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    2013 ANNUAL REPORT


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    Letter from the CEO I am honored to share the Bill & Melinda Gates Foundation’s 2013 Annual Report with you and our valued partners around the world. The foundation’s complete audited financial statements are available to view or download on gatesfoundation.org. I invite you to learn more about the foundation, our strategies, and the specific grants we made in 2013. This is the first Annual Report published since my arrival as CEO of the foundation. I couldn’t be more inspired by the breadth of innovative approaches our partners are taking to solve some of the world’s toughest challenges. The work all of you are doing to improve health and reduce poverty in the world’s poorest countries, or to help shape a more equitable U.S. education system, is fulfilling our shared mission: to give all people the chance to live a healthy and productive life. It is a great privilege to work alongside our partners, and I look forward to our collaboration in the year ahead. Sue Desmond-Hellmann, MD, MPH Chief Executive Officer Bill & Melinda Gates Foundation Cover: Ra Kumari, a beneficiary of Basix financial services, conducts a transaction at her laundry shop in Seemapuri slum (New Delhi, India, 2007). 2 | www.gatesfoundation.org 2013 Bill & Melinda Gates Foundation Annual Report


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    2013 Funding Areas For the Year ended December 31, 2013 Amounts in thousands of U.S. dollars Global Health $1,088,000 Non-Program Areas $52,000 Strategic Media Partnerships $35,000 Global Policy & Advocacy $171,000 2013 United States Program $510,000 Global Development $1,779,000 PROGRAM AREAS 2013 Global Development 1,779,000 Global Health 1,088,000 United States Program 510,000 Global Policy & Advocacy 171,000 Strategic Media Partnerships 35,000 NON-PROGRAM AREAS Family Interest 37,000 Charitable Contracts in Support of Programmatic Strategies 9,000 Employee Matching Gifts & Sponsorships 6,000 Total Direct Grantee Support $3,635,000 3 | www.gatesfoundation.org 2013 Bill & Melinda Gates Foundation Annual Report


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    Consolidated Statements of Financial Position As of December 31, 2013 and 2012 Amounts in thousands of U.S. dollars 2013 2012 ASSETS Cash 18,085 4,998 Prepaid expenses and other assets 11,983 10,776 Beneficial interest in the net assets of Bill & Melinda Gates Foundation Trust 40,472,654 (1) 36,371,337 (1) Program-related investment assets, net 114,840 75,861 Property and equipment, net 692,646 (2) 713,805 (2) Total Assets $ 41,310,208 $ 37,176,777 LIABILITIES AND NET ASSETS Liabilities Accounts payable $82,105 $59,420 Accrued and other liabilities 47,097 41,562 Grants payable, net 5,143,677 (3) 5,111,593 (3) Program-related investment liabilities 75,944 13,589 Total Liabilities 5,348,823 5,226,164 Net Assets Unrestricted 35,961,385 31,950,613 Total Liabilities and Net Assets $ 41,310,208 $ 37,176,777 (1) The Bill & Melinda Gates Foundation has a two-entity structure. One entity, the Bill & Melinda Gates Foundation (“foundation”), distributes money to grantees. The other, the Bill & Melinda Gates Foundation Trust (“trust”), manages the endowment assets. The foundation and the trust are separate legal entities with independently audited financial statements. However, the legal documents that govern the trust obligate it to fund the foundation in whatever dollar amounts are necessary to accomplish the foundation’s charitable purposes. Because the foundation has the legal right to call upon the assets of the trust, the foundation’s financial statements reflect an interest in the net assets of the trust in accordance with generally accepted accounting principles (GAAP). (2) Property and equipment for the foundation includes land and capitalized expenditures related to the foundation’s campus headquarters and Visitor Center located in downtown Seattle. IRIS Holdings, LLC (IRIS) is the legal entity that owns the land and campus buildings. Since the foundation is the sole owner of IRIS, the financial statements of the two entities are presented here on a consolidated basis. (3) Grants payable reflects the total amount of grants approved for payment in future periods ($5.5 billion in 2013 and $5.4 billion in 2012), discounted to the present value as of December 31, 2013 and 2012, as required by GAAP. General Note: More information about the financial positions of the trust and the foundation are available in their respective audited financial statements provided on the foundation’s web site. 4 | www.gatesfoundation.org 2013 Bill & Melinda Gates Foundation Annual Report


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    Consolidated Statements of Activities For the Years ended December 31, 2013 and 2012 Amounts in thousands of U.S. dollars 2013 2012 CHANGE IN NET ASSETS Revenues and gains Contributions and other income $ 7,806 $ 2,753 Investment income 1,726 990 Total revenues and gains 9,532 3,743 Expenses Grants 3,392,343 (2) 2,673,358 (2) Direct charitable 340,691 (3) 229,934 (3) Program and administrative 475,446 450,928 Federal excise and other taxes 67 40 Total expenses 4,208,547 3,354,260 Change in net assets before beneficial interest (4,199,015) (3,350,517) Change in beneficial interest in the Bill & Melinda Gates Foundation Trust: Contributions from the Trust 4,108,470 (1) 3,873,050 (1) Changes in net assets of the Trust 4,101,317 (4) 2,592,340 (4) Total change in beneficial interest 8,209,787 6,465,390 Changes in net assets 4,010,772 3,114,873 Unrestricted net assets, beginning of year 31,950,613 28,835,740 Unrestricted net assets, end of year $ 35,961,385 31,950,613 (1) The Bill & Melinda Gates Foundation has a two-entity structure. One entity, the Bill & Melinda Gates Foundation (“foundation”), distributes money to grantees. The other, the Bill & Melinda Gates Foundation Trust (“trust”), manages the endowment assets. The trust makes contributions to the foundation to fund the foundation’s grant making activities and its operating costs. The foundation and the trust are separate legal entities with independently audited financial statements. The foundation received $4.108 billion in contributions from the trust in 2013, which were used to fund the foundation’s operations comprised of grants to third parties, program-related investments and other direct charitable expenses, operating costs, and capital expenditures. (2) Grant expense includes cash payments made during 2013 of $3.3 billion, as well as an adjustment to record expenses related to grants approved for payment in future years. The future grants payable portion is then discounted to the present value as of December 31, 2013, as required by GAAP. Presented in the accompanying grants paid summary is grant expense on a cash basis, consistent with the reporting basis required in the annual 990-PF tax return. (3) Direct charitable expense includes payments made to third parties for charitable purposes. Examples of direct charitable expenses include payment for consulting services provided for grantees’ benefit and travel costs to bring grantees and other participants together. Direct charitable expenses, working in tandem with grants, are an effective means of achieving charitable goals and are disclosed separately in the audited financial statements to distinguish these from operational costs of running the foundation. (4) The legal documents that govern the trust obligate it to fund the foundation in whatever dollar amounts are necessary to accomplish the foundation’s charitable purposes. Because the foundation has the legal right to call upon the assets of the trust, the foundation’s financial statements reflect an interest in the net assets of the trust in accordance with GAAP. General Note: More information about the financial positions of the trust and the foundation are available in their respective audited financial statements provided on the foundation’s web site. 5 | www.gatesfoundation.org 2013 Bill & Melinda Gates Foundation Annual Report


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    Total Direct Grant Support Summary by Strategy For the Year ended December 31, 2013 Amounts in thousands of U.S. dollars GLOBAL DEVELOPMENT 1,779,000** Polio 24% Integrated Delivery 2% Special Initiatives 3% Global Libraries 3% Nutrition 3% Financial Services for the Poor 5% Agricultural Development 22% Water, Sanitation, & Hygiene 5% Family Planning 7% Vaccine Delivery 19% Maternal Newborn & Child Health 7% GLOBAL HEALTH 1,088,000** Malaria 17% HIV/AIDS 21% Life Sciences Partnerships 1% Special Initiatives 1% Tuberculosis 14% Vaccine Development 2% Strategy Planning & Management 2% Integrated Development 4% Discovery Cross-cutting 8% Enteric and Diarrheal Diseases 10% Pneumonia 10% Neglected Infectious Diseases 10% * Amount does not include advocacy and policy spending specific to individual strategies. ** Numbers include grants and direct charitable expenses (DCE), but do not include PRIs. 6 | www.gatesfoundation.org 2013 Bill & Melinda Gates Foundation Annual Report


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    Total Direct Grant Support Summary by Strategy For the Year ended December 31, 2013 Amounts in thousands of U.S. dollars UNITED STATES PROGRAM 510,000** U.S. Education 83% Pacific Northwest 9% Advocacy 4% Scholarships 2% Administration 2% GLOBAL POLICY & ADVOCACY 171,000** Tobacco 15% Development Policy & Finance 22% Donor Government Relations 15% Charitable Sector Support 5% Program Advocacy* 37% India Programs 5% Africa Representation 1% China Programs 1% * Amount does not include advocacy and policy spending specific to individual strategies. ** Numbers include grants and direct charitable expenses (DCE), but do not include PRIs. 7 | www.gatesfoundation.org 2013 Bill & Melinda Gates Foundation Annual Report


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    Total Direct Grant Support Summary by Strategy For the Year ended December 31, 2013 Amounts in thousands of U.S. dollars OPERATIONS / NON-PROGRAM AREAS 52,000** Family Interest 71% Charitable Contracts in Support of Programmatic Strategies 17% Employee Matching Gifts & Sponsorships 12% STRATEGIC MEDIA PARTNERSHIPS 35,000** Global Programs 68% United States Program 20% Research 12% * Amount does not include advocacy and policy spending specific to individual strategies. ** Numbers include grants and direct charitable expenses (DCE), but do not include PRIs. 8 | www.gatesfoundation.org 2013 Bill & Melinda Gates Foundation Annual Report


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    Guided by the belief that every life has equal value, the Bill & Melinda Gates Foundation works to help all people lead healthy, productive lives. In developing countries, it focuses on improving people’s health and giving them the chance to lift themselves out of hunger and extreme poverty. In the United States, it seeks to ensure that all people—especially those with the fewest resources—have access to the opportunities they need to succeed in school and life. Based in Seattle, Washington, the foundation is led by CEO Sue Desmond-Hellmann and Co-chair William H. Gates Sr., under the direction of Bill and Melinda Gates and Warren Buffett. For additional information on the Bill & Melinda Gates Foundation, please visit our website: www.gatesfoundation.org © 2014 Bill & Melinda Gates Foundation. All Rights Reserved. Bill & Melinda Gates Foundation is a registered trademark in the United States and other countries. 9 | www.gatesfoundation.org 2013 Bill & Melinda Gates Foundation Annual Report


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