(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 include land and construction in progress related to the foundation's new campus headquarters that is being constructed on a 12-acre site in downtown Seattle. IRIS Holdings, LLC (IRIS) is the legal entity that owns the land and future headquarters. 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 ($4.7 billion in 2010 and $5.1 billion in 2009), discounted to the present value as of December 31, 2010 and 2009, 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.