts These are expenses associated with numerous projects funded through the Advance for Christ

and His Church. Distributions of Designated Funds

These are designated and temporarily restricted fund balance expenditures. (2) Summary of Significant Accounting Policies

(a) Basis of Presentation

The financial statements of GBGM are prepared on the accrual basis of accounting. GBGM considers the net change in fair value of financial instruments, fair value adjustments

of certain alternative investment holdings, endowment contributions, perpetual trust contributions and change in value, change in pension obligations, and property sale gains or losses to be nonoperating activities.

(b) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, demand deposits, and short-term investments with original maturity dates of 90 days or less that are readily convertible to known amounts of cash, except for short-term investments held by the GBGM’s investment manager, as part of a long-term investment strategy and cash held in the pooled cash management program held for related entities as described in Note 3.

Cash held by GBGM in the pooled cash management program totaled $29,568,483 at

December 31, 2011, and was included in cash and cash equivalents. In November 2012, the pooled cash management program was discontinued and GBGM transferred their funds to other cash and investment accounts.

(c) Investments

Securities purchased for investments are recorded at cost of acquisition and those received as gifts are recorded at fair value, as determined by quoted market prices or other valuation methods.

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December 31, 2012 and 2011 (d) Buildings and Equipment

Buildings and equipment are recorded at the cost of acquisition, if purchased, or at fair value

at the date of gift. Buildings, building improvements, and equipment are depreciated on a straight-line basis over their estimated useful lives of 30, 20, and 5 years, respectively. Leasehold improvements are amortized over the life of the asset or the remaining lease term, whichever is shorter.

GBGM has granted indefinite use of certain properties (land and buildings) to related church

organizations under leasing or other arrangements and, accordingly, these properties are not reflected in the accompanying financial statements. These arrangements may call for nominal payments and are typically renewed so long as the grantee continues to carry out the stated program. The carrying value of such properties was reflected as a program expense at the time the arrangements for indefinite use of the property was made. Repair and maintenance costs incurred by GBGM for such properties are recorded as program expenses in the accompanying financial statements.

(e) Bequests and Other Contributions

Contributions, which include unconditional promises to give, are recognized as revenue

when received. Bequest income is recorded when the will is declared valid. Contributions received on behalf of a specified unaffiliated beneficiary are recorded as a liability to the specified beneficiary concurrent with recognition of the assets received from the donor.

GBGM is named as beneficiary of several perpetual trusts, which are administered by third

parties. The perpetual trusts are reported in the permanently restricted net asset class and the reported value is measured by the fair value of the trust assets as provided by trustees.

(f) Net Assets Unrestricted net assets represent resources over which the board of directors has full

discretion with respect to use. Temporarily restricted net assets represent expendable resources which have been time or

purpose restricted by the donor. Permanently restricted net assets represent contributions and other gifts which require that

the corpus be maintained intact and that only the income be used as specified by the donor.

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Revenues are reported as increases in unrestricted net assets unless their use is limited by donor-imposed restrictions. Expenses are reported as decreases in unrestricted net assets. New York State law (substantially in conformity with the Uniform Management of Institutional Funds Act) authorizes expenditures of appreciation (both realized and unrealized) in the value of endowment funds subject to a standard of business care and prudence. Gains and losses on investments are reported as increases or decreases in unrestricted net assets unless their use is restricted by donors or State law.

When a donor restriction expires, that is, when a stipulated time restriction ends or the

purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the accompanying statements of activities as net assets released from restrictions.

(g) Federal Income Tax Exemption GBGM is covered under General Council on Finance and Administration’s (“GCFA”) group

determination letter from the Internal Revenue Service indicating that it is a nonprofit corporation and, except for taxes pertaining to unrelated business income, is exempt from Federal and State income taxes under Section 501(c)(3) of the Internal Revenue Code. GBGM had no significant unrelated business income during the years ended December 31, 2012 and 2011.

GBGM accounts for the effect of any uncertain tax positions based on a more likely than not

threshold to the recognition of the tax positions being sustained based on the technical merits of the position under examination by the applicable taxing authority. If a tax position or positions are deemed to result in uncertainties of those positions, the unrecognized tax benefit is estimated based on a cumulative probability assessment that aggregates the estimated tax liability for all uncertain tax positions. Tax positions for GBGM include, but are not limited to, the tax-exempt status and determination of whether income is subject to unrelated business income tax; however, GBGM has determined that such tax positions do not result in an uncertainty requiring recognition.

(h) Use of Estimates The preparation of financial statements in conformity with accounting principles generally

accepted in the United States of America requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the revenue and expenses during the reporting period. The more significant areas include valuation of financial instruments, actuarial computations regarding various benefit obligations and the valuation of the Collins Forests. Actual results could differ from those estimates.

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(i) Financial Instruments Assets recorded at fair value in the statements of financial position are categorized based on

the level of judgment associated with the inputs used to measure their fair value. Level inputs, as defined by ASC 820, Fair Value Measurements and Disclosures, are as follows:

Level 1 - Values are unadjusted quoted prices for identical assets in active markets accessible at the measurement date. Level 2 - Inputs include quoted prices for similar assets in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are observable or can be corroborated by market data for the term of the instrument. Such inputs include market interest rates and volatilities, spreads and yield curves. Level 3 - Certain inputs are unobservable (supported by little or no market activity) and significant to the fair value measurement. Unobservable inputs reflect GBGM’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date.

(3) Related Parties Funding for GBGM’s operations is principally received from other units of The United

Methodist Church (the “Church”). Amounts received from the General Funds of The United Methodist Church are allocated to GBGM based on a four-year budget developed from projections of expected program costs. The main allocation received by GBGM is through the World Service Fund. The World Service Fund provides the basic financial resources for theChurch. The amount of the annual World Service budget, the method by which it shall be apportioned to the annual conferences, and the plan of distribution of World Service receipts among the World Service agencies are approved at each quadrennial session of the General Conference. The Advance for Christ and His Church is an official program of the Church through which support may be designated for projects approved by the Advance Committee of the General Board of Global Ministries of The United Methodist Church (“Advance Committee”). An Advance Special Gift is a contribution made by an individual, local church, organization, district, or conference to a project authorized by the Advance Committee. Advance Special Gifts and World Service offerings are passed to GBGM through GCFA from the General Funds of The United Methodist Church.

GBGM also receives appropriations from United Methodist Women (“UMW”), the United

Methodist Committee on Relief (“UMCOR”), and The United Methodist Development Fund (“UMDF”), for support of certain programs and administrative and management services. These appropriations have not been eliminated in these Parent Only financial statements.

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Service fees include contract services revenue from Collins Pension Plan for Missionaries Trust.

Other service fees from related parties consist mainly of sales of supplies to other GBGM-related entities, principally the United Methodist Women and UMCOR.

Amounts received from other United Methodist units accounted for approximately 79% and 82%

of GBGM’s total operating revenue in 2012 and 2011, respectively. GBGM’s continued existence at the present level is dependent upon the Church’s future financial support. The Church’s financial support of GBGM is dependent upon contributions from its congregations (i.e., congregational participation in the appointment covenant).

Cash held in the pooled cash management program at December 31, 2011 represents a pooled

cash management program that was administered by GBGM for GBGM-related entities and other Church agencies. At December 31, 2011, the balances held by GBGM in the pooled cash management program for related entities totaled $34,242,741. In November 2012, the pooled cash management program was discontinued and GBGM transferred these funds back to the related entities. In addition, GBGM transferred their own funds from the pooled cash management account to other cash and investment accounts.

(4) Investments At December 31, 2012 and 2011, the cost and fair value of investments are as follows: 2012 2011 Cost Fair Value Cost Fair Value Short-term securities $ 1,417,032 $ 1,417,032 $ 3,974,715 $ 3,974,715 U.S. Government securities 11,021 10,858 16,963,504 17,624,400 Multiple Asset Fund (GBOPHB) 127,339,315 134,642,026 - - Corporate bonds - - 9,854,279 10,476,124 Bond mutual funds 555,531 555,531 12,022,590 12,511,299 Other bonds 1,427,046 1,497,764 1,814,315 1,912,367 Equities 804,191 544,489 67,118,559 70,067,699 Total investments $131,554,136 $138,667,700 $111,747,962 $116,566,604

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December 31, 2012 and 2011 Investment return (loss) for the years ended December 31, 2012 and 2011 consisted of the

following: 2012 2011 Interest and dividends $ 2,395,960 $ 2,457,188 Net appreciation (depreciation) in fair value of investments: Realized gains on investments 7,047,080 3,216,280 Increase (decrease) in accumulated unrealized gains on investments 2,490,146 (5,469,322) Net appreciation (depreciation) in fair value of investments 9,537,226 (2,253,042) Total return on investments 11,933,186 204,146 Investment management expenses ( 335,968) ( 729,960) Return (loss) on investments, net $ 11,597,218 $( 525,814) (5) Mortgage Loans to Churches and Staff Mortgage loans to churches and staff consist of the following at December 31, 2012 and 2011: 2012 2011 Church mortgage loans $ 1,756,722 $ 1,807,132 Staff mortgage loans 115,471 115,471 1,872,193 1,922,603 Allowance for doubtful loans ( 983,000) ( 983,000) Total mortgage loans, net $ 889,193 $ 939,603

(6) Beneficial Interest in Collins Forests GBGM owns a beneficial interest in two timberlands in the Collins Forests, which are working

forests of old growth timber in California. GBGM also has a beneficial interest in a Collins Trust which owns a timberland in Pennsylvania. GBGM receives annual income from its interest in the California timberlands and has an irrevocable right to a percentage of the annual income from the trust which holds the Pennsylvania Forest. GBGM has recognized both its interest in the California timberlands and its beneficial interest in the Pennsylvania timberland as permanently restricted net assets. The value of $37,789,000 and $38,767,000 as of December 31, 2012 and 2011, respectively, represents the discounted present value of the

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December 31, 2012 and 2011 estimated future cash flows (over 30 years) from the Forests. The fair value as of 2012 and

2011 has been computed from estimates provided by management of the Forests during 2011 and 2010, (Level 3 inputs). The economic decline in the United States during recent years have significantly impacted the lumber and building products industry resulting in revenue streams that are less than earlier projections. Management of the Forests and of GBGM believe the economic conditions are temporary in nature and that over the 30-year period, revenues will approximate the original projections. There was a write down in fair value of $978,000 in 2012. There was no write down of fair value in 2011. This is supported by ASC 820, Fair Value Measurements and Disclosures, which provides guidelines regarding fair value considerations during depressed economic events.

The income from the Forests is used to satisfy the actuarially determined funding requirements

for the Collins Pension Plan. In addition, the income from the Forests supports contributions to the Collins Health Benefits Plan for post-retirement benefits and pays benefits to qualifying missionaries. The Forests’ income also supplements medical costs of active missionaries.

(7) Employee Benefits

(a) Retirement Benefits

Full-time laypersons and clergy employed by GBGM participate in the Retirement Plan for General Agencies (“RPGA”). This defined contribution plan is administered by the General Board of Pension and Health Benefits of The United Methodist Church (“GBOPHB”). GBGM makes semi-monthly contributions to each eligible employee’s account held by GBOPHB based on 8% of annual employee compensation. Additionally, GBGM matches up to 2% of each employee’s contribution to their United Methodist Personal Investment Plan (“UMPIP”). Total contributions made by GBGM for both components during 2012 and 2011 were $975,802 and $973,731, respectively.

(b) Collins Pension Plan

The missionaries employed by GBGM are covered by the Collins Pension Plan for Missionaries, a defined benefit plan. Benefits under the plan are based on the missionaries’ years of service. The annual benefit level (per year of pension credit service) in both 2012 and 2011 was $495.

Each missionary contributes $3.50 per month through a payroll deduction into the plan. GBGM contributes such amounts as are necessary on an actuarial basis to provide the plan with sufficient assets to meet the plan’s benefit obligation.

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The following sets forth financial information about the plan as of December 31, 2012 and 2011:

2012 2011 Benefit obligation at December 31 $ 106,956,552 $ 102,637,508 Fair value of plan assets at December 31 80,099,618 73,762,698 Unfunded obligation $( 26,856,934) $( 28,874,810) Benefit obligation weighted average assumptions: Discount rate 4.50% 5.50% Expected return on plan assets 8.00% 8.00% Benefit cost weighted average assumptions: Discount rate 4.50% 5.50% Expected return on plan assets 8.00% 8.00% Benefit cost $2,605,546 $11,995,507 Benefits paid 9,901,590 9,856,675 Employer contributions 2,400,000 1,800,000 Plan Assets The following table presents the fair value of the plan’s assets at December 31, 2012 and 2011: 2012 2011 Cash $ 235,335 $ 2,629,590 Multiple Asset Fund - GBOPHB 78,056,763 71,098,212 Receivables and payables 1,807,520 34,896 Total plan assets $80,099,618 $73,762,698

The plan’s investments are recorded at fair value using primarily Level 1 inputs, except for the Multiple Asset Fund – GBOPHB, which is recorded at fair value using primarily Level 2 inputs. The General Board of Pension and Health Benefits of The United Methodist Church (“GBOPHB”) Multiple Asset Fund’s investment objective is to maximize long-term investment returns, including current income and capital appreciation, while reducing short-term risk by investing in a broad mix of investments. The fund is a composite of U.S. equity funds (44%), fixed income funds (25%), international equity funds (20%), inflation protection funds (10%), and multiple asset fund cash (1%), which are Level 2 inputs.

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December 31, 2012 and 2011 The plan’s assets are maintained in the Collins Pension Plan for Missionaries Trust (the

“Trust”) administered by GBGM. The following table presents information with respect to plan assets:

Actual Allocation at Target asset December 31, Asset Category______ Allocation 2012 2011 Equities 65% 65% 65% Fixed income 35% 35% 35% Based on historically indexed data, the assumed long-term rates of return for 2012 are:

equities 8.0%, fixed income 6.0%, which produces an expected composite rate of return of 7.2%.

GBGM has an Investment Committee comprised of the board of directors, executive

management, and external consultants with financial and investment expertise. The Investment Committee meets on a quarterly basis to review investment performance and asset allocation. Managers are evaluated against prevalent market indices and changes are made when deemed necessary.

Future Benefit Payments Estimated future benefit payments reflecting expected future service for the next five fiscal

years and thereafter through 2022 are as follows: December 31, 2013 $10,417,930 December 31, 2014 9,990,824 December 31, 2015 9,527,570 December 31, 2016 9,156,150 December 31, 2017 8,704,905 Thereafter through 2022 37,659,714 A contribution will likely be made to the Collins Pension Plan in 2013. The exact amount will

be determined at a later date.

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December 31, 2012 and 2011 (8) Health, Life, and Other Employee Benefits GBGM provides health, life, and other employee benefits for its active employees and health,

dental, and life benefits to retirees through a group plan which qualifies for treatment as a multi-employer plan. Substantially all retired employees are eligible to participate in the plan if they have attained normal retirement age while in the employ of GBGM.

The General Agencies of The United Methodist Church Benefit Plan provides medical, dental,

life, and long- and short-term disability defined benefits to participants of the general agencies. The plan’s unfunded accumulated postretirement benefit obligation (“APBO”) was approximately $148,000,000 and $144,000,000 and the plan’s unfunded expected postretirement benefit obligation (“EPBO”) was approximately $195,000,000 and $188,000,000 as of December 31, 2012 and 2011, respectively.

GBOPHB transferred certain excess pension assets to the General Agency Benefit Trust (the

“Benefit Trust”) established by the 1996 General Conference as of December 31, 1996. Annually, the Benefit Trust allows a stated percentage, 6% and 4% for 2012 and 2011, respectively, of the fair market value of Benefit Trust assets at year-end to be available for distribution in the subsequent year in order to reimburse the participating agencies, through GCFA, for their funding of active and retiree health employee benefits. The fair value of the Benefit Trust’s assets (not plan assets) was approximately $148,945,000 and $138,884,000 as of December 31, 2012 and 2011, respectively. The total amount available for reimbursement in 2012 and 2011 was $8,333,065 and $5,842,051, respectively, of which GBGM’s share, net of retiree health benefits was $1,250,199 and $524,620, respectively.

All of GBGM’s active employees are covered by the plan. The cost of the benefits is recognized

as expense as premiums are paid. The total cost of benefits for active employees was $1,248,751 and $1,178,483 in 2012 and 2011, respectively, exclusive of reimbursement from the Benefit Trust.

Collins Retiree Medical/Dental Reimbursement Plan GBGM also sponsors the Collins Retiree Medical/Dental Reimbursement Plan, a

noncontributory postretirement welfare plan, which covers all retired missionaries, with a minimum service requirement of 15 years, for their respective lifetimes. Plan benefits include reimbursements for medical and dental care, medically related travel, Medicare premiums, and expenses for special medical care assistance. The level of benefits is based on the employees’ years of service: 50% reimbursement for retirees with 15 to 24 years and 75% for retirees with 25 years and over. Medicare premiums are reimbursed at 50% for retirees with 15 to 24 years and 75% for retirees with 25 years and over.

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December 31, 2012 and 2011 The following sets forth financial information about the Collins Retiree Medical/Dental

Reimbursement Plan as of December 31, 2012 and 2011: 2012 2011 Benefit obligation at December 31 $(27,912,154) $(25,557,908) Fair value of plan assets at December 31 29,834,533 27,786,703 Funded status $ 1,922,379 $ 2,228,795 Benefit obligation weighted average assumptions: Discount rate 4.50% 5.00% Expected return on plan assets 8.00% 8.00% Benefit cost weighted average assumptions: Discount rate 4.50% 5.00% Expected return on plan assets 8.00% 8.00% Benefit cost $( 385,893) $(1,197,811) Benefits paid 1,578,654 1,601,420 Employer contributions - - For measurement purposes, the assumed annual rates of increase in the per capita costs were as

follows in 2012: Medical 6.5% in 2013, decreasing by 0.5% per year to

ultimate rate of 5.0% in 2016 and all future years. Drug 5.5% in 2013 and all future years. Medicare Part B 5.0% in 2013 and all future years. Dental 1.0% in 2013 and all future years. Nursing home care 6.0% in 2013 and all future years.

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December 31, 2012 and 2011 Plan Assets The following table presents the fair value of the plan’s assets at December 31, 2012 and 2011: 2012 2011 Cash and cash equivalents $ 382,165 $ 2,207,269 Domestic bond fund 12,277,673 11,443,750 Domestic stock fund 11,803,179 10,228,173 International stocks 4,575,134 3,913,552 Receivables and payables 54,071 ( 6,041) Accrued income 742,311 - Total plan assets $29,834,533 $ 27,786,703

The plan’s cash and cash equivalents, receivables and payables, and accrued income are recorded at fair value using primarily Level 1 inputs. The plan’s domestic bond fund, domestic stock fund, and international stocks are recorded at fair value using primarily Level 2 inputs.

The plan assets are maintained in the Collins Health Benefit Trust (the “Health Trust”)

administered by GBGM. GBGM contributes such amounts as are necessary to provide the plan with sufficient assets to meet the plan’s current benefit obligation. The following table presents information with respect to plan assets:

Actual Allocation at Target asset December 31, Asset Category______ Allocation 2012 2011 Equities 65% 57% 55% Fixed income 35% 43% 46%

Based on historically indexed data, the assumed long-term rates of return for 2012 are: equities 8.0%, fixed income 6.0%, which produces an expected composite rate of return of 7.2%.

GBGM has an Investment Committee comprised of the Board of Directors, executive

management, and external consultants with financial and investment expertise. The Investment Committee meets on a quarterly basis to review investment performance and asset allocation. Managers are evaluated against prevalent market indices and changes are made when deemed necessary.

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December 31, 2012 and 2011 Future Benefit Payments Estimated future benefit payments reflecting expected future service for the next five fiscal years

and thereafter through 2022 are as follows: Benefits Benefits not reflecting reflecting Medicare subsidy Medicare subsidy December 31, 2013 $1,907,000 $2,128,000 December 31, 2014 1,888,000 2,107,000 December 31, 2015 1,843,000 2,059,000 December 31, 2016 1,816,000 2,028,000 December 31, 2017 1,772,000 1,980,000 Thereafter through 2022 8,193,000 9,165,000 A contribution may be made to the Collins Health Benefit Trust in 2013. The exact amount will

be determined at a later date. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”) was

signed into law in December 2003. The Act included a prescription drug benefit under Medicare (Medicare Part D), as well as a federal subsidy to sponsors of retiree health plans that provide a benefit at least actuarially equivalent to Medicare Part D. Accordingly, in 2012 the postretirement benefit obligation and benefit cost were reduced by $3,525,000 and $439,000, respectively, and in 2011 the postretirement benefit obligation and benefit cost were reduced by $3,325,000 and $397,000, respectively.

(9) Distributions from Agency Group Insurance Plan GBGM receives a distribution of funds from the Agency Group Insurance Plan (“AGI”) to offset

a portion of the costs of its employee health insurance plan. AGI is a self-insured medical benefits plan which is funded by participating organizations. This distribution was $489,453 in both 2012 and 2011. The final year of this distribution was 2012. The amount of each participating organization’s distribution is based upon the organization’s proportionate share of the base year health insurance premium cost.

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December 31, 2012 and 2011 (10) Commitments GBGM has a noncancelable operating lease for office space which expires in 2013. The annual

rental is adjusted each year upon the landlord’s analysis of carrying, maintenance, depreciation, and capital improvement fund charges for the building. The future minimum rental commitments under this lease are as follows:

Amount Year Ended December 31: 2013 $2,283,909

GBGM shares the office space with the United Methodist Women, UMCOR and other related Methodist agencies. The rental payments are allocated to each agency based on square feet utilization. Total rent expense incurred by GBGM under the lease amounted to approximately $2,213,092 and $2,477,000 in 2012 and 2011, respectively. This includes approximately $769,000 and $724,000 in 2012 and 2011, respectively, paid by the other related Methodist agencies.

(11) Assets Held for Others Assets held for others consist of amounts held for the following at December 31, 2012 and 2011: 2012 2011 Foundation for Theological Education in Southeast Asia (the “Foundation”) $14,058,217 $13,105,967 Education Endowment Fund 2,096,235 2,165,265 Beneficiary organizations designated by donors 5,678,190 6,502,517 Total assets held for others $21,832,642 $21,773,749 The investments held by GBGM for the Foundation are maintained in the Swope Wendell Fund,

the return from which was designated by the donor for programs to improve Christian theological education in Southeast Asia and China. All the investment return from the Swope Wendell Fund is given to the Foundation.

The Educational Endowment Fund represents investments held by GBGM to assist missionaries

in their children’s education. Missionaries with children under 18 years of age automatically contribute a fixed percentage of their salary which is combined with a matching contribution from GBGM. The missionaries’ vested interest in the Fund is distributed to them upon their termination or nonenrollement of their children.

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December 31, 2012 and 2011 (12) Description of Net Assets Unrestricted net assets at December 31, 2012 and 2011 include amounts board designated for

programs as follows: 2012 2011 Annuity fund $ 211,690 $ 202,109 Missionary work 2,795,453 845,453 Field projects 3,453,429 3,392,844 Property 4,007,011 4,127,755 Plant and equipment 75,049 75,049 Humanitarian relief 189,657 188,657 Special program emphasis 1,023,486 970,183 Advance Office 800,000 1,300,000 Economic development 44,076 37,415 VIM - Haiti 434,539 541,400 Mission education 434,413 526,220 Women, children, and youth 7,661 7,661 Total board designated unrestricted net assets $13,476,464 $12,214,746

Temporarily restricted net assets at December 31, 2012 and 2011 are available for the following purposes:

2012 2011 Advance special projects $ 1,593,831 $ 1,733,806 China programs 1,943,346 1,688,688 Projects for individuals and institutions 957,471 948,536 Scholarships and leadership training 6,332,627 6,435,560 Restricted through General Conference 6,025,907 5,792,632 Field projects 12,087,638 11,102,311 Missionary support 653,888 492,884 Other 128,269 110,368 Total temporarily restricted net assets $29,722,977 $28,304,785

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December 31, 2012 and 2011 Permanently restricted net assets at December 31, 2012 and 2011 represent contributions

restricted to investment in perpetuity. Income from these funds is expendable to support the following purposes:

2012 2011 Collins Forests $ 37,789,000 $ 38,767,000 Revolving loan fund - available for loans for restricted purposes 17,632,168 17,493,976 Permanent funds - income unrestricted 25,344,169 24,488,436 Permanent funds - income donor restricted for the following: Advance special projects 1,647,781 1,574,085 China programs 1,173,185 1,181,019 Field projects 15,622,560 15,415,701 Scholarships 4,931,918 4,820,142 Missionary support 3,953,314 3,738,282 Projects for individuals and institutions 817,827 907,154 Pensions 383,466 383,466 Total permanently restricted net assets $109,295,388 $108,769,261 (13) Endowment

GBGM’s endowment consists of approximately 1,400 individual funds established for a variety of purposes. Its endowment includes only donor-restricted endowment funds. As required by GAAP, net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions. Interpretation of Relevant Law The Board of Directors of GBGM has interpreted the applicable state law as requiring the preservation of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, GBGM classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund.

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December 31, 2012 and 2011 Changes in Endowment Net Assets Temporarily Permanently Unrestricted Restricted Restricted Total Endowment net assets, January 1, 2011 $ 6,596,335 $ 16,213,559 $ 52,614,171 $ 75,424,065 Investment return (loss): Investment income 1,170,570 545,569 654,829 2,370,968 Net depreciation (realized and unrealized) ( 429,957) ( 1,045,877) ( 635,275) ( 2,111,109) Total investment return (loss) 740,613 ( 500,308) 19,554 259,859 Contributions and transfers - - 470,605 470,605 Appropriation of endowment assets for expenditure (1,728,703) ( 3,876,665) ( 654,829) ( 6,260,197) Endowment net assets, December 31, 2011 5,608,245 11,836,586 52,449,501 69,894,332 Investment return: Investment income 848,920 660,894 639,390 2,149,204 Net appreciation (realized and unrealized) 1,314,652 3,088,769 1,194,094 5,597,515 Total investment return 2,163,572 3,749,663 1,833,484 7,746,719 Contributions - - 302,092 302,092 Appropriation of endowment assets for expenditure (1,213,218) ( 2,239,633) ( 639,390) ( 4,092,241) Endowment net assets, December 31, 2012 $ 6,558,599 $ 13,346,616 $ 53,945,687 $ 73,850,902

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Funds with Deficiencies From time to time, the fair value of assets associated with individual donor-restricted endowment funds may fall below the level that the donor or the applicable state law requires GBGM to retain as a fund of perpetual duration. There were no deficiencies as of December 31, 2012 and 2011. Return Objectives and Risk Parameters GBGM has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor-restricted funds that GBGM must hold in perpetuity or for a donor-specified period(s) as well as board-designated funds. Under this policy, as approved by the Board of Directors, the endowment assets are invested in a manner that is intended to produce results that exceed the price and yield results of a combination of the S&P 500 Index, MSCI-EAFE and BC Aggregate, while assuming a moderate level of investment risk. GBGM expects its endowment funds, over time, to provide an average rate of return of approximately 7% annually. Actual returns in any given year may vary from this amount. Strategies Employed for Achieving Objectives To satisfy its long-term rate-of-return objectives, GBGM relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). GBGM targets a diversified asset allocation that places a greater emphasis on equity-based investments to achieve its long-term return objectives within prudent risk constraints. Spending Policy and How the Investment Objectives Relate to Spending Policy GBGM has a policy of appropriating 100% of income for distribution annually. Capital gains are re-invested. From time to time realized gains may be distributed upon approval by the Board of Directors during the Annual Board Meeting. In establishing this policy, GBGM considered the long-term expected return on its endowment. Accordingly, over the long term, GBGM expects the current spending policy to allow its endowment to grow at an average rate of 7% annually. This is consistent with GBGM’s objective to maintain the purchasing power of the endowment assets held in perpetuity or for a specified term as well as to provide additional real growth through new gifts and investment return.

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December 31, 2012 and 2011 (14) Fair Value of Financial Instruments

Required disclosures concerning the estimated fair value of financial instruments are presented below. The estimated fair value amounts have been determined based on GBGM’s assessment of available market information and appropriate valuation methodologies. The following table summarizes required fair value disclosures and measurements at December 31, 2012 and 2011 for assets measured at fair value on a recurring basis under ASC 820, Fair Value Measurements and Disclosures: Fair Value Measurements at Reporting Date Using

Quoted Prices in Significant Significant Assets (Liabilities) Active Markets for Other Observable Unobservable Measured Identical Assets Inputs Inputs at Fair Value (Level 1) (Level 2) (Level 3)

December 31, 2012: Assets: Investments: Multiple Asset Fund (GBOPHB) $134,642,026 $ - $134,642,026 $ - Short-term securities 1,417,032 1,417,032 - - U.S. Government securities 10,858 10,858 - - Bond mutual funds 555,531 555,531 - - Other bonds 1,497,764 - 1,497,764 - Equities 544,489 544,489 - - Total investments 138,667,700 2,527,910 136,139,790 - Beneficial interest in Collins Forests 37,789,000 - - 37,789,000 Perpetual trusts held by others 40,423,437 40,423,437 - - Liabilities: Assets held for

others ( 21,832,642) ( 21,832,642) - -

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Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Significant Assets (Liabilities) Active Markets for Other Observable Unobservable Measured Identical Assets Inputs Inputs at Fair Value (Level 1) (Level 2) (Level 3)

December 31, 2011: Assets: Investments: Short-term securities $ 3,974,715 $ 3,974,715 $ - $ - U.S. Government securities 17,624,400 17,624,400 - - Corporate bonds 10,476,124 - 10,476,124 - Bond mutual funds 12,511,299 12,511,299 - - Other bonds 1,912,367 - 1,912,367 - Equities 70,067,699 70,067,699 - - Total investments 116,566,604 104,178,113 12,388,491 - Beneficial interest in Collins Forests 38,767,000 - - 38,767,000 Perpetual trusts held by others 22,137,934 22,137,934 - - Liabilities: Assets held for others ( 21,773,749) ( 21,773,749) - - The following methods and assumptions were used to estimate the fair value of each class of financial instruments: Investments The fair value of short-term securities, U.S. Government securities, bond mutual funds, and equities are determined using primarily Level 1 inputs in accordance with ASC 820. The fair values of the Multiple Asset Fund (GBOPHB), corporate bonds, and other bonds are determined using primarily Level 2 inputs.

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Beneficial Interest in Collins Forests Fair value is based on the discounted present value of the estimated future cash flows (over 30 years) from the Forests (Note 6). Because no public market exists for these assets and an estimate of fair value is not practicable to obtain, the fair value is determined using primarily Level 3 inputs. The following is a reconciliation of activity for 2012 and 2011 for assets measured at fair value based on significant unobservable information:

2012 2011 Balance at beginning of year $ 38,767,000 $38,767,000 Write down in fair value of Collins Forests ( 978,000) - Balance at end of year $ 37,789,000 $38,767,000 Perpetual Trusts Held by Others and Assets Held for Others Fair values are based on quoted market prices. Other The fair value of financial instruments for which estimated fair value amounts have not been specifically presented is estimated to approximate the related book value.

(15) GBGM Revolving Loan Funds During 2012, GBGM transferred $17,150,000 of its revolving loan funds to UMDF, on behalf of GBGM, for the purpose of making “missional” loans. The UMDF is best equipped within GBGM to manage and service GBGM loan funds. These funds are included in perpetual trusts held by others and permanently restricted net assets in the accompanying statements of financial position.

(16) Subsequent Events Management has evaluated subsequent events through May 31, 2013, the date the financial statements were available for issuance, and has determined that there are no subsequent events requiring disclosure.

GBGM Financial Statements

Documents

statements of cash flows

united methodist church

audit procedures

united states of america

audit committee

board of directors

general council

audit evidence